California Labor Code Section 132a—When Claims of Discrimination Are Brought Before the Workers’ Compensation Appeals Board

Quick Hits

• California prohibits employers from discriminating against workers who suffer workplace injuries or who have filed or made known their intention to file a claim for compensation under an employer’s workers’ compensation insurance policy.
• Discrimination can include discharging, threatening to discharge, or retaliating against a worker in any manner for filing or making known an intention to file a workers’ compensation claim.
• Penalties for discriminating against a worker for seeking workers’ compensation benefits can include a criminal misdemeanor, civil penalties of up to $10,000, attorneys’ fees or costs, front pay and back pay awards, and reinstatement.
• Most workers’ compensation insurance policies in California will not provide coverage or legal representation for an employer that is facing a claim of discrimination by a worker pursuant to Labor Code section 132a.

What Constitutes Discrimination?

As specifically stated in Labor Code section 132a, discrimination can include discharging, threatening to discharge, or discriminating against a worker “in any manner” because the worker filed or made known an intention to file for benefits under the employer’s workers’ compensation insurance program. The phrase “in any manner” is exceedingly broad and can cover a wide range of adverse actions, including retaliation, reducing hours, reducing pay, reducing or eliminating benefits, treating a worker differently from other employees, and/or failing to accommodate a worker’s disability, among other actions.

What Liability Does an Employer Face?

If a worker proves to the presiding workers’ compensation administrative law judge that he or she suffered discrimination because he or she suffered a workplace injury and filed or intended to file a workers’ compensation claim, a range of potential legal liability can accrue against the employer, including:

• a misdemeanor, punishable by imprisonment or fine;
• civil penalties up to $10,000;
• attorneys’ costs and expenses of up to $250;
• an award of front pay or back pay; and/or
• full reinstatement of the worker.

In addition, the Supreme Court of California ruled in City of Moorpark v. Superior Court that Labor Code section 132a “does not provide an exclusive remedy precluding FEHA and common law wrongful discharge claims.” This means that in addition to pursuing a claim of discrimination through the Workers’ Compensation Appeals Board, a worker may also choose to file a contemporaneous lawsuit in a civil court and seek damages available under the Fair Employment and Housing Act (FEHA). In the event the worker chooses to litigate his or her claims in civil court, potential damages may also include the worker’s attorneys’ fees, punitive damages, and full compensatory damages, including emotional distress damages.

Defending Against a Labor Code Section 132a Claim

Although Labor Code section 132a specifically prohibits an employer from discriminating against a worker for filing a workers’ compensation claim, the statute does not prohibit an employer from making legitimate business decisions with regard to managing its workforce. Thus, if the employer can show a nondiscriminatory reason for the adverse action, liability for discrimination is unlikely to accrue. In addition, employers can mitigate the likelihood of receiving a claim under Labor Code section 132a by engaging in a reasonable dialogue with injured workers, making appropriate accommodations, and consulting legal counsel prior to discharging a worker who has made a claim under the employer’s workers’ compensation insurance policy.

Conclusion

Employers will want to fully assess any action that could potentially be taken to be “adverse” when making an employment decision about a worker who has recently suffered a workplace injury, filed a workers’ compensation claim, or who has an ongoing workers’ compensation claim. If a Labor Code 132a claim is made, an employer will be called upon to investigate the merits of the claim in order to lay the foundation for a strong legal defense.

Ogletree Deakins will continue to monitor developments and will provide updates on the California blog as additional information becomes available.

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