Case Name: ARTHUR RODGERS, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, TRANSCON LINES, INC., et al., Respondents
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1984-07-05
Citations: 36 Cal. 3d 330
Docket Number: S.F. No. 24594
Parties: ARTHUR RODGERS, Petitioner, v. WORKERS’ COMPENSATION APPEALS BOARD, TRANSCON LINES, INC., et al., Respondents.
Judges: 
Reporter: California Reports
Volume: 36
Pages: 330–358

Head Matter:
[S.F. No. 24594.
July 5, 1984.]
ARTHUR RODGERS, Petitioner, v. WORKERS’ COMPENSATION APPEALS BOARD, TRANSCON LINES, INC., et al., Respondents.
Counsel
Harry F. Wartnick and Cartwright, Sucherman, Slobodin & Fowler for Petitioner.
Goshkin, Pollatsek, Meredith & Lee, Samuel E. Meredith, Vivian L. Schneider, Mullen & Filippi and John A. Thompson for Respondents.
Clifford D. Sweet III, Heggeness & Sweet, Michael A. Mathews, Mathews & McClain and C. Gordon Taylor as Amici Curiae on behalf of Respondents.

Opinion:
Opinion
KAUS, J.
In this workers' compensation matter, petitioner Arthur Rodgers, the employee, contends that the Workers' Compensation Appeals Board (WCAB) used the wrong formula in determining the credit against future workers' compensation payments to which his employer is entitled under Labor Code section 3861 as interpreted in Associated Construction & Engineering Co. v. Workers' Comp. Appeals Bd. (1978) 22 Cal.3d 829 [150 Cal.Rptr. 888, 587 P.2d 684], As we explain, the WCAB's approach is totally faithful to the rationale of Associated Construction and, in addition, is consistent with a line of post-Associated Construction decisions which have addressed a very similar question in the context of an employer's right to reimbursement for compensation benefits that have already been paid. Accordingly, we conclude that the WCAB decision should be upheld.
I
On March 4, 1974, Rodgers, a truck driver employed by Transcon Lines, Inc. (Transcon), was injured when he fell from a loading dock owned and operated by Melvin Sosnick Company (Sosnick). Shortly thereafter, Rodgers applied for workers' compensation benefits from Transcon and filed a civil action against Sosnick. After furnishing Rodgers with temporary disability benefits, Transcon intervened in the civil action, seeking reimbursement from Sosnick for the benefits it had provided to Rodgers. Rodgers' workers' compensation proceeding against Transcon was held in abeyance pending the outcome of the civil action.
At the trial in the civil action, the jury found that Rodgers had sustained total damages of $25,500 as a result of his injury, and that Sosnick, Rodgers and Transcon were all partially responsible for the injury, with Sosnick bearing 70 percent of the fault, Rodgers 25 percent and Transcon 5 percent. From the gross amount of Rodgers' recovery from Sosnick, the trial court deducted the amounts attributable to attorneys' fees and to the other expenses designated in section 3861, the statutory credit provision at issue here (see fn. 1, ante), and certified that Rodgers' "net recovery" in the civil action amounted to $7,734.28. The parties apparently agree that this is the appropriate net recovery figure for purposes of section 3861.
After the civil action was concluded, the proceedings in the related workers' compensation matter went forward. The parties stipulated that Transcon had fully paid all temporary disability benefits that were due, and that Rodgers had sustained a permanent disability of 20*4 percent, entitling him to permanent disability benefits of $5,022.50. The only issue on which the parties could not agree was how the employer's section 3861 credit was to be applied in this setting.
The parties recognized that our decision in Associated Construction sets forth the general, controlling principles in this area. In that decision we held that when an employer which is partially at fault for its employee's injury seeks to invoke the credit of section 3861, the WCAB should "deny the employer credit until the ratio of his contribution to the employee's damages corresponds to his proportional share of fault. Once the employer's workers' compensation contribution reaches this level, he should be granted a credit for the full amount available under section 3861." (22 Cal.3d at p. 843.)
Under this formulation, both parties acknowledged that Transcon was entitled to the full statutory credit—$7,734.28—once it had paid Rodgers some threshold amount in compensation benefits. The parties disagreed, however, on how that threshold should be computed. Transcon maintained that it should become eligible for the statutory credit once it had paid benefits equal to its own proportional share of the employee's total civil damages—i.e., 5 percent of $25,500 or $1,275. Rodgers, by contrast, took the position that Transcon should not be able to invoke the credit until it had paid benefits equal to the proportion of the civil damages attributable to both the employer and the employee—in this case, 30 percent of $25,500 or $7,650.
