Workers' Compensation Law

Vetoed: Apportionment Reform Efforts Fail Once Again

By Mark Webb


At first glance, Governor Gavin Newsom’s 2021 veto of Senate Bill 788 (Bradford) would appear to be just another episode in the long-running challenge to the law of apportionment based on what has been given the shorthand label of “impermissible factors.” The history of this issue is complex.1 This article will cover the history and the questions that remain about apportionment, which determines the portion or percentage of a disability that arises in the workplace.


Most recently, the legislative debate has been framed as a response to City of Jackson v. Workers’ Comp. Appeals Bd. (2017) 11 Cal.App.5th 109 and City of Petaluma v. Workers' Comp. Appeals Bd. (2018) 29 Cal.App.5th 1175. In the case of Senate Bill 899 (Pan) in 2018, and SB 788, employers and worker advocates actually agreed on the content of the bill; despite their efforts, the Governor vetoed these bills. At the inception of this debate, in 2008, the proffered amendment to Labor Code section 4663 stated: “Race, religious creed, color, national origin, age, gender, marital status, sex, or genetic predisposition shall not be considered a cause or other factor of disability with regard to any determination made under this section.” (Senate Bill 1115 (Migden).) By 2016, the debate had changed. Assembly Bill 305 (Gonzalez Fletcher) would have prohibited apportionment in Labor Code section 4663(c)(2): “(B)…based on either of the following conditions if those conditions are contemporaneous with the claimed physical injury: (i) Pregnancy. (ii) Menopause.

(C) Apportionment in the case of a psychiatric injury occurring on or after January 1, 2016, shall not be based on psychiatric disability or impairment caused by sexual harassment that is contemporaneous with the claimed psychiatric injury, or caused by any of the conditions listed in subparagraph (B) that are contemporaneous with the claimed psychiatric injury.” One year later, in 2017, Assembly Bill 570 (Gonzalez Fletcher) proposed amending Labor Code section 4663 to state: “No percentage of an apportionment in the case of a physical injury occurring on or after January 1, 2018, shall be based on pregnancy, childbirth, or other medical conditions related to pregnancy or childbirth.”


In 2016, during the ongoing legislative effort, a group of representative plaintiffs filed Page et al. v. Acting Administrative Director of the Division of Workers Compensation et al. (2016) BC625992 in Los Angeles Superior Court, claiming widespread gender discrimination in the administration of the workers’ compensation system. As the plaintiffs noted in their complaint: “Reducing the compensation due to women workers on the basis of stereotypes about women’s roles and capacities has no place in our State or in our constitutional system.” The case ultimately settled. The settlement included qualified medical evaluator (QME) training. Specifically, the training was to include: “…content addressing the importance of medical evaluators basing apportionment decisions on the medical evidence applicable to each individual applicant and not based on assumptions, stereotypes, or bias about an applicant’s gender, race, or other protected characteristic.” The settlement did not end efforts in the Legislature to amend Labor Code section 4663. By 2018 the debate on apportionment had returned to its initial points of contention: the permissible scope of “other factors,” as that term is used in Labor Code section 4663(c), and what a physician may take into account when making an apportionment decision. In 2018, employer and worker advocates agreed to this language in SB 899 (Pan): “A physician shall make an apportionment determination by finding the approximate percentage of the permanent disability that was caused by the direct result of injury arising out of and occurring in the course of employment and the approximate percentage of the permanent disability that was caused by other factors both before and subsequent to the industrial injury, including prior industrial injuries, but excluding race, gender, and national origin.” By 2021, the following language in SB 788 (Bradford) had been sent to the Governor without opposition: “The approximate percentage of the permanent disability caused by other factors shall not include consideration of race, religious creed, color, national origin, gender, marital status, sex, sexual identity, or sexual orientation.”


