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Special Report! Nunes v. State of CA, Dept. of Motor Vehicles: Vocational Apportionment Invalid

It has long been recognized that an employee’s ability to participate in vocational retraining is a significant factor that must be considered in assessing the worker’s permanent disability. (LeBoeuf v. WCAB (1983) 48 CCC 587, 597.) An employee’s inability to compete in the open labor market could support an award of permanent total disability. Even though vocational rehabilitation was repealed and replaced with the supplemental job displacement benefit, an employee still can rebut a scheduled rating by establishing that he or she was not amenable to rehabilitation. (Ogilvie v. WCAB (2011) 76 CCC 624.) That’s commonly done with evidence from vocational experts.

It was also well established that an employee’s disability could be apportioned pursuant to Labor Code § 4663 even if it was determined that he or she had a 100 percent loss of future earning capacity. (Acme Steel v. WCAB (Borman) (2013) 78 CCC 751.) But there was a dispute as to what role, if any, a vocational expert had in the apportionment analysis.

In some cases, the WCAB adopted opinions from vocational experts that applied “vocational apportionment.” Some vocational experts asserted that “Vocational apportionment is not the same as medical apportionment.” It was not uncommon for such experts to find that “vocational apportionment” did not apply, and that an employee was 100 percent disabled when an employee did not have work disability prior to an industrial injury. (See, for example, Target Corp. v. WCAB (Estrada) (2016) 81 CCC 1192 (writ denied).) In other cases, however, the appeals board rejected the concept of “vocational apportionment” and held that apportionment had to be consistent with LC 4663. (See, for example, Walsh v. Skyline Steel Erectors, 2021 Cal. Wrk. Comp. P.D. LEXIS 84.)

On June 22, 2023, the WCAB issued an en banc decision to resolve the issue affirmatively. In Nunes v. State of California, Dept. of Motor Vehicles, the WCAB held that:

  1. LC 4663 requires a reporting physician to make an apportionment determination and prescribes the standard for apportionment. The Labor Code makes no statutory provision for “vocational apportionment.”
  2. Vocational evidence may be used to address issues relevant to the determination of permanent disability.
  3. Vocational evidence must address apportionment, and may not substitute impermissible “vocational apportionment” in place of otherwise valid medical apportionment.

FACTS OF THE CASE

In Nunes, an applicant sustained admitted injuries to her neck and upper extremities. The qualified medical evaluator (QME) assigned impairment for the cervical spine, left upper extremity and carpal tunnel syndrome. The QME reported that 100 percent of the disability for the left shoulder was industrial. But she apportioned 40 percent of the cervical spine disability to pre-existing degenerative factors and 60 percent of the carpal tunnel disability to nonindustrial diabetes. The QME later issued a supplemental report stating that she did not believe the applicant would be employable in the open labor market.

The applicant’s vocational expert also reported that she sustained a 100 percent loss of access to the open labor market. Although he acknowledged the QME’s apportionment, he reported that “Vocational apportionment is not the same as medical apportionment.” He concluded that because the applicant “was capable of performing her usual and customary work with zero impediment until the specific injury of September 13, 2011 … 100 percent of Ms. Nunes’ loss of future earning capacity and non-amenability to vocational rehabilitation is industrial in nature.”

The defendant’s vocational expert also agreed that the applicant was not employable in the competitive labor market, resulting in a substantial loss of future earning capacity. But he concluded that “at least 10% vocational apportionment from non-industrial medical factors is attributable to Ms. Nunes’ inability to compete in the open labor market and participate in vocational rehabilitation services.”

Following a trial, the WCJ concluded that the applicant was entitled to an unapportioned award of 100 percent industrial injury because “there is no evidence of previous loss of earnings capacity.”

