ADJ9221135 · March 1, 2021

The WCJ found defendant's actions were taken in good faith to test a novel legal issue and did not constitute bad faith or frivolous tactics, which the WCAB panel adopted and upheld on reconsideration.

From the decision · page 4On 12/4/2020 the undersigned issued a Findings and Award whereby it was found that defendant's actions did not constitute bad-faith actions or tactics that were frivolous or solely intended to cause unnecessary delay, therefore no sanctions pursuant to Labor Code 5813 are warranted or awarded.

Not genuine offers of work letters included language indicating applicant was no longer available for employment due to release from prison, negating bad faith claim.

Favours Defendant prevailed

This language negated the claim that the notices were frivolous or intended to cause unnecessary delay, supporting denial of sanctions.

From the decision · page 4These Notices all indicate under "Duties required of position:" the phrase, "YOU HAVE VOLUNTARILY TERMINATED YOUR EMPLOYMENT DUE TO YOUR RELEASE FROM PRISON AND ARE NO LONGER AVAILABLE FOR EMPLOYMENT." Defendant never argued that they actually had Regular, Modified or Alternate Work available for the applicant (as evidenced by the added language under the "Duties required of position:" section). Thus, while Defendant's use of the Notices to communicate its position that Applicant was not entitled to the SJDB may not have been the correct manner of doing so, said action was not seen by the undersigned as frivolous or intended to cause unnecessary delay.

Defendant's position was a genuine, good faith dispute on entitlement to Supplemental Job Displacement Benefit for inmate injured workers, supported by lack of case law and precedent at the time.

Favours Defendant prevailed

This justified defendant's actions as not frivolous or in bad faith, supporting denial of sanctions.

From the decision · page 5With respect to the allegation that the action was done with improper motive or without merit, just because the undersigned was not ultimately persuaded by defendant's argument against the applicant's entitlement to a SJDB does not mean that Defendant's actions/arguments were not seen as based upon a genuine, good faith dispute regarding applicant's entitlement to the SJDB voucher or that Defendant did not have the right to litigate the argument. On the contrary, without any case law at the time giving guidance on this issue, and where there was precedent in the Labor Code for eliminating entitlement to inmate injured workers to some benefits and/or to significantly reduce entitlement to VR benefits, it was accepted by the undersigned that defendant's position constituted a genuine, good faith dispute regarding applicant's entitlement to the SJDB voucher. Given this case remained at the WCAB for 3 years and 3 months, it would appear the Appeals Board gave due consideration tothe arguments made by defendant as well, as it did not reject them out of hand as "frivolous".

Malmuth v WCAB (2009), Chavez v WCAB (2004), In re Marriage of Flaherty (1982)

No monetary sanction under Labor Code 5813 if the party acted with reasonable justification or if other circumstances make imposition unjust.

The WCJ applied these cases to find defendant's actions were reasonable and in good faith, thus no sanctions warranted.

From the decision · page 5C. APPLICANT CONTENDS THE WCJ MISAPPLIED THE MOLDINGS OF MALMUTH V WCAB (2009), 74 CCC 654, CHAVEZ V. WCAB (2004), 69 CCC 503, AND IN RE MARRIGAE OF FLAHERTY (1982), 31 CAL.3D 637 TO THE FACTS OF THIS CASE, WHICH ARE DISTINGUISHABLE.

Not genuine offers of work letters included language indicating applicant was no longer available for employment due to release from prison, negating bad faith claim.

From the decision · page 4These Notices all indicate under "Duties required of position:" the phrase, "YOU HAVE VOLUNTARILY TERMINATED YOUR EMPLOYMENT DUE TO YOUR RELEASE FROM PRISON AND ARE NO LONGER AVAILABLE FOR EMPLOYMENT." Defendant never argued that they actually had Regular, Modified or Alternate Work available for the applicant (as evidenced by the added language under the "Duties required of position:" section). Thus, while Defendant's use of the Notices to communicate its position that Applicant was not entitled to the SJDB may not have been the correct manner of doing so, said action was not seen by the undersigned as frivolous or intended to cause unnecessary delay.

Defendant's position was a genuine, good faith dispute on entitlement to Supplemental Job Displacement Benefit for inmate injured workers, supported by lack of case law and precedent at the time.

From the decision · page 5With respect to the allegation that the action was done with improper motive or without merit, just because the undersigned was not ultimately persuaded by defendant's argument against the applicant's entitlement to a SJDB does not mean that Defendant's actions/arguments were not seen as based upon a genuine, good faith dispute regarding applicant's entitlement to the SJDB voucher or that Defendant did not have the right to litigate the argument. On the contrary, without any case law at the time giving guidance on this issue, and where there was precedent in the Labor Code for eliminating entitlement to inmate injured workers to some benefits and/or to significantly reduce entitlement to VR benefits, it was accepted by the undersigned that defendant's position constituted a genuine, good faith dispute regarding applicant's entitlement to the SJDB voucher. Given this case remained at the WCAB for 3 years and 3 months, it would appear the Appeals Board gave due consideration tothe arguments made by defendant as well, as it did not reject them out of hand as "frivolous".