City of Oakland v. WCAB, 99 Cal. App. 4th 261 (2002)

David Gullet, a former employee of the Oakland Parks and Recreation Department, was demoted from his position as Parks Supervisor II to Parks Supervisor I due to budgetary pressures facing the city. In response to the demotion, Gullet filed a workers’ compensation claim and left his job after which time he received psychological counseling. The Workers’ Compensation Judge awarded Gullet disability payments in the amount of $25,000 and such further medical treatment as may be required. The Workers’ Compensation Appeals Board (WCAB) denied Oakland’s petition for reconsideration and held that the city had failed to carry its burden of proving its personnel decisions were made in good faith as required by California Labor Code Section 3208.3(h). The Court of Appeal vacated the order of the WCAB after concluding that the city had met its obligation under the statute to prove that it had made the demotion decision in good faith. In reaching this conclusion, the appellate court applied the Supreme Court’s standard for measuring an employer’s exercise of good faith as set forth in Cotran v. Rollins Hudig Hall Int’l, Inc., 17 Cal. 4th 93 (1998).