The following is a guest blog post by Gregory Grinberg, workers’ compensation sole practitioner servicing the Northern California Bay Area. His firm specializes in workers’ compensation defense law, and his blog, WCDefenseCA, deals with California workers’ compensation issues.
One of the most reassuring things about insurance, even workers’ compensation insurance, is the thought that the unknown, those risks that threaten businesses and hopes and dreams, are now covered. Being insured can provide a great sense of relief, but sometimes an illusory one.
There are some things that insurance will not cover. In the arena of California’s workers’ compensation, this includes, among other things, workers’ compensation discrimination actions.
Under Lab C §132a, acts of discrimination against employees (called applicants in the workers’ compensation system) are not insurable, and businesses from the biggest global giants to the smallest mom-and-pop shops, are left to fend for themselves when applicants attach a claim of discrimination to a workers’ compensation application.
Liability for §132a violations can be fairly steep, including
- up to $10,000 in penalties,
- $250 in attorney fees for the applicant’s attorney,
- back-pay and lost wages, and
- reinstatement if the alleged discriminatory conduct included dismissal or change in position.
The employer frequently has to pay for its own attorney, although sometimes the insurer will provide the representation (but it will not cover the liability).
Often §132a claims are made as knee-jerk reactions, with the applicant’s attorney seeking to use the risk of a liability as additional leverage to settle both the discrimination case and the case-in-chief injury claim. Courts may be ready to clamp down on this practice, as one recent (unpublished) opinion allowed a malicious prosecution action to proceed against an applicant’s attorney for filing and prosecuting an allegedly baseless §132a claim. See Johnston v Kelly.
Workers’ compensation, both case-in-chief matters and §132a petitions, is a different creature from the rest of the law. Attorneys often come to the aid of their business clients when §132a claims arise, but are stopped dead in their tracks by the workers’ compensation labyrinth.
When faced with one of these matters, consult with an attorney familiar with workers’ compensation law before proceeding – after all, Theseus beat the Minotaur himself, but even he needed a string to avoid getting lost in the labyrinth.
For comprehensive coverage of workers’ compensation insurance issues, turn to CEB’s California Workers’ Compensation Practice and Advising California Employers and Employees, chap 17. For more on Lab C §132a discrimination claims, check out CEB’s Wrongful Employment Termination Practice, chap 5.
© The Regents of the University of California, 2012. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.