Labor Code 3208.3 (h) Good Faith Personnel Action

The court of appeal, in a published decision, has given a definition to a “good faith personnel action” under Labor Code section 3208.3 (h).

The applicant was employed by the City of Oakland for 30 years and rose through the ranks to a supervisor. The director of the department that the applicant worked in informed the applicant his position was going to be eliminated.  The applicant accepted a position and was later demoted. The applicant filed a stress claim and left work.

The Workers’ Compensation Judge (WCJ) concluded after trial that the employer did not prove that its personnel actions were in good faith.  The WCJ found the injury industrial.  The employer petitioned for reconsideration and the Workers’ Compensation Appeals Board (Board) upheld the WCJ.

Since there was no prior case that defined what a “lawful, nondiscriminatory, good faith personnel action” the appellate court looked at a wrongful termination case Cotran v. Rollins Hudig Hall Internal. Inc. (1998) 17 Cal 4th 93 (Cotran). This case described that there must be a “objective good faith standard” in determining the employers conduct.  This appellate court concluded that 3208.3 has a similar meaning to the objective good faith standard.

The employer is allowed a certain freedom in making its regular and routine personnel decisions. “To be in good faith, the personnel action must be done in a manner that is lacking outrageous conduct, is honest and with a sincere purpose, and is without intent to mislead, deceive, or defraud, and is without collusion or unlawful design.”

The appellate court indicated that the Board was trying to use a “no fault” concept for 3208.3 which is not the proper test.

This court concluded that even if mistakes were made in the process of the demotion of the applicant it was still a good faith personnel action within the meaning of section3208.3.  Based on the particular facts of this case the appellate court indicated that the only conclusion is that this was a good faith personnel activity according to 3208.3. “Good faith personnel action” they indicated may elude a precise set of rules or definitions. But here a regular and routine employment event was carried out in a reasonable manner with no hint of improper motive. Therefore, the WCJ and the Board were overturned.

In this case the applicant’s own testimony proved the good faith personnel action.

Case: City of Oakland V. WCAB (Gullet)

Harvey Brown
3501 Jamboree Rd. Suite 602
Newport Beach, CA 92660

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