DANIELS v. WORKERS COMPENSATION APPEALS BOARD

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Court of Appeal, Second District, Division 4, California.

Adolphus DANIELS, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD and McDonnell Douglas Corporation, Respondents.

B013578.

Decided: July 22, 1986

Fred L. Wright, Torrance, for petitioner. Irell & Manella, and James N. Adler and Edward R. McGah, Jr., and Kegel, Tobin & Hamrick, and David E. Lister, Los Angeles, for respondent McDonnell Douglas Corp. Richard W. Younkin, William B. Donohoe, Alvin R. Barrett, and Charles E. Finster, San Francisco, for respondent W.C.A.B.

This case presents the issue of interpretation of Labor Code section 132a as it applies to an employee's right to job reinstatement and reimbursement for lost wages and work benefits resulting from the employer's discriminatory termination of the employment.1  We conclude that respondent Workers' Compensation Appeals Board erroneously interpreted and applied section 132a to deny reinstatement and reimbursement of lost wages and work benefits.

On March 19, 1980, while employed by defendant McDonnell Douglas Corporation (Douglas), applicant sustained industrial injury resulting in work disability and medical treatment.   Despite issuance of a disability certificate evidencing his total incapacity from June 11 to June 18, 1980, Douglas terminated his employment on June 17, 1980.   Applicant then filed a claim for section 132a benefits for unlawful discrimination.  (Daniels v. Workers' Comp. Appeals Bd. (McDonnell Douglas Corporation) (1983) 48 Cal.Comp.Cases 686, 687–688.)

The Board found no violation of section 132a;  however, on review this court, relying on Judson Steel Corp. v. Workers' Comp. Appeals Bd. (1978) 22 Cal.3d 658, 150 Cal.Rptr. 250, 586 P.2d 564, concluded that “in the absence of any evidence by ․ Douglas of any bona fide business necessity for terminating the applicant, ․ Douglas' actions herein have penalized the applicant solely for having sustained an industrial injury, and, therefore, clearly come within the broad prohibition against employer discrimination contained in the legislative mandate of Labor Code section 132a.”  (Daniels v. Workers' Comp. Appeals Bd., supra, 48 Cal.Comp.Cases at p. 692.)   Consequently, we reversed the Board's findings and orders, and remanded the matter for further proceedings consistent with the views expressed in our opinion.  (Ibid.)

On remand the Board issued a Decision After Remittitur wherein it found that Douglas violated section 132a on June 17, 1980, and that applicant was accordingly entitled to an increase in benefits in accordance with section 4553 and to reinstatement and reimbursement of lost wages in an amount to be adjusted by the parties, the Board reserving jurisdiction to determine at the trial level any amount of benefits the parties were unable to adjust.

Douglas then sought reconsideration of the Board's remittitur decision, contending that applicant had not raised the issue of reinstatement, and if applicant had done so, Douglas would have defended on the ground that in accordance with defendant's business practice, applicant would have been laid off on October 2, 1981, in conjunction with a general reduction of Douglas' work force on a seniority basis as required by a collective bargaining agreement (CBA).   The Board denied reconsideration, stating that the reinstatement issue “had been raised because it was inherent in the raising of the 132a issue.”   The Board also stated, “ ‘however it was not our intention to foreclose defendant from raising any legitimate defense it might have to any particular issue.   Our intention was to issue a finding that defendant [Douglas] had discriminated against applicant in violation of § 132a and to award the benefits that are authorized under that statute.   That statute provides that applicant has at least a prima facie right to reinstatement.   If defendant believes it has a valid reason to deny reinstatement, it can raise that issue at the trial level if the parties cannot adjust the matter.’ ”

The parties were unable to resolve the benefits issue, and the case proceeded to hearing by the workers' compensation judge (WCJ).

At the hearing on September 12, 1984, the parties stipulated to the “Facts and Contentions” in substance as follows:  Applicant was employed by Douglas on November 26, 1979.   Applicant's employment was governed by the CBA providing for layoffs strictly in inverse order of seniority.   Between 1980 and 1982, Douglas laid off approximately 10,000 persons as a result of declines in production.   The layoffs in the bargaining units in which applicant was employed were made strictly in accordance with seniority.   Had applicant been employed by Douglas on October 2, 1981, he would have been laid off on that date by the nondiscriminatory operation of the seniority provisions of the applicable CBA and would have lost all rights to recall on October 2, 1983, since under the CBA an employee with less than two years' seniority at the time of layoff loses all seniority after he has been laid off for two years.   Had applicant remained employed by Douglas from his June 17, 1980 termination date through October 2, 1981, he would have received straight time and overtime pay at a specified rate.   From August 4, 1980, through 1981 and into 1982 applicant was employed at Superior Gear where his earnings were $11,284.36 in 1980, and $25,948.77 in 1981, of which approximately $19,461.28 was earned between January 1, 1981 and October 2, 1981.   In addition to straight time and overtime, applicant would have been entitled under the CBA in the June 18, 1980 through October 2, 1981 period to certain medical, vacation, sick leave, dental, severance, life insurance and retirement benefits.   Douglas stipulated that it agrees to pay those benefits.   Applicant has been paid the 50 percent penalty on all normal workers' compensation benefits, less a reserve for attorney fees.

