With 2020 now behind us (thank Heavens) and 2021 looming before us (I’m afraid to open my eyes), now might be a good time to take a breath, have a sip of coffee, and get back to basics. Over the past few months, I have encountered the issue whether an offer of modified work was valid, and now seems like a good time to revisit the concept.

To recap Workers’ Comp 101, an offer of modified work is an essential tool in the defendant’s toolkit to reduce financial liability. An offer of modified work terminates temporary disability liability and forestalls liability for a 15% increase on permanent disability for those injuries in the 2005 – 2013 window. An offer of modified work also relieves the defendant of liability for a supplemental job displacement voucher. In short, an offer of modified work is the simplest way to significantly reduce claim exposure.

However, too frequently I am seeing offers that do not stand up to judicial scrutiny. An offer by phone call or text may not be sufficient to establish a bona-fide offer of work. Without proper documentation, even the most earnest offer of modified work may not avoid liability.

Make the offer in writing

As a general point from a defense attorney’s perspective, the best way to make an offer of modified work is *always* in writing, with a clear description of the physical duties, hours, and wages being offered. This offer should be mailed to the applicant, copied to the carrier, and placed in the applicant’s personnel file. In the case of Nelson v. SP Plus, 2020 Cal. Wrk. Comp. PD Lexis 166, the employer offered a dispatch position as modified work to the injured worker via text message. However, the text message did not provide any information as to the duties required or whether those duties fell within the workers’ restrictions. At trial, the employer testified that it was the intent to have the applicant come in to see what job could be offered. The WCAB concluded that the employer had not made an offer of modified work, and temporary disability benefits were awarded.

The offer must be bona-fide

The next point is that an offer of modified work must be a bona-fide, good faith offer. In Perry v. Direct TV, 2018 Cal. Wrk. Comp. P.D. LEXIS 191, the employer offered work within the applicant’s restrictions but took away his company vehicle during the period of modified duty. Because the applicant did not have a personal car, the company provided him with a company van to perform his job. However, the company also had a policy precluding the use of company vehicles during periods of light duty, which precluded the applicant from continuing his modified duty. The board held that the offer of modified work was not valid because he was not allowed to continue using the company vehicle for his commute. It should be noted that the bard held this was a decision based on unique circumstances and was not intended to hold that employer must provide a company vehicle for an offer of modified work to be valid. The take-away from this case is that the employer must ensure that the offer of modified work can actually be extended without self-defeating policies.

Termination/resignation does not void the obligation to make the offer

What if an employee is terminated or resigns? Must the employer still make an offer of modified work? The answer, generally, is yes.

City of Seaside v. WCAB (Sanchez) (1991) 56 CCC 598 (writ denied), an injured police officer was the subject of an unrelated investigation regarding misconduct. The applicant resigned in light of adverse findings in the investigation, but then argued that he was entitled to temporary disability benefits because the employer could not offer modified work. The employer argued that the employee’s resignation signaled an implicit rejection of any offer of light work. The WCAB held that a resignation could not be interpreted as a refusal of modified work because the offer was never made. Therefore, a resignation could not be used to terminate temporary disability benefits – an offer of modified work must have been made.

Other cases have held similar findings:

  • Ventura Regional Sanitation District v. WCAB (Deavenport) (2001) 66 CCC 667 (writ denied) (employee resigned in the face of embezzlement charges, but no showing was made that light duty would have been otherwise available).
  • Surita v. Denny’s Restaurant, 2012 Cal. Wrk. Comp. P.D. LEXIS 539 (in a dispute over whether applicant voluntarily resigned, employer was liable for TD when it never made an offer of modified or alternative work).
  • Rodriguez v. County of Monterey, 2018 Cal. Wrk. Comp. P.D. LEXIS 465 (terminated applicant entitled to TD when defendant did not prove modified work was available).
  • Hernandez v. Bokisch, Inc., 2019 Cal. Wrk. Comp. P.D. LEXIS 317 (applicant was entitled to TD because his resignation did not negate defendant’s obligation to make offer of modified work).

