County of Los Angeles v. Workers' Comp. Appeals Bd.

• Decision Date: 17 December 1981
• Citation: 637 P.2d 681,30 Cal.3d 391,179 Cal.Rptr. 214
• Court: California Supreme Court
• Parties: , 637 P.2d 681 COUNTY OF LOS ANGELES, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Francis P. Conroy et al., Respondents. L.A. 31454.

Page 214

179 Cal.Rptr. 214

30 Cal.3d 391, 637 P.2d 681

COUNTY OF LOS ANGELES, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Francis P. Conroy et al., Respondents.

L.A. 31454.

Supreme Court of California, In Bank.

Dec. 17, 1981.

Rehearing Denied Feb. 10, 1982.

Patrick A. Wu, Deputy County Counsel, Los Angeles, for petitioner.

Marvin N. Shapiro, Rose, Klein & Marias, Los Angeles, Frank Evans, Vonk, Krimen, Hershenson & Evans, San Francisco, for respondents.

BIRD, Chief Justice.

Is an indigent person who is required to work in order to receive general assistance benefits entitled to workers' compensation for an injury sustained on the job?

I.

In 1971, petitioner, the County of Los Angeles (County), provided two types of general assistance benefits, commonly known as "welfare" and "workfare," to qualified indigent applicants. The County assigned applicants who were able to work to the workfare program. Those who were unable to work were assigned to the welfare program. Applicants of comparable need received the same level of benefits in each program. The only difference between the two programs was that the County required workfare recipients to earn their monthly benefit checks.

Under the workfare program, the County assigned recipients to a job with the County or with some other local governmental agency. The County determined the number of hours the recipient was required to work each month by dividing the amount of his or her monthly benefit check by the federal minimum wage. For example, at a minimum wage of $2 per hour, the recipient would have had to work 50 hours to receive $100 in benefits.

The agency itself supervised the workfare recipient's performance in the job; kept a tally of his or her hours; and reported to the county whether the recipient had, or had not, worked the required number of hours each month. However, the County, not the agency, paid the recipient and the agency did not reimburse the County for such payments. If the recipient failed or refused to work the requisite number of hours and the County found that such failure or refusal was unjustified, the County would terminate the recipient's benefits.

In May 1971, respondent, Francis P. Conroy, applied to the County for general assistance benefits. Since he was able to work, the county assigned him to the workfare program. Conroy began working pursuant to the County's assignment and in turn received monthly benefit checks of about $100.

In July and August 1971, the County assigned Conroy to work for the Inglewood Unified School District (District) as a watchman. To receive his benefits, Conroy had to work for seven or eight hours per day, seven days per month. The District assigned Conroy to Morningside High School, where he worked under the supervision of the chief custodian.

On August 12, 1971, while on a meal break, Conroy fell from a chair in the lunchroom. He was sitting with the chair tilted back when the legs slipped out from under him and he fell. His head and back hit the concrete floor and his arm was cut on a piece of broken glass.

After the accident, Conroy suffered persistent backaches, recurring headaches, and shooting pains in his right leg. As a result, he did not report for work. When the County asked why he was not working, he explained that his injuries prevented him from doing so. The County continued to send Conroy his monthly benefit check. ¹

In 1976, Conroy filed a claim for workers' compensation benefits based on the injury he suffered while working at the Morningside High School. ²

The County contested his claim, arguing that at the time he was injured, Conroy did not qualify as an employee under the Workers' Compensation Act (Lab.Code, § 3200 et seq.) ³ and was, therefore, not entitled to benefits. The County argued in the alternative that even if Conroy did qualify as an employee, the County was not liable since he was an employee of the District, not the County.

The workers' compensation judge rejected both of the County's contentions and awarded Conroy temporary and permanent disability benefits totalling $1,800. The judge did, however, allow the County to offset the welfare payments it had made to Conroy against this award. The Workers' Compensation Appeals Board (Board) denied the County's petition for reconsideration, noting that it had previously held that an indigent who is required to work as a condition of receiving welfare benefits qualifies as an employee. (County of Los Angeles v. Workmen's Comp. Appeals Bd. (Duke) (1974) 39 Cal.Comp.Cases 809.) The County now seeks review of the Board's decision.

II.

