JUDSON STEEL CORPORATION, a corporation, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD of the State of California and Ralph Maese, Respondents.
On May 3, 1977, this court granted Judson Steel Corporation's (Judson) petition for writ to review the opinion and order denying reconsideration made by the Workers' Compensation Appeals Board (Board) on January 28, 1977, in the matter of Ralph Maese, applicant, vs. Judson Steel Corporation, defendant; WCAB No. 74 BGN 14251, whereby Board upheld the imposition by the workers' compensation judge of a fifty percent increase in the award under the Labor Code, section 4553,1 on the ground Judson had, in violation of Labor Code section 132a,2 improperly discriminated against Maese because Maese had sustained an industrial injury.
Maese sustained an industrial injury on January 18, 1974, which arose out of and occurred in the course of employment with Judson. An application for adjudication of claim regarding the injury of January 18, 1974 was filed by Maese with Board on May 3, 1974. After the injury Maese was unable to return to work for over a year (until April 19, 1975.) On April 21, 1975, Maese, along with other employees, was laid off. Judson claims the discharge was required by the union contract3 under a provision that stripped Maese of his seniority.
On May 9, 1975, Maese filed with Board a ‘Petition for Increase of Award on Grounds of Discrimination Against Employee’ (hereinafter referred to as the ‘132a petition’), alleging discrimination following the industrial injury of January 18, 1974.
Several hearings were held on the 132a petition. On February 19, 1976, Maese testified that Daniel Cortez, who was shop superintendent for Judson in April of 1975, laid him off and told him it was due to the fact that he had lost his seniority under the union labor contract. He was then asked by counsel if Cortez told him he was being laid off because he had filed a workers' compensation action. He replied: ‘No, he didn't. Not as far as I know he didn't.’ Maese, after he was laid off, indicated he spoke with a ‘Tony’ at the union. ‘Tony’ was the ‘shop steward or something like that.’ Maese acknowledged he was told by ‘Tony’ that he was laid off due to the union contract.
Cortez testified that it was the union shop steward, Al McDow (McDow) who informed him that Maese lost his seniority under the union contract. This occurred, Cortez claimed, when McDow called Tony Rezendes (Rezendes), union business agent, from Cortez' office to advise him of the situation and Rezendes told Cortez to lay off Maese because his seniority was gone. At the time other employees were also laid off in reverse order of their seniority because of lack of work.
On October 5, 1976, a further hearing was held, at which Judson called both Rezendes and McDow as adverse witnesses. Rezendes testified he was business agent for the union that included Judson employees. The union contract provision in question included both on the job and off the job injuries. He did not recall talking to Maese about his discharge. He did recall that Cortez called him but he was never told that the injury in question was work related. He indicated when an employee was injured on the job the union and Judson could mutually extend the twelve-month absence period, thus preventing an injured employee from losing his seniority. It was Rezendes' opinion that it was the duty of the company to notify the union that an employee, injured on the job, would be off over twelve months.
McDow testified he was union shop steward at Judson. He knew Maese had been injured on the job, but it was not his responsibility to notify the union. He did not know if any union representative was aware of Maese's injury. He claimed Cortez brought to his attention that Maese had been off over a year and therefore was going to be laid off. McDow also denied he had ever called Rezendes as claimed by Cortez.
On November 4, 1976, the workers' compensation judge issued findings and award which stated in part:
‘1. The defendant Judson Steel Corporation discriminated against the applicant by discharging him solely as the result of his having sustained an industrial injury while in its employ in direct violation of Labor Code Section 132a.
‘2. Penalties are awarded in the sum equal to fifty (50) per cent of the total compensation paid applicant [Maese] . . ..’
Judson then filed a petition for reconsideration. On January 28, 1977, the Board denied the petition.
Section 132a was amended to its present version by the Legislature in 1972. Except for Randolph v. City of Los Angeles, infra, 67 Cal.App.3d 201, 136 Cal.Rptr. 543, we have found no cases analyzing and discussing the application of the section.4 Prior to being amended in 1972, section 132a only provided that the employer was guilty of a misdemeanor if he engaged in prohibited conduct. The former version of section 132a did not provide for criminal sanctions against an insurer nor did it provide for any award of increased compensation under section 4553 against employers or insurers who engaged in unlawful discrimination against an injured worker.
