The question of the effect of the notice and consent provisions of the Labor Code were addressed by the Third Appellate District in this appellate case (McKinnon).  The Court in particular considered these issues based upon Labor Code § 3853, 3859 and 3860.

The McKinnon matter involved a slip and fall injury suffered while the worker was exiting an elevator during the course and scope of usual and customary duties.  Workers' compensation benefits were provided.  After the provision of some of these workers' compensation benefits, the employer/carrier filed a civil complaint against defendant Otis Elevator.  Subsequent to actually filing a complaint, the subrogation counsel notified the worker that the employer/carrier was "pursuing subrogation against Otis", and inquired whether a third-party action would be pursued by the worker.  The worker replied that she had not yet made a decision whether or not to pursue the third-party action.

Approximately six months later, the employer/carrier's counsel sent a second letter to the worker, advising that the employer/carrier was in the process of settling its case against defendant Otis Elevator and noted that none of the workers' compensation rights would be affected.  A request for the worker to sign a consent to this settlement was made, but never returned by the worker.

In addressing these issues, the Court noted that the Labor Code contains various notice and consent provisions that must be adhered to by the employer and the employee.  The question at issue is whether the lack of adherence to these notice and consent provisions affect the right of an employer or employee to move forward with a third-party suit if they do not participate in the prior lawsuit brought by the other.  The Court noted Labor Code § 3853, which requires that whether an action is brought by an employer or employee against the third-party, that party shall give to the other a copy of the complaint, by personal service or certified mail.  In the McKinnon matter, this was not done, as only a letter was transmitted.

Secondly, the Court noted that Labor Code § 3859 requires the non-participating party's consent to the settlement.  In the McKinnon matter, the employer/carrier requested consent from the worker, but this consent was never given.  The Court noted that the employer/carrier failed to provide the worker notice about its settlement with Otis, which would give the worker the opportunity to recover all the damages she had suffered.  The Court found that the employer/carrier did not adhere to the notice and consent provisions of Labor Code § 3853 and 3859.

The Court did not address any ramifications this would have for the employer/carrier with regard to their settlement or the underlying workers' compensation matter.  The Court did address however, the affect upon the worker's right to pursue a lawsuit against the defendant in light of the employer/carrier's failure to adhere to the notice and consent requirements of the Labor Code.