Author: WorkCompAcademy

Safety National® is a specialty insurance and reinsurance provider with its corporate headquarters in St. Louis Missouri . It is a wholly-owned subsidiary of Tokio Marine Holdings, Inc., a Tokyo-based global insurer with a presence in over 40 countries.

Safety National just announced the winners of its annual Safety First Grant Program. Three policyholders will be awarded matching grants in order to develop the creative risk control ideas they submitted into formal safety programs.

“As a market leader and safety advocate, we are committed to identifying industry innovation that reduces the risk of employee injury and illness,” said Mark Wilhelm, Executive Chairman of Safety National. “Over the last 10 years, the Safety First Grant Program has funded 32 risk control projects, responding to the emerging needs of our clients while building a blueprint for safer workplaces.”

Winners of the 2024 program included:

– – First Place: Berry Global was awarded the $10,000 matching grant for the addition of radar technology capable of detecting human motion inside of an industrial robot cell. This innovation will prevent dangerous machine restarts, which can result in significant injury.
– – Second Place: Bigge Group was awarded the $5,000 matching grant toward the implementation of an enterprise-wide system used to monitor workplace temperature. These sensors can detect rising heat levels, mitigating heat-related illnesses.
– – Third Place: Lam Research was awarded the $2,500 matching grant to install ergonomic improvement equipment, including over 30 pneumatic and electric adjustable tables. This technology will eliminate problematic manual material handling tasks that lead to musculoskeletal disorders.

Nominees for the annual Safety First Grant Program must be an active Safety National policyholder with a risk-reducing solution that applies to the workers’ compensation line of coverage. The applied solutions must relate to an identifiable and quantifiable loss source and include an anticipated estimate of injury cost savings for the policyholder.

“Each year, our applicants submit increasingly impressive innovative and creative risk management ideas for this program, finding new ways to build a safer workplace for their employees,” said Matt McDonough, Assistant Vice President Risk Control of Safety National. “In celebrating these winning submissions, we hope other organizations are inspired to discover their next great risk-reducing solutions.”

Full details on the 2024 Safety First Grant Program winning solutions can be found on its website.

The 2025 grant application period will open in June 2025.

Nowhere Santa Monica and eight other Nowhere LLCs operate nine organic grocery stores and cafes known as Erewhon in the Los Angeles area. A tenth LLC, Nowhere Holdco, is their managing member.

Edgar Gonzalez worked for Nowhere Santa Monica at its Erewhon market for approximately five months. As a condition of employment, Gonzalez entered into an individual (i.e., non-class) arbitration agreement with Nowhere Santa Monica which provided that any dispute “between Nowhere Santa Monica, LLC DBA Erewhon-Santa Monica” and Gonzalez relating to his employment would be submitted to arbitration.

On May 25, 2022, Gonzalez filed suit against the ten Nowhere entities,defining them as “Defendants” those ten entities plus “any of their parent, subsidiary, or affiliated companies.” He alleged that he and the putative class members “were employees or former employees of Defendants covered by” the Labor Code and applicable Industrial Welfare Commission Wage Orders.

In ten causes of action Gonzalez alleged defendants violated the Labor Code by failing to pay minimum and overtime wages; provide meal or rest periods; provide timely wages and accurate wage statements; indemnify employees for expenses; or pay for vested vacation time on termination of employment. These violations, Gonzalez alleged, constituted unfair business practices.

The complaint, a 20-page block of unbroken, nondescript boilerplate, mentioned no employment agreement, described no work performed or control exerted over such work, and made no distinction between any of the ten defendants.

The ten Nowhere entities filed a joint motion to compel Gonzalez to arbitrate his claims on an individual, non-class basis and to dismiss his class allegations. In support of the motion, Tom Wong, Nowhere Holdco’s Chief Financial Officer, declared that each Erewhon market had its own management team that supervised its own employees. Wong declared that Gonzalez worked for Nowhere Santa Monica at the Erewhon market in Santa Monica from May 27, 2021 to October 15, 2021, and never worked at any other Erewhon market or was employed by any defendant other than Nowhere Santa Monica.

Gonzalez opposed the motion on the ground the non-Santa Monica Nowhere entities were not parties to the arbitration agreement.

The trial court found no evidence that Gonzalez was “attempting to enforce any benefit as to the [non-Santa Monica] Defendants while refusing to arbitrate with them,” and thus no evidence demonstrating that his “claims against the nonsignatory Defendants were ‘intimately founded in and intertwined with’ Plaintiff’s arbitrable claims against Nowhere Santa Monica.” The court therefore granted the motion to compel individual arbitration as to Nowhere Santa Monica but denied it as to the other Nowhere entities. Gonzalez thereafter dismissed his complaint against Nowhere Santa Monica.

The other Nowhere entities appeal. The Court of Appeal reversed in the published case of Gonzalez v. Nowhere Beverly Hills LLC -B328959 (December 2024).

It is undisputed that an arbitration agreement exists between Gonzalez and Nowhere Santa Monica. The non-Santa Monica entities admit they are nonsignatories to this agreement, but contend they may enforce it under principles of equitable estoppel because Gonzalez’s (and the class’s) claims against all Nowhere entities depend on and are intertwined with Nowhere Santa Monica’s obligations under the employment agreement with Gonzalez. The Court of Appeal agreed.

