California: Everything You Need to Know About AD Decisions

When all else fails “read the instructions.” Sounds like good advice, unless you are attempting to figure out how to obtain and secure a decision from the Administrative Director (AD) of the Department of Industrial Relations (DIR), specifically one dealing with Supplemental Job Displacement Benefits (SJDB) disputes.

I. Importance of the SJDB Voucher

For industrial dates of injury on or after 1/1/2013, Labor Code § 4658.7 provides that injured workers are entitled to a SJDB voucher up to an amount of $6,000, under certain conditions. The SJDB voucher (Form DWC-AD 10133.32) with instructions on how to use the voucher can be found at the following link:

https://www.dir.ca.gov/dwc/FORMS/DWC_AD10133_55_Form.pdf

Obtaining this voucher is important, because 8 Cal. Code Reg. § 17304(a) provides that the voucher may trigger additional funds for the injured worker from the “Return to Work Fund,” currently in the amount of $5,000.

PRACTICE NOTE: For instructions on how to obtain the “Return-to-Work Supplement” of $5,000, refer to 8 Cal. Code Reg. §§ 17300–17310.

If the injured worker’s request for a SJDB voucher is denied, he or she will most certainly want to know how to resolve this dispute. But finding the regulations detailing that process is not so easy.

In the past, a good starting point might be to pull out your Labor Code, flip to SUBCHAPTER 1.9, “Rules of the Court Administrator,” ARTICLE 9, entitled, “Review of Administrative Orders Issued by the AD.” There, in black and white, was all the information (in regulations 8 Cal. Code Reg. §10290 et seq.) that you would need to complete your task.

Problem is, those regulations (8 Cal. Code Reg. § 10290 et seq.) no longer exist. The position of “Court Administrator” has been deleted from the workers’ compensation system. As a result, the regulations of Keven Star, the one and only workers’ compensation court administrator, has been deleted as well. However, remnants of the regulations still exist in other parts of the California Code of Regulations. Still, it’s a bit of a challenge to find them.

II. AD determination re SJDB procedure; 8 Cal. Code Reg. § 10133.54

It is a little-known fact that the regulations provide that the parties should request the AD to resolve their disputes regarding entitlement to Supplemental Job Displacement Benefits (SJDB). A quick look in the Labor Code Index under the topic, “Supplemental Job Displacement Benefits” will refer you to a set of regulations 8 Cal. Code Reg. §§ 10133.31-10133.60 dealing with all aspects of the SJDB benefits.

It is in this Article 7.5 where you will find regulation 8 Cal. Code Reg. § 10133.54, which provides exact instructions for appealing a denial of SJDBs with the AD. In addition, regulation 8 Cal. Code Reg. § 10133.55 provides the parties with a fillable pre-printed form to use, Form DWC-AD 10133.55, “Request for Dispute Resolution before the AD” that can be found at this link:

https://www.dir.ca.gov/dwc/FORMS/DWC_AD10133_55_Form.pdf

Following this regulation, 8 Cal. Code Reg. § 10133.54, parties should be able to complete the correct form, attach all pertinent information, including a proof of service, and then be able to submit the form to the AD, after serving it on all parties. The opposing party then has 20 days to file a response. In the event the AD fails to issue a determination within 60 days, the Request for SJDB shall be deemed denied.

III. How to Appeal the AD’s Determination re SJDBs; 8 Cal. Code Reg. § 10208.11

What happens if a party wishes to appeal an adverse determination from the AD regarding SJDBs? Well, then, you would go back to regulation 8 Cal. Code Reg. § 10208.11 for instructions. That regulation states that within 20 days of the AD’s decision, the “appealing” party must file a Petition Appealing the Decision of the AD setting forth the specific factual and legal basis for the appeal. The regulation also specifies that the “mailbox rule” would add an additional five days to that timeframe, by stating, “except that the time for filing shall be extended in accordance with 8 Cal. Code Reg. § 10507…”

This regulation does not go into as much detail as the Independent Medical Review (IMR) Appeal regulation of 8 Cal. Code Reg. § 10957.1, as far as the how the Petition should be formatted. So, perhaps, the appealing party should copy the format found in the Independent Medical Review (IMR) Regulation, 8 Cal. Code Reg. § 10957.1, and adapt it for use in the SJDB context.

Lastly, remember to:

1. Add a verification, as that is now required on all petitions per WCAB Regulation, 8 Cal. Code Reg. § 10450(e)” and
2. Include a Proof of Service.

