DEPARTMENT OF CORRECTIONS AND REHABILITATION,
S282013
IN THE SUPREME COURT OF CALIFORNIA
February 20, 2025
Fourth Appellate District, Division Two E079076; Workers’ Compensation Appeals Board ADJ1360597
Justice Kruger authored the opinion of the Court, in which Chief Justice Guerrero and Justices Corrigan, Liu, Groban, Jenkins, and Evans concurred.
DEPARTMENT OF CORRECTIONS AND REHABILITATION v. WORKERS’ COMPENSATION APPEALS BOARD
S282013
Opinion of the Court by Kruger, J.
California‘s workers’ compensation law guarantees a certain level of recovery for employees who are injured on the job, regardless of whether the employer was at fault. (
The question in this case is whether, for purposes of calculating the 50 percent premium under Michael Ayala was working as a correctional officer for California‘s Department of Corrections and Rehabilitation (CDCR) when he suffered significant injuries in a planned attack by prison inmates. He filed a workers’ compensation claim in which he asserted that his injuries were caused by CDCR‘s serious and willful misconduct in failing to take appropriate safety measures to respond to a credible and specific threat of inmate violence. Although a workers’ compensation administrative law judge (WCJ) initially rejected the argument, the Workers’ Compensation Appeals Board (Board) agreed with Ayala that CDCR had engaged in serious and willful misconduct, and thus concluded that Ayala was entitled to a 50 percent increase in compensation under CDCR did not challenge the Board‘s finding of serious and willful misconduct, but it disagreed with Ayala about the amount to which he was entitled as a result. Under the terms of the Workers’ Compensation Act, which is codified as division 4 of the Labor Code, employees recovering from injury are entitled to collect temporary disability (TD) benefits, which are capped at two-thirds of the employee‘s average weekly earnings, subject to statutory limits. ( CDCR argued that the 50 percent increased compensation under On Ayala‘s motion for reconsideration, the Board reversed. The Board agreed that it lacked jurisdiction to award IDL and EIDL benefits, but considered this beside the point, because the Board “unquestionably has jurisdiction to issue and calculate [the] applicant‘s serious and willful award that he is entitled to under section 4553.” The Board concluded that for purposes of calculating the award, the “compensation otherwise recoverable” included IDL and EIDL benefits. The Board relied for its conclusion primarily on a Government Code provision defining industrial disability leave as “temporary disability as defined in Divisions 4 (commencing with Section 3201) and 4.5 (commencing with Section 6100) of the Labor Code.” ( The Court of Appeal granted CDCR‘s petition for review and reversed the decision of the Workers’ Compensation Appeals Board as inconsistent with The Court of Appeal acknowledged the Board‘s reliance on Brooks, noting that “although Brooks construed a different statute, its reasoning could support a conclusion that base compensation includes industrial disability leave.” (Ayala, supra, 94 Cal.App.5th at p. 472.) The court expressed no view on the issue presented in Brooks, concerning the application of the two-year limitation period prescribed by The Court of Appeal also discussed and distinguished a second appellate decision cited and discussed in Brooks. In State of California v. Workers’ Comp. Appeals Bd. (1996) 44 Cal.App.4th 128 (Ellison), the Court of Appeal affirmed a Board order awarding a statutory penalty under the workers’ compensation law for unreasonable delay in payment of disability benefits, even though the claimant in that case was entitled to receive IDL payments rather than TD payments. (Ellison, at p. 130.) The court in this case saw Ellison as off-point because nothing in the opinion purported to “expand the scope” of the term ” ‘compensation.’ ” (Ayala, supra, 94 Cal.App.5th at p. 474.) The court also noted that the Board in Ellison had determined that the penalty at issue should be calculated based on what the employee would have received in TD benefits, rather than what she was due in IDL payments. (Ibid.) In this respect, the Board‘s approach in Ellison was consistent with the Court of Appeal‘s determination about the proper calculation of the 50 percent premium prescribed by Ayala petitioned for review, supported by the Board as amicus curiae. We granted the petition. The question in this case requires us to consider the interplay between two statutory schemes governing disability benefits for certain workers who are injured on the job. The first of these schemes is the law governing workers’ compensation. First enacted in 1913, the Workers’ Compensation Act is now codified as division 4 of the Labor Code. The act sets out “a comprehensive statutory scheme through which employees may receive prompt compensation for costs related to injuries incurred in the course and scope of their employment.” (Kuciemba v. Victory Woodworks, Inc. (2023) 14 Cal.5th 993, 1005; see The workers’ compensation law