The opinion
Filed 12/5/23
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
JOSE VELASQUEZ, 2d Civil No. B321638
(W.C.A.B. No. ADJ11436476)
Petitioner,
v.
WORKERS’ COMPENSATION
APPEALS BOARD, THE
SALVATION ARMY et al.,
Respondents.
Our Workers’ Compensation Act broadly defines
employment and must be liberally construed to protect injured
workers. Persons “rendering service for another” are generally
presumed to be employees. (Lab. Code, § 3357.) 1 But the
Legislature has expressly excluded from the definition of
“employer” any private, nonprofit organization sponsoring a
person who, as a condition of sentencing, performs services for
the organization. (§ 3301, subd. (b).) The Legislature did so to
encourage these organizations to provide drug and alcohol
All statutory references are to the Labor Code unless
1
otherwise stated.
rehabilitation programs at no cost to convicted defendants who
could not otherwise afford treatment as an alternative to their
incarceration.
As a condition of probation, Jose Velasquez entered a
residential rehabilitation program sponsored by The Salvation
Army. He was injured while working in its warehouse. The
Workers’ Compensation Appeals Board (the Board) concluded
Velasquez was not employed by either The Salvation Army or the
County of Santa Barbara (the County), and denied workers’
compensation benefits.
We issued a writ of review. (§ 5950.) We conclude: 1) The
Salvation Army is statutorily excluded from being an employer
for workers’ compensation purposes under section 3301; and 2)
the record was inadequately developed during the administrative
proceedings to determine whether the County was Velasquez’s
employer. The latter issue must be remanded to the Board for
further consideration. Accordingly, we affirm in part, annul in
part, and remand the matter for further proceedings.
FACTUAL AND PROCEDURAL HISTORY
Velasquez pleaded guilty in Santa Barbara County
Superior Court to a felony count of forgery. (Pen. Code, § 476.)
The court suspended pronouncement of judgment, placed
Velasquez on supervised probation for three years with terms,
including that he “[e]nter and complete a residential treatment
program as directed by Probation.”
Velasquez entered The Salvation Army’s residential adult
rehabilitation center in Santa Monica for substance abuse
treatment. The Salvation Army is a private, nonprofit
organization. Its residential treatment program is a six-month
program provided at no cost to the beneficiaries. The program
2
includes 12 hours per week of counseling, attendance at weekly
religious services, meditation, and a work therapy component
during which participants work in The Salvation Army’s
warehouse. The work therapy component is designed to help
individuals become productive members of society.
Velasquez was injured while moving furniture at The
Salvation Army’s warehouse and sought workers’ compensation
for his injuries. Both The Salvation Army and the County denied
his claim for benefits.
At the administrative hearing, the workers’ compensation
judge (WCJ) identified the issue as: “Employment and whether
the applicant was an employee of Defendant The Salvation Army
when he was the beneficiary of a Court-mandated drug diversion
program per Labor Code Section 3352. [¶] The parties further
raise the applicability of Labor Code Section[s] 3351 and 3301.”
A probation department manager testified that The
Salvation Army’s residential treatment program was on the list
of programs approved by the County. The manager testified that
when the court orders a residential treatment program, the
probation department can offer suggestions, but the defendant
ultimately selects the program. The manager denied that the
probation department only offered defendants one program
option, but he could not swear that never occurred.
The Salvation Army’s intake coordinator testified
Velasquez was a “beneficiary” in their substance abuse program.
Velasquez was referred to the program by “the Santa Barbara
County Public Defender’s Office or Santa Barbara County
Probation Department or a combination of both.” He worked in
the warehouse as a “work therapy assignment[],” which is a
program requirement.
3
Velasquez’s intake paperwork at The Salvation Army
stated: “This is [a] work therapy program. While working you
may be required to do some lifting.” The Salvation Army advised
Velasquez he would be required to perform “manual labor, lifting,
stacking, bending, stooping, carrying, driving, loading, unloading
as well as being exposed to potentially dangerous
instrumentalities and equipment.” He signed a waiver form in
which he agreed he was not an employee entitled to workers’
compensation coverage. 2 The waiver also stated Velasquez would
not sue for personal injury, disability, or death, “whether caused
by the negligence of The Salvation Army or otherwise.”
Velasquez testified that a probation officer spoke to him in
the jail and told him that, instead of sending him to prison, the
probation department was going to send him to The Salvation
Army Rehabilitation Center in Santa Monica for six months to
help with his drug addiction. The program was free and it was
the closest one he could attend. Velasquez would receive
counseling, attend Alcoholics Anonymous meetings, and
“probably . . . do a little bit of working in a warehouse.”
Velasquez agreed because he did not want to go to prison. He
testified he was not offered any other program.
Velasquez testified that he participated in The Salvation
Army’s rehabilitation program for six months. He worked five to
six days a week in The Salvation Army’s warehouse under the
direction of the warehouse supervisor. He worked with other
program beneficiaries and with regular employees. He also
supervised other workers, taught them how to load the trucks,
and attended one supervisors’ meeting. Velasquez did not receive
2
Contractual waivers of workers’ compensation are invalid.