The stipulation provides further:  Douglas contends that it owes applicant no back pay for the June 18, 1980 through October 2, 1981 period because applicant was disabled from work until July 14, 1980, and from July 14, 1980 through October 2, 1981, applicant's earnings at Superior Gear exceeded the earnings he would have received at Douglas in that period.   Douglas did not offer to pay any amounts for section 132a lost wages or benefits and did not offer to reinstate applicant in his former employment, contending that applicant was not entitled to reinstatement since he would in any event have been laid off by the nondiscriminatory application of the seniority clause of the CBA.   Applicant contends that he is entitled to reinstatement and to reimbursement for lost wages from June 17, 1980 through September 12, 1984, less earnings at Superior Gear from August 4, 1980 through February 3, 1982, and less “two months employment in 1984 at $150.00 per week,” and to two 10 percent penalties for the entire class of benefits untimely paid by Douglas.

Based on the stipulation, the WCJ found that applicant is not entitled to reinstatement;  is entitled to lost earnings and benefits for the period July 14, 1980 to August 4, 1980, plus interest at the legal rate in an amount to be adjusted by the parties;  and is not entitled to any penalties since Douglas did not unreasonably refuse or delay benefits.

It was the opinion of the WCJ that in view of the evidence that applicant was disabled and unable to work before July 14, 1980, and the evidence that his earnings at Superior Gear from August 4, 1980 into 1982 exceeded the earnings he would have received had he remained in Douglas' employ, applicant was entitled to lost earnings only in the period July 14, 1980 to August 4, 1980, plus interest, since he received benefits while disabled and did not lose any earnings in the period he was employed by Superior Gear.   The WCJ opined further that inasmuch as applicant would have been laid off by Douglas on October 2, 1981, pursuant to the seniority provisions of the CBA, applicant had no lost wages after October 2, 1981, the CBA being nondiscriminatory and a proper basis for applicant's termination unrelated to his industrial injury or any consequence thereof.   The WCJ stated further that no penalty is assessed against Douglas on the amount of wage loss found since the law is unclear as to what time period is used to measure wage loss;  and no penalty is assessed for failure to reinstate since it was found that applicant was not entitled to reinstatement.

On reconsideration the Board affirmed all of the WCJ's findings except the Board found that Douglas had unreasonably delayed severance pay and sick leave benefits.   In reaching its decision, the Board rejected applicant's contention that section 132a be interpreted in accordance with the “plain language” of the statute.   Instead, the Board interpreted section 132a as follows:

“[I]f instead of focusing on the specific language, we ask what is the scope of relief the [L]egislature intended to afford, we may then look to the type of relief given to other discriminatees and if this reveals a uniform approach, then we may assume that the Legislature had a similar approach in mind for purposes of § 132a.  [¶] The term ‘reinstatement’ has been interpreted in other discrimination contexts, as not requiring reinstatement when the employee would have been terminated for reasons that are independent of the discrimination.   See e.g. Goldblatt Bros.[,] Inc. 135 NLRB 153 at 159–160.  Calcite Corporation 228 NLRB 1048.   The cases also establish that the remedy that has uniformly been given in discrimination context is ‘make-whole’, rather than preferential, relief.  Teamsters v. U.S. 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396, Golden Gate [sic] Bottling Co. v. N.L.R.B. 414 U.S. 168, 94 S.Ct. 414, 38 L.Ed.2d 388, Social Security Board v. Nierotko 327 U.S. 358, 66 S.Ct. 637, 90 L.Ed. 718, Dept. of Fair Employment and Housing v. C.E. Miller (FEHC Dec No. 84–02.)   Thus we can assume that the [L]egislature's use of the term ‘reinstatement’ without any further clarification was intended to contemplate a reinstatement remedy to a discriminatee under § 132a that is the equivalent of the make-whole remedy given in other discrimination contexts․  [¶] Moreover as a practical matter if the employer must reinstate applicant and there is nothing to preclude the employer from terminating another employee to create a space for applicant, then the reinstatement remedy would have the effect of penalizing an employee who did not profit from the discrimination.   Petitioner's assertion notwithstanding, there is no reason to believe that the Legislature wished an employee who had not profited from the discrimination to bear the consequences of that discrimination, Cf. Teamster v. U.S., supra.”