In their veto messages, both Governor Jerry Brown and, later, Governor Newsom stated that current law protected against the problems the bills sought to address. As Governor Brown stated in his veto message on SB 899: “This bill is unnecessary as it would not change existing law and may disturb settled court decisions, which already provide protection from the inappropriate application of the apportionment statutes.” Governor Newsom echoed this theme in his September 2021 veto message on SB 788: “While I support efforts to combat bias within the medical profession, this bill creates confusion with well-settled law, which is likely to result in increased litigation and subsequent delays to much-needed benefits to workers. Ongoing efforts by the Division of Workers’ Compensation to implement mandatory continuing education of medical-legal evaluators related to current anti-bias laws and apportionment training is better suited to achieve the intent of this bill.” (Italics added.) The “ongoing efforts” the Governor referenced include revisions the Division of Workers’ Compensation (DWC) proposed to QME regulations.2 These proposed revisions include language stating that to become a QME, an applicant shall, prior to appointment: “…complete a course of at least two (2) hours in anti-bias training. The course shall include the following: (1) Instruction designed to increase awareness and understanding of differences in human experience, as well as awareness of implicit or unconscious bias, stereotyping, and discrimination, and the ways in which unconscious bias can unintentionally impact perceptions and decision-making, including in medical evaluations and reporting, and lead to disparities in health care strategies, to help eliminate or reduce implicit bias in medical evaluations and reporting. (2) At least one example of potential gender bias in a fictitious QME evaluation in which an apportionment rating is made based on an assumption about a risk factor related solely to the injured worker’s gender. (3) At least one example relating to an evaluation and rating of permanent disability resulting from industrial breast cancer, taking into account the ways in which gender bias could potentially impact an assessment of the impairment that results from breast cancer and its treatment. (4) The course shall include a post-course examination based on the program material. Credit for the course may be given only for a passing rate of no lower than 70 percent correct responses. The administrative director may audit physicians’ examinations and scores.” (Proposed 8 CCR §11(h).) A formal rulemaking process for these regulations has not yet commenced. On October 11, 2021, the DWC announced it had developed an update to the online education module for Qualified Medical Evaluators.3 Among the expectations of QMEs following completion of these courses is acquiring the ability to: “Recognize the law requires impartiality and prohibits discrimination against injured workers based on protected characteristics including sexual orientation, race, gender, age, national origin, and religion.” (California Department of Industrial Relations, Department of Workers’ Compensation, QME Training Model) The “DWC Apportionment Webinar”4 referenced in the new educational materials contains references to documents dealing with implicit bias. There is also a list of various regulatory, statutory, and case law citations to help in understanding the law of apportionment. While one can argue about this reading list and its completeness, one of the included references is noteworthy: Government Code section 11135, relating to discrimination in state government programs. If Government Code section 11135 sounds familiar, it should. It figured prominently in the unpublished case of Vaira v. Workers’ Compensation Appeals Board (2007) C054948. The implications of its inclusion in QME and stakeholder education materials could be profound.5 Vaira was not a complex case until it was made so by the court’s agreement that Government Code section 11135 applied to workers’ compensation. Having made that determination, the court addressed the position of amicus curiae The Impact Fund, which argued, “[A]pportionment to age is per se unlawful and apportionment to osteoporosis is improper because it disproportionately impacts women.” In response the court stated: “…assuming such disparate impact exists, we disagree with The Impact Fund that this establishes a violation of section 11135. Reducing permanent disability benefits based on a preexisting condition that is a contributing factor of disability is not discrimination.” However, the court also said: “We emphasize that this case does not present a claim that the WCAB has apportioned disability to a condition peculiar to women while failing to give equal treatment to a condition peculiar to men that may also contribute to disability. Such unequal treatment of disabling conditions peculiar to a particular race, ethnicity or gender may give rise to a claim of discrimination.” While the issue before Vaira was based on alleged age and gender discrimination, “protected bases,” as that term is used in Government Code section 11135(c), reference Government Code section 12926, which includes these words: “race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, age, sexual orientation, or veteran or military status.” (Government Code section 12926(l).)