(§ 5000.)
4
a paycheck, but received a weekly cash “gratuity” of $14 and $12
in “duckets” to purchase items from The Salvation Army store.
The WCJ did not permit testimony as to whether Velasquez
was exposed to the same risks as regular employees.
During the program, Velasquez had no contact with the
County. But The Salvation Army contacted his probation officer
and reported everything he was doing and how he behaved.
Velasquez was required to show his probation officer his program
graduation certificate.
The WCJ concluded Velasquez was not an employee of
either The Salvation Army or the County, and ordered he “take
nothing” against either. The WCJ acknowledged that
Velasquez’s work “conferred a benefit upon the Salvation Army.”
But he reasoned The Salvation Army was not an employer
because it was “sponsoring” Velasquez pursuant to section 3301,
subdivision (b), “as a condition of his probation to get him clean
and sober.” The WCJ concluded: “Based upon this statutory
scheme and the societal interest in having private, non-profit
organizations working with County and State prosecutors and
government in terms of probation and drug and alcohol
intervention, that societal interest outweighs the workers’
compensation general interest of finding persons to be employees
whenever possible.
Velasquez petitioned the Board for reconsideration. On
September 4, 2019, the Board granted Velasquez’s petition for
reconsideration but deferred ruling on the merits pending
“further study.” On May 31, 2022, the Board issued its opinion
and decision after reconsideration, affirming the WCJ’s order.
The Board relied on Arriaga v. County of Alameda (1995) 9
Cal.4th 1055 (Arriaga) and Dominguez v. County of Orange (Apr.
5
8, 2016, ADJ 8935451) 2016 Cal.Wrk.Comp. P.D. LEXIS 180
(Dominguez). The Board concluded The Salvation Army was
exempt from providing workers’ compensation as a nonprofit
sponsor (§ 3301, subd. (b)), and the County did not employ
Velasquez because it did not exercise control over his working
conditions. (Velasquez v. Salvation Army (May 31, 2022, ADJ
11436476) 2022 Cal.Wrk.Comp. P.D. LEXIS 162.)
Velasquez filed a petition for a writ of review in this court
and we granted the petition. (§ 5950.)
Request for Remand
In briefing filed in this court, the Board requests “the
Decision be annulled and this matter remanded to the Appeals
Board for further consideration” whether Velasquez was an
employee of the County, and whether The Salvation Army was
his employer. Velasquez and the County oppose the request.
The issue as to The Salvation Army’s status as an employer
was fully litigated before the WCJ, and, therefore, we decline the
Board’s request as to The Salvation Army. We conclude a
remand is necessary as to the County for the reasons set forth
below.
DISCUSSION
“ ‘In reviewing an award or decision made by [the Board],
we are governed by familiar principles. [The Board’s] factual
findings, when supported by substantial evidence, are binding on
us. [Citations.]’ [Citation.] ‘ “ ‘ “Questions of statutory
interpretation are, of course, for [a] court to decide. [Citations.]” ’
” ’ [Citation.] ‘However, although [the Board’s] conclusions on
questions of law are not binding on this court [citation], and the
interpretation of a labor statute is a legal question subject to our
independent review [citation], we nevertheless “generally defer to
6
the [the Board’s] interpretation of labor statutes unless clearly
erroneous” [citation].’ [Citation.]” (Meadowbrook Ins. Co. v.
Workers’ Comp. Appeals Bd. (2019) 42 Cal.App.5th 432, 436, as
modified on denial of rehearing (Dec. 20, 2019).)
The California Constitution vests the Legislature with
“plenary power . . . to create, and enforce a complete system of
workers’ compensation.” (Cal. Const., art. XIV, § 4.) The
Workers’ Compensation Act (the Act) (§ 3200 et seq.) defines both
“employer” and “employee,” and provides exceptions to both
definitions.
An “employer” generally includes a county, other public
agency, and “[e]very person including any public service
corporation, which has any natural person in service.” (§ 3300.)
Section 3301, subdivision (b), provides an exception for a “private,
nonprofit organization while acting solely as the sponsor of a
person who, as a condition of sentencing by a superior or
municipal court, is performing services for the organization.”
An “employee” is generally defined as “every person in the
service of an employer under any appointment or contract of hire
or apprenticeship, express or implied, oral or written, whether
lawfully or unlawfully employed.” (§ 3351.) “Any person
rendering service for another, other than as an independent
contractor, or unless expressly excluded herein, is presumed to be
an employee.” (§ 3357.) “ ‘Employee’ ” excludes “a person
performing services in return for aid or sustenance only, received
from any religious, charitable, or relief organization.” (§ 3352,
subd. (a)(2) (former subd. (b).) “Employee” also excludes “[a]
person performing voluntary service for a public agency or a
private, nonprofit organization who does not receive
remuneration for the services, other than meals, transportation,
7
lodging, or reimbursement for incidental expenses.” (§ 3352,
subd. (a)(9) (former subd. (i).)
