In Gerald Zelnik v. Office of Statewide Health Planning,[1] the Workers’ Compensation Appeals Board confirmed that defendants have a right to assert a good faith personnel action defense against a psyche injury claim, even if not timely alleged in the case.
In this matter, the parties stipulated that while employed on August 31, 2018, as a regional compliance officer by the defendant, the applicant sustained an injury arising out of and in the course of employment to his psyche. However, the defendant failed to timely deny the injury claim. On September 4, 2018, a claim form was submitted to the defendant. The defendant twice denied the claim after more than 90 days had elapsed, once on December 13, 2018, and again on January 2, 2019.
After the trial, the judge issued a Findings and Award concluding that the defendant failed to reject liability for applicant’s psyche injury claim within 90 days of receiving the claim form. Thus, the psyche injury was presumed compensable under Labor Code (LC) section 5402(b). The Workers’ Compensation judge also found that LC§ 5402(b) barred Defendant from asserting the LC§ 3208.3(h) good faith personnel action defense. Based on this finding, the judge ruled in favor of the applicant, finding a compensable injury.
The defendant claimed that the judge erred in finding that Section 5402(b) barred the defendant from asserting a good faith personnel action defense against the applicant’s psyche claim. The Appeals Board agreed with the defendant, rescinding the Findings and Award, and returning the matter to the trial level so the defendant could litigate the good faith personnel action defense.
The Appeals Board held that precedent establishes that LC§ 5402(b) does not preclude a defendant from asserting a good faith personnel defense to bar compensation for a psyche claim. In the case of Khachatrian v. State Attorney General’s Office,[2] the Appeals Board held that LC§ 5402(b) does not preclude a defendant from asserting a good faith personnel action defense to bar compensation for a psyche injury. Accordingly, the Appeals Board confirmed that the LC§ 5402(b) presumption of compensability does not bar evidence of a good faith personnel action defense. The law clearly establishes that while a psychiatric injury is presumed compensable under LC§ 5402(b), a defendant is not precluded from asserting and presenting evidence of the good faith personnel action defense, regardless of when the evidence was obtainable.
The moral of this story is to always keep fighting to prove an affirmative defense and challenge any presumptions that may exist in a case.
[1] 2023 Cal. Wrk. Comp. P.D. LEXIS 259; [2] 2019 Cal.Wrk. Comp. P.D. LEXIS 37