Section 132a states: ‘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.’ While this stated policy is quite broad, the section explicitly specifies which activities of an employee, when infringed upon by an employer, result in a violation. The employee must have either (1) filed or made known his intention to file an application, (2) received a rating, award or settlement, or (3) testified or made known his intention to testify in any manner related to the appeals board. These are the only activities which constitute ‘protected activity’ under section 132a. Accordingly, section 132a cannot be read to state a broad, universal policy of nondiscrimination against injured workers. (Randolph v. City of Los Angeles, 67 Cal.App.3d 201, 204, 136 Cal.Rptr. 543, 545.) ‘As can be seen from the remainder of the section making its violation both a misdemeanor and the reason for a possible 50% increase in the workers' compensation otherwise payable (see Lab.Code, § 4553), the discrimination, prohibited and penalized by section 132a, involves either an employer or his insurer threatening or taking punitive action of any kind against industrially injured employees because they avail themselves of their rights under the Workers' Compensation Act as codified (see Lab.Code, §§ 3200, 3201) or in the case of employers only because these employees either make known their intention to testify or do testify in workers' compensation proceedings.’ (Randolph, supra.) (Emphasis added.)
Appropriate to our analysis is language found in Mercer-Fraser Co. v. Industrial Acc. Com., 40 Cal.2d 102, 108, 251 P.2d 955, 957, where the court is discussing the application of the increased compensation provision of section 4553 to cases where the employer is guilty of serious and willful misconduct.5 It stated: ‘Imposition of the increased award upon evidence showing (or a finding of) conduct any less culpable than that specified by the statute would constitute an unlawful taking of property of one person and an unwarranted giving of it to another. An award of the type here involved, although denominated and regarded for some purposes as ‘increased compensation,’ is actually of the nature of a penalty [citations] . . .. Such an award, therefore, can be sustained only if the evidence establishes and the commission finds, directly or impliedly, every fact essential to its imposition.' (Emphasis added.)
Section 132a makes an employer liable for increased compensation provided under section 4553 if the employer actually discharges, or threatens to discharge, or in any other manner discriminates against an employee because of a protected activity. Discharge of an employee, threat thereof, or demotion are only the most obvious forms of prohibited discrimination. Often, the prohibited discrimination can take on more subtle forms such as denial of raises granted similarly situated co-employees or transfer to less desirable work shift.
However, merely because an employee has engaged in protected activity does not insulate the employee from otherwise permissible ordinary discipline by the employer, compliance with normal work rules, transfer, suspension, discharges, or layoffs when not motivated by the employer's anti-employee animus because the employee has engaged in such activity. (Cf., N.L.R.B. v. Tamper, Inc., 4 Cir., 522 F.2d 781, holding that under 29 U.S.C. section 158 (unfair labor practices under National Labor Relations Act) one's status as a union sympathizer can not shield one from punishment for violation of reasonable work rules, and, similarly, Winchester Spinning Corp. v. N.L.R.B., 4 Cir., 402 F.2d 299, holding union activity does not insulate an employee from ordinary discipline.)
The motivation of the employer is the key element in demonstrating a violation of section 132a. In the normal situation, absent a motivation by the employer of retribution or punishment on the employee for engaging in protected activity, a mere showing of all the other elements of a violation of section 132a is insufficient to impose liability for increased compensation. Of course, since direct knowledge of motivation is difficult to obtain, evidence of improper motivation can be demonstrated by circumstantial evidence. Maese, however, did not produce such evidence.
It is clear from the language of the Board's Opinion and Order Denying Reconsideration quoted below that the Board has taken the view that the protected activities under section 132a are not limited to the three specific protected activities listed under the section.6 The Board, in its Answer to Petition for Writ of Review, argues: ‘[T]he Legislative intent [of § 132a as amended in 1972] was to change the prior law which specified certain acts as a misdemeanor, to declare a policy against all discrimination against workers who are injured in the course and scope of their employment and provide a penalty therefor. The Board is charged with the duty of determining whether the facts of a particular case amount to discrimination. The remaining portions of that Code provide for specific situations which are exemplary but not all-inclusive.’
In light of our discussion ante, we can not accept the Board's view. The evidence in this case does not demonstrate discrimination by Judson because Maese engaged in any of these protected activities. At most it merely shows inadvertence and mistake caused by an unfortunate breakdown in communications. To adopt the Board's conclusion would raise serious constitutional questions especially in light of the misdemeanor provisions of section 132a. The provisions for increased compensation pursuant to section 132a by reference to section 4553 and the misdemeanor penalties can only be imposed against an employer who has discriminated against an employee because the employee has engaged in one of the specific protected activities stated in section 132a.
