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Wednesday, May 15, 2019

Unsuccessful Comp Defense Barred Same Defense in FEHA Claim

  • State: California
  • Topic: WEST
  • - Popular with: Legal
  • -  6 shares
A California appellate court ruled that an employer could not present evidence of its nondiscriminat…

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James Witkop May 15, 2019 a 2:47 pm PDT

This is an issue that too few understand in WC cases. Employers need to select their insurers carefully and, ideally, demand the ability to designate their own defense counsel. An insurer that designates panel counsel based on absurd factors like which firm will accept the lowest rates exposes their insureds to issues like these.

Randy Bugg May 15, 2019 a 3:05 pm PDT

Conversely, insurers need to select their employers more carefully.

David Hornback May 22, 2019 a 6:05 pm PDT

@James Witkop am I understanding that it'd be your contention that due to likely less than proper handling by panel/in-house council on the termination for cause/as a bonafide GFPA, due to losing on that issue at the WCAB level (Which seems to happen MOST of the time btw) that this then unduly exposed the employer to a valid defense on the FEHA matter?

Bill Armstrong May 15, 2019 a 5:23 pm PDT

Interim is not shown on the SIP list of approved self-insureds. If not, and they are insured, this opinion does not address numerous issues which would be involved on an estoppel approach, including the fact that an insured employer is dismissed per operation of law from the WC proceedings under L.C 3755 and the Court decision in Canton Poultry. If the employer was not a party to the WCAB action and it proceeded only against the carrier, one questions how estoppel could be applied.

Randy Bugg May 15, 2019 a 3:05 pm PDT

Conversely, insurers need to select their employers more carefully.

David Hornback May 22, 2019 a 6:05 pm PDT

@James Witkop am I understanding that it'd be your contention that due to likely less than proper handling by panel/in-house council on the termination for cause/as a bonafide GFPA, due to losing on that issue at the WCAB level (Which seems to happen MOST of the time btw) that this then unduly exposed the employer to a valid defense on the FEHA matter?

James Witkop May 16, 2019 a 2:05 am PDT

Collateral estoppel applies to parties and their privies. As the California Supreme Court stated: "The determinations of the commission, like those of the superior court, are res judicata in all subsequent proceedings, including court actions, between the same parties or those privy to them." Scott v. IAC (1956) 46 Cal.2d 76. Insureds and insurers are in privy and the actions of one can legally bind the other.

Randy Bugg May 15, 2019 a 3:05 pm PDT

Conversely, insurers need to select their employers more carefully.

David Hornback May 22, 2019 a 6:05 pm PDT

@James Witkop am I understanding that it'd be your contention that due to likely less than proper handling by panel/in-house council on the termination for cause/as a bonafide GFPA, due to losing on that issue at the WCAB level (Which seems to happen MOST of the time btw) that this then unduly exposed the employer to a valid defense on the FEHA matter?

Bill Armstrong May 16, 2019 a 7:25 pm PDT

Canton Poultry stands for the proposition that the attorney for the carrier represents only the carrier, with no duty to the employer (absent something factually unique.) The Scott Court noted 3755 presents unique issues. One of those is who would be parties to be bound by estoppel principals. I guess we have very different views here in first dollar insured situations, which is fine. I would not guide a client to believe they are privy to the actions of a carrier in defending a WC matter such that the employer is estopped in other actions.

Randy Bugg May 15, 2019 a 3:05 pm PDT

Conversely, insurers need to select their employers more carefully.

David Hornback May 22, 2019 a 6:05 pm PDT

@James Witkop am I understanding that it'd be your contention that due to likely less than proper handling by panel/in-house council on the termination for cause/as a bonafide GFPA, due to losing on that issue at the WCAB level (Which seems to happen MOST of the time btw) that this then unduly exposed the employer to a valid defense on the FEHA matter?

James Witkop May 17, 2019 a 2:55 pm PDT

I would not say we disagree. You asked for an opinion as to how the Court reached the decision it did and I provided one. Maybe the defendant in the civil case conceded privity. Maybe the Court found privity. The decision could not be less clear. Either way, collateral estoppel is something that insurers often don't consider. My point simply was an employer needs to be aware and protect itself.

Randy Bugg May 15, 2019 a 3:05 pm PDT

Conversely, insurers need to select their employers more carefully.

David Hornback May 22, 2019 a 6:05 pm PDT

@James Witkop am I understanding that it'd be your contention that due to likely less than proper handling by panel/in-house council on the termination for cause/as a bonafide GFPA, due to losing on that issue at the WCAB level (Which seems to happen MOST of the time btw) that this then unduly exposed the employer to a valid defense on the FEHA matter?

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