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Standard C&R Forms Clash With Defendant's Expectations & Tips for Creating a Challenge-Proof C&R

An important case regarding the terms of a settlement agreement has just originated from the Los Angeles WCAB. Despite the fact that it has not been designated a “significant panel decision” we believe that the rationale of the Appeals Board’s decision will be followed in subsequent cases.

In the case under discussion the defendant resolved a cumulative trauma claim by C&R and added a relatively standard addendum which included the following language: “All claims of injury to any body part, system or condition not listed in this Compromise and Release are hereby dismissed with prejudice.”

“Not good enough”, said WCJ Schulman when the applicant hired a new lawyer and filed a specific injury claim that occurred within the alleged CT period that had just been resolved and after she had been terminated from her employment. The applicant’s new specific injury claim was allowed to proceed on its merits.

In Orellana v. United Care Services (2015) (ADJ9913367) , the applicant alleged a specific back injury on September 22, 2014. She had previously litigated a CT injury to her back and other body parts through October 1, 2014. The CT claim was settled by a C&R that was approved on December 10, 2014. The C&R agreement included the above quoted addendum as well as a stipulation that the applicant did not sustain any other injuries other than those listed in the C&R.

Defendant argued in the subsequent specific injury case that it had bought its peace as to any prior specific injury claims because the addendum included language that resolved all claims of injury not listed in the C&R. This argument did not persuade the WCJ or the Appeals Board for the following reasons.

Specifically, the WCJ pointed out that the standard Compromise and Release form has an important provision at Paragraph 3 limiting its scope "to settlement of the body parts, conditions, or systems and for the dates of injury set forth in Paragraph No. 1 despite any language to the contrary in this document or any addendum.”

The applicant had not yet litigated the specific injury of September 22, 2014 when the C&R of the CT claim was approved. It is unknown from the Appeals Board’s decision whether her deposition was taken before the matter of the validity of the new specific injury claim came up for trial. At trial she overcame a post-termination defense with unrebutted testimony that she had reported the specific injury to a supervisor and sought medical treatment before her termination.

This WCAB panel decision illustrates the pitfalls of paragraph 3 of the standard Compromise and Release form. Where a conflict exists between the C&R form and an attached addendum, the WCAB can and probably will resolve that conflict in favor of the Applicant.

This was also a missed opportunity for the defendant. Any time you are resolving a CT claim, it is vital that you are aware of the facts of your claim so that any unfiled specific dates of injury which may be known to the defendant on reasonable inquiry are created with Applications and ADJ numbers at the time of settlement. Had this been done, the C&R of the cumulative trauma claim probably would have resolved all issues with this employee.

As to the post-termination aspect of this case the defendant asserted that the specific injury claim was not reported prior to the applicant’s termination. However the defendant did not introduce any evidence to rebut the applicant’s trial testimony that she reported the injury to certain named persons at her job. Specifically, the defendant did not bring to the trial those persons to whom the applicant claimed she reported the specific injury. Whether those rebuttal witnesses would have been believed by the WCJ to support the post-termination defense is a matter of speculation. However the defendant did not give itself that opportunity.

What this Means for You

Retaining counsel who is aware of the intricacies of Compromise and Release settlements is vital to making sure that closed claims stay closed. Your GMK attorney is well versed in these situations and can take specific steps to assure that a settled claim remains resolved.

There may be a silver lining of sorts in the Appeals Board’s decision because the ruling seems to suggest that the parties may agree to strike the form language of Paragraph 3 when the intended agreement is contradicted by the form language.

If you are settling a claim by C&R by which you intend to incorporate all other purportedly unknown or unfiled claims the language of Paragraph 3 of the form C&R must be eliminated with agreement by the applicant.

Any time you are settling a CT claim, review the record carefully for “hidden specific injuries” that may be buried in the applicant’s testimony or in the medical records. Declining to settle only on the existing pleadings and assuring that your settlement encompasses those unfiled specific claims should tip the odds in your favor for preparing settlement documents that stick.

GMK’s 2016 Northern California Seminar

GMK is pleased to present our Annual Northern California Seminar on Friday, May 20th, 2016, 8:00 a.m. - 12:10 p.m. at the Marriott - Walnut Creek, 2355 North Main Street, Walnut Creek, CA.

