California Workers’ Compensation Arbitration: How ADR Decisions Are Made

What is workers’ compensation ADR arbitration?

Arbitration is adjudication by an agreed neutral. Unlike an Ombudsman, who assists with information, communication and informal problem-solving, or a mediator, who helps participants negotiate voluntarily, an arbitrator is authorized to decide the issues properly submitted for determination.

California workers’ compensation ADR arbitration should not be assumed to be identical to commercial arbitration, employment-contract arbitration or an ordinary proceeding before a Workers’ Compensation Appeals Board district office. It is a Program-specific adjudicative process operating within California workers’ compensation law.

The applicable ADR Agreement and Program Rules ordinarily determine such matters as:

• Which employees, employers, claims and dates are covered.
• Which disputes may be submitted to arbitration.
• Whether an Ombudsman inquiry, mediation or another procedure must occur first.
• How arbitration is requested.
• How the arbitrator is selected or appointed.
• How issues, exhibits, witnesses and arguments are presented.
• How an award is served, implemented and reviewed.

There is therefore no single arbitration checklist that applies automatically to every California workers’ compensation ADR Program.

Ombudsman, mediation and arbitration: the decision-control map

The same claim may move through several dispute-resolution stages, but the purpose and authority of the neutral change at each stage.

Ombudsman assistance clarifies. Mediation negotiates. Arbitration decides.

Where does arbitration fit in a workers’ compensation ADR Program?

A useful general pathway is:

Question or problem → Ombudsman inquiry and facilitation → defined unresolved dispute → mediation → arbitration decision

Ombudsman stage: clarify and connect

A problem may begin with an unanswered communication, uncertainty about Program coverage, a missing document, inconsistent claim information or a disagreement about the correct procedure. The Ombudsman helps identify the participants, applicable Program materials and the issues requiring attention. The Ombudsman does not issue a binding decision.

Mediation stage: negotiate with assistance

When a defined dispute remains unresolved, mediation provides a structured opportunity for the participants to exchange information, identify areas of agreement and consider a complete, partial or procedural resolution. The mediator manages the discussion, but the participants decide whether to settle.

Learn more at California Workers’ Compensation Mediation.

Arbitration stage: obtain a decision

If the dispute remains unresolved and the Program’s prerequisites have been satisfied, an authorized participant may request arbitration. The arbitrator then determines the issues properly submitted under the governing procedures.

Not every matter must pass through every stage. Some questions resolve during Ombudsman assistance, some disputes settle in mediation, and some Programs establish specialized or expedited routes for particular issues. The applicable ADR Agreement and Program Rules control.

How does California law treat an ADR arbitration award?

California Labor Code section 3201.5 applies to qualifying construction and related employers and unions. Labor Code section 3201.7 authorizes qualifying labor-management arrangements in other industries. Both sections allow an agreement to establish an alternative dispute-resolution system that supplements or replaces all or part of the ordinary workers’ compensation dispute process, including mediation and arbitration.

Under both statutes:

• The arbitrator’s findings of fact, award, order or decision have the same force and effect as an award, order or decision of a workers’ compensation administrative law judge.
• The arbitration system must provide for review by the Workers’ Compensation Appeals Board in the same manner as reconsideration of a final workers’ compensation judge decision.
• Subsequent judicial review is available under the statutory procedures governing review of Workers’ Compensation Appeals Board decisions.

An arbitration award is binding because the arbitrator decides the submitted controversy. Binding does not mean immune from review. The statutory reconsideration and judicial-review procedures remain important.

The California Division of Workers’ Compensation describes carve-out Programs as collectively bargained alternatives for benefit delivery and dispute resolution. Eligibility to participate must be approved by the DWC Administrative Director.

ADR may change the process, but it may not diminish protected compensation entitlements

The distinction between processes and payments is essential when discussing California workers’ compensation ADR.

Labor Code sections 3201.5 and 3201.7 authorize qualifying agreements to establish alternative procedures for resolving disputes and negotiated systems for delivering medical care, medical evaluations, return-to-work services and related functions.

The statutes do not authorize an ADR Agreement to diminish an employee’s protected entitlement to compensation payments for disability or to employer-paid medical treatment otherwise provided by California workers’ compensation law.

Arbitration may decide whether a claimed entitlement exists, what facts apply, which period is involved, what amount is supported by the record or what action is required. The use of arbitration does not, by itself, reduce the underlying statutory protection.

For additional information, review California Workers’ Compensation Benefits.

What workers’ compensation disputes may reach ADR arbitration?