contains detailed provisions governing the calculation of benefits for workplace injury. As pertinent here, employees unable to work while recovering from an injury are generally entitled to collect TD payments, in an amount capped at up to two-thirds of the employee‘s average weekly earnings. ( The second statutory scheme at issue in this case is the statute creating IDL. Enacted in 1974 as part of the Berryhill Total Compensation Act, the IDL statute applies to covered state employees who are “temporarily disabled by illness or injury arising out of and in the course of state employment.” ( The question before us is one of statutory interpretation, which we review de novo. (Lauher, supra, 30 Cal.4th at p. 1290.) We employ familiar principles in this enterprise. We begin with the text, considering the ordinary meaning of the statutory language as well as the text of related provisions, terms used elsewhere in the statute, and the structure of the statutory scheme. (Larkin v. Workers’ Comp. Appeals Bd. (2015) 62 Cal.4th 152, 157 (Larkin).) If the text is clear, we must give The workers’ compensation law instructs that “[l]iability for the compensation provided by this division [i.e., the workers’ compensation law] . . . shall, without regard to negligence, exist against an employer for any injury sustained by his or her employees arising out of and in the course of the employment....” ( Section 4553 does not specify what constitutes the “compensation otherwise recoverable” that is subject to the 50 percent premium for serious and willful employer misconduct. But a definition applicable throughout the workers’ compensation law provides that ” ‘[c]ompensation’ means compensation under this division and includes every benefit or payment conferred by this division upon an injured employee . . . without regard to negligence.” ( Section 3207 defines ” ‘[c]ompensation’ ” broadly in some respects, to “include[] every benefit or payment conferred by” the workers’ compensation law. But this definition includes an essential limitation: that compensation includes only those benefits and payments “under” the workers’ compensation law. As the WCJ held and CDCR agrees, this means that Ayala is entitled to a serious misconduct premium calculated as one-half of the category of benefits and payments to which he is entitled under the workers’ compensation law, including, most significantly, TD payments ( This straightforward reading of the statutory language accords with our prior decisions concerning the meaning of the term “compensation” as used in the workers’ compensation law. In City of Moorpark v. Superior Court (1998) 18 Cal.4th 1143, we considered whether the general exclusive remedy provisions of the workers’ compensation law meant that Ayala agrees that “IDL is not ‘conferred by’ Division 4, so it does not meet the strict definition of ‘compensation’ under section 3207.” Still, he raises several arguments for treating IDL benefits as though they were nonetheless “compensation” under the workers’ compensation law. The arguments are not persuasive. Ayala‘s primary argument, which echoes the Board‘s primary line of reasoning in this case, does not concern the meaning of either section 4553 or section 3207. It instead focuses on a definitional provision in the statute creating IDL. The definitional provision, In any event, Ayala‘s Ayala‘s argument to the contrary relies heavily on Brooks, supra, 161 Cal.App.4th 1522. This reliance is misplaced. Brooks concerned a different question: whether IDL payments count as “temporary disability payment[s]” that start the running of the two-year limit on “[a]ggregate disability payments” in Ayala relies primarily on language in the Brooks opinion that speaks generally of a definitional “equivalen[ce]” between IDL and TD. (Brooks, supra, 161 Cal.App.4th at p. 1532.) But that language must be understood in context. The result in Brooks did not depend on any broad conclusion that IDL is for all legal purposes equivalent to TD. To answer the question before it, Brooks needed to establish only that IDL benefits, like TD benefits, are payments made to compensate an injured employee during a period of temporary disability, such that the period during which an employee receives IDL benefits ought to count toward the two-year limit on aggregate disability payments. (See, e.g., id. at p. 1533 [describing IDL as “a form of temporary disability” and noting that “temporary disability indemnity” can be paid at either the IDL rate or the TD rate (italics added)].) The argument Ayala raises here depends on a much more far-reaching view of the ways in which IDL is assertedly “equivalent” to TD — one that runs up against the plain meaning of the definition of ” ‘[c]ompensation’ ” in section 3207. Brooks did not adopt such a view; indeed, it had no reason to consider it.3 Nor, by the same token, do we cast any doubt on the holding of Brooks by giving effect to the plain meaning of section 3207 in this case. Ayala also relies on Ellison, supra, 44 Cal.App.4th 128. Unlike Brooks, Ellison did consider the