The WCAB, finding no justification for imputing the negligence of the employee to the employer in this context, concluded that the threshold figure should be determined by reference to the employer's own degree of fault. Accordingly, it entered an order which provides that after Transcon pays Rodgers compensation benefits of $1,275, it will be entitled to a credit of $7,734.28. Rodgers now challenges that order.
II
The logical starting point of analysis, of course, is our decision in Associated Construction. In that case, we reviewed at some length the legislative and judicial background of employers' subrogation rights within California's workers' compensation system, and it is unnecessary to retrace that ground in detail here. For our purposes, a very brief synopsis will suffice.
Under the workers' compensation statutes, an employee who is injured in the course of his employment may recover compensation benefits from his employer without regard to the negligence of either party. (§ 3600.). Except in certain limited circumstances, the employee's compensation claim is his exclusive remedy against his employer. (§ 3601.) At the same time, the pertinent statutes provide that the availability of workers' compensation benefits does not preclude an injured employee from pursuing an ordinary civil action "against any person other than the employer"—e.g., a third party tortfeasor—who may be responsible for his injury. (§ 3852.) In addition, when a third party is liable for the employee's injuries, the controlling statutes grant the employer the right (1) to obtain reimbursement from the third party for workers' compensation benefits which the employer has already paid (§§ 3852, 3853, 3856, subd. (b)) and (2) to obtain a credit-based on its employee's recovery from the third party—against its future workers' compensation liability. (§ 3861.) It is, of course, this latter credit which is at issue in this case.
From their inception, the statutory provisions relating to reimbursement and credit have provided no explicit guidance on the question of whether an employer's negligence affects its right to obtain such benefits. In Witt v. Jackson (1961) 57 Cal.2d 57 [17 Cal.Rptr. 369, 366 P.2d 641] and Roe v. Workmen's Comp. Appeals Bd. (1974) 12 Cal.3d 884 [117 Cal.Rptr. 683, 528 P.2d 771], our court—drawing, in part, on the philosophy underlying the then-prevailing all-or-nothing contributory negligence doctrine—held that where the employer's negligence was a concurrent, proximate cause of the injury, the employer was totally barred from obtaining any such reimbursement or credit.
In Associated Construction, however, we faced the question whether the adoption of comparative negligence principles in Li v. Yellow Cab Co. (1975) 13 Cal.3d 804 [119 Cal.Rptr. 858, 532 P.2d 1226, 78 A.L.R.3d 393] and American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578 [146 Cal.Rptr. 182, 578 P.2d 899] had rendered the approach of Witt and Roe obsolete. We concluded that it had. "Applying the principle that the employer and third party should, to the extent consistent with the employer's statutory immunity from tort liability, share the burden of the employee's recovery as joint tortfeasors" (22 Cal.3d at p. 842), we concluded that a concurrently negligent employer should not be totally barred from obtaining reimbursement or credit but instead that it "should receive either credit or reimbursement for the amount by which [its] compensation liability exceeds [its] proportional share of the injured employee's recovery. [Citation.]" (Ibid.)
Having reached this general conclusion, we went on to discuss in some detail exactly how this principle should be applied in both the reimbursement and credit contexts. Because this passage of the opinion is particularly pertinent to this case, we quote it at some length.
We began with the reimbursement procedure: "When the issue of an employer's concurrent negligence arises in a judicial forum, application of comparative negligence principles is relatively straightforward. The third party tortfeasor should be allowed to plead the employer's negligence as a partial defense, in the manner of Witt. Once this issue is injected into the trial, the trier of fact should determine the employer's degree of fault according to the principles of American Motorcycle. The court should then deduct the employer's percentage share of the employee's total recovery from the third party's liability—up to the amount of the workers' compensation benefits assessed against the employer. Correspondingly, the employer should be denied any claim of reimbursement—or any lien under section 3856, subdivision (b)—to the extent that his contribution would then fall short of his percentage share of responsibility for the employee's total recovery." (Fn. omitted.) (Ibid.)