Even when an employee is terminated for cause, the employer may still face TD liability unless the employer can establish good cause. A mere allegation or belief of misconduct is not sufficient; the court must determine whether there was actual misconduct and whether that misconduct constituted a refusal to perform modified work (Spiva v. The Baby Connection, 2019 Cal. Wrk. Comp. P.D. LEXIS 381.)

This of course raises the question: What if a terminated employee is made an offer of work, and accepts? Must the employer follow through with the offer? I have not found any cases addressing this unique situation, but one presumes that an employer will not be forced to rehire an employee terminated for cause; the implication is that the ability to offer modified work but for the termination, and the termination is the only barrier to returning to work, is the qualifying factor.

As you are likely aware, recent cases have found that termination due to closures related to the pandemic are not deemed “good cause terminations” and do not eliminate TD liability. The rationale behind these cases appears to be that either the employer cannot establish the stay-at-home order is “good cause” for termination (Corona v. California Walls, Inc, dba Crown Industrial Operators, 2020 Cal. Wrk. Comp. P.D. LEXIS 256, holding that the employer must meet the burden of proving that a temporarily partially disabled employee was terminated for good cause; Ceballos v. TriMark Chefs’ Toys (2020) 85 CCC 955 (panel decision), holding that defendant could have avoided liability for TD by showing that work would have been available but for the applicant’s termination due to his own misconduct).

As strange as it seems, even a legal barrier to returning to work does not absolve the employer from making the offer and may result in the obligation to provide TD or a voucher.

In Salazar v. Kodiak Roofing & Waterproofing, 2020 Cal. Wrk. Comp. P.D. LEXIS 277, the employer was able to prove that it could accommodate the injured worker’s restrictions, and made an offer of return to work, but that the applicant was legally prohibited from working due to his undocumented status. The WCAB held the employer, who had indeed made an offer of modified work, was not responsible for TD benefits.

Voucher exposure

An injured worker is entitled to a supplemental job displacement voucher when they have sustained permanent disability and no offer of regular, alternate, or modified work is made within 60 days of receipt of a report finding of permanent disability. Thus, even if the employer has made an offer of modified work prior to applicant’s MMI date, another, separate offer must be made after the applicant is rendered MMI. In addition, the employer is required to make an offer of regular, modified, or alternative work on a specific form — the notice of offer of regular, modified, or alternative work for injuries occurring on or after Jan. 1, 2013 (form DWC-AD 10133.35). Failure to make an offer on this form will result in voucher liability even if modified, alternate, or regular work is, in fact, available.

For example, an employer may be responsible for the voucher when modified work is available but for reasons unrelated to the injury, the employee is unable to return to work. In Dennis v. State of California—Department of Corrections and Rehabilitation Inmate Claims (2020) 85 CCC 389, 406, an inmate was injured while on work assignment. He was released prior to reaching MMI status. The Department of Corrections argued that the applicant could not accept an offer of return to work because he had been released, making a bona-fide offer of return to work impossible. The court held that it held that an employer’s inability to offer regular, modified, or alternative work does not release an employer from the statutory obligation to provide an SJDB voucher.

Likewise, an employer may not be able to make a bona-fide offer of work when it discovers the injured worker is undocumented. In the old seminal Del Taco v. WCAB (Gutierrez) case, the Court of Appeal held that an undocumented worker is not entitled to vocational rehabilitation benefits when the individual is unable to return to work solely because of immigration status, rather than because of an industrial injury. However, as vocational rehabilitation has been repealed, this case is not exactly on point, and has not yet been revisited in the arena of the voucher. It is possible that an undocumented employee may not be entitled to a voucher if the sole reason he/she cannot return to work is immigration status. Stay tuned for further updates that may address this specific issue.

To sum up, employers often surmise that an offer of modified work is not necessary or can be made informally. As the cases noted above show, the best defense is always to make a written offer, on the required forms if necessary, that outline the physical duties anticipated. Documentation of the employer’s efforts to accommodate an injured worker will assist the attorneys at Mullen & Filippi in defending against unreasonable demands for TD and vouchers and will result in an overall cost reduction in litigated cases. Feel free to contact the attorneys at Mullen & Filippi for any return-to-work related questions -we’re here to help!

Sara W. Angelini, Associate Attorney, San Jose Office January 2021

Leave a Reply

Your email address will not be published. Required fields are marked *