The Act “shall be liberally construed by the courts with the
purpose of extending their benefits for the protection of persons
injured in the course of their employment.” (§ 3202.) “This
command governs all aspects of workers’ compensation; it applies
to factual as well as statutory construction.” (Arriaga, supra, 9
Cal.4th at p. 1065.)
The Salvation Army
The Board correctly concluded that section 3301,
subdivision (b), excludes The Salvation Army as an employer.
Section 3301 provides in part:
“As used in this division, ‘employer’ excludes the following:
“(a) Any person while acting solely as the sponsor of a
bowling team.
“(b) Any private, nonprofit organization while acting solely
as the sponsor of a person who, as a condition of sentencing by a
superior or municipal court, is performing services for the
organization.”
The legislative intent supports the applicability of section
3301, subdivision (b). “The Finance, Insurance, and Commerce
Committee, whose chairman authored the amendment that
added subdivision (b) to section 3301, provided the following
analysis: ‘Quite often, a person convicted of a minor crime is
given the opportunity of performing a certain amount of public
service in lieu of a jail sentence. The sentence is normally
satisfied by performing services under the sponsorship of a
private nonprofit organization . . . . Accordingly, the purpose of
the amendment is to clarify that they are not employees of the
sponsoring private nonprofit organization.’ (Finance, Ins., and
8
Commerce Com., Summary and Analysis of Assem. Bill No. 44
(1981-1982 Reg. Sess.) Jan. 27, 1981, p. 2.)” (Arriaga, supra, 9
Cal.4th at pp. 1065-1066, italics omitted.) Velasquez came within
the purpose of the legislation when, in lieu of incarceration, he
“perform[ed] services under the sponsorship of a private nonprofit
organization.” (Id. at p 1066.)
Arriaga concluded that both the County and Caltrans were
employers for community service work. (Arriaga, supra, 9
Cal.4th at pp. 1062-1063.) But Caltrans is a government agency.
The exception in section 3301, subdivision (b), applies only to a
“private, nonprofit organization.” Arriaga noted, “The result of
this statutory scheme, admittedly, is that the workers’
compensation rights of a person who elects to work in lieu of
paying a fine turn on the nature of the entity, if any, to which the
county assigns that person. In all cases the county will remain
liable for workers’ compensation because it is the ‘general
employer. If the county, as here, assigns the person to work for
another a public entity, the latter will also be liable for workers’
compensation because it is a ‘special employer.’ [Citation.] But if
the county assigns the person to work for a private nonprofit
organization, that organization will not be liable for workers’
compensation because the statute (§ 3301, subd. (b)) specifically
exempts it from employer status.” (Arriaga, supra, 9 Cal.4th at
p. 1066, fn. 8, italics added.)
Arriaga stated that the distinction between employer
status for government work sites and non-employer status for
nonprofit work sites has a rational basis: “[T]o relieve the private
nonprofit organization of the expense of workers’ compensation
insurance encourages such organizations to provide community
service programs of the type now before us.” (Arriaga, supra, 9
9
Cal.4th at p. 1066, fn. 8.) Encouraging nonprofit organizations to
provide alternatives to incarceration is served by exempting both
public service work as an alternative form of punishment, and
rehabilitation programs that include a work component. As the
Board concluded in Dominguez, The Salvation Army is exempt
under section 3301, subdivision (b), because Velasquez “was
compelled into an approved drug program or face incarceration,
and drug rehabilitation was a condition of his sentencing.”
(Dominguez, supra, 2016 Cal.Wrk.Comp. P.D. LEXIS 180 at *9.)
Velasquez contends section 3301, subdivision (b), is
inapplicable because The Salvation Army did not serve “solely” as
his sponsor, but was also his employer. Velasquez argues the
definition of the word “sponsor” in section 3301, subdivision (b),
should be given the same meaning as the phrase “sponsor of a
bowling team” under subdivision (a). The two subdivisions in
section 3301, however, are not worded the same and bear no
relation. Section 3301, subdivision (b), includes the phrase
“performing services for the organization.” This phrase does not
appear in section 3301, subdivision (a), and contemplates that
services will be performed for the nonprofit organization. The
Salvation Army was a “sponsor,” which is defined as “ ‘a person
who takes responsibility for the actions of another,’ ” including
“ ‘ during a period of instruction, apprenticeship or probation.’ ”
(Dominguez, supra, 2016 Cal.Wrk.Comp. P.D. LEXIS 180 at *9.)