We then turned to the credit procedure: "When the issue of an employer's concurrent negligence arises in the context of his credit claim based on a third party settlement, the board must determine the appropriate contribution of the employer since the employee's recovery does not represent a judicial determination of tort damages. Specifically, the board must determine (1) the degree of fault of the employer, and (2) the total damages to which the employee is entitled.[ ] The board must then deny the employer credit until the ratio of his contribution to the employee's damages corresponds to his proportional share of fault. Once the employer's workers' compensation contribution reaches this level, he should be granted a credit for the full amount available under section 3861. Only when such level of contribution has been reached, however, will grant of the statutory credit adequately accommodate the principle that a negligent employer should not profit from his own wrong.10" (Italics added.) (Id. at p. 843.)
In the accompanying footnote 10, we illustrated the application of the credit procedure we had adopted through the following hypothetical: "Assume an employee receives $20,000 in workers' compensation benefits. He later sues a third party to recover for the same injury, which suit is settled without the consent of the employer. Out of the settlement, the employee actually receives, after the payment of 'expenses or attorneys' fees' within the meaning of section 3861, the sum of $25,000. The employee then seeks further benefits from the board, and his employer claims a credit in the amount of the $25,000 settlement recovery. Under the principles announced herein, the board would then determine the employer's degree of fault and the employee's total damages. Should the board find the employer free of negligence, of course, the employer would receive the benefit of the entire $25,000 settlement as a credit against future payments. Were the board, however, to determine that the employer was 50 percent negligent, and that the employee is entitled to $100,000 in damages, then the employer could not claim a credit until he contributed an additional $30,000 in benefits. The employer would then have contributed a total of $50,000 to the employee's recovery, or 50 percent of the employee's total damages of $100,000 and the ratio of his contribution to the employee's damages would correspond to his degree of fault." (Italics added.) (Id. at p. 843, fn. 10.)
If the italicized language in the above quotations—referring to "his proportional share of fault" and "his degree of fault"—is taken at face value, it might appear that there is no issue left to be decided in this case at all and that Associated Construction in fact held that the threshold figure—after which the employer's statutory credit becomes effective—is to be deter mined by the employer's own degree of fault. As Rodgers maintains, however, that language in Associated Construction cannot in itself fairly be viewed as definitively resolving the issue presented here. Unlike in this case, in Associated Construction the employee's injury had been caused solely by the concurrent negligence of his employer and the third party, and our opinion specifically noted that "[a]s no allegations of employee negligence appear on the face of this record, we do not decide here how such negligence, if established, would affect the proportional contribution of the employer." (Italics added.) (22 Cal.3d at pp. 842-843, fn. 9.) In light of this express disclaimer, Rodgers is correct in maintaining that Associated Construction did not decide the issue presented here.
Nonetheless, the reasoning of Associated Construction clearly supports the WCAB's conclusion that the employee's negligence should not be imputed to the employer in this context. As the above passages demonstrate, our conclusion in Associated Construction that an employer should be denied the benefit of the statutory credit until it has paid compensation benefits equal to its proportional share of the employee's tort damages rested on the proposition that such a rule was necessary to "accommodate the principle that a negligent employer should not profit from [z'is] own wrong" (italics added) (id. at p. 843) and to further the objective "that the employer and third party should, to the extent consistent with the employer's statutory immunity from tort liability, share the burden of the employee's recovery as joint tortfeasors." (Id. at p. 842.) Those principles would not be furthered by denying the employer its statutory credit until it has paid additional benefits equal to the proportion of tort damages attributable to the employee's fault, even if the employer were an ordinary tortfeasor, it would not be liable for that portion of the employee's tort damages.
Further evidence that Associated Construction supports the WCAB conclusion is found in the opinion's explanation for rejecting an alternative method of integrating comparative fault principles into the section 3861 credit determination, which had been proposed by the employer in that case. The employer had suggested that when an employer is concurrently negligent, the amount of the credit provided by section 3861 should simply be reduced by the percentage of the employer's fault; thus, for example, if the employee's net recovery for purposes of section 3861 was $100,000 and the employer was 50 percent at fault, the employer would be entitled to a $50,000 credit against future compensation liability. We rejected that approach—which we described as a "mechanistic application of Li"—explaining that under such a formulation "a negligent employer that had made an insignificant contribution would have its already deficient contribution further reduced—a result clearly at odds with the premise that an employer should not be able to profit from its own wrong.11" (Id. at pp. 843-844.) The accompanying footnote 11—which we set out below —makes it clear that what we had in mind in describing the employer's contribution as "deficient" was that the contribution did not equal the proportion of the tort damages for which the employer would have been liable under ordinary comparative negligence principles. Consequently, it is evident that the fundamental purpose of the "threshold" approach which we adopted in Associated Construction was simply to ensure that the employer did not obtain the benefits of the credit until it had paid compensation equal to its theoretical tort liability. The formula used by the WCAB in this case is true to that purpose.