In view of our ruling in favor of Judson, the other issues raised on appeal require no response.
The award of benefits under sections 132a and 4553 is annulled.
1. Hereinafter, unless otherwise specified, all references will be to the Labor Code.Labor Code section 4553: ‘The amount of compensation otherwise recoverable shall be increased one-half where the employee is injured by reason of the serious and willful misconduct of any of the following:‘(a) The employer or his managing representative.‘(b) If the employer is a partnership, on the part of one of the partners or a managing representative or general superintendent thereof.‘(c) If the employer is a corporation, on the part of an executive, managing officer, or general superintendent hereof.‘But such increase of award shall in no event exceed ten thousand dollars ($10,000); together with costs and expenses incident to procurement of such award, not to exceed two hundred fifty dollars ($250).’
2. Labor Code section 132a:‘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.‘Any employer who discharges, or threatens to discharge, or in any manner discriminates against any employee because the latter has filed or made known his intention to file an application with the appeals board, or because the employee has received a rating, award or settlement, or, because the employee testified or made known his intentions to testify in any manner relating to the appeals board, is guilty of a misdemeanor and subject to the provisions of Section 4553.‘Any insurance carrier who advises, directs, or threatens an insured under penalty of cancellation or a raise in premium or for any other reason, to discharge an employee because the latter has filed or made known his intention to file an application with the appeals board, or because the employee has received a rating, award, or settlement, is guilty of a misdemeanor and subject to the provisions of Section 4553.‘Proceedings under this section for increased compensation as provided in Section 4553 are to be instituted by filing an appropriate petition with the appeals board, but such proceedings may not be commenced more than one year from the discriminatory act or date of termination of the employee. The appeals board is vested with full power, authority, and jurisdiction to try and determine finally all the matters specified in this section subject only to judicial review.’
3. Section 17 of the union contract provides in pertinent part:‘Seniority [¶] (A) . . . The continuous service and seniority status of an employee shall not be affected or interrupted as a result of layoffs, injury, illness, leaves of absence, or other cause not due to the voluntary act or fault of the employee; however, the continuous service of an employee and his or her seniority status shall be terminated for any of the following reasons, unless the Company and the Union, by agreement in writing, determine otherwise; [¶] . . .(6) When an employee has not performed any work for the Company for twelve (12) consecutive months as a result of layoff by the Company or as a result of illness or injury, it being understood that, by mutual agreement between the Company and the Union, the aforementioned twelve (12) consecutive month period may be extended in cases of compensable illness and/or injury . . .’ (Emphasis added.)
4. The Board, however, has explored the present section 132a in the Board en banc opinion of Ravert v. Taitak Internat. Industries (1976) 41 Cal.Comp.Cases 497.
5. The court notes a tendency among workers' compensation judges and attorneys to refer to violations of section 132a as constituting ‘serious and willful misconduct.’ As will be seen by the discussion herein, violations of section 132a are disinct from serious and willful misconduct.
6. The Board in its Opinion and Order Denying Reconsideration dated January 28, 1977 stated in part:‘Although Labor Code Section 132a refers to the discharge or threat of discharge of an employee, the provisions of that action are not limited to those examples. To the contrary that section proscribes any ‘discrimination’ against the industrially injured worker. It is therefore not limited to termination or threats of termination, but also refers to other ways in which an employer may penalize an employee. Since the evidence here establishes that the loss of seniority affects a worker's rights with this particular employer, the loss of seniority operates as a penalty and is therefore within the scope of discrimination prohibited by Labor Code Section 132a.‘Although it is true, as defendant contends, that there is no evidence that the applicant lost his seniority solely because of the filing of a workers' compensation claim, this is not the criterion provided for by Labor Code Section 132a. That section provides that the policy of this State as declared by the legislature, is to protect the industrially injured worker from discriminatory treatment. Consequently those situations in which an employee is penalized solely because he was injured on the job or had to lose time from work solely because of a work injury (rather than for example, situations in which the employer reasonably believes that the employee's injury prevents him from being able to do his job in an appropriate manner) are within the scope of Labor Code Section 132a. Here the applicant was penalized solely because he missed more than twelve months of work due to an industrial injury. Accordingly, the penalty that was imposed upon the applicant was one that occurred under circumstances prohibited by Labor Code Section 132a.
HASTINGS, Associate Justice.
KAUS, P. J., and ASHBY, J., concur.