meaning of a provision of the workers’ compensation law that referred to the provision of “compensation,” as applied to a worker entitled to receive IDL. But Ellison is no more helpful to Ayala than Brooks. The question presented in Ellison was whether, when an employer unreasonably delays “compensation” to an injured worker, the Board has the authority to impose a 10 percent penalty on the award of benefits (see The Court of Appeal in Ellison upheld the Board‘s decision on appeal. It concluded that the Board had acted within its statutory authority in imposing the penalty, alluding to, among other things, “the Legislature‘s definition of IDL as identical with temporary disability indemnity (TD) under the Labor Code ( Ayala seeks to marshal this language in support of the proposition that the definition of IDL in Venturing beyond the definition in Ayala focuses in particular on Although Ayala‘s argument focuses mainly on IDL, the argument he makes based on Ayala also invokes Ayala briefly advances two remaining textual arguments, which we need only briefly address. Ayala first argues that even if payments credited against TD benefits are not “compensation under” the workers’ compensation law ( Ayala also argues that section 3207‘s reference to ” ‘[c]ompensation’ . . . without regard to negligence” means that the standard definition may be “set aside for the more specific provisions found within section 4553” that govern cases of serious and willful employer misconduct. But there are no “more specific provisions” within section 4553 governing what “compensation” means. Section 4553 simply states that “compensation otherwise recoverable” — that is, the compensation that would be owed “without regard to negligence” — must be increased by one-half in cases of serious and willful employer misconduct. This is a straightforward instruction for cases involving serious and willful employer misconduct, and it creates no evident conflict with any other provision of the law. Ayala worries that if IDL benefits are not treated as “compensation” under division 4 of the Labor Code, then the result will be to render section 4553 useless as it applies to public employees. This argument assumes that if IDL payments are not treated as “compensation” to which the one-half premium applies, then a public employee who receives IDL benefits will not be entitled to any additional recovery at all in the event of injury caused by an employer‘s serious and willful misconduct. But the assumption is wrong: As noted above, it is undisputed in this case that the “compensation otherwise recoverable” on which the one-half premium is to be calculated includes the Ayala and the Board argue that It is, moreover, worth remembering that the interpretive question we address here has implications that extend beyond the context of section 4553 premiums for serious and willful employer misconduct. “Certainly, our holding applying the limitation in the statutory definition of ‘compensation’ does not benefit Ayala. However, in other contexts, it would favor the injured worker. For instance, had Ayala‘s injuries been caused by his own serious and willful misconduct, his industrial disability leave [benefit] would not have been reduced by one-half for the very same reason it does not increase by one-half here.” (Ayala, supra, 94 Cal.App.5th at pp. 475-476, citing Finally, we are mindful of our obligation to give appropriate deference to the Board‘s reasoned interpretations of the statute it administers. We have accordingly given careful consideration to the Board‘s position that the section We affirm the judgment of the Court of Appeal. KRUGER, J. We Concur: GUERRERO, C. J. CORRIGAN, J. LIU, J. GROBAN, J. JENKINS, J. EVANS, J. See next page for addresses and telephone numbers for counsel who argued in Supreme Court. Name of Opinion Department of Corrections & Rehabilitation v. Workers’ Compensation Appeals Board Procedural Posture (see XX below) Original Appeal Original Proceeding Review Granted (published) XX 94 Cal.App.5th 464 Review Granted (unpublished) Rehearing Granted Opinion No. S282013 Date Filed: February 20, 2025 Court: County: Judge: Counsel: Carla R. Anene, Jasmine Dovlatyan, Mark Beatty, Mary R. Huckabaa, A. Gina Hogtanian and Tariq Ashrati for Petitioner. Ellen Sims Langille for California Workers’ Compensation Institute as Amicus Curiae on behalf of Petitioner. Anne Schmitz and Allison J. Fairchild for Respondent Workers’ Compensation Appeals Board. Adams, Ferrone, Ferrone, Ferrone Law Group and Michael T. Bannon for Respondent Michael Ayala. Anne Schmitz and Allison J. Fairchild for Workers’ Compensation Appeals Board as Amicus Curiae on behalf of Respondent Michael Ayala. Counsel who argued in Supreme Court (not intended for publication with opinion): Michael T. Bannon Ferrone Law Group 4333 Park Terrace Drive, Suite 200 Westlake Village, CA 91361 (805) 373-5900 A. Gina Hogtanian State Compensation Insurance Fund 655 North Central Avenue, 3d Floor Glendale, CA 91203 (707) 592-9416I.
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CONCLUSION