THE WCAB’S DECISION

The WCAB issued an en banc decision rescinding the WCJ’s award. It explained that LC 4663(c) authorizes and requires the reporting physician to make an apportionment determination, and further prescribes the standards the physician must use. It stated that apportionment must account for “other factors both before and subsequent to the industrial injury,” and may include disability that formerly could not have been apportioned, including apportionment to pathology, asymptomatic prior conditions and retroactive prophylactic work restrictions. It also stated, “Section 4663(c) does not provide, however, for collateral sources of expert opinion as to apportionment, and further does not authorize the application of any other standard of apportionment.” So, it held that “’vocational apportionment’ offered by a non-physician is not a statutorily authorized form of apportionment.”

The WCAB then discussed the role of vocational evidence in addressing the issues relevant to the determination of permanent disability. It explained that vocational evidence may be offered to rebut a scheduled rating by establishing that it’s not feasible for an injured worker to engage in vocational retraining. Moreover, it stated, “Vocational evidence may also be considered by evaluating physicians as relevant to their determination of permanent disability, and may assist the parties and the WCJ in assessing those factors of permanent disability.”

The WCAB stated that “[I]n order to constitute substantial evidence, vocational reporting must consider valid medical apportionment.” It explained that a vocational report is not substantial evidence “if it relies upon facts that are not germane, marshalled in the service of an incorrect legal theory.” It stated, “Examples of reliance on facts that are not germane often fall under the rubric of ‘vocational apportionment,’ and include assertions that applicant’s disability is solely attributable to the current industrial injury because applicant had no prior work restrictions, or was able to adequately perform their job, or suffered no wage loss prior to the current industrial injury.” (Citations omitted.)

The WCAB added that the proper analysis “requires an evaluation of all factors of apportionment, so long as they are otherwise supported by substantial medical evidence, and irrespective of whether they were the result of pathology, asymptomatic prior conditions, or whether those factors manifested in diminished earnings, work restrictions, or an inability to perform job duties.”

The WCAB remanded for the WCJ to address apportionment in accord with the principles explained in the case.

ANALYSIS OF THE DECISION

The Nunes decision invalidates the concept of “vocational apportionment.” The WCAB recognized that it was being used by vocational experts to reject apportionment in a manner inconsistent with binding case law. It was being used to reject apportionment that would have been medically appropriate.

Nunes, however, does not make apportionment the exclusive domain of medical doctors nor require a vocational expert to follow the opinion of a medical doctor. The WCAB was clear that “an unapportioned award may be appropriate where it can be established through competent medical and/or vocational evidence that the current industrial injury is the sole causative factor for the employee’s residual permanent disability” (emphasis added).

So, the decision does not preclude a vocational expert from finding that an employee is permanently totally disabled if the expert can explain why an industrial injury is the sole cause of his or her inability to compete in the open labor market. In fact, such an analysis necessarily would require a vocational expert to consider whether nonindustrial causes might be contributing to the disability.

But vocational experts no longer may reject a physician’s apportionment to nonindustrial factors simply by finding no work restrictions or wage loss prior to the current industrial injury. Vocational experts must consider apportionment under the same legal standards as physicians, and the law allows apportionment to pre-existing nonindustrial factors even if they were not labor disabling before the industrial injury occurred.

The Nunes decision is available on the DIR website (PDF). 

  • Sure Log

    Sure Log

    Attorney of Counsel Michael Sullivan & Associates, LLP

    Mr. Log is a specialist in workers’ compensation defense and related labor law issues. He analyzes files for litigation and settlement, conducts research, reviews records to facilitate completion of discovery and drafts a variety of documents, including trial and appellate briefs. He was instrumental in a 2009 case that ended vocational rehabilitation in California.

    Mr. Log prepares seminar material and co-authors white papers on significant topics in workers’ comp law, including “An Analysis of the New Regulations Regarding Disputes Over Medical-Legal Expense and Medical Treatment,” “Special Report: A First Look at SB 863,” about the 2012 legislation’s wide-ranging changes to the state’s workers’ compensation system, and “SB 863: Five Years Later.”

    Mr. Log is also Co-Author of “Sullivan on Comp,” a 16-chapter objective analysis of California workers’ compensation law, updated monthly.