California: Labor Code Section 4662 and Vocational Experts

Labor Code Section 4662 was modified by the legislature in AB 1847 in 2014. Contrary to popular belief, it was not amended in SB 863. The older version of Section 4662, adopted in 2007, created the conclusive presumption of permanent total disability as follows:

(Publisher’s Note: Citations link to lexis.com; bracketed cites to Lexis Advance.)

“Any of the following permanent disabilities shall be conclusively presumed to be total in character:
(a) Loss of both eyes or the sight thereof
(b) Loss of both hands or the use thereof
(c) An injury resulting in a practically total paralysis
(d) An injury to the brain resulting in incurable mental incapacity or insanity.
In all other cases, permanent total disability shall be determined in accordance with the fact.” [2007 version]

The 2014 current version of Labor Code Section 4662 [LC 4662] reads as follows:

“(a) Any of the following permanent disabilities shall be conclusively presumed to be total in character:
1. Loss of both eyes or the sight thereof
2. Loss of both hands or the use thereof
3. An injury resulting in a practically total paralysis
4. An injury to the brain resulting in incurable mental incapacity or insanity.
(b) In all other cases, permanent total disability shall be determined in accordance with the fact.” [2014 version]

The intended difference between the two versions of Labor Code Section 4662 is that cases that rely on “in accordance with the fact” are not entitled to a conclusive presumption of permanent total disability and apportionment under Labor Code Section 4663 [LC 4663] may apply.

The first question presented in this article is whether or not in a case that falls under the current version of Labor Code Section 4662 for permanent total disability “based on the fact,” counsel is required to produce vocational rehabilitation evidence that the Applicant is or is not feasible for vocational rehabilitation or if permanent total disability can be proven without vocational evidence. The second issue presented in this article is to what extent, if any, are vocational rehabilitation experts required to take into consideration apportionment that is determined by a medical doctor in these cases? What qualifications should a vocational expert have in these cases and what issues should be addressed in vocational rehabilitation reports? How has the role of vocational experts changed in light of the Court of Appeals decision in Contra Costa County v. Workers’ Comp. Appeals Bd. (Dahl) [(2015) 240 Cal. App. 4th 746, 193 Cal. Rptr. 3d 7, 80 Cal. Comp. Cases 1119].

Is Vocational Rehabilitation Evidence Necessary in a Labor Code Section 4662 “Based on the Fact” Case?

The short answer is “no” if and only if the evaluating physician (an AME or PQME) opine with reasonable medical probability that the Applicant’s medical condition alone justifies a finding of permanent total disability, inability to compete in the open labor market, or total loss of future earning capacity, all of which mean the same thing [see Ogilvie v. Workers’ Comp. Appeals Bd. (2011) 197 Cal. App. 4th 1262, 1274-1275, 129 Cal. Rptr. 3d 704, 76 Cal. Comp. Cases 624 [76 CCC 624]]. The physician’s medical conclusions must constitute substantial medical evidence on the question of the cause of permanent total disability due to the medical condition(s) alone.

In addition, the physician must determine whether or not there is any apportionment of permanent disability pursuant to Labor Code Section 4663. It is clear from a reading of the current version of Labor Code Section 4662(b) that any case in which it is claimed that the Applicant is permanently totally disabled “based on the fact” includes the requirement that the physician address apportionment under Labor Code Section 4663. This is true even though injuries resulting in permanent total disability under Labor Code Section 4662(a) conclusive presumptions are not subject to apportionment.

For injuries occurring on or before 2013, Labor Code Section 4660 [LC 4660] defined permanent disability in part as “diminished earning capacity” to be determined by RAND studies. For injuries occurring on or after 1/1/13, in Labor Code Section 4660.1 [LC 4660.1], the definition of permanent disability was eliminated and the 1.4 “adjustment factor” replaced the eight DFEC rankings. The legislature dropped the definition of permanent disability as “diminished future earning capacity” from the Labor Code. However, the instructions for the 2005 Permanent Disability Rating Schedule (2005 PDRS) indicate on pages 1-2 and 1-3 that a permanent disability rating can range from 0% to 100% and states: “Permanent total disability represents a level of disability at which an employee has sustained a total loss of earning capacity. Some impairments are conclusively presumed to be totally disabling. Labor Code Section 4662.” Despite the elimination of the Diminished Future Earning Capacity (DFEC) eight rankings for injuries occurring on or after 1/1/13, the PDRS currently in effect still defines permanent total disability as a total loss of earning capacity.

