Author: WorkCompAcademy

Last year, Governor Gavin Newsom signed AB 51, which effectively outlawed mandatory arbitration agreements with employees – a new version of a bill that prior Governor Jerry Brown had vetoed repeatedly while he was in office.

The law allows workers to pursue damages and attorneys’ fees and open criminal cases against employers who discriminate and retaliate against them for declining arbitration contracts.

The analysis of the Senate Rules Committee demonstrated that the legislature was well aware that a bill prohibiting arbitration agreements could be challenged as being preempted by the Federal Arbitration Act (“FAA”).

As the bill’s author stated, “The Supreme Court has never ruled that the FAA applies in the absence of a valid agreement. AB 51 regulates employer behavior prior to an agreement being reached. Further, understanding the Courts’ hostile precedence toward policies that outright ban or invalidate arbitration agreements, AB 51 does neither. Both pre-dispute and post dispute agreements remain allowable and the bill takes no steps to invalidate any arbitration agreement that would otherwise be enforceable under the FAA. The steps help ensure this bill falls outside the purview of the FAA.”

Courthouse News reports that this past January, U.S. District Judge Kimberly Mueller blocked state officials from enforcing key provisions of the bill that regulate agreements governed by the Federal Arbitration Act. The Obama appointee agreed with a coalition of business groups led by the U.S. Chamber of Commerce that AB 51 unfairly regulated or singled out arbitration agreements in comparison to other contracts.

The ruling was appealed to the 9th Circuit Court of Appeals, and the matter was set for oral argument this December.

Arguing employers could retaliate against workers, a California Justice Department attorney told a Ninth Circuit panel Monday it should overturn a judge’s ruling that federal law preempts the state’s pro-worker bill barring arbitration requirements as conditions of employment.

Proponents of the bill say it protects workers in food service, hospitality and retail who are increasingly being forced to sign away their rights to sue in exchange for being hired.

The chamber argued the bill would unfairly expose California businesses to civil and criminal penalties and force them to both alter hiring practices and spend more on dispute resolution.

California Deputy Attorney General Chad Stegeman told the Ninth Circuit AB 51 was crafted to complement the Federal Arbitration Act – referred to during oral arguments as the FAA – and that it doesn’t undermine arbitration but rather targets employers’ “discriminatory intent” toward workers.

“It’s a matter of consent. An employer can’t fire an employee because of their refusal to arbitrate,” Stegeman said, adding Mueller’s ruling exposes workers to unfair contracts. “The court created a new substantive right to force arbitration. But there’s no such right derived from the FAA.”

Andrew Pincus of Mayer Brown, an attorney for the chamber, told the panel the Federal Arbitration Act clearly preempts state laws that block formation and enforcement of arbitration agreements.

Supreme Court precedent directly applies in situations described in AB 51 where workers must weigh the benefits of nonnegotiable employment contracts even if they don’t have the same bargaining power, Pincus said.

The panel took the matter under submission and did not indicate when it would rule.

Applicant attorney, Moses Luna, 73, of Newport Beach, was arrested on 20 felony counts of insurance fraud after allegedly billing 20 separate insurance companies for translation and interpreting services to collect over $310,000 in undeserved workers’ compensation fees.

An investigation by the Department of Insurance and the Orange County District Attorney’s Office found Luna, a workers’ compensation attorney, created Adelante Interpreting, Inc., a translation and interpreting company, and then fraudulently billed 20 separate insurance carriers for translation and interpreting services.

Luna exclusively referred his own workers’ compensation clients to Adelante Interpreters to fraudulently collect over $311,220 in workers’ compensation fees.

The fees Luna received were for translation and interpreting services rendered to workers’ compensation claimants during depositions and medical appointments. Insurance companies paid the fees, due to Luna’s referrals, since the services were necessary for processing the claims.

Luna failed to disclose his financial interest in the company, as required by law, and used his daughter’s name, Deborah Luna, on corporate paperwork to hide his ownership of the company.

Although his daughter’s name was used for the paperwork, Luna controlled all aspects of Adelante Interpreters including, but not limited to: administrative protocols, employee protocols, independent contractor protocols, as well as billing and collection protocols.

The victim insurance companies include: ACM, AIG, Amtrust, BHHC, CompWest, Employers, ESIS, Farmers, Hartford, ICW, Liberty Mutual, Markel, Matrix, Midwest, Sedgwick, SCIF, Sentry, Travelers, York and Zurich.

Luna is scheduled to return to court on January 19, 2021. This case is being prosecuted by the Orange County District Attorney’s Office.