“Because arbitration is a matter of contract, the basic rule is that one must be a party to an arbitration agreement to be bound by it or invoke it – with limited exceptions.” One exception is the doctrine of equitable estoppel, which as a general matter precludes a party from asserting rights it otherwise would have had against another when its own conduct renders assertion of those rights inequitable.

In the arbitration context, “If a plaintiff relies on the terms of an agreement to assert his or her claims against a nonsignatory defendant, the plaintiff may be equitably estopped from repudiating the arbitration clause of that very agreement. In other words, a signatory to an agreement with an arbitration clause cannot . . . ‘on the one hand, seek to hold the non-signatory liable pursuant to duties imposed by the agreement, which contains an arbitration provision, but, on the other hand, deny arbitration’s applicability because the defendant is a non-signatory.”

Applying these principles, the Court of Appeal concluded that the trial court incorrectly denied the non-Santa Monica entities’ motion to compel arbitration because all of Gonzalez’s claims against them are intimately founded in and intertwined with the employment agreement with Nowhere Santa Monica, an agreement which contains an arbitration provision.

The California Legislative Analyst’s Office released a report Monday detailing the urgent need to fix the state’s “broken” unemployment insurance system, which currently faces significant financial challenges incurred during the pandemic, including an outstanding $20 billion loan from the federal government.

According to the Executive Summary the “State’s Unemployment Insurance (UI) Financing System Is Broken. The state’s UI program is supposed to be self-sufficient-that is, the system should collect enough funds to pay for benefits over time. This means, in some years, the system will collect more than necessary so that, during most economic downturns, there is enough money to pay for rising benefit costs. That system is broken: tax collections routinely fall short of covering benefit costs. (The state’s fiscal problems are unrelated to the widespread fraud that affected temporary federal UI programs during the pandemic.) Both our office and the administration expect these annual shortfalls to continue for the foreseeable future. Under our projections, deficits would average around $2 billion per year for the next five years. This outlook is unprecedented: although the state has, in the past, failed to build robust reserves during periods of economic growth, it has never before run persistent deficits during one of these periods.”

The state’s UI tax system requires a full redesign so that contributions: (1) cover benefit costs in most years and (2) build up a reserve that can be drawn down during recessions. The Report recommend four main areas of change:

– – We recommend the Legislature increase the taxable wage base from $7,000 to $46,800, tying the taxable wage base to the amount of UI benefits a worker can actually receive ($450 per week). Taxing this level of earnings means no taxes would be paid on wages that are not covered by UI. This taxable wage base level would place California among the ten states with taxable wages bases above $40,000 and all other Western states. While necessary, this step alone would not be sufficient to address the state’s solvency problems.
– – Following federal guidelines, we recommend the state adopt a simple, robust UI tax structure comprised of a standard tax rate and a reserve-building tax rate. The standard tax rate would cover typical UI benefit costs. The reserve-building rate would help the state build up a robust reserve that can be drawn down during recessions. Under current conditions, the standard tax rate would be 1.4 percent and the reserve-building rate would be 0.5 percent, for a total of 1.9 percent UI tax rate applied to our proposed $46,800 taxable wage base.
– – We recommend the Legislature transition to a new experience rating system that bases employers’ tax rates on increases or decreases in their employment, rather than an exact accounting of their former workers’ UI costs (as the current system operates). This approach would continue to reflect, indirectly, employers’ costs to the UI system because business that reduce employment tend to have higher UI usage. Thus, this alternative approach maintains the policy goals of experience rating but does not suffer from the main downsides of the current system.
– – The outstanding federal loan complicates the state’s efforts to fix its broken UI financing system: as long as the federal loan remains outstanding, even an improved tax system would probably not be able to build reserves ahead of the next recession. To address this, and in acknowledgment of the unique nature of the pandemic that caused the significant UI loan, we outline a shared approach to refinancing the federal loan. This would involve two equal parts: (1) a revenue bond paid back by employers and (2) new borrowing from the Pooled Money Investment Account paid back by the General Fund.

The Executive Summary concludes by saying “The scope and magnitude of our recommendations reflect the deep problems in the existing UI system. These include: (1) the staggeringly large and growing loan from the federal government and (2) the fact that the system is currently running a deficit even during an economic expansion. These are significant problems in isolation, let alone in combination. The significant changes proposed in this report are an honest reflection of these problems. However, whether or not the Legislature takes action, employers will soon pay more in UI taxes than they do today due to escalating charges under federal law. Making changes now will allow the Legislature to make strategic choices about how to repay the federal loan, while also replacing the UI financing system with one that is simpler, balanced, and flexible.”

Labor Code Sections 62.5 and 62.6 authorize the Department of Industrial Relations to assess employers for the costs of the administration of the workers’ compensation, health and safety and labor standards enforcement programs. These assessments provide a stable funding source to the support operations of the courts, to ensure safe and healthy working conditions on the job, to ensure the enforcement of labor standards and requirements for workers’ compensation coverage.