Case law that has been developed under the 2014 revised version of Labor Code Section 4662 “based on the fact” supports the conclusion that a physician can find that an injured worker has a total loss of earning capacity based on the medical conditions alone, without the need for vocational expert opinion. In G4S Secure Solutions, Inc. v. Workers’ Comp. Appeals Bd. (Simone) [(2015) 80 Cal. Comp. Cases 823 [80 CCC 823] (writ denied) (affirming Simone v. G4S Secure Solutions (USA) Inc. (2015) 2015 Cal. Wrk. Comp. P.D. LEXIS 449 [2015 Cal. Wrk. Comp. P.D. LEXIS 449] (Appeals Board noteworthy panel decision)], a WCAB panel upheld a WCJ’s award of permanent total disability under Labor Code Section 4662(b) “based on the fact” wherein that finding was based solely on the medical evidence from an AME in orthopedic surgery. The date of injury in this case was in March 2008 but the trial occurred after enactment of AB 1847 in 2014 that revised Labor Code Section 4662.

In Simone, the Applicant was an armed security guard, employed for five years, who in March 2008 stepped into a trench causing her hip and lumbar spinal injuries. She had a total hip replacement surgery in 2009 that failed due to complications from cellulitis, and a lumbar spinal laminectomy, decompression, and fusion in July 2011 that also failed and resulted in a chronic pain syndrome. She has an unstable gait, uses a walker at home and uses a wheelchair while in public. Based on the totality of her orthopedic residuals, the AME opined that she cannot compete in the open labor market. It should be noted that the AME also rated the Applicant’s WPI based on the AMA Guides, which ratings were not included in the published opinion. However, the AME testified in deposition that based solely on the hip and lumbar spine conditions, he opined that the Applicant is permanently and totally disabled and unable to compete in the open labor market. The WCAB panel upheld the WCJ’s finding of 100% permanent total disability with no apportionment.

See also Oakland Raiders v. Workers’ Comp. Appeals Bd. (Gilbert) [(2012) 77 Cal. Comp. Cases 457 [77 CCC 457] (writ denied)], County of Los Angeles v. Workers’ Comp. Appeals Bd. (LeCornu) [(2009) 74 Cal. Comp Cases 645 [74 CCC 645] (writ denied)], and Barrett Business Services, Inc. v. Workers’ Comp. Appeals Bd. (Gallagher) [(2013) 78 Cal. Comp. Cases 1318 [78 CCC 1318] (writ denied)]. The Gallagher case is a hybrid of a Labor Code Section 4662(b) “based on the fact” case and a rebuttal of the DFEC under Ogilvie because an AME opined that the strict WPI rating of 35% was not accurate, his impairment rating was somewhere between 39% WPI and 81% WPI, and his three failed back surgeries and medication created a synergistic effect on his ability to compete in the open labor market plus a vocational expert opined that the Applicant was not amenable for retraining and 100% totally disabled. In this case, the AME reviewed the vocational expert’s report and vice versa.

The problem with this case, and others cited in it, is that the jury is out on whether under the 2014 version of Labor Code Section 4662, the Applicant needs vocational rehabilitation evidence that the Applicant is not feasible for retraining even though an evaluating physician opines that the Applicant’s medical condition alone causes permanent total disability “based on the fact” and the date of injury is on or after 1/1/15. AB 1847 was a spot bill in which the legislature amended a host of existing laws in various statutes outside and within the Labor Code and Labor Code Section 4662 was one change among many in other statutes that have nothing to do with workers’ compensation law. AB 1847 was not an urgency act but went into effect on January 1, 2015, since the bill was signed into law by the Governor on July 28, 2014.

The cases cited above all invo

lve dates of injuries that pre-date January 1, 2015, the date the revised Labor Code Section 4662(b) went into effect. If Labor Code Section 4662(b) applies retroactively to cases pending as of 1/1/15, then the case law cited above is still good law. It is likely that based on the PDRS definition of permanent total disability, a vocational expert’s opinion about vocational rehabilitation feasibility is not necessary when the injured worker is deemed totally disabled by a physician strictly for medical reasons.

Even if the revised version of Labor Code Section 4662(b) applies only for injuries occurring on or after 1/1/15, the case law cited above probably still applies because the AME’s conclusions are consistent with the 2005 PDRS definition of permanent total disability and the current version of Labor Code Section 4662(b). The only additional element is that the evaluating physician who opines that the Applicant has a total loss of future earning capacity or who cannot compete in the open labor market has to determine if there is any apportionment under Labor Code Section 4663 since cases under Labor Code Section 4662(b) are not entitled to the presumption of total disability as they are under Labor Code Section 4662(a).