Navigating the Complexity of Workers’ Compensation

Below is a glimpse of the morning’s topics and speakers:

• What Would You Do?
Dan Wagner, Esq. and Frank Su, Esq.
• How to Defend Against Cumulative Trauma Claims
George Krikes, Esq. and Ryan Frazier, Esq.
• New Case Law - Ryan Frazier, Esq. and Amanda Hart, Esq.
• Apportionment and Permanent Disability
Angela Trueblood, Esq. and Kirk Morales, Esq.

Approval for MCLE credits by the State Bar of California and Board of Legal Specialization is currently pending for attorneys. Certificates of attendance for obtaining continuing education credits will be available for Claims Professionals.

The half day seminar will begin at 8:00 a.m. and conclude at 12:10 p.m. Continental breakfast will be provided. Space is limited so please RSVP as soon as possible.

RSVP to Lauren Vargas at

SAVE THE DATE - GMK’s 2016 Northern California Seminar

The half day seminar being held on Friday, May 20th, 2016 will begin at 8:00 a.m. and conclude at 12:10 p.m. The seminar will be held at:

Walnut Creek Marriott
2355 North Main Street
Walnut Creek, CA 94596

Continental breakfast will be served. Approval for MCLE credits by the State Bar of California and Board of Legal Specialization is currently pending for attorneys.

Certificates of attendance for obtaining continuing education credits will be available for Claims Professionals.

Additional information will be sent in future GMK Alerts; however, reservations are being accepted now. RSVP to Lauren Vargas at

Labor Code §132a and Other Claims of Discriminatory Termination – The Prue Case

Labor Code §132a prohibits an employer from discharging or otherwise discriminating against an employee because the employee has filed (or made known his/her intention to file) a workers’ compensation claim. An applicant/employee can allege a violation of §132a by filing a petition with the Workers’ Compensation Appeals Board (WCAB). If there is a violation of §132a the employee is entitled to an increase in any compensation award by one-half (up to a maximum of $10,000) and costs of up to $250 in addition to reinstatement and reimbursement of lost wages and benefits.

Although it is the declared policy of the State of California not to discriminate against an injured worker, the California Court of Appeal in Dutra v. Mercy Medical Center Mt. Shasta (2012) 250 Cal.App.4th 750 concluded that the applicant/employee can only bring his/her §132a claim under the jurisdiction of the WCAB and cannot bring a civil tort action alleging a violation of public policy based on §132a.

However, in City of Moorpark v. Superior Court (1998) 18 Cal. 4th 1143, the California Supreme Court had previously held that §132a does not totally provide an exclusive remedy for the applicant/employee as §132a does not preclude the employee from filing a discrimination action under the Fair Employment and Housing Act (FEHA) or other common law claims for wrongful discharge.

A recent published case before the California Court of Appeal, Prue v. Brady Company (November 17, 2015) D066404 ___Cal.App.4th __, has broad applicability to employers with regard to work related injuries, §132a and FEHA claims and allegations of violation of the public policy based on asserted wrongful termination following a work injury. In Prue the employee alleged that he had suffered a work-related injury and was later terminated because of his disability. He did not file a §132a claim before the WCAB. More than one year after his termination he filed a civil action claiming that the termination was in violation of public policy.

Even though the Complaint specifically referenced Labor Code §132a, the court held that the employee had sufficiently alleged a common law tort claim of disability discrimination under FEHA and, therefore, his lawsuit for wrongful termination in violation of public policy could proceed on that basis. The court found that the two-year statute of limitations for a common law tort action applied rather than the one-year statute for FEHA claims and claims under Labor Code §132a so the plaintiff’s claim was timely. The court also denied the employer’s assertion that §132a was the employee’s exclusive remedy and allowed the common law tort cause of action for wrongful termination in violation of public policy to proceed.

What this means to you:

In addition to filing a §132a claim with the WCAB the employee has other legal avenues to seek redress against the employer if the employer takes an adverse action (usually termination) against the employee and the employee believes the action was based on his/her work-related injury and subsequent disability.

Additionally, the statute of limitations is longer for such a tort claim (2 years) as compared to the one-year limitation under §132a or FEHA. It should also be noted that this case was brought by a firm that typically represents applicants in WCAB proceedings and that many such firms are now filing civil cases alleging various violations of employment laws and/or public policy.

Employers must be vigilant in making sure that they do not take adverse employment actions against employees with work related injuries and/or disabilities.

For further information or assistance please contact GMK employment law attorney Jeanne Flaherty at 818-755-0444 or

Court of Appeal Upholds Constitutionality of Independent Medical Review and Court Rejects Admissibility of Privately Retained Medical-Legal Reports


The First District Court of Appeal has upheld the constitutionality of Independent Medical Review (IMR) in the matter of Stevens v. WCAB (2015) (A143043, ADJ1526353) a published case with uncomplicated facts that directly presents the issue.

