BulletinPumpkin Spice and Everything Nice

September 25, 20190
Wherever you stand on the pumpkin spice debate, all the trappings of the fall season have arrived. For this author’s part, it’s nice having a shorthand for that unique combination of cinnamon, nutmeg, ginger, cloves, and allspice. Requesting a cinnamon, nutmeg, ginger, cloves, and allspice latte, however, would be a mouthful (a delicious, delicious, mouthful). In September, of course, we also celebrate Labor Day. Here’s to hoping that future generations of employees and employers, like past generations, continue to seek a humane balance between health and productivity. Now pass the pumpkin flavored everything. 


While attorneys and claims professionals may report otherwise, the Appeals Board has indicated that Saturday is not a working day for the purposes of determining under Labor Code 4610(i)(1) whether a Utilization Review decision timely issued within five working days of the receipt of a request for authorization for medical treatment. Using every tool in the statutory interpretation toolkit, the Appeals Board indicated that Saturday is widely not considered a working day as reflected in statutory and regulatory language, case law, and dictionaries. 
Specifically the Appeals Board found that while Saturday is considered a business day under Civil Code section 9, Labor Code 4610 does not incorporate that definition in defining the phrase “working day,” and the Board distinguished between business days and working days in the statutory scheme, augmenting and reconciling the analysis in the earlier Gomez decision. The Appeals Board provided a close reading of Civil Code section 7 and 7.1, Government Code 6700 and 6702, and Code of Civil Procedure 12a. Section 12a provides in pertinent part that where the “last day for the performance of any act provided or required by law to be performed within a specified period of time is a holiday, then that period is hereby extended to and including the next day that is not a holiday. For the purposes of this section, ‘holiday’ means all day on Saturday…” The Appeals Board therefore held that the “standard, modern definition of the phrase ‘working day,’ is a day other than a Saturday, a Sunday, or a state holiday…”
As a reminder, a significant panel decision is not binding precedent but is intended to inform the body of binding appellate court and en banc decisions. To be considered significant, the issue must be of general interest to the workers’ compensation community, generally involves novel arguments or facts not addressed by existing case law, and all Appeals Board members must have reviewed the decision and agreed to its significance.
In the recent case of Dennis Gray v. Pathway Group, Inc., etc. et al. (2019), a panel of Workers’ Compensation Appeals Board Commissioners indicated that the Dynamex case did not over-rule the 30-year-old Borello case, or indicate any intent to modify the factors applied in workers’ compensation claims when a trier of fact is deciding whether an employment relationship exists. Borello set forth multiple factors for determining whether an individual is an independent contractor or an employee. Those factors include: 1) whether the entity to whom service is provided controls the manner and means of the work; 2) whether the worker is engaged in an occupation distinct from the entity receiving the service; 3) whether the entity can discharge the worker at will; 4) whether the job is typically performed by a specialist without supervision; 5) the time necessary to perform the service; 6) the skill necessary to perform the service; 7) the method of payment; 8) whether the tools necessary were provided by the worker or the entity receiving the service; 9) whether the work is part of the entity’s regular business; and 10) the belief of the parties as to the employment relationship. Dynamex, on the other hand, in the specific context of wage orders not directly related to workers’ compensation, set forth a simpler “ABC” test for determining whether an individual is an independent contractor or an employee. That test sets forth that a worker is an employee if their job forms part of the company’s core business, if the company directs the manner in which the work is done, and if the worker has not established an independent business providing such work. 
In Gray, the applicant submitted a job application to Pathway Group, Inc., who then assigned him to work for Commercial Cooling, where he worked as an assembler. Commercial Cooling provided the applicant with his schedule, his job duties, and the tools necessary to complete his work. The applicant’s check was paid through Solvis Staffing Services. The question at trial was whether Commercial Cooling, Pathway, and Solvis were jointly liable as joint employers of the applicant. The Workers’ Compensation Judge found a general-special relationship between Pathway and Commercial Cooling, where Pathway was the general and Commercial Cooling was the special employer. The Judge found that Solvis did not have an employment relationship with the applicant. On Petition for Reconsideration, Commercial Cooling argued it was not jointly and severally liable, and Pathway argued that Solvis also employed the applicant. 
By a unanimous panel decision, the Appeals Board reversed the finding of joint and several liability between Commercial Cooling and Pathway and rejected the Judge’s reliance on the ABC test set forth in the Dynamex decision. The panel indicated that the factors set forth in Borello remain the standard for determining whether an employment or independent contractor relationship exists. That said, the panel disagreed that the independent contractor or employer framework was relevant to the case and found that the question of whether all of the entities were jointly and severally liable as employers could be answered using the established analytical framework for addressing general-special employment relationships set forth in cases like Kowalski v. Shell Oil Co. (1979). The Appeals Board’s decision denotes that a general-special issue exists where there is a clear employment relationship but a question as to the identity of the employer, whereas the independent contractor issue arises where there is a question as to whether the worker has an employment relationship with any entity.  
What this ultimately means is that rumors of Borello’s death have been greatly exaggerated. The test for whether an employment relationship exists remains multivariable and complex. It should be noted that AB 5, which was recently signed by Governor Gavin Newsom, codifies the Dynamex test in some contexts, and was passed to reduce worker misclassification and perceived employer abuse of the independent contractor classification. The bill, however, does not apply to all professions, does not provide an “across the board” test, and will likely be the subject of ongoing litigation in workers’ compensation.
The Case Briefs section of our website is a great resource as to case law and statutory interpretation in workers’ compensation and provides practice pointers, insights into recent cases, and updates on changes in the law.  This month, Associate Attorney Cameron Ross of our Stockton office, provides a primer on disputes over service and discusses just what constitutes a valid proof of service from an evidentiary standpoint.  It’s a good read for anyone who has ever been faced with a penalty petition arising out of a letter or demand they never received. The article along with others can be viewed by clicking on the following link:  https://www.mulfil.com/case-briefs/

This Bulletin was written by Jim Cotter, Associate Partner in our Oakland office.  A copy of this Bulletin and the most current twelve months is available on our website at www.mulfil.com/bulletins.

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