Medical determinations of permanent total disability without vocational expert evidence are not without precedence in other disability determination settings. While proving permanent total disability in a workers’ compensation claim, you are in a parallel universe when proving that a claimant is totally disabled and entitled to social security disability benefits. In social security disability cases, a medical doctor can and will opine that a claimant for Title II or Title XVI disability benefits “meets the listings” that results in a conclusive presumption that the claimant is unable to engage in any kind of “substantial gainful activities”, which means, in essence, that the person cannot compete in the open labor market due to medically determinable physical and/or mental impairments [see, e.g., Appendix 1 to Subpart P of 20 C.F.R. Ch. III, Part 404, 20 C.F.R. §§ 404.1571-404.1576 [20 CFR 404.1571-404.1576] of the Social Security Act]. If a person “meets the listings”, no vocational rehabilitation evidence is needed, and the person then fully qualifies for social security disability benefits. The Applicant in the Simone case cited above, would meet the listings under Section 1.02 of Subpart P of the Social Security Act [see, e.g., Appendix 1 to Subpart P of 20 C.F.R. Ch. III, Part 404, section 1.02 for lumbar spine or joint dysfunctions].

To What Extent, If Any, Are Vocational Experts Required to Take Into Consideration Apportionment?

A separate question arises as to whether or not there is a difference between a case that Applicant’s counsel contends falls under Labor Code Section 4662(b) with permanent total disability “based on the fact” as opposed to a case that is prosecuted under LeBoeuf v. Workers’ Comp. Appeals Bd. [(1983) 34 Cal.3d 234, 666 P.2d 989, 193 Cal. Rptr. 547, 48 Cal. Comp. Cases 587 [48 CCC 587]], which is also referred to as an “Ogilvie Method 3 rebuttal” [see Ogilvie v. Workers’ Comp. Appeals Bd. (2011) 197 Cal. App. 4th 1262, 1274-1275, 129 Cal. Rptr. 3d 704, 76 Cal. Comp. Cases 624 [76 CCC 624]; Contra Costa County v. Workers’ Comp. Appeals Bd. (Dahl) (2015) 240 Cal. App. 4th 746, 193 Cal. Rptr. 3d 7, 80 Cal. Comp. Cases 1119 [80 CCC 1119]].

A case prosecuted under Labor Code Section 4662 does not involve WPI ratings under the AMA Guides at all. As indicated above, if a doctor opines that an injured worker’s industrially related medical condition(s) result in permanent total disability, inability to compete in the open labor market, or results in a total loss of earning capacity with no apportionment then a 100% un-apportioned award can be issued by the WCAB without the need for vocational evidence.

In contrast, the LeBoeuf/Ogilvie/Dahl cases refer to rebuttal by a vocational expert of the entire permanent disability rating string including a challenge of the DFEC adjustment factor (or perhaps the 1.4 adjustment factor for injuries occurring on or after 1/1/13). The hallmark of the current interpretation of the Dahl and LeBoeuf cases is that in order to rebut a rating string, there must be vocational evidence that the Applicant is not amenable to vocational retraining due to his or her industrial injuries. A LeBoeuf rebuttal may be used to bring a permanent disability rating string that is under 100% to 100% permanent disability, under the right circumstances. A LeBoeuf rebuttal has been affirmed in Contra Costa County v. Workers’ Comp. Appeals Bd. (Dahl) [(2015) 240 Cal. App. 4th 746, 193 Cal. Rptr. 3d 7, 80 Cal. Comp. Cases 1119], in which the Court of Appeal indicated that in such a rebuttal, the Applicant must demonstrate with a preponderance of vocational evidence that the Applicant is not amenable for rehabilitation before a successful rebuttal of a rating string can be accomplished.

If counsel chooses to hire a vocational expert in an Ogilvie Method 3 rebuttal case (that incorporates LeBoeuf), a vocational expert must address any evaluating physician’s conclusions about apportionment of disability under Labor Code Section 4663. If a physician opines there is apportionment in a Labor Code Section 4662(b) “based on the fact” case, counsel should also hire a vocational rehabilitation expert to opine whether the new injury alone would have resulted in total loss of earning capacity regardless of the apportionment to a prior injury or other factor. His or her failure to do so makes his or her conclusions not substantial expert evidence. In the published case of Acme Steel v. Workers’ Comp. Appeals Bd. (Borman) [(2013) 218 Cal. App. 4th 1137, 160 Cal. Rptr. 3d 712, 78 Cal. Comp. Cases 751 [78 CCC 751]], the Court of Appeal held that the WCAB must include evidence that considers apportionment of disability under Labor Code Section 4663 when a vocational expert opines that the Applicant is unable to compete in the open labor market. So in any case in which a vocational expert is rebutting a permanent disability rating string, he or she must consider whether or not apportionment in the medical evidence affects his or her conclusions including how and why it does.

