A new bill would redefine the Labor Code’s definition of “signature” to clear up any confusion about parties’ ability to use electronic signatures on settlement documents.

John P. Kamin

After the pandemic sent many work comp practitioners to remote work, the Workers' Compensation Appeals Panel suspended rules and regulations impacting signature requirements. This led many applicants and their attorneys to use electronic signatures.

After the COVID-19 state of emergency ended in February 2023, the board issued an en banc decision on March 22, 2023, that rescinded the suspensions and reinstated the rules and regulations governing signatures. Many judges began requiring applicants to use wet signatures after that decision.

Assembly Bill 2337 would change two Labor Code sections to clarify that parties can use electronic signatures. The first change would apply to LC 17 to redefine “signature” to include electronic signatures. The second change would apply to LC 5003, a statute stating that a compromise and release must be attested to by two disinterested witnesses or signed by a notary public. The bill would allow an electronic signature to be used when there is an electronic signature, an electronic record documenting who signed which papers at which times, etc., and a notary’s electronic signature.

The bill is at its beginning stages and needs approval from the Assembly, Senate and eventually Gov. Gavin Newsom before becoming law. As it is very early in the legislative session, this bill has been referred to the Assembly Judiciary Committee and the Assembly Insurance Committee. It currently is not scheduled for any hearings, but it is very possible that this bill will wind up on those committees’ agendas in the next two or three months.

Analysis

The use of electronic signatures has its pros and cons.

If an applicant has to sign something by hand, it arguably ensures that he exists because someone had to put that pen to paper. Otherwise, an unethical actor or actors could potentially conspire to have a nonexistent applicant sign a compromise and release in an attempt to commit fraud and get settlement money.

While this extreme example is a rarity, it could happen and possibly does happen from time to time. One has to wonder, though: If unethical, fraudulent people were willing to execute such a scheme, wouldn’t they probably be willing to fake a wet signature too? Probably so.

Conversely, many attorneys have pointed out that if one can buy a car or sign a seven-figure mortgage with an electronic signature, why can’t an applicant electronically sign a compromise and release?

It’s also worth noting that other statutes, rules and regulations — which the WCAB does not necessarily have to abide by because they are from other areas of law — allow for e-signatures. These include Government Code Section 16.5, California Rules of Court Rule 2.257 and Civil Code Section 1633.7(d).

Conclusion

It is foreseeable that lawmakers could approve this bill clarifying the signature requirements in workers’ compensation law. Of course, committee hearings will help inform us on the success of this bill and any potential amendments. We will continue to monitor this bill and report back on it, so stay tuned for updates.

John P. Kamin is a workers’ compensation defense attorney and partner at Bradford & Barthel’s Woodland Hills location. He is WorkCompCentral's former legal editor. This entry from Bradford & Barthel's blog appears with permission.