The issues an arbitrator may decide depend on the statute, ADR Agreement, Program Rules, referral or arbitration request, prior orders and procedural history. Depending on the Program, disputes may concern:

• Whether the employee, employer or claim is covered by the ADR Program.
• The identity of the responsible employer, insurer or claims administrator.
• Claim acceptance, delay or denial.
• The occurrence or nature of a claimed injury.
• The body parts, conditions or cumulative-trauma period placed in issue.
• Causation, apportionment or another medical-legal question.
• The applicable medical-provider or medical-evaluation procedure.
• Temporary disability periods or payment disputes.
• Permanent disability issues.
• Return-to-work, modified-work or supplemental-benefit issues.
• Credits, offsets, reimbursement or payment calculations.
• Compliance with a prior agreement, award or Program order.
• Settlement approval or disputes about the meaning or performance of an agreement.
• The procedure required to resolve another claim issue.

Inclusion in this list does not mean that an issue is automatically arbitrable or that arbitration is the first required procedure. Specialized statutes, administrative review systems or Program procedures may govern particular disputes.

The four-corner decision frame: understanding an arbitration dispute

Arbitration becomes easier to understand when the controversy is placed inside four clearly defined corners. This is an educational framework, not a substitute for the filing requirements of any particular Program.

1. Authority: why may this arbitrator decide the dispute?

The first question is whether the employee, employer, claim and issue are governed by the ADR Agreement. Relevant sources may include the collective bargaining or labor-management agreement, Program Rules, employer participation documents, bargaining-unit information and prior Program determinations.

2. Issue: what precise question remains unresolved?

Arbitration should focus on an identified controversy rather than a general description that the entire claim is disputed. A clear issue statement identifies the decision, notice, payment period, body part, procedure or obligation placed before the arbitrator.

3. Record: what information should the arbitrator consider?

The record may include stipulated facts, notices, correspondence, payment records, medical reports, employment information, witness testimony, Program documents and other information permitted by the governing procedure.

4. Requested decision: what is the arbitrator being asked to determine?

The requested decision should correspond to the submitted issue and the arbitrator’s authority. Identifying the requested determination helps distinguish evidence relevant to the dispute from background information that does not require adjudication.

Authority identifies the source of the arbitrator’s power. The issue identifies the question. The record supplies the information. The requested decision identifies the determination sought.

How does workers’ compensation ADR arbitration commonly proceed?

Procedures differ among ADR Programs, but an arbitration may include the following general stages:

1. Confirm Program coverage. The participants identify the employer, bargaining unit, agreement, claim and date or claimed period of injury.
2. Identify the governing rules. The applicable ADR Agreement, Program Rules and arbitration procedures are reviewed.
3. Complete required preliminary steps. Ombudsman activity, mediation, written objections, conferences or other prerequisites may be required.
4. Request arbitration. An authorized participant submits the designated request, notice or referral identifying the unresolved issue.
5. Select or appoint the arbitrator. The selection process and any qualifications required of the arbitrator are established by the particular ADR Agreement and Program Rules.
6. Define the submitted issues. The participants identify the questions to be decided and issues that are not in dispute.
7. Organize the information. Documents, reports, witness information, stipulations and arguments are exchanged or submitted as required.
8. Address preliminary matters. The arbitrator may conduct a conference concerning scheduling, exhibits, witnesses, procedural disputes or the form of the hearing.
9. Conduct the hearing or submission. The matter may proceed through an in-person hearing, videoconference, written submission or another permitted format.
10. Close the record. The arbitrator determines when the evidentiary and argument record is complete.
11. Issue and serve the decision. The award or order states the arbitrator’s determinations and is distributed as required.
12. Implement or seek review. The participants comply with the decision or use the applicable reconsideration procedure.

These steps are illustrative. A particular Program may combine, omit or modify stages, establish different terminology or use a specialized procedure for an identified type of dispute.

What does a workers’ compensation ADR arbitrator do?

An arbitrator may

• Determine the procedure authorized by the applicable Program Rules.
• Clarify which issues have been submitted for decision.
• Conduct conferences and hearings.
• Receive stipulated facts, documents, testimony and argument.
• Rule on procedural and evidentiary questions within the arbitrator’s authority.
• Apply the governing law, agreement and Program Rules.
• Make findings and issue an award, order or decision.
• Retain limited authority over an issue when permitted by the governing procedure.

An arbitrator does not

• Serve as the attorney or representative of any participant.
• Provide medical treatment or diagnose a medical condition.
• Guarantee that a particular participant will prevail.
• Decide issues that were not properly submitted or are outside the arbitrator’s authority.
• Rewrite the governing statute, agreement or Program Rules.
• Act as the mediator unless separately appointed and permitted to do so.
• Replace the claims administrator’s ordinary administrative functions.

