A new bill would redefine the Labor Code’s definition of “signature” to clear up any confusion about parties’ ability to use electronic signatures on settlement documents.
After the pandemic sent many work comp practitioners to remote work, the WCAB suspended rules and regulations impacting signature requirements. This led many applicants and their attorneys to use electronic signatures.
After the Covid-19 state of emergency ended in February 2023, the Appeals Board issued an en banc decision on March 22, 2023 that rescinded the rules suspensions and reinstated the rules and regulations governing signatures. Many judges began requiring applicants to use wet signatures after that en banc decision.
Assembly Bill 2337 would change two Labor Code sections to clarify that parties can use electronic signatures. The first change would apply to LC 17, to redefine “signature” to include electronic signatures. The second change would apply to LC 5003, a statute stating that Compromise and Release needs to be attested to by two disinterested witnesses or signed by a notary public. The bill would allow an electronic signature to be used when there is an:
- Electronic signature
- An electronic record documenting who signed which papers, at which times, etc.
- And a notary’s electronic signature
The bill is at its beginning stages, and needs approval from the Assembly, state Senate, and eventually Gov. Newsom before becoming law. As it is very early in the legislative session, this bill has been referred to the Assembly Judiciary Committee and the Assembly Insurance Committee. It currently is not scheduled for any hearings, but it is very possible that this bill will wind up on those committees’ agendas in the next 2-3 months.
ANALYSIS
The use of electronic signatures have their pros and cons.
If an applicant has to sign something by hand, it arguably ensures that they actually exist because someone had to put that pen to paper. Otherwise, an unethical actor or actors could potentially conspire to have a nonexistent applicant sign a Compromise and Release in an attempt to commit fraud and get settlement money. While this extreme example is a rarity, it could happen and possibly does happen from time to time. One has to wonder though – if unethical fraudulent people were willing to execute such a scheme, then wouldn’t they probably be willing to fake a wet signature too? Probably so.
Conversely, many attorneys have pointed out that if one can buy a car or sign a seven-figure mortgage with an electronic signature, then why can’t an applicant electronically sign a Compromise and Release?
It’s also worth noting that other statutes, rules, and regulations – which the WCAB does not necessarily have to abide by because they are from other areas of law – allow for e-signatures.
These include:
CONCLUSION
It is foreseeable that lawmakers could approve this bill clarifying the signature requirements in workers’ compensation law. Of course, committee hearings will help inform us on the success of this bill, and any potential amendments. We will continue to monitor this bill and report back on it, so stay tuned to the Bradford and Barthel blog for updates as the legislative session moves on.
Got a question about workers’ compensation defense issues or pending legislation? Feel free to contact John P. Kamin. Mr. Kamin is a workers’ compensation defense attorney and partner at Bradford & Barthel’s Woodland Hills location, where he monitors the recent legislative affairs as the firm’s Director of the Editorial Board. Mr. Kamin previously worked as a journalist for WorkCompCentral, where he reported on work-related injuries in all 50 states. Please feel free to contact John at jkamin@bradfordbarthel.com or at (818) 654-0411.
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