California: Vocational Experts and Apportionment

The Exception to Defendant’s Burden of Proof on Apportionment

One of the most frequent issues pending before the WCAB lately has been how to handle apportionment to significant non-industrial causes when the applicant has successfully rebutted the Diminished Future Earning Capacity (DFEC) through the use of vocational experts.

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I. Substantial Evidence and the Vocational Report

Applicant attorneys have arrived at trial with all the evidence they think they need to rebut the DFEC component of the rating string. However, many times their vocational expert has not commented on Labor Code Section 4663 [LC 4663] apportionment. Perhaps they think that it is not necessary. (In cases where apportionment to non-industrial factors is minimal, a comment from the vocational expert is probably not essential.) Traditionally apportionment is not applicant’s burden to prove. It is up to the defendant to prove apportionment of permanent disability (PD) to non-industrial factors. However, recent Noteworthy Panel Decisions (NPD) have seemed to carve out an exception to this rule, which may prove fatal to an applicant’s case or, at the very least, delay the proceedings, until the record can be satisfactorily developed by the vocational expert on the issue of apportionment.

II. Neither Vocational Expert’s Report = Substantial Evidence

Such was the situation in the NPD of Walter v. International Capital Group, 2015 Cal. Wrk. Comp. P.D. LEXIS 32 [2015 Cal. Wrk. Comp. P.D. LEXIS 32]. Sharon Walter was a bookkeeper with International Capital Group when she suffered an admitted industrial injury to her neck, right shoulder and psyche on April 27, 2007. Medical experts evaluated Ms. Walter. The orthopedic reports were rated by the Disability Evaluation Unit (DEU) for a total of 27%. The psych report rated at 41%. Using the Combined Values Chart, the total PD rated out at 57%.

Applicant argued that she was not capable of returning to the job market and should be considered 100% PD “in accordance with the fact” per Labor Code Section 4662 [LC 4662]. She offered the report of her vocational expert, Mr. Diaz, into evidence to support her position. Defendant rebutted this argument of 100% PD by insisting that the strict rating of 57% was accurate, because Ms. Walter was capable of returning to work. Defendant offered the report of their vocational expert, Ms. Hunt, in support of their position.

The Workers’ Compensation Judge (WCJ) found neither vocational expert’s report to constitute substantial evidence for the following reasons:

1. Defendant’s expert: She failed to consider the analysis of the psychiatrist in forming her opinions as to Ms. Walter’s abilities.

2. Applicant’s expert: He failed to consider the extensive apportionment determination to non-industrial factors made by Dr. Pang, the AME in orthopedics, in his analysis.

Given that the orthopedic disability in this case rated at only 27%, the WCJ did not believe that the evidence produced at trial rose to the level of 100% permanent and total disability “in accordance with the facts” pursuant to Labor Code Section 4662, especially since he could not consider either vocational expert’s reports. The WCJ concluded that 57% PD was the most accurate PD determination in this case.

III. Vocational Experts Must Address Apportionment Issues

Applicant filed a Petition for Reconsideration, which was granted by the WCAB. The WCAB concurred with the WCJ that neither vocational experts’ report constituted substantial evidence. The WCAB also agreed that applicant’s vocational expert should have considered the apportionment determination of Dr. Pang in his Labor Code Section 4662 analysis and explained:

“The WCJ was correct to find Mr. Diaz’ report was not substantial evidence since he failed to properly consider Dr. Pang's apportionment in reaching his conclusion that applicant has sustained a total loss of earning capacity. In Ogilvie, the court held that the standard rating may be rebutted by evidence that the employee is not amenable to rehabilitation and, for that reason, the employee's diminished future earning capacity is greater than reflected in the scheduled rating. However, the ‘employee’s diminished future earnings must be directly attributable to the employee’s work-related injury and not due to non-industrial factors such as general economic conditions, illiteracy, proficiency in speaking English, or an employee’s lack of education.’ (Ogilvie, 76 Cal.Comp.Cases at 633.) Apportionment to non-industrial factors also removes that portion of the disability from consideration under Ogilvie.” (Emphasis added.)

Mr. Diaz, the applicant’s vocational expert in the Walter case, correctly did not consider the “impermissible factors” of:

•   general economic conditions;
•   illiteracy;
•   proficiency in speaking English; or
•   an employee’s lack of education.

However, according to the WCAB, Mr. Diaz incorrectly did not take into account the orthopedic apportionment determination of Dr. Pang, the agreed orthopedic evaluator.

Therefore, the WCAB returned the matter to the trial level to develop the record on this issue. After examining the evidence in the case, the WCAB felt that an increase in permanent disability may be justified under a LeBoeuf v. WCAB (1983) 34 Cal. 3d 234 [48 Cal Comp Cases 587], analysis even if applicant’s diminished future earning capacity or inability to compete in the labor market did not reach the level of 100% PD.