An employer-employee relationship must exist in order to bring the Workers' Compensation Act into effect. (§ 3600.) An "employee" is defined as "every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written ...." (§ 3351.) In Laeng v. Workmen's Comp. Appeals Bd. (1972) 6 Cal.3d 771, 776-777, 100 Cal.Rptr. 377, 494 P.2d 1, this court held that section 3351 defines the term "employee" broadly. A person who renders service to another is presumed to be an "employee." (§ 3357.)

The Laeng court indicated that an asserted employment relationship must be considered in light of the legislative mandate to construe these statutes liberally in favor of awarding compensation. (Laeng, supra, 6 Cal.3d at pp. 777-778, 100 Cal.Rptr. 377, 494 P.2d 1. See § 3202.) "(A)n 'employment' relationship sufficient to bring the act into play cannot be determined simply from technical contractual or common law conceptions of employment but must instead be resolved by reference to the history and fundamental purposes underlying the Work(ers') Compensation Act." (Laeng, supra, 6 Cal.3d at p. 777, 100 Cal.Rptr. 377, 494 P.2d 1, citations and fn. omitted, emphasis added.)

In Laeng, a job applicant had been injured while performing a physical agility test as a "tryout" for a city refuse crew job. In determining whether an employment relationship existed, the court focused on whether the applicant had performed a service for and had conferred a benefit on the city. (Id., at pp. 780-783, 100 Cal.Rptr. 377, 494 P.2d 1.) The court found that he had done so, since the tryout test enabled the city to select better qualified employees. During the test, the applicant subjected himself to the city's control and the city directed his activities. In that sense as well, the applicant was in the service of the city. Finally, the court noted that the Workers' Compensation Act is intended to protect against the special risks of employment. That purpose was served by granting compensation benefits, since the tryout test was designed to correlate with the skills required on the job. The test thus included special risks similar to those inherent in the job itself.

The County contends that despite the import of the statutory provisions and the language found in Laeng, this court should deny respondent any benefits. Relying on the 47-year-old case of McBurney v. Industrial Acc. Com. (1934) 220 Cal. 124, 30 P.2d 414, the County argues that a contract of employment was essential to establish any right to compensation. In the McBurney case, this court denied benefits because the worker's relationship to the county was "in the field of public welfare" and as a result no contract of employment was present. (Id., at pp. 127-128, 30 P.2d 414.)

The McBurney case presents some interesting questions. For example, it is not entirely clear whether the worker in McBurney was required to work in order to receive welfare benefits. The discussion of this point in McBurney is contradictory. The court twice stated that work was required as a condition of receiving welfare benefits (id., at pp. 125, 126, 30 P.2d 414), but also noted that the indigent "would receive the relief whether he worked or not" (id., at p. 128, 30 P.2d 414).

However, the Courts of Appeal ignored the contradictory language in McBurney. They interpreted McBurney as holding that an indigent who is required to work in order to receive welfare benefits is not an employee under the Workers' Compensation Act. (Los Angeles Co. v. Indus. Acc. Com. (Jones) (1934) 2 Cal.App.2d 614, 615, 38 P.2d 828; Board of Education v. Indus. Acc. Com. (Stout) (1934) 3 Cal.App.2d 411, 414, 39 P.2d 521.)

A threshold question is whether McBurney, as interpreted by the Courts of Appeal, has continuing validity since it relies upon an overly restrictive definition of the employment relationship under the Workers' Compensation Act. The statutory definition of employee includes, "every person in the service of an employer under any appointment or contract of hire ...." (§ 3351, emphasis added.) Unfortunately, in McBurney this court ignored the use of the disjunctive word "or," and simply restricted the definition to those situations where a contract for hire was present. ⁴ This does not square with the plain meaning of the statute. McBurney is also inconsistent with this court's ruling in Laeng, where a contract for hire was held not to be a prerequisite to the establishing of an employment relationship under the Workers' Compensation Act.

If the principles of Laeng are applied to the present case, it is clear that respondent was an employee of the County under the Workers' Compensation Act. Even more so than the job applicant in Laeng, respondent was in the service of the County when he was injured. He performed the job of watchman on the grounds of a school. Similar to the applicant in Laeng, respondent subjected himself to the County's control. The County, though it did not directly supervise his day-to-day activities, exercised its right of control by assigning him to jobs. Also, the County determined respondent's rate of pay, specified the number of hours he was to work, and had the sole power to terminate his benefits if he did not perform his work to the County's satisfaction. ⁵ The County received a...