As to applicant's contention that Judson Steel Corp. v. Workers' Comp. Appeals Bd., supra, 22 Cal.3d 658, 150 Cal.Rptr. 250, 586 P.2d 564, precluded use of the CBA to bargain away his right to benefits for the employer's discrimination, the Board opined that the CBA “is not being used here to reduce what the applicant is entitled to under Labor Code § 132a.   The agreement is being used only to define what ‘make-whole’ relief is, rather than to give applicant less than ‘make-whole’ relief.  [¶] For a similar reason we must reject petitioner's arguments with respect to the issues of whether he is entitled to the employer's cost of applicant's health benefit package for the period he was not working for defendant and that he is entitled to additional benefits from the time he left his employment with Superior Gear.   Counsel's arguments on these issues are based on his unsupported assumption that the overriding legislative intent was to give preferential treatment to discriminatees.   But as we noted earlier, we cannot discern any reason as to why the [L]egislature might have had this intention.   We believe a more rational view of the legislative intent, and a view that would be consistent with the ways in which discrimination laws have been uniformly construed, is to conclude that the [L]egislature intended that the victim of the discrimination be given make-whole relief.   Thus the applicant here is not entitled to the employer's cost of the benefit program nor is he entitled to wages after he left Superior Gear.   Were he to receive those benefits, he would be more than made whole for the discrimination.   He would receive a preference that the [L]egislature did not intend for him to have.   Cf. Macey v. World Airways, Inc. 14 FEP [Cases 1426].”  (Fn. omitted.)

 In construing section 132a on review, we first note that the ultimate interpretation of a statute is of course an exercise of judicial power, and it is the responsibility of the courts to declare its true meaning even if it requires rejection of an interpretation by an administrative agency where that interpretation is clearly erroneous or contrary to the plain language of the statute.  (City of Anaheim v. Workers' Comp. Appeals Bd. (1981) 124 Cal.App.3d 609, 613, 177 Cal.Rptr. 441;  Crumpler v. Board of Administration (1973) 32 Cal.App.3d 567, 578, 108 Cal.Rptr. 293;  see Judson Steel Corp. v. Workers' Comp. Appeals Bd., supra, 22 Cal.3d at p. 668, 150 Cal.Rptr. 250, 586 P.2d 564.) 2

In interpreting section 132a we begin with the fundamental rule that a court should ascertain the intent of the Legislature so as to effectuate the purpose of the law.  (Moyer v. Workmen's Comp. Appeals Bd. (1973) 10 Cal.3d 222, 230, 110 Cal.Rptr. 144, 514 P.2d 1224.)   In determining such intent, we turn to the words in the statute, and give effect to the statute according to the usual, ordinary import of the language used in framing it.  (Ibid.)  The words must be construed in context, keeping in mind the nature and obvious purpose of the statute in which they appear.  (Ibid.)  The object which the statute seeks to achieve and the evil which it seeks to prevent are of prime consideration in the statute's interpretation.  (Judson Steel Corp. v. Workers' Comp. Appeals Bd., supra, 22 Cal.3d at p. 669, 150 Cal.Rptr. 250, 586 P.2d 564.)   Moreover, section 3202 enjoins us to construe section 132a liberally with the purpose of extending its benefits for the protection of persons injured in the course of their employment (id., at p. 668, 150 Cal.Rptr. 250, 586 P.2d 564), keeping in mind that the underlying policy of the workers' compensation statutes and their constitutional foundation (Cal. Const., art. XIV, § 4), as well as the recurrent theme of countless appellate decisions on the matter, has been one of pervasive and abiding solicitude for the worker.  (Webb v. Workers' Comp. Appeals Bd. (1980) 28 Cal.3d 621, 626, 170 Cal.Rptr. 32, 620 P.2d 618;  Moyer v. Workmen's Comp. Appeals Bd., supra, 10 Cal.3d at p. 233, 110 Cal.Rptr. 144, 514 P.2d 1224;  Industrial Indemnity Co. v. Workers' Comp. Appeals Bd. (1985) 165 Cal.App.3d 633, 638, 211 Cal.Rptr. 683.)

With these principles in mind, we turn to the meaning of the words “reinstatement,” “reimbursement for lost wages,” and “work benefits” in section 132a.