IV. Application of McDuffie to Developing the Record for Vocational Experts

When the medical record lacks substantial evidence, it is not unusual for the WCAB or WCJ to order that the record be developed, in accordance with the preferred method as set forth in the WCAB en banc decision of McDuffie v Los Angeles County Metropolitan Transit Authority (2002) 67 Cal. Comp. Cases 138 [67 CCC 138]. First, the parties are encouraged to request supplemental reports or take the deposition of the original medical evaluator. If that is not sufficient, the parties may agree to utilize an agreed medical evaluator (AME). In the event the parties are not able to agree to an AME, the judge should consider the appointment of a “regular physician” pursuant to Labor Code Section 5701 [LC 5701].

What is interesting in the Walter NPD is that the WCAB applied the McDuffie method for developing the record (normally applied only to a medical evaluation analysis) to a vocational analysis.

The WCAB directed the parties to “select a mutually agreed-upon vocational expert to evaluate applicant’s future earning capacity per Ogilvie. If the parties are unable to agree upon a vocational expert, the WCJ should appoint an independent expert to report in this matter.” It will be interesting to see if this application of the McDuffie method to vocational evidence becomes a common practice among WCJs.

V. Exception to the Rule That Apportionment Is Defendant’s Burden to Prove?

In any event, the key issue in the Walter NPD is the fact that the applicant’s vocational expert’s report was not considered substantial evidence because he failed to comment on the AME’s apportionment to nonindustrial factors. This has been a recurrent theme recently. Failure to comment on the medical apportionment determination often results in the vocational expert’s report not constituting substantial evidence, catching many applicant attorneys unaware. They are unclear as to where the legal mandate for this requirement can be found, given that it is defendant’s burden to prove apportionment. It is certainly acknowledged that there is authority pursuant to Labor Code Section 4663 to insist that medical evaluators make an apportionment determination in order for their reports to constitute substantial evidence. However, no similar legal authority exists with regard to vocational experts.

This issue was discussed in the NPD of Brewer v California Department of Corrections, 2014 Cal. Wrk. Comp. P.D. LEXIS 218 [2014 Cal. Wrk. Comp. P.D. LEXIS 218]. In that case the WCAB stated:

“Therefore, where an employee's scheduled disability rates less than 100% after apportionment, the employee can seek to rebut the scheduled rating by showing, through expert vocational evidence, that he or she is not amenable to vocational rehabilitation and, as a result, his or her DFEC is greater than that reflected in the scheduled rating. (Ogilvie III, supra, 197 Cal.App.4th at p. 1262; see also LeBoeuf v. Workers’ Comp. Appeals Bd. (1983) 34 Cal.3d 234 [48 Cal.Comp.Cases 587].) Under Acme Steel v. Workers’ Comp. Appeals Bd. (Borman) (2013) 218 Cal.App.4th 1137 [78 Cal.Comp.Cases 751], however, sections 4663 and 4664(a) still mandate apportionment to causation where the injured employee’s non-amenability to vocational rehabilitation is due to a combination of industrial and non-industrial factors. Moreover, the burden is on the injured employee to affirmatively demonstrate that ‘the employee’s diminished future earnings are directly attributable to the employee’s work-related injury, and not due to nonindustrial factors.’ (Ogilvie III, supra, 197 Cal.App.4th at p. 1275.) Therefore, when attempting to rebut a scheduled permanent disability rating, the burden is on the injured employee to establish what portion of his or her diminished future earning capacity is due to the injury and what portion is due to non-industrial factors. This is an exception to the general rule regarding the burden of proof on apportionment discussed above.” (Emphasis added.)

It appears the WCAB is saying that there’s an exception to the general rule that apportionment is defendant’s burden to prove. Apparently, there are occasions when the burden of proof on apportionment would shift from defendant to applicant. That occasion would be when applicant has successfully rebutted the DFEC through the use of their vocational expert and a medical evaluator in the case has apportioned PD to more than a minimal amount of non-industrial factors.

At that point, applicant is required to offer up commentary from their vocational expert on apportionment of PD between industrial and non-industrial factors. The WCAB cites the 1st DCA case of Acme Steel v WCAB, (Borman) (2013) 218 Cal. App. 4th 1137 [78 Cal Comp Cases 751], in support of this theory. However, nowhere in Borman does it mandate that an applicant’s vocational expert address apportionment. Instead, the Borman court found fault with the WCAB (not the vocational expert) for failing to address apportionment to non-industrial causes, as follows:

“…The WCALJ erred, however, by failing to address the issue of apportionment…

Here, the WCAB ignored substantial medical evidence presented by Dr. Schindler, as summarized above, showing that Borman’s 100 percent loss of hearing could not be attributed solely to the current cumulative trauma…

… In sum, the WCAB's failure to apportion the hearing loss portion of the current cumulative trauma is contrary to the law, and, as a consequence, the award must be annulled.” (Borman, supra.) (Emphasis added.)

