ALONSO NAVARRO, Applicant,
v.
A&A FARMING; and WESTERN GROWERS INSURANCE CO. Defendants.
Nos. GOL 0087934, GOL 0087935, GOL 0087936
California Workers Compensation Decisions
Workers’ Compensation Appeals Board State of California
February 13, 2002
OPINION AND DECISION AFTER RECONSIDERATION (EN
BANC)
MERLE
C. RABINE, Chairman
On
November 13, 2001, the Board granted reconsideration of the
Findings and Order issued by the workers' compensation
administrative law judge ("WCJ") on August 27,
2001. In that decision, the WCJ found that defendant, A&A
Farming ("A&A"), did not violate Labor Code
section 132a ("section 132a") when it terminated
its contributions to an ERISA group health benefits plan
after applicant, Alonso Navarro, had been off work for over
three months due to his industrial injuries.[1] In essence,
the WCJ concluded there was no "discrimination,"
within the meaning of section 132a, because the ERISA
plan's provision that employer contributions would be
discontinued after a disabled employee had been off work for
90 days applied whether or not the disability was
work-related.
On
reconsideration, applicant contended in substance: (1) that
it is a violation of section 132a for an employer to
terminate an industrially-injured employee's group
medical coverage while the employee is temporarily disabled;
and (2) that ERISA does not preempt his section 132a claim.
A&A filed an answer asserting in substance that ERISA
does preempt applicant's section 132a claim.
Because
of the important legal issue presented, and in order to
secure uniformity of decision in the future,
the Chairman of the Board, upon a majority vote of
its members, has reassigned this case to the Board as a whole
for an en banc decision. (Lab. Code,
§115.)[2] Based on our review of the relevant
statutory and case law, we conclude that where an injured
employee's section 132a claim is premised upon the
employer's termination of (or refusal to provide) group
health plan benefits to the employee pursuant to the terms of
an ERISA plan, the employee's section 132a claim
"relates to" the ERISA plan and, therefore, is
preempted by ERISA. (29 U.S.C. § 1144(a).)[3]
Accordingly, we will not reach the question of whether the
employer's act of discontinuing its contributions to the
ERISA plan on applicant's behalf constituted
"discrimination" under section 132a.
I.
BACKGROUND
The
essential facts are not in dispute.
A&A
is a farming corporation that, at all times relevant here,
was a participating member employer of the Western Growers
Assurance Trust ("the Trust"), a multi-employer
trust that provides medical, dental, vision, and other
benefits to the employees of participating employers. The
Trust, which is funded in part by employer contributions, is
an "employee welfare benefit plan" within the
meaning of ERISA (29 U.S.C. § 1002(1)(A)).[4]
Under
the Participation Agreement between A&A and the Trust,
the only A&A employees eligible for health coverage were
those who actively worked at least 20 hours per week. The
Trust terms also provided, however, that upon approval by the
Trust at the time the employer became a participating member,
a participating employer could establish a general policy to
continue making contributions to the Trust on behalf of a
disabled employee for up to 180 days after the employee
became disabled and ceased active work. In accordance with
the Trust terms, A&A adopted a general policy providing
that it would continue to make Trust contributions for its
disabled employees for a period of 90 days, whether or not
the disability was work-related.
Applicant
was employed as a working foreman/irrigator by A&A for
nine years. On August 6, 1996, on November 18, 1999, and
during a period from August 6, 1996 to April 5, 2000, he
sustained industrial injuries to his back. As result of his
injuries, he stopped working on April 5, 2000 and he had back
surgery two days later. While off work following his surgery,
he received temporary disability indemnity. With the
exception of one partial-day attempt to return to work, he
never worked for A&A after April 5, 2000, although he
would have done so had he been physically able.
While
applicant was actively working, A&A made contributions to
the Trust on his behalf. In addition, he contributed $20 per
month (which was deducted from his paycheck).
After
applicant stopped working in April 2000 due to his industrial
injuries, A&A made contributions to the Trust on his
behalf for the months of May, June, and July 2000, in
accordance ' with its continuation policy. Applicant also
sent checks to A&A covering his $20 contributions for
each of these months, plus the month of August 2000.
By a
letter dated August 15, 2000, however, A&A stated it was
returning applicant's $20 contribution for the month of
August because it would only provide medical coverage for
disabled employees for a period of 90 days after they
commenced leave due to their disability. It also notified him
that, after this 90-day period, continuation of his health
coverage was available under COBRA.[5]
By a
letter dated August 25, 2000, applicant's counsel wrote
to A&A stating that any termination of applicant's
health coverage while he was temporarily disabled due to his
industrial injuries would constitute discrimination under
section 132a. The letter also enclosed a $40 check from
applicant for his September and October 2000 health plan
contributions. The letter stated that, because A&A is
"obligated to continue applicant's health
care," then A&A should "process applicant's
co-pay premium checks without delay." A&A, however,
did not comply with applicant's request.
On
September 21, 2000, applicant filed a "Petition for
Benefits-Discrimination [Labor Code Sec. 132a],"
alleging in substance that A&A's failure to continue
contributing to the Trust on his behalf while he was
temporarily disabled on an industrial basis constituted
unlawful discrimination against an industrially-injured
worker in violation of section 132a.
On June
19, 2001, the issue of applicant's section 132a petition
was tried.
On
August 27, 2001, the WCJ issued the decision now before us.
To reiterate, the WCJ concluded in substance that applicant
had failed to establish a violation of section 132a because
A&A's policy of continuing health coverage for a
limited period of 90 days applied to all of its employees,
not just applicant, whether the disability was industrial or
not. Thus, the WCJ found, there was no section 132a
discrimination against applicant.
II.
DISCUSSION
Section
132a states that "[i]t is the declared policy of this
state that there should not be discrimination against workers
who are injured in the course and scope of their
employment" and it provides that, where unlawful
discrimination is found, the employer is liable to the
injured employee for various penalties, including a 50%
increase in workers' compensation benefits (up
i to $10,000) and reimbursement of lost
wages and/or benefits. (Lab. Code, §132a.) Although
section 132a provides that certain specific employer acts
constitute unlawful discrimination,[6] violations of section 132a
are not limited to its express discriminatory acts. Rather,
whenever an employee's industrial injury causes an
employer to take an adverse action against the injured
employee, the employer may have engaged in unlawful
discrimination within the meaning of section 132a, unless the
employer establishes that the adverse action was
"necessitated by the 'realities of doing
business.' " (Judson Steel Corp. v. Workers'
Comp. Appeals Bd. (Maese) (1978) 22 Cal.3d 658, 666-667
[43 Cal.Comp.Cases 1205, 1210].) Discrimination in violation
of section 132a "is just as obnoxious to the interests
of the State and contrary to public policy and sound morality
as sexual or racial discrimination." (City of
Moorpark v. Superior Court (1998) 18 Cal.4th 1143, 1153
[63 Cal.Comp.Cases 944, 952].)[7]
Nevertheless,
under the Supremacy Clause, Congress may preempt any state
law either by express provision or by implication. (New
York State Conference of Blue Cross & Blue Shield Plans
v. Travelers Ins. Co. ("Travelers") (1995) 514
U.S. 645, 654 [115 S.Ct. 1671, 131 L.Ed.2d 695].)[8] ERISA
contains a preemption clause which expressly provides that
ERISA "shall supersede any and all State laws insofar as
they ... relate to any employee benefit plan ... ." (29
U.S.C. § 1144(a).)
This
ERISA preemption provision " '[is] not a model of
legislative drafting' " (Pilot Life Ins. Co. v.
Dedeaux ("Pilot...