In Borman, the Applicant had sustained a prior industrial injury that resulted in a 20% permanent disability award for hearing loss. He had a subsequent injury in which he suffered a total loss of hearing with 100% permanent and total disability. The AME determined that 80% of the total disability was due to the new injury and 20% was due to the old injury. A vocational expert opined that despite the old injury, the new injury resulted in the Applicant having a total loss of future earning capacity and was 100% disabled.

The vocational expert did not address the fact that the evaluating physician had apportioned 20% of the permanent disability to the prior injury. Hypothetically a vocational expert could have written in his or her report the Applicant has a total loss of future earning capacity that was caused solely by his new injury and the old injury did not affect his ability to work, especially since he did in fact continue to work for the same employer after the first injury.

The take-away in Borman is that if you use a vocational expert, you must have the expert review all of the medical evidence in the case and comment upon any medical determination of apportionment under Labor Code Section 4663 and how that apportionment affects the vocational expert’s opinion concerning how, when, and why the injured worker is not amenable to vocational rehabilitation and how the medical apportionment to a prior award or non-industrial factors affect his or her conclusions.

What Qualifications Should a Vocational Expert Have in These Cases and What Issues Should Be Addressed in Vocational Rehabilitation Reports?

Many attorneys who practice workers’ compensation law also practice before the Office of Disability Adjudication and Review (ODAR) in social security disability cases. In fact, social security administrative law judges insist on reviewing the medical-legal reports that are generated in a workers’ compensation case that leads to a claim for Title II SSDI or Title XVI SSI disability benefits.

Vocational rehabilitation experts routinely testify live in social security disability cases, as do medical doctors. In these cases, vocational experts have a sequential step analysis that is driven by the administrative law judge that is consistent with determination of one’s eligibility for benefits [see Appendix 1 to Subpart P of 20 C.F.R. Ch. III, Part 404 of the Social Security Act, 20 C.F.R. § 404.1520 [20 CFR 404.1520]].

Vocational rehabilitation experts who routinely testify before the administrative law judges at the ODAR offices are the most qualified vocational experts to testify to challenge a standard permanent disability rating pursuant to a LeBoeuf/Ogilvie/Dahl rebuttal. The old-school vocational rehabilitation specialists who were used in our vocational rehabilitation cases prior to 2009 are not generally as qualified as those rehabilitation experts who have gained experience in both the workers’ compensation and social security disability communities. In rebutting a rating string under Leboeuf/Ogilvie/Dahl, a vocational rehabilitation specialist has many issues to discuss in his or her report before even getting to EDD data and doing a comparison analysis of same or similarly situated employees to the injured worker. However, any vocational expert must first establish that the Applicant is not amenable to vocational retraining and why.

A vocational expert’s evidence to rebut a standard permanent disability rating follows under the following steps and involves a combination of factors that are relevant in a social security disability case and in a workers’ compensation case:

•   The claimant’s vocational history (past relevant work for the 15 year period prior to the onset of disability, which in our context is the last date the Applicant worked for the defendant employer).
•   The past relevant work history includes a description of the level of arduousness of the physical duties of the jobs, the level of skill needed to become proficient for each job (called a Specific Vocational Profile), the U.S. Department of Labor Dictionary of Occupational Trades (DOT) codes for each job, and whether the claimant performed the job as described in the DOT or not [see 20 C.F.R. §§ 404.1562-404.1569a [20 CFR 404.1562-404.1569a]].
•   Whether or not the claimant can perform his or her past relevant work based on a set of hypotheticals that reflect the claimant’s medically determined physical and/or mental impairments. This information is based on the conclusions of a treating or evaluating physician and takes into account work restrictions and WPI ratings.
•   Whether the claimant has any transferable skills [see 20 C.F.R. § 404.1568(d)(1)-(d)(4) [20 CFR 404.1568]]. Transferable skills are skills that can be used in other jobs when the skilled or semi-skilled work activities performed in the past 15 years can be used in other available jobs. Transferability of skills requires analysis of three factors: (1) the same or lesser degree of skill is required; (2) the same or similar tools and machines are used; and (3) the same or similar raw materials, products, processes, or services are involved [see 20 C.F.R. §§ 404.1568(d)(1)-(d)(4)]. Also, special rules apply if the claimant is over 55 years (“of advanced age”) or 60 years or older (“retirement age”).
•   If so, can the claimant perform any job using his or her transferrable skills? If not, why not?
•   Is the claimant amenable to vocational rehabilitation? If not, why not?
•   Can the claimant perform any sedentary unskilled work if under 60 years of age? “Sedentary unskilled work” means lifting up to 20 pounds occasionally, 10 pounds frequently; sitting or standing options for 6 out of 8 hours, with basic simple tasks.
•   If the answer is “no”, the claimant wins SSDI or SSI benefits.
•   If the answer is “yes”, what jobs are available in the national, regional, and local economy that the claimant can perform?
•   In the context of the workers’ compensation vocational evidence, a vocational rehabilitation expert should be asked to review the treating or evaluating physician’s Return To Work and Voucher, DWC form 10333.36 which essentially is a residual functional capacity assessment by the physician when the Applicant is MMI as to all parts of body claimed.
•   Using EDD data, what loss of earning capacity has the Applicant had over a three-year period post injury (or, arguably, three years post P&S/MMI date) compared to non-injured employees who are similarly situated?
•   How does a physician’s finding of apportionment of permanent disability affect the vocational expert’s conclusions concerning the Applicant’s loss of earning capacity? Has the injured worker lost 80% of his earning capacity in a case in which he has 100% disability with 20% apportionment to non-industrial factors or a prior award?
•   Or, would the Applicant have lost 100% of his or her future earning capacity regardless of any apportionment between two or more injuries? If so, how and why?