Finally, one additional passage in Associated Construction confirms the validity of the WCAB's ruling. The employee in Associated Construction had argued that by providing a concurrently negligent employer with any credit whatsoever we would be permitting the employer to profit from its wrong. In response we explained: "Under the rule we announce . . . the employer does not so profit; no credit is available until the employer has fully satisfied its share of tort damages. Allowing the concurrently negligent employer a credit limited in this fashion is rational if nonnegligent employers are to be permitted credit; each profits, if at all, only to the extent that it committed no wrong. The resultant system effects a fair and equitable balance between the interest of the employee in receiving his full damages and the interest of the employer in recovering its subrogation interest. The employer does not profit from its wrong, nor does the employee enjoy a double recovery." (22 Cal.3d at p. 846.)
By equating the posture of a concurrently negligent employer who has paid compensation benefits equal to its share of tort damages with that of a nonnegligent employer, this passage makes clear that there is no basis for increasing the threshold figure beyond the employer's own share of tort damages. Since a totally nonnegligent employer would not have its credit right withheld until it had paid benefits in an amount equal to its negligent employee's share of the tort damages, there is no rational ground for placing this additional burden on a concurrently negligent employer.
In addition, while Rodgers' proposed rule would not actually afford the employee a "double recovery"—the employee's recovery from the third party will have been reduced by virtue of the employee's negligence—the rule would have the anomalous effect of rewarding employee negligence by increasing an employee's recovery vis-á-vis his employer whenever the em ployee's fault increases. Not only would this unfairly penalize employers, but it would undercut the deterrence rationale of the comparative negligence system by permitting a negligent employee to recapture the portion of his tort damages which he was denied in the civil action because of his own responsibility for his injuries. Such a result would hardly represent the "fair and equitable balance between the interest of the employee . . . and the interest of the employer ." that Associated Construction envisioned.
Accordingly, while Associated Construction formally reserved decision on the issue presented here, we believe that the reasoning of the decision leaves no doubt as to the soundness of the WCAB's conclusion in this case. (See also Note, Associated Construction and Engineering Co. of California v. Workers' Compensation Appeals Board: Comparative Negligence in the Workers' Compensation System (1980) 68 Cal.L.Rev. 895, 905-906.)
Additional support for the WCAB's approach is provided by a number of recent cases, decided in the wake of Associated Construction, which have addressed a similar issue in the context of an employer's claim for reimbursement. In Kemerer v. Challenge Milk Co. (1980) 105 Cal.App.3d 334 [164 Cal.Rptr. 397], an employee brought suit against a third party, and the employer intervened and sought reimbursement for all compensation benefits that it had paid. The jury found the third party 70 percent at fault and the employee 30 percent at fault; no fault was attributed to the employer. After the trial court had granted the employer full reimbursement, the third party appealed, contending that the employee's negligence should have been imputed to his employer and that the employer's reimbursement should have been reduced accordingly. The Kemerer court rejected the contention, pointing out that such imputation would provide the third party with a double deduction on account of the employee's negligence and would improperly reduce the innocent employer's subrogation recovery. (See also Aceves v. Regal Pale Brewing Co. (1979) 24 Cal.3d 502, 512 & fn. 4 [156 Cal.Rptr. 41, 595 P.2d 619]; Jarvis v. Southern Pac. Transportation Co. (1983) 142 Cal.App.3d 246, 256-259 [191 Cal.Rptr. 29]; Johnson v. Cayman Development Co. (1980) 108 Cal.App.3d 977, 981-983 [167 Cal.Rptr. 29]; Kramer v. Cedu Foundation, Inc. (1979) 93 Cal.App.3d 1, 6-9 [155 Cal.Rptr. 552].)