Velaquez also contends that section 3301, subdivision (b),
does not apply here because the superior court did not order him
to perform public service or community service in lieu of a jail
sentence. He argues he was only ordered to complete a
residential treatment program. Velasquez seeks to exclude from
section 3301, subdivision (b), services provided to a private,
10
nonprofit organization as a part of court-ordered rehabilitation as
opposed to court-ordered community service. The statute,
however, is much broader. Section 3301, subdivision (b), does not
require public service or community service. Instead, section
3301, subdivision (b), applies when, as a condition of sentencing,
the person is “performing services for the organization.” The
distinction drawn by Velasquez between court-ordered
rehabilitation and court-ordered community service does not
appear in the statute.
The superior court ordered Velasquez to “[e]nter and
complete a residential treatment program as directed by
Probation.” The Salvation Army’s residential treatment program
was approved by the probation department. The superior court
order for residential treatment necessarily included all aspects of
the program, including “work therapy.” Velasquez worked in the
warehouse to comply with the court’s order to complete the
residential treatment program.
Because we conclude that section 3301 exempts The
Salvation Army from being an employer in this circumstance, we
need not reach the remaining contentions raised by The
Salvation Army as to whether Velasquez is statutorily excluded
from being an employee under the following: 1) the statutory
exception to the definition of “employee” for “[a] person
performing services in return for aid or sustenance only, received
from any religious, charitable, or relief organization” (§ 3352,
subd. (a)(2) (former subd. (b)); and 2) the exclusion from the
definition of “employee” for “[a] person performing voluntary
service for a public agency or a private, nonprofit organization
who does not receive remuneration for the services, other than
meals, transportation, lodging, or reimbursement for incidental
11
expenses.” (§ 3352, subd. (a)(9) (former subd. (i).)
Constitutionality of Section 3301
Velasquez contends that section 3301 is unconstitutional as
applied if it precludes him from workers’ compensation benefits.
We disagree.
The California Constitution vests the Legislature with
“plenary power . . . to create, and enforce a complete system of
workers’ compensation.” (Cal. Const., art. XIV, § 4.) “The
Legislature’s broad power over workers’ compensation matters
has been repeatedly affirmed” and “ ‘gives the Legislature
complete, absolute, and unqualified power to create and enact the
workers’ compensation system.’ ” (Stevens v. Workers’ Comp.
Appeals Bd. (2015) 241 Cal.App.4th 1074, 1094.) The state
Constitution does not “impos[e] a mandate on the Legislature to
create and enforce an unlimited system of workers’ compensation
benefits,” but “endow[s] that body expressly with exclusive and
‘plenary’ authority to determine the contours and content of our
state’s workers’ compensation system, including the power to
limit benefits.” (Facundo-Guerrero v. Workers’ Comp. Appeals
Bd. (2008) 163 Cal.App.4th 640, 650.)
We do not agree that the inapplicability of workers’
compensation here violates “the social public policy of this State”
to “accomplish substantial justice in all cases.” (Cal. Const., art.
XIV, § 4.) Section 3301 resolves conflicting public policies of
compensating injuries to criminal defendants and facilitating
drug and alcohol rehabilitation programs by nonprofit
organizations as alternatives to incarceration. We will not
“ ‘second-guess the apparent policy decision of the Legislature’ ”
in making this determination, which was clearly within its
constitutional authority to make. (Facundo-Guerrero v. Workers’
12
Comp. Appeals Bd., supra, 163 Cal.App.4th at p. 651.)
The County
Velasquez also contends he was an employee of the County.
He relies on the probation department’s role in his enrollment in
The Salvation Army program. The County denies it had an
employment relationship with Velasquez.
The Board concedes its decision on reconsideration relied
upon erroneous legal analysis and that there has been no
evidentiary review or factual findings in this case with respect to
whether the County was Velasquez’s employer. The Board
requests “the Decision be annulled and this matter remanded to
the Appeals Board for further consideration” whether Velasquez
was an employee of the County.
Arriaga noted the distinction between community service
work performed for a government entity and that performed for a
nonprofit organization but stated, “In all cases the county will
remain liable for workers’ compensation because it is the ‘general
employer.’ ” (Arriaga, supra, 9 Cal.4th at p. 1066, fn. 8.) In
concluding the county was Arriaga’s employer, our Supreme
Court relied on three factors discussed in County of Los Angeles v.
Workers’ Comp. Appeals Bd. (1981) 30 Cal.3d 391, 398-399
(Conroy): control over the work, benefit to the county, and
exposure to the same risks of employment faced by regular
employees. (Arriaga, at p. 1062.)
Conroy, supra, 30 Cal.3d 391, found a “workfare” recipient
was covered by workers’ compensation. Los Angeles County
required the recipient to work as a watchman for a school district
as a condition of receiving public benefits. (Id. at p. 395.) Our
Supreme Court concluded that the county was the employer
based on three criteria: 1) “The County, though it did not directly
13
supervise his day-to-day activities, exercised its right of control
by assigning him to jobs. Also, the County determined [Conroy’s]
rate of pay, specified the number of hours he was to work, and
had the sole power to terminate his benefits if he did not perform
his work to the County’s satisfaction”; 2) “The County received a
benefit from respondent’s work, which helped to ensure the safety
of a school within the County’s boundaries”; and 3) “[B]y
assigning [Conroy] to work at the school, the County exposed him
to the same risks of employment faced by similar school
employees.” (Id. at pp. 398-399, fn. omitted.)