We first note that in the opening sentence of the statute, the Legislature declared its broad purpose and policy condemning discrimination as follows:  “It is the declared policy of this state that there should not be discrimination against workers who are injured in the course and scope of their employment.”  (§ 132a;  see fn. 1, supra;  Judson Steel Corp. v. Workers' Comp. Appeals Bd., supra, 22 Cal.3d at p. 661, 150 Cal.Rptr. 250, 586 P.2d 564;  County of Santa Barbara v. Workers' Comp. Appeals Bd. (1980) 109 Cal.App.3d 211, 216, 167 Cal.Rptr. 65.)

Following the opening sentence, section 132a provides:  “(1) Any employer who discharges, ․ or in any manner discriminates against any employee ․ is guilty of a misdemeanor and the employee's compensation shall be increased by one-half․  Any such employee shall also be entitled to reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer.”  (Emphasis added.)

Giving effect to the statute according to the ordinary import of the language used in framing it, and construing it both in the context of the expressly declared purpose of the statute to prevent the evil of employer discrimination, as well as liberally with the purpose of extending its conferred benefits for the protection of injured workers (Cal. Const., art. XIV, § 4;  § 3202), the obvious import of the statute is that the Legislature mandated reinstatement and reimbursement for lost wages and work benefits upon determination that the employer has discriminatorily terminated an employee.

 This court determined on prior review of this matter that Douglas violated section 132a in discriminatorily terminating applicant's employment on June 17, 1980.  (Daniels v. Workers' Comp. Appeals Bd., supra, 48 Cal.Comp.Cases 686.)   On remand, the Board erroneously interpreted section 132a, disregarding the plain language and purpose of the statute, and instead resorting to a “make-whole” theory gleaned from federal labor law.   This theory of a “make-whole” remedy and “FEHA” (California Fair Employment and Housing Act [Gov.Code § 12900 et seq.] ) is inapplicable to the unique California workers' compensation statute which not only includes a strong policy declaration against employer discrimination, making such discrimination a misdemeanor, but also specifically and clearly mandates the remedies of reinstatement and reimbursement of lost wages for employer discrimination.

The Board and respondent employer also erred in resorting to the provisions of the CBA as a business reality justifying denial of applicant's statutory right to reinstatement.

 Business reality can properly be raised as a defense to the employer's discriminatory act;  that is to say, a business reality may be offered by an employer to justify what would otherwise constitute a section 132a discrimination (Judson Steel Corp. v. Workers' Comp. Appeals Bd., supra, 22 Cal.3d at p. 667, 150 Cal.Rptr. 250, 386 P.2d 564;  Smith v. Workers' Comp. Appeals Bd. (1984) 152 Cal.App.3d 1104, 199 Cal.Rptr. 881;  Western Electric Co. v. Workers' Comp. Appeals Bd. (1979) 99 Cal.App.3d 629, 160 Cal.Rptr. 436;  Daniels v. Workers' Comp. Appeals Bd., supra, 48 Cal.Comp.Cases 686), but an employer may not resort to the business reality concept to defeat the mandated remedy of reinstatement of an employee who has already established that the employer is guilty of discrimination.  (Ibid.)

The stipulation by the parties here that applicant would have been laid off on October 2, 1981, pursuant to the nondiscriminatory seniority provisions of the CBA is immaterial, since the determinative discriminatory act is Douglas' wrongful termination of applicant's employment on June 17, 1980.   As a result of that discriminatory termination and nonreinstatement, applicant was not an employee on October 2, 1981, when employees were being laid off pursuant to the CBA.   The section 132a remedies of reinstatement and reimbursement for wage lost flow from Douglas' June 17, 1980 discriminatory act, not from hypothetical operation of the CBA as to applicant on October 2, 1981.   Also, statements by applicant's counsel in oral argument regarding his interpretation of section 132a as to reinstatement and lost wages are not binding on this court.   Interpretation of statutes “is a subject within the authority of the courts, not the parties.”  (Oakland Raiders v. City of Berkeley (1976) 65 Cal.App.3d 623, 629, 137 Cal.App.3d 648;  see Western Pioneer Ins. Co. v. Estate of Taira (1982) 136 Cal.App.3d 174, 182, 185 Cal.Rptr. 887;  1 Witkin, Cal Procedure (3d ed. 1985) Attorneys, § 205, p. 236.)

The statute mandates that upon discrimination by the employer the “employee shall ․ be entitled to reinstatement and reimbursement for lost wages and work benefits․”  (§ 132a.)   In view of this conclusion it is unnecessary to address the employer's assertion that business realities such as the CBA provisions justify denial of reinstatement.