Rodgers contends that these reimbursement cases are distinguishable from this case because in the reimbursement context the imputation of employee negligence to the employer would inure to the benefit of the third party tortfeasor whereas in the credit context such imputation would benefit the employee. While the two situations do differ in this regard, in both contexts the imputation would work to the detriment of the employer, requiring it to bear a greater liability than it would otherwise have to bear. In Associated Construction we treated the employer's reimbursement and credit rights as parallel remedies, implying that comparative negligence principles should be applied consistently in both contexts. (22 Cal.3d at pp. 842-843.) Rodgers fails to advance any convincing reason—consistent with the rationale of Associated Construction—to explain why the scope of an employer's subrogation right should vary depending on whether it has paid compensation benefits before the civil judgment or after. Thus, we think the decisions refusing to impute an employee's negligence to an employer for reimbursement purposes do support the WCAB ruling here.
Ill
As discussed above, the approach adopted by the WCAB in this case is consistent with both Associated Construction and with the post-Associated Construction decisions. Rodgers raises three separate arguments, however, which he claims support his proposed credit rule. None withstands analysis.
First, he maintains that a rule imputing the employee's negligence to the employer for purposes of determining the employer's credit rights is supported by this court's decision in Witt v. Jackson, supra, 57 Cal.2d at page 69. At the time of Witt, however, the contributory negligence doctrine barred a negligent employee from obtaining any recovery whatsoever from a third party, and Witt's imputation of the employee's negligence to the employer simply had the effect of absolving the third party of any responsibility for reimbursing the employer for benefits it had paid to the negligent employee. Witt's imputation rule never applied to an employer's statutory credit, because at that time if the employee were negligent, he could not recover any tort damages which would give rise to such a credit. Thus, Witt provides no support for Rodgers' position.
Rodgers also claims that the WCAB's formula improperly injects the issue of employee negligence into the workers' compensation proceeding and improperly reduces the employee's compensation benefits on the basis of such negligence. This contention simply assumes its conclusion. From the employer's point of view, of course, it is Rodgers' proposed rule, rather than the formula adopted by the WCAB, that would introduce the question of employee negligence into the credit determination; the WCAB's ruling requires consideration of only the employer's negligence, a consideration of "fault" clearly sanctioned by Associated Construction. In like manner, the assertion that the WCAB rule permits an employer to reduce his workers' compensation liability by virtue of the employee's negligence erroneously assumes that the governing statutes grant an employee the right to full workers' compensation benefits in addition to the employee's civil recovery and without regard to the employer's credit. Since section 3861 does not explicitly limit or qualify the employer's right to a credit in any way, an employer could at least as plausibly maintain that the "threshold" formula adopted in Associated Construction and applied by the WCAB in this case provides an employee with additional compensation benefits solely on the basis of the employer's negligence.
Finally, Rodgers argues that in the great majority of cases in which the employee's third party action is settled and no specific apportionment of fault is determined in the civil action, the rule applied by the WCAB will add complexity and burdensome litigation to the worker's compensation proceeding, over and above that mandated by our Associated Construction decision. That simply is not so. As already noted, in Associated Construction we specifically held that in those cases in which the third party action is settled and there is no judicial determination of total tort damages or judicial apportionment of fault, "the board must determine (1) the degree of fault of the employer, and (2) the total damages to which the employee is entitled." (Italics added.) (22 Cal.3d at p. 843.) Thus, Associated Construction clearly contemplated that in such cases the WCAB would determine the degree of the employer's fault; it is Rodgers' proposal—not the WCAB's—that would require the board to assign a specific percentage figure to the employee's fault.
Rodgers' contention on this point appears to rest on the assumption that it would be easier and less burdensome for the WCAB to determine the combined fault of the employer and employee than it would for it to determine the employer's fault alone. We can find no basis for such an assumption. As a practical matter, in determining the relative fault either of the employer alone or of the employer and employee together, the WCAB will have to consider the role played by each of the participants—including, of course, the third party tortfeasor—in contributing to the injury. When there is fault on the part of both the employer and the employee, that "fault" will not generally appear as an indivisible whole or a single, identifiable unit; rather, in determining the combined fault of employer and employee—as Rodgers proposes—the WCAB would normally have to determine separately the relative fault of the employer and the employee and then add the two figures together. Thus, if anything, Rodgers' proposal would be the more burdensome one for the WCAB to apply.