Section 5908.5 mandates that “[a]ny decision of the appeals
board granting or denying a petition for reconsideration or
affirming, rescinding, altering, or amending the original findings,
order, decision, or award following reconsideration . . . shall state
the evidence relied upon and specify in detail the reasons for the
decision.” “This procedural demand aims at revealing the basis of
the Board’s action, at avoidance of careless or arbitrary action,
and at assisting meaningful judicial review.” (Patterson v.
Workers’ Comp. Appeals Bd. (1975) 53 Cal.App.3d 916, 924.)
As the Board concedes, the record contains insufficient
factual findings and legal analysis from the Board so this court
can conduct a meaningful judicial review of the question whether
Velasquez was an employee of the County. The Board’s failure to
comply with section 5908.5 constitutes a sufficient basis to annul
the Board’s decision and remand for further proceedings.
(LeVesque v. Workmen’s Comp. App. Bd. (1970) 1 Cal.3d 627, 633-
634; City of Fresno v. Workers’ Comp. Appeals Bd. (1985) 163
Cal.App.3d 467, 470.) Such a failure makes a review of the
substantive issues “not appropriate.” (Painter v. Workers’ Comp.
Appeals Bd. (1985) 166 Cal.App.3d 264, 272.)
14
Pursuant to the Board’s confession of error and request for
remand, we will annul the Board’s decision on reconsideration
issued May 31, 2022, and remand the matter to the Board for
further consideration whether Velasquez was an employee of the
County. (Kuykendall v. Workers’ Comp. Appeals Bd. (2000) 79
Cal.App.4th 396, 403 [substantial justice creates a duty to
develop an adequate record despite delay in proceedings].)
We note that this matter languished for more than two
years following the grant of reconsideration before the Board
reached its decision on reconsideration. We encourage the Board
to decide this matter with reasonable dispatch upon remand so
the parties will have a complete resolution of these important
issues. (See, e.g., Earley v. Workers’ Compensation Appeals
Board (2023) 94 Cal.App.5th 1.)
DISPOSITION
The order of the Workers’ Compensation Appeals Board on
reconsideration is affirmed to the extent that it concluded The
Salvation Army was not Velasquez’s employer. The Board’s
decision as to the County is annulled and this matter is
remanded to the Board for further consideration whether
Velasquez was an employee of the County.
Velasquez is awarded costs.
CERTIFIED FOR PUBLICATION.
GILBERT, P. J.
I concur:
YEGAN, J.
15
BALTODANO, J., Concurring and Dissenting:
I agree the matter must be remanded to the Board to
develop an adequate record regarding whether the County was
an employer. But I respectfully disagree with the conclusion that
The Salvation Army was not an employer for workers’
compensation coverage.
As a condition of his felony probation, the superior court
ordered Velasquez to complete a residential treatment program.
The court did not order him to perform work for The Salvation
Army. Velasquez thus qualifies as an employee eligible to file a
claim for workers’ compensation after he suffered an injury while
performing work assignments required solely by The Salvation
Army.
At the center of this controversy is Labor Code 3 section
3301, subdivision (b), which for workers’ compensation coverage
excludes from the definition of an “employer” “[a]ny private,
nonprofit organization while acting solely as the sponsor of a
person who, as a condition of sentencing by a superior or
municipal court, is performing services for the organization.”
(Italics added.) It is susceptible to two interpretations.
Under the first interpretation, the labor The Salvation
Army required was not “a condition of sentencing.” The
sentencing court ordered Velasquez to participate in a
rehabilitation program as a term of felony probation, and did not
order him to perform services for a nonprofit organization. Under
this interpretation, the exemption in section 3301, subdivision (b)
would not apply and Velasquez would qualify as an employee.
The second interpretation, adopted by my colleagues, would
apply the exemption because a rehabilitation program was a
3 Undesignated statutory references are to the Labor Code.
condition of sentencing, and Velasquez performed services while
fulfilling that condition, regardless of whether such work was
imposed by the court.
Because there is no evidence that the superior court
ordered Velasquez to “perform[] services for” The Salvation Army
“as a condition of sentencing,” I conclude the former
interpretation is more appropriate and the exemption does not
apply. “If the statutory language permits more than one
reasonable interpretation, courts may consider other aids, such
as the statute’s purpose, legislative history, and public policy.”
(Coalition of Concerned Communities, Inc. v. City of Los Angeles
(2004) 34 Cal.4th 733, 737.) This interpretation is supported by
the plain terms in section 3301, subdivision (b), the presumption
in favor of workers’ compensation coverage, the legislative
history, and public policy.