The best example is when there are two injuries to the low back. The first injury resulted in a herniated lumbar disc at L5-S1 but when treated conservatively (medications, ESIs, physical therapy), the Applicant is released to return to his or her usual and customary duties which are moderately arduous.

Then the Applicant has a second injury to the same level of his or her spine (either by way of a specific injury or cumulative trauma). The Applicant has lumbar spinal surgery that fails—either there is a development of arachnoiditis or a chronic lumbar pain syndrome occurs and the Applicant has to use a walker and wheelchair to ambulate. Hypothetically, there is apportionment between the two injuries and possible non-industrial factors but the evidence could indicate the 100% total disability is from the failed surgery and it is impossible to parcel out apportionment of the 100% permanent disability between the two separate injuries.

If, on the other hand, the evaluating or treating physician opines that 80% of the permanent total disability is due to the second injury and 20% is due to the earlier specific injury, then the question becomes whether or not a vocational expert could present competent evidence that the sole cause of the total loss of earning capacity was due to the second injury since the Applicant was able to return to his or her usual and customary occupation until the second injury occurred.

This analysis can and should be used in the context of a workers’ compensation case in which the Applicant is utilizing a vocational expert opinion by report to rebut a rating string or under Labor Code Section 4662(b) where there is apportionment by a physician for medical reasons. The most important factor here is that all vocational experts must take into consideration in their conclusions the medical apportionment finding under Labor Code Section 4663 by the treating and evaluating physicians.

Finally, can counsel utilize vocational expert opinion in order to increase a permanent disability rating that is less than 100% to a higher rating that is less than 100% permanent total disability? In dicta, the Court of Appeal in Dahl expressed its doubt that an Applicant can successfully rebut a permanent disability rating string in order to increase the award based on a different loss of future earnings projection caused by the industrial injury [see Contra Costa County v. Workers’ Comp. Appeals Bd. (Dahl) (2015) 240 Cal. App. 4th 746, 761 n.6, 193 Cal. Rptr. 3d 7, 80 Cal. Comp. Cases 1119]. However, the court did not specifically address the issue in Dahl since the vocational rehabilitation expert failed to indicate that the Applicant was not amenable to retraining. The court did not expressly reverse any of the three rebuttal methods described in Ogilvie v. Workers’ Comp. Appeals Bd. [(2011) 197 Cal. App. 4th 1262, 1274-1275, 129 Cal. Rptr. 3d 704, 76 Cal. Comp. Cases 624]. However, the court in Dahl seems to have confused the three methods of rebuttal described by the court in Ogilvie by focusing only on a rebuttal under LeBoeuf rather than an Ogilvie rebuttal method that addresses the DFEC adjustment.

The take-aways here are for counsel to always be aware of the need to prove that an injured worker is not amenable for retraining as the first element to prove a higher permanent disability rating to rebut the DFEC adjustment or perhaps the “adjustment factor.” Secondly, the Applicant bears the burden in a Labor Code Section 4662(b) or any kind of LeBoeuf case to show that apportionment of permanent disability by a medical physician has been considered by any vocational expert opinion. Finally, the evaluating physicians should always review a vocational expert’s opinion and vice versa.

© Copyright 2016 LexisNexis. All rights reserved. This material is excerpted from an upcoming edition of The Lawyer’s Guide to the AMA Guides and California Workers’ Compensation.