Francis Stevens had been adjudicated 100% disabled. Her doctor recommended prescriptions and home health care, which were submitted to utilization review. UR denied both the drugs and the home health aide. Stevens appealed the determination to IMR, submitting additional evidence, and the decision was affirmed. She then appealed to the WCAB, additionally raising the issue of constitutionality of the IMR process. She claimed the IMR process violated constitutional separation of powers, the constitutional provisions for review of workers’ compensation decisions and principles of due process.

The Court rejected the separation of powers argument and the challenge to review of workers’ compensation decisions because of the plenary power given to the legislature over California’s comprehensive workers’ compensation system. The due process argument similarly failed because California’s scheme for evaluating medical treatment requests is fundamentally fair and affords workers sufficient opportunities to present evidence and be heard.

The court found one aspect for the WCAB to consider further; that is whether the Board properly lacked authority to reject the IMR decision because the home health care may not include personal care under MTUS where this was the only care needed.

To explore the constitutional challenges, the Court of Appeal provided an excellent summary of workers’ compensation laws enacted over the last dozen years to address the handling of medical treatment requests and treatment disputes. By reviewing the entire framework for consideration of medical treatment requests against both state and federal constitutional mandates, the court’s decision is very well supported.

One could easily conclude that the Court of Appeal thought the California Supreme Court would review their decision. Stevens has only 10 days to get her Petition for Review filed with the Supreme Court. We expect this, and look forward to the Supreme Court’s response.


The Second District Court of Appeal has issued its published decision in the matter of Batten v. WCAB, (2015) (B260916, ADJ3781289), holding that privately obtained experts are not admissible to rebut the opinion of a panel QME or AME. The court was adamant in expressing its decision by declaring that “[t]here is no ambiguity to clarify, there is nothing to construe, there is only the obligation to follow the statutory law”.

Batten had an admitted orthopedic injury and claimed a psychiatric compensable consequence. The parties selected a panel QME in psychiatry who said there was psychiatric injury but causation was only 47% industrial. Batten obtained permission from the WCAB to obtain a report at her own expense in rebuttal.

Batten selected Dr. Gary Stanwyck, a well-known evaluator. His report found over 51% causation. He was deposed and his report was reviewed and commented on by the panel QME. At trial the WCJ admitted the report and found Dr. Stanwyck’s analysis convincing and persuasive. Psychiatric injury was found.

Defendant appealed on the grounds that Dr. Stanwyck’s report, obtained under Labor Code §4605, was inadmissible under Labor Code §4061(i).

Batten argued that the report of her consulting physician, Dr. Stanwyck, should be admissible under §4064 which states in part that “[a]ll comprehensive medical evaluations obtained by any party shall be admissible in any proceeding before the appeal board, except as provided in section 4060, 4061, 4062, 4061.1, or 4062.2.” The WCAB found that §4061(i) in fact precluded admissibility.

Section 4061(i) expressly declares that evaluations obtained other than by the procedure found in §4061.1 or §4062.2 shall not be admissible in any proceeding before the appeals board.

The WCAB pointed out that §4605, which allows an employee to obtain a report from a consulting physician at their own expense, comes under Article 2 of the Labor Code, “Medical and Hospital Treatment”. In that context, the Board found that a “consulting physician” means “a doctor who is consulted for purposes of discussing proper medical treatment, not one who is consulted for determining medical-legal issues in rebuttal to a panel QME”.

The Court of Appeal agreed but found that this reading permits the admission of an applicant’s self-procured (and paid for) report by a consulting physician only in the course of seeking medical treatment. Therefore §4061(i) permits the admission of an evaluation by a treating physician, but neither §4064 nor §4061 permits admission of a report by an expert retained solely for the purpose of rebutting a report from a panel QME or AME.

What this means for you

• Independent Medical Review is constitutional. A Supreme Court challenge is expected soon.

• Medical reports that are self-procured (and paid for) by an applicant under Labor Code §4064(d) may be used by a treating physician to formulate a medical-legal opinion, but the report may not be used to rebut a report of a panel QME or AME that the applicant deems unfavorable. The ability of an applicant to have a self-procured report concerning medical treatment entered into evidence is likely a red herring since all medical treatment determinations must go through the UR/IMR process.

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