Plain language
By its express terms, section 3301, subdivision (b), applies
only where services are performed for a nonprofit organization
“as a condition of sentencing.” The superior court here did not
impose a court-ordered condition of probation requiring
Velasquez to perform services for The Salvation Army. Instead,
the court ordered Velasquez to felony probation, including that he
participate in a residential treatment program. It was The
Salvation Army, not the court, that imposed the “work therapy”
requirement as a component of its residential treatment program.
Because Velasquez did not render services for The Salvation
Army as a condition of sentencing, the exemption in section 3301,
subdivision (b), does not apply.
Requiring substance abuse treatment as a term of
probation serves different purposes than ordering community
2
service as an alternative punishment to satisfying a jail sentence
or paying a fine. A “sentencing court has broad discretion to
determine whether an eligible defendant is suitable for probation
and what conditions should be imposed.” (People v. Welch (1993)
5 Cal.4th 228, 233; People v. Lent (1975) 15 Cal.3d 481, 486; Pen.
Code, § 1203.1, subd. (j).) “A court may impose probationary
conditions it determines ‘fitting and proper to the end that justice
may be done, that amends may be made to society for the breach
of the law, for any injury done to any person resulting from that
breach, and generally and specifically for the reformation and
rehabilitation of the probationer . . . .’ ” (People v. Prudholme
(2023) 14 Cal.5th 961, 965.)
In exercising its discretion to grant probation, the superior
court here made no determination about the appropriateness of
The Salvation Army’s “work therapy” requirement as a term of
felony probation. Nor did the superior court specify The
Salvation Army as the residential treatment program provider or
order Velasquez to perform work there. Indeed, there is no
evidence the court was even aware of The Salvation Army’s work
requirement. Velasquez could have satisfied the residential
treatment requirement at any program, including one that did
not require him to work. The Salvation Army dictated the
requirements for its program, including “work therapy,” chapel,
and morning devotion, but those conditions are not tantamount
to court-ordered sentencing conditions.
In Arriaga v. County of Alameda (1995) 9 Cal.4th 1055,
1059 (Arriaga), the Alameda County Sheriff assigned Arriaga to
work for the state Department of Transportation (Caltrans) as
part of a sentence to work off an unpaid speeding ticket.
Caltrans assigned Arriaga to clean a ventilation duct in a tunnel,
3
where she was allegedly injured while performing the work. (Id.
at pp. 1059-1060.) Our Supreme Court concluded that Arriaga
was an employee of both the county and Caltrans. (Id. at p.
1063.)
In a footnote, Arriaga said the exemption of section 3301,
subdivision (b), would apply “if the county assigns the person to
work for a private nonprofit organization.” (Arriaga, supra, 9
Cal.4th at p. 1066, fn. 8.) But that situation did not occur in
Arriaga. Nor did it occur here. Velasquez was not assigned to
work, but was referred to The Salvation Army for “residential
[drug] treatment.” The Arriaga footnote noted the purpose of
section 3301, subdivision (b): “to relieve the private nonprofit
organization of the expense of workers’ compensation insurance
[, which] encourages such organizations to provide community
service programs of the type now before us.” (Arriaga, at p. 1066,
fn. 8, italics added.) But the rehabilitation program here is not of
that “type.”
Unlike Arriaga, who was given a “weekender” community
service assignment to pay off a traffic ticket, the court here
suspended imposition of sentence, placed Velasquez on felony
probation, and ordered him to participate in a substance abuse
treatment program. The Salvation Army’s requirement that
Velasquez “continuously” perform manual labor in its warehouse
alongside payroll employees and supervise others for 40 to 48
hours per week for six months is a far cry from the weekend
community service ordered in lieu of a fine in Arriaga.
Statutory presumption
The Worker’s Compensation Act (the Act; § 3200 et seq.)
“shall be liberally construed by the courts with the purpose of
extending their benefits for the protection of persons injured in
4
the course of their employment.” (§ 3202.) This principle has
been repeatedly reaffirmed by precedents of our Supreme Court.
(King v. CompPartners, Inc. (2018) 5 Cal.5th 1039, 1051;
Department of Rehabilitation v. Workers’ Comp. Appeals Bd.
(2003) 30 Cal.4th 1281, 1290; People ex rel. Garcia-Brower v.
Kolla’s, Inc. (2023) 14 Cal.5th 719, 725.) “This command governs
all aspects of workers’ compensation; it applies to factual as well
as statutory construction.” (Arriaga, supra, 9 Cal.4th at p. 1065.)
“The purpose of the Act is to protect individuals against the
special risks of employment. [Citations.] ‘The Act intends
comprehensive coverage of injuries in employment . . . by defining
“employment” broadly in terms of “service to an employer.” ’ ”
(Arriaga, supra, 9 Cal.4th at p. 1061.) A traditional “contract of
hire is not ‘a prerequisite’ to the existence of an employment
relationship.” (Ibid.) Workers’ compensation is intended to apply
to “any and all workers . . . to the extent of relieving from the
consequences of any injury or death incurred or sustained by
workers in the course of their employment.” (Cal. Const., art.