IV. Are Parties Required to Exhaust Administrative Remedies?

When dealing with medical treatment disputes, it is clear that an appeal pursuant to 8 Cal. Code Reg. § 10957.1 from an adverse IMR decision of the AD is a party’s only option. Does the same rule hold true for an appeal of an adverse AD decision regarding SJDBs?

Is it necessary to exhaust the administrative remedies of the AD before requesting resolution of the dispute over the SJDB voucher through a Workers’ Compensation Judge (WCJ)?

It is probably the best practice to exhaust administrative remedies before approaching a WCJ for assistance. In the Noteworthy Panel Decision (NPD) of Barcenas v. Ramos Enterprises, 2015 Cal. Wrk. Comp. P.D. LEXIS 91, the WCJ denied applicant’s entitlement to a SJDB voucher since he had been fired from his employment for cause (“threat of violence to another co-worker”). Therefore, he would not have been eligible for an offer of modified work, so it followed that he would also have not qualified for a SJDB voucher in the event no offer of modified work materialized. In dicta, at the conclusion of his decision, the WCJ added:

“Finally, pursuant to 8 CCR §10133.54(b) if there is a dispute regarding the Supplemental Job Displacement Benefit, a party may request the AD to resolve the dispute. Subsection (g) states that either party may appeal the AD's determination by filing ‘a petition together with a declaration of readiness to proceed pursuant to section 10250. . . .This administrative remedy was not pursued and/or exhausted by Applicant.”

However, even in this Barcenas case, the option to first present the dispute to the AD for resolution, before file a Declaration of Readiness to have the matter decided by a WCJ, appears to be advisory, as opposed to mandatory.

V. Example: Dennis v. State of California; Department of Corrections

This above conclusion was also reached in the Noteworthy Panel Decision (NPD) of Dennis v. State of California; Department of Corrections, 2018 Cal. Wrk. Comp. P.D. LEXIS 349, which had the following chronology of facts:

10/29/2013: Applicant injured his wrist while working as an inmate.

5/15/2017: Applicant was offered modified work at the prison, (after his release from prison).

9/11/2017: Parties entered into Stipulations & Award for 31% PD.

9/19/2017: Applicant filed a Petition with the AD requesting a SJDB voucher

12/8/2017: After no response from the AD, (which is deemed a denial of his request by operation of law,) applicant’s request for SJDB voucher was deemed denied per 8 Cal. Code Reg. § 10133.54(f), as discussed above.

12/28/2017: Last day for applicant to file an appeal from AD’s decision per 8 Cal. Code Reg. § 10133.54(g). (NOTE: The regulation does provide for an additional five days for mailing, so arguably, the last day would have been on or about 1/2/2018.)

2/05/2018: Applicant filed a DOR and a “Petition for SJDB Voucher” with WCAB

5/09/2018: Workers’ Compensation Judge (WCJ) issued F&A:

• Applicant’s appeal of the AD decision is untimely
• Mr. Dennis not entitled to SJDB voucher

Mr. Dennis filed a Petition for Reconsideration from the WCJ’s decision arguing that, “Rule 10133.54(g) regarding the timeliness to appeal the decision of the AD is ambiguous and should not bar him from bringing this action before the Workers' Compensation Appeals Board because it violates his due process rights.”

PRACTICE NOTE: Any time a “due process” (i.e., notice and opportunity to be heard) argument can be credibly made on appeal, this will be particularly helpful in catching the attention of the reviewing authorities. As discussed below, it worked extremely well for Mr. Dennis in this case.

The WCAB reviewed Labor Code § 4658.7 dealing with SJDBs and decided that although the AD is permitted to adopt regulations to administer the SJDB, the role of adjudicating the SJDB remains with the WCAB.

With regard to the merits of this particular situation, the WCAB found:

“…while defendant timely sent applicant a Notice offering regular, modified, or alternative work, we note that such offer was not a bona fide job offer because applicant was released from prison and could not return to prison for employment. (§4658.7(b)(1); Jackson v. California Prison Industry Authority (August 2, 2017, ADJ9968628) [2017 Cal. Wrk. Comp. P.D. LEXIS 368.] Therefore, the exception found in section 4658.7(b) which releases the employer from providing the SJDB voucher does not apply.”

Ultimately, the WCAB awarded the applicant his SJDB voucher.

VI. Conclusion

There have been a lot of changes to the laws regarding how workers’ compensation claims are processed in California over the past 10 years. The Department of Industrial Relations has had a very difficult task trying to timely update all of the regulations necessary to effectively implement all of the new laws. At times, it takes a bit of digging through the piles of instructions to figure out WHAT is required and WHEN it is required. Regardless of the difficulty, it is a necessary task to properly represent a party or parties affected by these laws and regulations.

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