Bailey: The WCAB’s Preliminary View of a Section 132a Claim and a Sanctions Notice to the Worker’s Lawyer

Can losing modified work after a doctor issues new restrictions count as discrimination under Labor Code section 132a, the California law against punishing workers for workers’ comp claims? In a non-final order in Matthew Bailey v. Hotline Electrical Contractor, Inc., Nos. ADJ11736712 & ADJ13220428 (WCAB Oct. 26, 2026), a three-member Appeals Board panel said it “appears” that a lineman in that position did not prove discrimination. The Board granted Bailey’s petition for reconsideration, said its decision is not final on the merits, and gave notice that it intends to sanction Bailey’s attorney up to $2,500 for a petition that misstated and failed to cite the trial record.

A lineman lost modified duty after new restrictions

Matthew Bailey, a union journeyman lineman, injured his right upper extremity in 2014 while working for Hotline Electrical Contractor, and later sustained a cumulative injury to the same arm between November 2017 and November 2018. After 2014 restrictions and, by his account, a release to full duty, he returned to the company in 2017 and 2018 and reported in October 2018 that his arm was worsening. The physician’s November 10, 2018 report placed him on modified duty with no forceful or repetitive use of the right hand.

Company emails on November 11, 2018 said it could not accept modified duty during “storm work” and had no job for him while crews worked fires, and asked when he would be released to full duty. A November 15, 2018 termination slip records a “voluntary quit” for “personal reasons.”

The testimony conflicted. Bailey said he was escorted off the worksite, told he was not going back, and checked “personal reasons” under protest. The company’s former regional safety manager said Bailey wanted the 16-hour days fire crews were working, beyond his 40-hour modified schedule, and quit when that was refused. Temporary disability was paid from November 10, 2018 through March 1, 2019.

Bailey filed his section 132a petition in November 2019. A 2021 compromise and release left that claim open, and it went to trial.

The trial judge found the petition timely but no violation

In July 2026 findings, the workers’ compensation judge found the petition timely and found that the employer did not violate section 132a, because Bailey failed to prove he was singled out for disparate treatment because of his injury. The employer did not challenge the timeliness finding, so the Board did not revisit it. The presiding judge’s report recommended denying reconsideration.

An adverse result is not enough under section 132a

The Board started from the California Supreme Court’s formulation in Department of Rehabilitation v. Workers’ Comp. Appeals Bd. (Lauher) (2003) 30 Cal.4th 1281, as the Board quoted it. A worker must show more than “some adverse result” triggered by the injury. The worker “must also show that he or she had a legal right to receive or retain the deprived benefit or status, and the employer had a corresponding legal duty to provide or refrain from taking away that benefit or status.” Put another way, the worker must show “disadvantages not visited on other employees because they were injured.”

The Board’s tentative answers to Bailey’s arguments

A promise of continued modified duty. Bailey argued the company breached an arrangement, and his union agreement, by not continuing modified duty after November 10, 2018. The Board said there was no evidence of such an arrangement, or that the change was “anything other than a re-assignment from the employer either due to a business necessity or worsening of his injury.”

Disability perceived by the employer. Bailey argued the company acted on a perceived disability. The Board answered that the employer relied on the physician’s opinion, as it must. An employer may not offer modified duty beyond the restrictions or invent its own, and “[t]here is no obligation in the Labor Code that requires the defendant to investigate the veracity of a physician’s opinion as to modified restrictions or to make decisions regarding restrictions without a medical opinion.” Unable to offer suitable work, the company paid temporary disability, and it asked the insurer to report a full work release so Bailey could resume working. If Bailey thought the restrictions were wrong, the Board said, his options were to ask the same doctor again, change doctors, or pursue medical-legal discovery.

Treatment as a union member. The Board said there was no evidence that union members were treated differently or that the union agreement was breached, and added: “Any collective bargaining violations cannot be adjudicated in this forum.”

Its conclusion was cautious: “it appears that applicant failed to meet his burden to prove a discriminatory act due to industrial injury and may not be entitled to enhanced benefits under section 132a.”

The sanctions notice targets the attorney’s petition

The notice runs against Bailey’s attorney, named personally in the order, not against Bailey or the employer. WCAB Rule 10945(b) requires every petition to “support its evidentiary statements by specific references to the record.” The Board noted that seven paragraphs of the petition’s statement of facts cited no evidence, and that its citations pointed to the wrong records, including the wrong minutes of hearing and summaries of evidence. One example: the petition claimed no negative job history, although the record showed a 2017 discharge for violating company policy.

Prior warning mattered. In a September 24, 2025 decision denying Bailey’s petition to disqualify the trial judge, the same panel had warned the attorney that failing to state the facts and evidence fully and accurately “could be construed as either frivolous or bad-faith conduct.” Citing Labor Code section 5813, which allows sanctions of up to $2,500 for “bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay,” and Rule 10421(b), the Board announced its intent to impose up to that maximum, payable to the General Fund.

What the order decided and what remains open

The disposition is an order granting reconsideration and a notice of intent. Under Labor Code section 5909, a petition is deemed denied unless the Board acts within 60 days after the case is transmitted to it; here that period began on August 25, 2026 and ran to Monday, October 26, the date of the order. In our reading, the grant keeps the petition open for a later decision; the order itself awards Bailey nothing. The Board stated: “This is not a final decision on the merits of the Petition for Reconsideration.”

The attorney has 20 days plus five for mailing after service to file a response in EAMS, limited to whether good cause exists to impose sanctions under section 5813 and Rule 10421. Absent a response showing good cause, the Board said it will order payment of up to $2,500. The October 26 order left the merits and any sanction for a later decision.

In our reading, Bailey shows how a section 132a claim can turn on the medical restrictions and the employer’s documented reason for its decision. Where the restrictions themselves are disputed, the Board’s preliminary view points to the medical routes it listed. Our guide to section 132a after a firing or demotion explains the claim, the remedies and the one-year deadline.