XIV, § 4.) And “ ‘[i]f a provision in [the Act] may be reasonably
construed to provide coverage or payments, that construction
should usually be adopted even if another reasonable
construction is possible.’ [Citation.]” (Arriaga, at p. 1065.)
Concluding The Salvation Army was Velasquez’s employer under
the circumstances here is a reasonable statutory interpretation
that provides workers’ compensation coverage.
Legislative history
The conclusion that The Salvation Army was Velasquez’s
employer is bolstered by the legislative history for section 3301,
subdivision (b). My colleagues assert that the Legislature
enacted the sponsorship exemption for nonprofit organizations
5
“to encourage these organizations to provide drug and alcohol
rehabilitation programs at no cost to convicted defendants.”
(Maj. opn., ante, pp. 1-2.) But the legislative history reveals no
such purpose. Instead, the Legislature intended court-ordered
community service work to be a sentencing alternative and that
nonprofit organizations sponsoring such work be excluded as
employers.
The Department of Industrial Relations, of which the Board
is a part, stated the legislation would “exclude from the definition
of ‘employer’, non-profit organizations, to the extent they use the
labor of persons sentenced by municipal or superior courts to
perform services for them.” (Cal. Dept. of Industrial Relations,
Enrolled Bill Rep. on Assem. Bill No. 44 (1981-1982 Reg. Sess.)
(Apr. 12, 1981) p. 1.) And the Assembly committee report quoted
by my colleagues (maj. opn., ante, at pp. 8-9) makes clear the
exemption applies when “ ‘a person convicted of a minor crime is
given the opportunity of performing a certain amount of public
service in lieu of a jail sentence. The sentence is normally
satisfied by performing services under the sponsorship of a
private nonprofit organization. . . . Accordingly, the purpose of
the amendment is to clarify that they are not employees of the
sponsoring private nonprofit organization.’ (Finance, Ins., and
Commerce Com., Summary and Analysis of Assem. Bill No. 44
(1981-1982 Reg. Sess.) Jan. 27, 1981, p. 2.).” (Arriaga, supra, 9
Cal.4th at pp. 1065-1066.)
Here, the court did not sentence Velasquez “to perform
services for” The Salvation Army, or to perform work “in lieu of a
jail sentence.” Nor was his sentence “satisfied by performing
services.” Because Velasquez was ordered to complete three
years of felony probation, the court retained jurisdiction to
6
sentence him to up to three years in jail if he violated probation,
even after completing The Salvation Army’s six-month treatment
program. (Pen. Code, §§ 473, subd. (a), 1170, subd. (h)(2), 1203.2,
subd. (c).)
Public policy
Public policy is also served by providing workers’
compensation coverage here. In State Compensation Ins. Fund v.
Workmen’s Comp. Appeals Bd. (1970) 8 Cal.App.3d 978, the court
held that a county jail inmate was entitled to workers’
compensation for injuries received while working on a road crew.
The court stated, “[T]he policy underlying modern penology
places great stress upon the theory of rehabilitation of those
convicted of crime. . . . Voluntary work projects are a further and
valuable means towards the accomplishment of this end.” (Id. at
p. 983.) Patients in a state hospital are similarly covered by
workers’ compensation for “injury arising out of and in the course
of a vocational rehabilitation program work assignment”
(§ 3370.1), as are state prison inmates who suffer injuries arising
from assigned work (§ 3370). Public policy also supports workers’
compensation coverage when a nonprofit organization orders a
probationer to work as part of a rehabilitation program.
Denying workers’ compensation benefits may also leave
injured program participants like Velasquez with no remedy for
injury or disability incurred while rendering services. The
Salvation Army’s waiver form included an agreement to not sue
for injuries caused by its negligence. During oral argument in
this matter, counsel for The Salvation Army contended that
Velasquez was not covered by workers’ compensation but would
also be barred from bringing a civil suit because workers’
compensation is the “exclusive remedy.” The Salvation Army’s
7
position—that Velasquez has no recourse, even if injuries were
caused by its negligence—is contrary to the public policy of
providing compensation to persons injured while rendering
services to another. (Cal. Const., art. XIV, § 4; § 3202.)
The Salvation Army argues it will be forced to discontinue
all its rehabilitative programs if required to provide workers’
compensation coverage to Velasquez. Whether the workers’
compensation exemptions should be expanded is a legislative
decision. The Legislature has “ ‘plenary’ authority to determine
the contours and content of our state’s workers’ compensation
system, including the power to limit benefits.” (Facundo-
Guerrero v. Workers’ Comp. Appeals Bd. (2008) 163 Cal.App.4th
640, 650; Cal. Const., art. XIV, § 4.) The Legislature may balance
the public policy of encouraging nonprofit organizations to
provide rehabilitation services against the countervailing policies
of providing probationers with compensation if they are injured
while rendering services to the organization.