Labor Code Sections 62.5 and 62.6 require allocation of the six assessment types between insured and self- insured employers in proportion to payroll for the most recent year available. Enclosed with a letter is an invoice for the share of the following total assessments, and a document showing the methodology used to compute the assessment amounts and the resulting determination of the respective assessment/surcharge factors. The factors are applied to the premium amount are allocated across the following six categories:

– – Workers’ Compensation Administration Revolving Fund Assessment (WCARF) – – $ 698,761,939
– – Subsequent Injuries Benefits Trust Fund Assessment (SIBTF) – – $ 848,000,000
– – Uninsured Employers Benefits Trust Fund Assessment (UEBTF) – – $ 53,088,800
– – Occupational Safety and Health Fund Assessment (OSHF) – – $ 189,509,130
– – Labor Enforcement and Compliance Fund Assessment (LECF) – – $ 181,983,628
– – Workers’ Compensation Fraud Account Assessment (FRAUD) – – $ 90,435,332

All workers’ compensation insurance policies issued with an inception date during the calendar year 2025 must be assessed to recover amounts advanced on behalf of policyholders. Assessable Premium is the premium the insured is charged after all rating adjustments (experience rating, schedule rating, premium discounts, expense constants, etc.) except for adjustments resulting from the application of deductible plans, retrospective rating or the return of policyholder dividends.

The assessment factors to be applied to the estimated annual assessable premium for 2025 policies are shown in the table on the notice. These are the same factors that were used to calculate the assessment.

The total assessment is calculated based on the direct workers’ compensation premiums reported to the Department of Insurance for Calendar Year 2023 by carriers. The first installment is due on or before January 1, 2025, with the balance due on or before April 1, 2025.

U.S. Attorney Phillip A. Talbert announced that Ifeanyi Vincent Ntukogu, 49, of Fresno, was sentenced to seven years and three months in prison for illegally distributing oxycodone and hydrocodone.

Ntukogu was a pharmacist in Madera who dispensed more than 450,000 oxycodone and hydrocodone pills based on fraudulent prescriptions, all in exchange for cash.

“As a licensed pharmacist, Mr. Ntukogu was trusted to dispense medications safely, supporting positive health outcomes. He intentionally exploited his trusted role, dispensing hundreds of thousands of fraudulently prescribed oxycodone and hydrocodone pills, knowing his greed-fueled actions would put opioids in the hands of drug dealers and could cause grave harm to the public. Working closely with our state and federal law enforcement partners, we dismantled this operation and held those who chose profit over public safety accountable,” said Special Agent in Charge Sid Patel, who leads the FBI Sacramento field office.

“Ntukogo thought he could outsmart the system by rejecting red flag prescriptions all while conducting drug deals on the side for cash. His illicit scheme led to the distribution of nearly half a million highly addictive opioids in Tennessee, Texas and beyond; fueling the fire of prescription drug misuse and endangering American lives,” said DEA Special Agent in Charge Bob P. Beris. “This lengthy sentence underscores the serious consequences for medical practitioners who place profits above people. DEA will continue to work with our counterparts to investigate, arrest and prosecute individuals who abuse their positions and threaten public safety.”

According to court records, from December 2014 through November 2018, Ntukogu dispensed more than 450,000 oxycodone and hydrocodone pills based on fraudulent prescriptions delivered to him by his co-conspirators and co-defendants in the case, Kelo White and Donald Pierre. The prescriptions were from more than 10 different physicians whose signatures were forged.

Ntukogu reviewed each prescription and rejected the ones that he believed regulators may deem suspicious. For example, he rejected prescriptions that were supposedly written by certain doctors or that were written for individuals who were having prescriptions filled at other pharmacies because he believed those prescriptions may raise red flags.

Ntukogu dispensed the pills through his New Life Pharmacy in Madera. Upon doing so, he required cash payments from White and Pierre and increased the price that he charged over time. White and Pierre then illegally sold the pills in Tennessee, Texas, and elsewhere.

Ntukogu received hundreds of thousands of dollars for his participation in the scheme. His sentence was also enhanced because he used his special skills as a pharmacist to help commit the crime.

This case was the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the California Department of Health Care Services. Assistant U.S. Attorneys Antonio Pataca and Joseph Barton prosecuted the case.

The case was investigated under the DOJ’s Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. For more information about OCDETF, please visit Justice.gov/OCDETF.

This case was also part of the DOJ’s Operation Synthetic Opioid Surge (SOS), which is a program designed to reduce the supply of deadly synthetic opioids in high impact areas as well as identifying wholesale distribution networks and international and domestic suppliers.

White is scheduled to be sentenced on Feb. 24, 2025. He faces a statutory maximum penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Pierre, the remaining defendant in the case, was previously convicted and sentenced to nine years and four months in prison.

“This defendant displayed a blatant disregard for public safety and the law,” U.S. Attorney Talbert said. “It took the effort of agents, investigators, undercover officers, and medical professionals to bring an end to this illicit prescription-writing racket. The U.S. Attorney’s Office will continue our pursuit of those who fuel the opioid epidemic for their own personal benefit.”