 The Board on the previous remand should have awarded applicant reinstatement to his former job and reimbursement of lost wages and work benefits.   The wage losses, as contended by applicant, should be the total amount he would have received had he remained in Douglas' employ from June 18, 1980, until the date of the stipulation (September 12, 1984),3 allowing against that total a credit to Douglas for those weeks that the applicant was employed at Superior Gear and elsewhere in that period.4

In reaching its erroneous interpretation of section 132a the Board focused on the fact that applicant “would be more than made whole” if the language of the statute was literally interpreted.   We are aware that mandated reinstatement and reimbursement of lost wages and work benefits will result in a windfall to applicant employee.   We are equally aware that a contrary decision would result in a windfall to respondent employer.   The literal interpretation given the statute by this court, and the result thus arrived at, finds additional support in the fact that it was the respondent employer's discriminatory act which triggered imposition of these statutorily mandated remedies.   Compelled reinstatement and reimbursement are undoubtedly intended to deter future employer discrimination.

 As to penalties, the WCJ and Board correctly concluded that Douglas did not unreasonably delay payment of benefits (other than unreasonable delay in paying the severance and sick leave benefits) since Douglas obviously had a reasonable doubt as to its liability for reinstatement and reimbursement benefits in view of the first impression nature of judicial interpretation and application of section 132a.  (See Kerley v. Workmen's Comp. App. Bd. (1971) 4 Cal.3d 223, 93 Cal.Rptr. 192, 481 P.2d 200.) 5

The March 18, 1985 Decision After Reconsideration by respondent Workers' Compensation Appeals Board is annulled and the matter is remanded with directions that the Board enter an award reinstating petitioner Adolphus Daniels to his former employment and reimbursing him for lost wages and work benefits in accordance with the views expressed in this opinion.

I respectfully dissent.   I agree with the Board's interpretation of section 132a, and its resultant effort to “make-whole” the applicant.   I believe the future benefits dictated by the majority opinion to be unwarranted.   I would affirm the decision of the Board.

FOOTNOTES

1.   Labor Code section 132a provides:  “It is the declared policy of this state that there should not be discrimination against workers who are injured in the course and scope of their employment.  [¶] (1) Any employer who discharges, ․ or in any manner discriminates against any employee because he or she has filed or made known his or her intention to file an application for adjudication with the appeals board, or because the employee has received a rating, award or settlement, is guilty of a misdemeanor and the employee's compensation shall be increased by one-half․  Any such employee shall also be entitled to reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer.”All further section references herein are to the Labor Code unless otherwise noted.

2.   Respondents rely on the rule that “[t]he contemporaneous administrative construction of a statute by those charged with its enforcement and interpretation, while not necessarily controlling, is entitled to great weight, and courts generally will not depart from such construction unless it is clearly erroneous or unauthorized.”  (Cannon v. Industrial Acc. Comm. (1959) 53 Cal.2d 17, 22, 346 P.2d 1;  see Judson Steel Corp. v. Workers' Comp. Appeals Bd., supra, 22 Cal.3d at pp. 668–669, 150 Cal.Rptr. 250, 586 P.2d 564.)

3.   The stipulated facts upon which the matter was submitted for hearing relate only to the period until the date (September 12, 1984) of the stipulation and hearing.   Reimbursement for lost wages and work benefits thereafter remains a matter for determination by the Board.

4.   The stipulation provides that applicant received earnings of $11,284.36 plus $25,948.77 while employed at Superior Gear;  and applicant concedes that he also received “two months employment in 1984 at $150.00 per week.”   Also, as the WCJ and Board correctly concluded, applicant should not be awarded lost wages for the June 18 to July 14, 1980 period while he was disabled and receiving benefits therefor.

5.   The WCJ declined to assess any penalty because of existing uncertainty in the law.   On reconsideration, the Board, in imposing penalty on the severance and sick leave benefits only, stated:  “Petitioner has also asked that a penalty be awarded because defendant failed to pay a severance benefit ․ and ․ a sick leave benefit․  This assertion is somewhat puzzling because at the trial level defendant stipulated that it would pay a 10% penalty on these benefits and presently asserts that it had paid this amount․  In any event, since the parties agree that a penalty is owed, we will award it.”   Thus it is unnecessary to discuss the question as to penalty on the particular class of benefit unreasonably delayed.  (See Gallamore v. Workers' Comp. Appeals Bd. (1979) 23 Cal.3d 815, 827, 153 Cal.Rptr. 590, 591 P.2d 1242;  Burton v. Workers' Comp. Appeals Bd. (1980) 112 Cal.App.3d 85, 89, 169 Cal.Rptr. 72.)

WOODS, Presiding Justice.

McCLOSKY, J., concurs.