These terms are further defined in Government Code section 12926, all within the Fair Employment and House Act. (Government Code §12900 et seq.) The few Workers’ Compensation Appeals Board (WCAB) panel decisions on this issue offer little guidance. In Timothy Beecham v. Swift Transportation Services LLC (2017) 2017 Cal.Wrk.Comp. P.D. LEXIS 555, a panel of the WCAB determined that the evaluation by the QME rating the permanent disability of the injured worker was impermissibly driven by bias: “The unavoidable implication here is that Dr. Hsia felt that these markers were abnormally low for a person with “Negro blood.” It was inappropriate for Dr. Hsia to draw medical conclusions based on comparing applicant’s muscle definition to the general population of individuals who share his ethnic or racial makeup; it indicates that Dr. Hsia relied on stereotypes regarding members of applicant’s ethnic or racial group in evaluating and diagnosing applicant. We will therefore affirm the WCJ’s decision striking Dr. Hsia's report and ordering a new panel in neurology.” Id. at p. 3. It should be noted that the Beecham case arose from the determination of a workers’ compensation judge (WCJ) that because of bias, the opinion of the QME was not substantial evidence. In 2021, a panel of the WCAB let stand a finding by a workers’ compensation judge (WCJ) of impermissible bias in Pratcher v. County of Los Angeles (Sedgwick CMS) (2021), ADJ10588652, ADJ10869158, ADJ13221640. As WCJ Nikki Mehrpoo Jacobson noted in her Report and Recommendation on Petition for Removal6: “The credible trial testimony reflects that applicant is concerned and uncomfortable to return to Dr. Borelli as the medical evaluator based on his prior in-person comments to the female Applicant: “I like my women thick.” Based on this comment and stereotype and the totality of the testimony and evidence, I found that there was a continuing bias, thus this bias invalidating the totality of his reporting and lack of substantial medical evidence. I also found Dr. Borelli’s use of the terms “obesity,” “adipose,” and “obese” as further evidence for my findings of bias.” It is important to note that Beecham addressed the issue of whether a medical report was admissible after a finding that the QME was impermissibly biased. Pratcher dealt with the issue of whether a replacement panel of QMEs should be ordered when there was a complaint of bias on the part of the QME.7 These cases deal with explicit bias. The DWC materials speak of “discrimination” and “implicit bias.” These terms are not synonymous. As stated in the legislative findings in Assembly Bill 241 (Kamlager-Dove)8 requiring various medical professional licensing boards to add anti-implicit bias training to their continuing education requirements: “Implicit bias, meaning the attitudes or internalized stereotypes that affect our perceptions, actions, and decisions in an unconscious manner, exists, and often contributes to unequal treatment of people based on race, ethnicity, gender identity, sexual orientation, age, disability, and other characteristics.”


The training the DWC is offering will be useful. The reference in the DWC Apportionment Webinar to Government Code section 11135 may not. It depends on whether, with even this minor reference, issues regarding QME bias become conflated with issues of disparate impact and discrimination. If they are, the confusion Governor Newsom sought to avoid with his veto of SB 788 may survive and the Legislature—or the Courts—will be asked to deal with this issue once again.

Mark Webb is Owner of Prop 23 Advisors, a consulting firm focusing on workers’ compensation legislative and regulatory issues, working with insurtech enterprises seeking to enter the California workers’ compensation service provider marketplace and providing governance, risk, and compliance (GRC) recommendations focusing on unlisted small- to medium-size firms. He currently serves on the California Advisory Committee for the Workers’ Compensation Research Institute (WCRI). Mark is a member of the State Bar of Arizona and a former Deputy Director of the Arizona Department of Insurance. He can be reached at

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1 The following bills dealing with apportionment to impermissible factors were vetoed: SB 1115 (Migden) (2008), SB 145 (DeSaulnier) (2009), AB 1155 (Alejo) (2011), AB 305 (Gonzalez Fletcher) (2015), AB 1643 (Gonzales Fletcher) (2016), AB 570 (Gonzales Fletcher) (2017), and SB 899 (Pan) (2018), which dealt in various ways with apportionment under Labor Code section 4663. In 2018, AB 479 (Gonzalez Fletcher) sought to amend Labor Code section 4660.1 to specify how impairments resulting from occupational breast cancer were to be rated. Governor Brown vetoed it as well. 2 These draft regulations were published in a pre-rulemaking forum. The forum closed comments on May 14, 2021. 3 4 5 Vaira is not cited as a reference in the Division’s materials. 6 You can find the Report and Recommendation on Petition for Removal at You can find the WCAB Opinion and Order Denying Petition for Removal at, but it does not include Judge Mehrpoo Jacobson’s Report. 7 A similar issue with a different result was presented in Agamo v. Mitsubishi Motor Credit of America (Tokio Marine Management, Inc.) (2021) ADJ205708; ADJ1690431; ADJ4513618 , available at 8 AB 241 requires continuing education courses for physicians and surgeons, nurses, and physician assistants to include the understanding of implicit bias and the promotion of bias-reducing strategies. The bill is available at These requirements will apply to QMEs who are licensed by the Medical Board of California and becomes operative for physician and surgeon licensees on January 1, 2022.