Post Termination Claims

One of the cases I see often it is a “post termination” claim, or a case where the employee doesn’t file a claim for workers compensation benefits until after they are terminated. To protect employers from retaliation claims legislation was included in Labor Code 3600, which wraps a bunch of exceptions into the exclusive remedy rule, for example no claim can be made if the employee is intoxicated at work and this leads to injury.

Most often when I pick up representation in post termination cases I am told by the employee that concessions were made regarding the WC case, for example not filing a claim and obtaining treatment through the employer’s medical insurance, so the employer will not have an additional WC claim on the books warranting a higher premium. Everything is fine until the employer decides to terminate the injured worker primarily because the termination ends access to the employer’s medical insurance or forces the employee to make significantly higher payments for treatment or pay for it outright. In California workers compensation all treatment is provided free of charge with no co-pays.

As noted above Labor Code 3600(a) (10) prohibits employees who are terminated for cause from obtaining California workers compensation benefits by filing a claim post termination. It is an added hurdle on the path to benefits. However, in most cases, if the employee is truly injured the claim will succeed. Labor Code Section 3600(10) says where a claim is filed after notice of termination or layoff, and the claim for injury occurred before the termination or layoff, no compensation shall be paid unless the employee demonstrates by a preponderance of the evidence that

 (A) the employer had notice of the injury, 
 (B) medical reports prior to the termination contain evidence of injury ,
 (D) or there is a cumulative trauma. 

As you know from my blogs and web sites I always advise my clients to complete and submit a DWC-1 claim form because it provides unequivocal evidence that the employer had notice of the injury. However, at trial most often the injured worker testifies about conversations with management and this is sufficient with a credible witness.

A claim without medical reporting before the termination or layoff is much more difficult. In fact, workers compensation claims without medical treatment are always reviewed and highly litigated. The post termination defense presents a big problem in such cases because it appears more likely the claim was filed in retaliation or in bad faith.

Just to emphasize the complexities of the post termination defense consider Sheppard v. County of Kern, 2022 Cal. Wrk. Comp. P.D. LEXIS 74, where the panel majority held that an applicant’s psychiatric claim was not barred by the post-termination defense under LC 3208.3(e) when he filed his claim after he resigned following a Skelly hearing. Applicant attended the hearing and was given notice of proposed disciplinary action, including a termination. He chose to resign instead of to be terminated. The majority found the defendant never effectuated actual notice of termination or layoff, and because applicant voluntarily resigned, the post-termination defense was inapplicable. In other words actual notice of termination is required for the post termination defense to apply.

With cumulative traumas it may be the injured worker does not know of the injury until after termination or layoff. Labor Code Section 5412 addresses cumulative traumas. The reason cumulative traumas can be filed post termination is that Labor Code Section 5412 assigns the date of injury for a cumulative trauma as the date upon which the employee first suffered disability therefrom and either knew, or in the exercise of reasonable diligence should have known, that such disability was caused by his present or prior employment. Until the employee actually knows that an injury or disability is work related, he cannot file a claim for benefits.

The post termination defense is why the filing a DWC-1 claim form with the employer is so important. Not only does it create an obligation of the WC carrier to begin discovery, but it prevents assertion of the “post termination” defense.