Applicant Claimed injury to her Psyche on a cumulative trauma basis. The applicant was the supervisor over a department that wrote over $2 mil in loan guarantees that were later found to be fraudulent. The FBI investigated the fraud and the applicant was involved in attempting to recover the money. The applicant claimed the assignment caused her stress. Two years after the fraudulent loans were issued, the applicant was terminated for poor performance.
The parties went to an AME to resolve the issue. The AME found 20% of the Applicant’s problems related to the stress from the bad loans. 40% of the applicants problems were non-industrial, or pre-existing. The remaining 40% was due to the applicant’s Termination. If the Termination was in good faith, then the claim did not meet the predominate cause threshold of Labor Code Sec 3208.3.
The applicant Attorney cross examined the AME. The AME stood by his prior findings that employment was only 20% of the applicants overall psychiatric problems. However, if the termination was bad faith, then the injury would be compensable and predominantly cause by work.
The applicant refused defendants offer to settle before trial. Therefore the matter proceeded to trial. At trial the applicant testified to physical manifestations of her stress that the employer was aware of. Also, the applicant claimed she requested family leave the day before she was terminated. The inference was that the termination was because of her wanting family leave and industrial stress.
On cross examination, the applicant testified to being terminated for poor performance. Also, the applicant indicated she requested a demotion because of her poor performance. Finally, the applicant admitted she made no claim of wrongful termination, or discrimination.
The court ruled that the applicant had not proved a bad faith termination. The court specifically looked at the applicants testimony on cross examination by defendant to make that determination. Therefore, the Judge found that applicant’s injury was only 20% caused by the events of employment and therefore not compensable under Labor Code 3208.3. The EDD lien of $43,940.00 was disallowed in full. And the court Ordered the Applicant Take Nothing from Defendant.
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