How is the arbitrator selected?

The selection process and any qualifications required of the arbitrator are established by the particular ADR Agreement and Program Rules. California Labor Code sections 3201.5 and 3201.7 do not impose the arbitrator-eligibility requirements applicable under Labor Code section 5270.5.

Hearings, evidence and the arbitration record

An arbitration hearing provides an organized method for presenting the information necessary to decide the submitted controversy. The governing rules may permit:

• Agreed or stipulated facts.
• Claim notices and correspondence.
• Medical and medical-legal reports.
• Payment histories and benefit calculations.
• Employment, wage or return-to-work records.
• Testimony from the employee or other witnesses.
• Expert testimony when authorized and relevant.
• Written briefs or oral argument.
• Program agreements, rules, prior decisions and stipulated exhibits.

The arbitrator may establish dates for exchanging exhibits, identifying witnesses, resolving objections and completing the record. Participants should use the actual arbitration notice, scheduling order and Program Rules rather than assume that ordinary WCAB filing procedures apply automatically.

A hearing may occur in person, remotely or through another permitted format. Some disputes may be submitted on an agreed written record when the governing procedure and participants permit it.

Participation and representation in arbitration

The persons participating in an arbitration may include the injured worker, employer, insurer, claims administrator, union or labor-management representative, attorney, lien claimant, witness or another person whose participation is permitted or necessary.

A participant’s ability to obtain private legal advice should be distinguished from the procedures required for an attorney to be recognized as counsel of record in the ADR Program. A participant may privately consult an attorney and enter into a fee agreement. The applicable statute, ADR Agreement and Program Rules determine how notice of representation is filed and how counsel participates directly in the proceeding.

Filing a notice of representation may affect where hearing notices, orders, exhibits and other communications must be sent. Entering into a private fee agreement does not necessarily notify the ADR Program that counsel should be added to the Program record.

Arbitration awards, reconsideration and judicial review

Possible arbitration results

A binding decision is still subject to statutory review

Labor Code sections 3201.5 and 3201.7 require an arbitration system to provide review by the Workers’ Compensation Appeals Board in the same manner as reconsideration of a final order, decision or award of a workers’ compensation administrative law judge.

Labor Code section 5900 begins the statutory reconsideration provisions. Labor Code section 5950 addresses subsequent judicial review through a petition for writ of review. Filing periods, service requirements and other procedural rules may be strict.

A disagreement with the result is not, by itself, a complete reconsideration request. Review is governed by specific statutory and procedural requirements.

This webpage does not calculate a filing deadline, identify available grounds for review or advise a participant whether reconsideration or judicial review should be pursued.

Practical information for arbitration participants

For injured workers

• Identify the applicable ADR Program and obtain its current Rules.
• Keep the arbitration request, notices, scheduling orders and proof of service.
• Identify the exact issues submitted to the arbitrator.
• Keep claim numbers, ADR case numbers and participant contact information together.
• Organize documents by subject and date rather than sending an unorganized claim file.
• Review how the Program recognizes an attorney or other permitted representative.
• Do not assume that a state-system form is the correct Program form.

For employers, insurers and claims administrators

• Confirm employer, bargaining-unit and Program coverage information.
• Identify a participant who understands the claim and the submitted issues.
• Preserve claim notices, payment records and authorization history.
• Distinguish undisputed administrative activity from the issue requiring adjudication.
• Comply with Program-specific service and document-exchange requirements.
• Document implementation of the award or order.

Frequently asked questions about workers’ compensation ADR arbitration

Official California workers’ compensation ADR arbitration resources

• California Labor Code section 3201.5 — construction-industry collectively bargained workers’ compensation ADR systems.
• California Labor Code section 3201.7 — qualifying nonconstruction labor-management workers’ compensation ADR systems.
• California DWC labor-management carve-out information — official Program information, participating-program lists and regulatory resources.
• California Workers’ Compensation Appeals Board — official information concerning the Appeals Board and reconsideration functions.
• California Labor Code section 5900 — statutory starting point for petitions for reconsideration.
• California Labor Code section 5950 — statutory judicial-review provision.
• DWC fact sheets and guides for injured workers — official California workers’ compensation forms and educational materials.

Questions about an ADR-covered claim or arbitration process?

The Office of the Ombudsman can help identify the applicable Program, explain available Program procedures, assist communication and help participants determine the appropriate stage within the governing ADR process. The Ombudsman does not provide legal advice or decide the arbitration.

Office of the Ombudsman Find My ADR Program