An employer may receive notice that a disgruntled former employee has filed a workers’ compensation claim alleging a psychiatric injury after being fired or laid off. However, the employer may not necessarily be liable for the claimed injury thanks to the post-termination defense pursuant to Labor Code Section 3208.3(e).

The legislature has specifically enacted a separate Labor Code section for a post-termination defense to a psychiatric injury. For all other injuries, the post-termination defense is governed by Labor Code Section 3600(a)(10).

California Labor Code Section 3208.3(e), provides, in relevant part:

“Where the claim for compensation is filed after notice of termination of employment or layoff, including voluntary layoff, and the claim is for an injury occurring prior to the time of notice of termination or layoff, no compensation shall be paid unless the employee demonstrates by a preponderance of the evidence that actual events of employment were predominant as to all causes combined of the psychiatric injury and one or more of the following conditions exist:

(1) Sudden and extraordinary events of employment were the cause of the injury.

(2) The employer has notice of the psychiatric injury under Chapter 2 (commencing with Section 5400) prior to the notice of termination or layoff.

(3) The employee’s medical records existing prior to notice of termination or layoff contain evidence of treatment of the psychiatric injury.

(4) Upon a finding of sexual or racial harassment by any trier of fact, whether contractual, administrative, regulatory, or judicial.

(5) Evidence that the date of injury, as specified in Section 5411 or 5412, is subsequent to the date of the notice of termination or layoff, but prior to the effective date of the termination or layoff.

Unlike the post-termination defense under Labor Code Section 3600(a)(10), Labor Code Section 3208.3(e) always gives the employee the right to proceed with a med-legal examination, which increases defense costs. This is because Labor Code Section 3208.3(e) imposes the burden to the employee to “demonstrate by a preponderance of the evidence that actual events of employment were predominant as to all causes combined of the psychiatric injury.” Only a QME or doctor can make a medical determination on this issue.

Additionally, there are five exceptions to the psychiatric post-termination defense. Subsection (2) – (4) are rather self-explanatory. If, before the termination, the employer knew about the psychiatric injury or there is medical evidence of a psychiatric injury, then the post-termination defense is defeated. Likewise, if the injured worker has established that the psychiatric injury is a result of a sexual or racial harassment, then the defense is not applicable.

As for the sudden and extraordinary exception, case law has defined it using the terms, “uncommon, unusual, and unexpected.” This is more of a factual argument that varies from case to case.

Lastly, subsection (5) provides an exception if the date of injury under Labor Code Section 5411 (a specific injury) or Labor Code Section 5412 (a CT injury) is in between the notice of termination and the effective date of termination. This issue does is not relevant if the employee was fired immediately.

At Yrulegui & Roberts, we understand the frustration employers experience dealing with disgruntled employees who have filed a frivolous retaliation claim. We vigorously defend these claims by quickly completing discovery, pushing for a minimal settlement, or setting the case for trial.  Contact us today to arrange a confidential appointment with a lawyer. We provide workers’ comp defense services from our office locations in Fresno, Bakersfield, and Sacramento.