(See also the DCA writ denied case of Pacific Compensation Insurance Company v. WCAB (Nilsen) (2013) 78 Cal. Comp. Cases 722 [78 CCC 722], for a similar holding.)

Some guidance for this apportionment quandary can perhaps be found in the recent case of Duplessis v. Network Appliance, 2014 Cal. Wrk. Comp. P.D. LEXIS 316 [2014 Cal. Wrk. Comp. P.D. LEXIS 316]. The WCJ in that case discussed the issue as follows:

“Applicant argues that to charge vocational experts with determining apportionment is inconsistent with the law. Of course it is. However, in order to support an award of 100% disability, which is what applicant seeks here, I believe a vocational expert must provide a conclusion, based on substantial evidence, that one industrial injury, standing alone, has produced that effect on the applicant’s employability…. Such a conclusion is not altogether uncommon, but was understandably elusive in this case, as multiple injuries, according to the AME, combined to yield the current result.”

If the applicant’s vocational expert can’t parcel out the industrial from the non-industrial causes of the injured worker’s 100% PD, does that mean the applicant fails in their burden of proof? Apparently, yes, according to this WCJ. In support of this theory, the WCJ in Duplessis relies on logic and the writ denied case of Binstock v. WCAB (2012) 77 Cal Comp Cases 365 [77 CCC 365]. The WCJ in Binstock, supra, wrote,

“Mary Ciddio, the AVE, testified that the total constellation of issues, both industrial and nonindustrial, rendered the applicant noncompetitive in the labor market. There is no vocational evidence that the industrial disability alone has had this result.”

If the vocational expert in cases of Duplessis or Binstock or in the instant case of Ms. Walter had opined that the industrial injury alone was the cause of applicant’s decrease in earning capacity or inability to retain employment, would that have been sufficient?

Several other cases in recent months have tackled this issue, with no clear guidance on the vocational expert’s role with regard to apportionment. See the following:

Pound v. WCAB (2014) 80 Cal. Comp. Cases 50 [80 CCC 50] (writ denied)

“With respect to Applicant’s level of PD, the WCJ relied on the opinion of AME Harvey Wieseltier, M.D., to find apportionment based on nonindustrial factors. Citing Acme Steel v. W.C.A.B. (Borman) (2013) 218 Cal. App. 4th 1137 [78 Cal. Comp. Cases 751], the WCJ explained that apportionment of any non-industrially caused PD applies even if there is a finding of PTD based on vocational expert evidence.”

Diaz v. State of California, 2014 Cal. Wrk. Comp. P.D. LEXIS 560 [2014 Cal. Wrk. Comp. P.D. LEXIS 560] (Appeals Board noteworthy panel decision)

“The WCAB may not disregard evidence showing a basis for apportionment even if other evidence supports a finding of total permanent disability before apportionment. (Acme Steel v. Workers' Comp. Appeals Bd. (Borman) (2013) 218 Cal.App.4th 1137 [78 Cal.Comp.Cases 751].)”

Mercer v. State of California, 2014 Cal. Wrk. Comp. P.D. LEXIS 690 [2014 Cal. Wrk. Comp. P.D. LEXIS 690] (Appeals Board noteworthy panel decision)

“Under Acme Steel v. Workers' Comp. Appeals Bd. (Borman) (2013) 218 Cal.App.4th 1137 [78 Cal.Comp.Cases 751], where an injured employee successfully rebuts the scheduled permanent disability rating through the presentation of vocational expert evidence under Ogilvie, the permanent disability must be apportioned in accordance with the medical evidence.”

Joberg v. Illuminations, 2014 Cal. Wrk. Comp. P.D. LEXIS 717 [2014 Cal. Wrk. Comp. P.D. LEXIS 717] (Appeals Board noteworthy panel decision)

“Moreover, the Appeals Board has held that finding 100% permanent disability pursuant to LeBoeuf does not preclude apportionment under sections 4663 and 4664. (Nooner v. Workers’ Comp. Appeals Bd. (2009) 74 Cal.Comp.Cases 300 [Nooner].) Wilkinson’s [the vocational expert] testimony also does not address the apportionment by Drs. Harris and Nathan. Therefore, the WCJ's explanation for not applying the apportionment reported by Drs. Harris and Nathan is inadequate under sections 4663 and 4664 and Borman.”

VI. CONCLUSION

The law is unclear as to what type of language and analysis is expected from a vocational expert on the issue of apportionment. Nevertheless, due to the volume of WCAB NPDs issued recently requiring this discussion by vocational experts, it behooves attorneys to ensure that their vocational experts have considered the issue of apportionment to non-industrial factors in their employability analysis. Likewise, defense attorneys need to make sure their vocational experts are basing their opinions on substantial evidence as well.

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