Dahl and Future Earning Capacity

A challenge we have been facing since SB899 was enacted is whether the future earning capacity factor in the Permanent Disability Schedule is rebuttable.  Applicant’s attorneys have been successful in some venues using expert opinion that similarly situated employees have a greater loss of future earning capacity than the Schedule would indicate.

In Dahl, Applicant was attempting to rebut the Schedule using this methodology.  However, the 2nd District Court of Appeal issued a decision invalidating a finding by the WCAB that, in fact, vocational evidence rebutted the scheduled rating.  The Court of Appeal held that in the Dahl case, County Costa County v. WCAB, 240 Cal.App.4th 746 (2015), the Applicant had not rebutted the Schedule because she had not proven one of the three methods permissible under Ogilvie v. WCAB, 197 Cal.App.4th 1262 (2011).

In Ogilvie, the 3rd District held there are three acceptable methods to rebut the presumptively correct rating from the Schedule:  Factual calculation errors, an omission of medical complications aggravating Applicant’s disability and, the one Ms. Dahl used, that because of the disability, she was “not amenable to vocational rehabilitation” and, thus, has a greater loss of future earning capacity than provided for in the Schedule.

Initially, the WCJ at trial, held that Applicant had not rebutted the Schedule. Then, on remand, the judge changed his ruling.  This was based upon vocational expert testimony that similarly situation employees would suffer greater diminished future earning capacity than the scheduled rating indicates. The Court noted that the vocational expert did not make his calculations of DFEC based on Ms. Dahl, as an individual, but on a theoretical group of employees.  The Court found the expert’s analysis, based on the earnings loss of a group of individuals more “similarly situated to Ms. Dahl” than the group used to determine the DFEC factor in the PD Schedule to be persuasive.

The Court of Appeal held that the scheduled rating is presumptively correct, and the employee may not rebut the presumption merely by offering an alternative calculation of her diminished future earning capacity.  It held that Ogilvie did not overthrow the long-held approaches to calculating earning capacity (LeBoeuf) but did not intend that they should be interpreted so broadly as to return to ad hoc decision-making that prevailed prior to SB899.  The Court pointed out that employees can present an alternative analysis that shows a greater diminished future earning capacity than set forth in the Schedule in virtually any case. That is not permissible.

Another important factor in the Court’s decision is that evidence in the Dahl case did not support a finding that she could not benefit from vocational retraining.  Rather, the two experts chosen by the parties agreed that Applicant would be a good candidate for rehabilitation.  However, Applicant’s expert concluded that Applicant was “not amenable” to vocational rehabilitation because it would not restore her to full earning capacity.  The Court held that the determination of amenability to rehabilitation must be based on medical evidence.