Workers Comp Zone


The Meg Whitman campaign ended yesterday, a spectacular failure.

So Jerry Brown will soon be forming a gubernatorial team. At the victory celebration Tuesday night at Oakland’s Fox Theater, a handful of prominent players in California workers’ comp stopped by to savor the moment.

Workers’ comp isn’t likely to be near the top of Brown’s agenda, though rate issues could cause it to rise in importance.

But within several months we’ll see cabinet level appointments being made and we’ll know who will be heading agencies such as the DIR.

For a moment, let’s look back at Brown’s governorship of 30 years ago.
What did he do in workers’ comp?

The following list, read by Salinas attorney Todd McFarren at a CAAA convention earlier this year, recites many of the pro-worker aspects of the Brown years:

AS GOVERNOR 1975-1983

– Prevents outgoing Reagan administration’s last-minute packing of WCAB with hostile commissioners; appoints most solid pro-worker majority on the Appeals Board in history

– Signs legislation that:
-provides for free choice of physician
-permits C&R of medical liens
-requires employers to notify injured workers of rights to benefits
-requires coverage of household domestics

-Signs legislation that:
-authorizes commutation of PPD
-increases min PPD from $20 to $30, and max TD to $154
-rescues UEF with appropriation, increases sanctions

-Signs legislation that:
-permits free choice of physician from first day
-requires notice of entitlement to WC benefits
-increases minimum TD to $49

-Signs legislation that:
-eliminates 240-week maximum for TTD

-Signs legislation that:
-creates the DIR
-provides attorney’s fees for dependent’s depositions
-enacts the Confidentiality of Medical Information Act

-Signs legislation that:
-increases maximum TD to $175
-provides attorney’s fees from a lien claimant’s recovery
-eliminates offsetting TD against SDI
-DWC sponsored legislation that, among other things, would have
established wage-loss

-Vetoes legislation that would have:
-required appointment of specified labor and employer
representatives to the WCAB and UIAB
-Signs legislation that:
-provides for the appointment of pro-tem WCAB referees

Signs legislation (AB 684) that:
-provides first major benefit increase bill in CAAA’s history,
doubling PPD from $70 to $140 and TD to $224, increasing
S&W penalties and creating power press exception to exclusive
remedy doctrine
-creates and funds 15 new judge teams
-preserves “dual capacity” doctrine
-permits commutation of PPD
-creates first cancer presumption
-memorializes the passing of Eugene Marias, a pioneering
applicants attorney

Other notable achievements during Brown’s governorship include the following:
-Signs the Agricultural Labor Relations Act in 1975
-Signed legislation allowing collective bargaining for teachers
and public employees
-Created the nation’s first Wellness Commission
-Created the California Worksite Education and Training Act
in 1982
-Signed a 1980 law (SB 1874) that requires employers to
provide information to workers on toxic substances
produced or handled in their workplace
-Signed law in 1976 (SB 1051) strengthening California’s equal
pay law

The list is quite impressive.

But Brown’s earlier governorship was not without controversy, however.
In 1980, Brown’s administration supported SB 375, which would have limited attorney involvement in workers’ comp cases and instituted a dispute resolution administrative bureaucracy. In an often quoted story, then-Brown adviser (and current Court of Appeals Justice) Anthony Kline) is said to have uttered that applicant workers’ comp lobbyists were “of no more importance than a flea on a gnat’s ass”.

With help from the Democratic legislative leadership at the time, SB 375 did not prevail. But the struggles over SB 375 and budgetary issues surrounding the WCAB led to bad feelings in the comp community and labor community for some time.

In his last year in office, 1982, labor, insurers, and applicant attorneys and CTLA (the trial lawyers lobby group at the time), pushed through a legislative deal which Brown signed. That deal took much of the edge off earlier feelings surrounding SB 375.

In the decades that followed, Brown had little reason to follow workers’ comp.

But with his resurgent career, we’ll eventually see Brown filling out his record on comp.

Stay tuned.

For those wanting to read more about Tony Kline’s recollection of the Brown years on workers’ comp, here are some quotes from a 1991 oral history interview which you can find here (caveat: in sharing this, I’m not implying that the following represent Brown or Kline’s current views; Kline has since sat on the Court of Appeals and has ruled on many workers’ comp cases, watching the drama of multiple reforms unfold): … h_djvu.txt

In the 1991 interview, Kline noted that:
“The California workers’ compensation system, though it’s a
little-known fact, is the largest workers’ compensation system in
the world. It’s much bigger than the federal system. When Jerry
Brown was governor, there were then, I believe $17 billion
passing-maybe it was $7 billion, but I believe it was $17 billion-
passing through that system, because there were so many workers
covered. But despite the size of the program, both in terms of
the amount of money involved and the size of the bureaucracy,
the sad fact was that California workers were compensated less
than workers in thirty-two other states. The reason for this was
that doctors and lawyers were taking out of this system what
many believed to be an unconscionable amount.

Now, the doctors and the lawyers have very, very effective
lobbies, and although they ordinarily are at cross-purposes in the
legislature, their interests are not conflicting when it comes to
any reform of the workers’ compensation system that would
diminish the economic advantage to those two professions.

In any case, there is no meaningful reform of workers’
compensation, in my view, or of which fm aware, that does not
to some extent limit the amount spent on medical reports and
lawyers’ fees. The reform that Brown supported in 1980–it was
Senate Bill 375 –was supported by a coalition of labor unions,
insurance companies, large employers-the California
Manufacturers Association, for example. Now, that’s an unusual
coalition. Ordinarily you don’t find organized labor on the same
side as insurance companies and large corporations, but you did
on this bill. And yet that coalition, which has some powerful
forces within it, was unable to overcome the enormous resistance
of lawyers and doctors, particularly lawyers.

The lawyers’ group that lobbies on the issue of workers’
compensation is known as the California Applicants Attorneys
Association. Most people in California have no idea what an
applicant’s attorney is, but there’s nobody in the state legislature
who has any doubt. They are very well known and they are very
well financed and they are very professionally represented by
lobbyists in the assembly and in the senate. What they succeeded
in doing was bottling that bill up in a committee to whose
members they make sizable political contributions.

But our real goal was not to hurt doctors and lawyers.
That was not our purpose at all. Our purpose was simply to
benefit injured workers without increasing still further the large
premiums that California employers have to pay. The manner in
which workers’ compensation premiums-costs of supporting the
system-diminished California’s competitive effectiveness in terms
of our national economy, is not as widely known as it should be.
The problem in workers’ compensation is not only that injured
workers are inadequately compensated, but that corporations are
so heavily burdened by insurance premiums. So there is both a
traditional Democratic and traditional Republican community of
interests here, working people and large businesses, and yet those
two unusual partners were unable to overcome the resistance of
lawyers and doctors.

LABERGE: How were you even able to get that coalition together to begin
with-the labor unions and the corporations?

KLINE: I don’t think I can give Jerry Brown or his administration all the
credit for that. They perceived their own self-interest correctly.
It’s no secret, really, that the costs of this system are inordinately
the result of medical and legal costs that can be reduced without
prejudicing the rights of workers and without relieving the
corporations of burdens that they should bear. So it didn’t
require that much of the governor, but the governor did support
it. I think that to his credit, he was willing to take on doctors
and lawyers. I think this is another bill that helped to create the
idea-the false idea, in my view-that Jerry Brown was anti-lawyer
or anti-doctor or anti-professional, or maybe anti-elitist. But he
was not unwilling to challenge vested interests, in this case
doctors and lawyers, if he felt that it made sense, that it was a
useful social policy, and that it was feasible.”

Julius Young

Category: Political developments