Further, there is an additional practical anomaly to Rodgers' proposal. Under the WCAB's approach, in which the employer's credit is postponed until it pays benefits equal to its own proportional share of tort damages, the parties assume their normal adversary posture with regard to their respective conduct; the employee has the incentive to prove that the employer bears a large responsibility for the injury and that he, himself, is relatively free from fault, while the employer will attempt to demonstrate its own innocence and place the responsibility on others—the third party or employee. Adoption of Rodgers' approach—in which the employer's credit would be postponed on the basis of the combined total of employer and employee fault—would, however, create the peculiar situation in which the employee would have the financial incentive to urge that a greater degree of fault be assigned to him; the more at fault the employee is found to be, the greater the sum the employer would be required to pay to the employee before it would be entitled to claim its statutory credit. While this anomaly, in and of itself, would not necessarily preclude adoption of Rodgers' proposal, it does point up the basic irrationality—and unfairness—of the suggested rule.
IV
In sum, we conclude that the WCAB properly determined the employer's credit in this case. The decision is affirmed.
Mosk, J., Broussard, J., Shaw, J., and Mana, J.,* concurred.
Section 3861 provides in relevant part: "The [WCAB] . . . shall allow, as a credit to the employer to be applied against his liability for compensation, such amount of any recovery by the employee for his injury . as has not theretofore been applied to the payment of expenses or attorneys' fees, . or has not been applied to reimburse the employer." Unless otherwise specified, all section references are to the Labor Code.
Although the record indicates that Rodgers obtained a total judgment of $15,589.20 against Sosnick, and that Transcon obtained a judgment of $3,300.08 against Sosnick, it does not clearly reveal how these figures were arrived at. There is some suggestion, however, that the trial court, in computing these amounts, may well have relied on a BAJI formulation that was later disapproved in our Associated Construction decision. (See 22 Cal.3d at p. 847, fn. 12.)
Even if the underlying civil judgment was in some respects erroneous, however, the error would not affect this proceeding, since neither party has challenged the validity of that judgment here. Furthermore, although it is not clear whether Transcon obtained reimbursement for all of the compensation benefits which it furnished Rodgers before the civil judgment was entered, Transcon has not contended that any of its past payments for which it has not obtained reimbursement should be taken into consideration in determining its right to a credit under section 3861. (Cf. Associated Construction, supra, 22 Cal.3d at p. 843, fn. 10.) Accordingly, we need not consider that issue here.
Because Rodgers' permanent disability benefits amounted only to $5,022.50, it is, of course, clear that once Transcon pays $1,275, its statutory credit of $7,734.28 will be more than sufficient to relieve it of any further liability for the current permanent disability award. Nonetheless, the WCAB acted properly in setting forth the total amount of the credit and explaining its operative effect, since it is possible that additional benefits may be awarded to Rodgers in the future if new or further disability should arise as a result of the injury.
In this case, of course, the WCAB did not have to make these determinations because those questions had already been resolved by the jury in the civil action.
Footnote 11 read: "Thus, under its proposed rule the employer herein would be relieved of all further contribution even if it is determined that employer was 85 percent at fault; credit for only 15 percent of the employee's $40,000 net settlement would effectively wipe out employer's further workers' compensation liability of approximately $5,800."
Indeed, an example may help illustrate how—under Rodgers' approach—a negligent employee may actually obtain a greater total recovery than a careful one. Assume that the employee has suffered $100,000 in tort damages, and that—as in this case—the employee's attorney's fees and expenses in the civil action consume 50 percent of the employee's recovery from the third party. If the third party were 100 percent at fault, the employee would receive a gross tort recovery of $100,000 and a net recovery—after deductions—of $50,000. Thus, the nonnegligent employee would receive a net tort recovery of $50,000, and—because in this hypothetical neither the employer nor employee were at all at fault and thus the employer could immediately claim its section 3861 credit—the employee would obtain no additional worker's compensation benefits unless such benefits exceeded $50,000.
On Rodgers' theory, if instead of being totally free of fault, the employee in the above hypothetical were 4 percent at fault, he would receive a greater total recovery than the nonnegligent employee. His total tort damages would be reduced by 4 percent, and his gross tort damages would thus be $96,000. Assuming that attorney's fees and expenses would still consume 50 percent of the gross recovery, his net tort recovery would be $48,000. If the employee's fault were imputed to the employer in determining the section 3861 threshold, the employer would have to pay $4,000 in benefits—the percentage of tort damages attributable to employer and employee fault—before it could claim its $48,000 credit. Thus, the 4-percent-negligent employee would receive $52,000 total recovery as compared to the $50,000 obtained by the totally nonnegligent employee. Further, the disparity would generally increase as the percentage of the employee's fault increased.
Assigned by the Chairperson of the Judicial Council.