Dominguez v. County of Orange
I am not persuaded by the unpublished panel decision in
Dominguez v. County of Orange (Apr. 8, 2016, ADJ 8935451) 2016
Cal.Wrk.Comp. P.D. LEXIS 180 (Dominguez). 4 After Dominguez
4 Dominguez is not binding authority on Board panels or
workers’ compensation judges because it is not reported in the
California Workers’ Compensation Reporter, and is a
three-member panel decision rather than an en banc decision.
(Cal. Code Regs., tit. 8, § 10325, subd. (a); Griffith v. Workers’
Comp. Appeals Bd. (1989) 209 Cal.App.3d 1260, 1264, fn. 2; Gee
v. Workers’ Comp. Appeals Bd. (2002) 96 Cal.App.4th 1418, 1424,
fn. 6.) Nor has it been designated a “[s]ignificant panel
decision[],” which “involve[s] an issue of general interest to the
workers’ compensation community but [is] not binding
8
violated probation, his probation officer gave him the option of
entering a residential drug program to avoid jail. Dominguez
was injured while unloading donor goods as part of the work
required by The Salvation Army. (Id. at *5-6.) The Salvation
Army was dismissed by stipulation from the workers’
compensation claim. (Id. at *2.) The Board nonetheless opined
in dictum that The Salvation Army was not an employer but
instead a “sponsor” pursuant to section 3301, subdivision (b).
(Dominguez, at *7.)
This dictum in Dominguez, supra, 2016 Cal.Wrk.Comp.
P.D. LEXIS 180, erroneously applied section 3301 because the
court did not sentence Dominguez to perform services for a
private nonprofit organization. It does not apply to a situation
where, as in Dominguez, and as here, the court ordered
completion of a rehabilitation program and the nonprofit—not
the court—included work as part of its program.
Alternative theories
Because they conclude section 3301, subdivision (b),
exempts The Salvation Army from providing workers’
compensation coverage, my colleagues do not reach two
alternative theories of exemption. I conclude these exemptions
do not apply.
The definition of “employee” in the Act excludes “[a] person
performing services in return for aid or sustenance only, received
from any religious, charitable, or relief organization.” (§ 3352,
subd. (a)(2) (former subd. (b).) The record does not show such an
precedent.” (Cal. Code Regs., tit. 8, § 10325, subd. (b).) Even
published Board decisions are not binding on this court. (Land v.
Workers’ Comp. Appeals Bd. (2002) 102 Cal.App.4th 491, 495, fn.
2.)
9
arrangement here. There was no evidence Velasquez performed
labor in return for “aid or sustenance,” or that it was “calculated
to be the equivalent of his necessaries of life.” (Hoppmann v.
Workers’ Comp. Appeals Bd. (1991) 226 Cal.App.3d 1119, 1125
(Hoppmann).) Instead, The Salvation Army categorized
Velasquez’s labor as “work therapy.”
Nor do I find applicable the exclusion from the definition of
“employee” for “[a] person performing voluntary service for a
public agency or a private, nonprofit organization who does not
receive remuneration for the services, other than meals,
transportation, lodging, or reimbursement for incidental
expenses.” (§ 3352, subd. (a)(9) (former subd. (i).) Work
compelled by fear of criminal penalties is not “voluntary service”
pursuant to this provision (Arriaga, supra, 9 Cal.4th at p. 1064),
and is not performed “out of charitable generosity” (Hoppmann,
supra, 226 Cal.App.3d at p. 1123). Moreover, the cash and
duckets Velasquez received, however minimal, may be considered
remuneration. (See State Compensation Ins. Fund v. Workmen’s
Comp. Appeals Bd., supra, 8 Cal.App.3d at pp. 979, 983 [county
employment of inmate doing road work established by “gratuity”
of “credit slips” worth 50 cents per day]; but see Hoppmann, at p.
1126 [persons receiving “wages not merely nominal” are covered
by workers’ compensation].)
Conclusion
Liberally construing section 3301 (Cal. Const., art. XIV, § 4;
§ 3202; Veilleux v. Workers’ Comp. Appeals Bd. (1985) 175
Cal.App.3d 235, 241-242), I conclude The Salvation Army was
Velasquez’s employer under the Act. Because the Board erred in
concluding otherwise, I would annul its order. I concur with the
remand to the Board regarding whether the County was an
10
employer, and respectfully dissent from the opinion that The
Salvation Army was not an employer.
CERTIFIED FOR PUBLICATION.
BALTODANO, J.
11
State of California
Workers’ Compensation Appeals Board
______________________________
The Law Office of Daniel K. Simon, Daniel K. Simon and
Carolyn Layfield for Petitioner.
Allison J. Fairchild for Respondent Workers’ Compensation
Appeals Board.
Bradford and Barthel and Louis A. Larres for Respondent
the Salvation Army.
Rosenberg Yudin, Lawrence Kirk; Peatman Law Group and
Lance Peatman for Respondent County of Santa Barbara.