The California Attorney General announced the arraignment and surrender of Dr. Po Long Lew for unlawfully prescribing sedatives and muscle relaxants to his patients without a medical purpose.

Dr. Lew allegedly prescribed benzodiazepines such as Xanax, and carisoprodols such as Soma without first completing a legitimate physical exam of his patients and without his patients demonstrating a medical need.

He was arraigned in Los Angeles Superior Court. Dr. Lew is charged with ten counts of Unlawful Prescribing Without Medical Purpose, in violation of Health & Safety Code Section 11153.

Working out of his medical practice in Rosemead, the complaint alleges that between December 2018 and October 2019, Dr. Lew prescribed the muscle relaxant Soma, and two sedatives, Xanax and Ativan to patients individually or in combinations of two of the three medications. Benzodiazepines (sedatives) and carisoprodols (muscle relaxants) are known to cause a dangerous drug interaction when taken with opioids.

They are especially dangerous because each of the medications depress the central nervous system and a person’s ability to breathe. The three medications together are known to those addicted to prescription medication as the “Holy Trinity,” and are highly sought out on the street.

The case stems from an investigation conducted by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA). Through the DMFEA, the Attorney General’s office works to protect Californians by investigating and prosecuting those who perpetuate fraud on the Medi-Cal program.

DMFEA also investigates and prosecutes those responsible for abuse, neglect, and fraud committed against elderly and dependent adults in the state. DMFEA regularly works with whistleblowers, the California Department of Health Care Services, and law enforcement agencies to investigate and prosecute.

It is important to note that a criminal complaint contains charges that are only allegations against a person. Every defendant is presumed innocent until proven guilty.

On August 30, 2014, Isaul Alvarado, an employee of Ventura Coastal, sustained a serious leg injury when he stepped into an uncovered screw conveyor (also known as an auger) located below ground level on Ventura’s premises.

The Division of Occupational Safety and Health conducted an inspection of Ventura’s facility and issued a citation to Ventura under the California Occupational Safety and Health Act for a serious violation of a regulation requiring screw conveyors at or below floor level to be guarded by railings or substantial covers or gratings.

Ventura appealed the citation to the Board, arguing that it did not violate the safety order or, if there was a violation, it was misclassified as serious. The ALJ upheld the citation, finding Ventura committed the violation alleged, and it was properly classified as a serious violation. The ALJ did, however, reduce the proposed penalty.

The Board, on its own motion, ordered reconsideration of the ALJ’s decision regarding the penalty. Ventura also filed a petition for reconsideration by the Board, asserting as grounds for reconsideration that the evidence did not justify the findings of fact, and the findings of fact did not support the decision.

On September 22, 2017, the Board issued its decision after reconsideration, upholding the decision of the ALJ.

On October 20, 2017, Ventura filed a second petition for reconsideration with the Board. It asserted three of the Board’s factual findings were not supported by the evidence, so the decision exceeded the Board’s authority. Alternatively, at a minimum, the violation should be reclassified from serious to general.

On December 15, 2017, Ventura filed a petition for a writ of mandate in the superior court, seeking review of the Board’s September 22, 2017 decision. The Board filed a motion to dismiss or for judgment on the pleadings, asserting the writ petition was statutorily required to be filed within 30 days after the Board’s decision was issued. The trial court granted the Board’s motion and entered a judgment of dismissal.

The Court of Appeal reversed and remand with directions in the published decision of Ventura Coastal LLC, v Occupational Safety and Health Appeals Board.

Ventura’s second petition for reconsideration was not properly filed and had no effect on the timeliness of its petition for writ of mandate. The Board’s decision after reconsideration was filed on September 22, 2017, and Ventura’s time for filing a petition for writ of mandate for review of that decision expired 31 days thereafter, on October 23, 2017 (because October 22 fell on a Sunday). Its petition for writ of mandate was not filed until December 15, 2017.

In light of the recent Supreme Court decision in Saint Francis Memorial Hospital v. State Dept. of Public Health (2020) 9 Cal.5th 710, the time limitation for filing the writ petition is subject to equitable tolling, and the employer should have been allowed to amend its petition to allege facts supporting application of that doctrine.

The requirements for its application present questions of fact that have not yet been addressed by the trial court. This includes questions regarding whether the conduct of Ventura, the reason for its delay in filing the petition, and the length of the delay were reasonable and in good faith. Additionally, if tolling is appropriate, the trial court must determine the length of the tolling period and whether the petition was timely filed, in light of any tolling period that is allowed. The trial court must also address the issues of notice and prejudice to the Board.

A list of pending COVID-19 litigation filed by employees against their employers maintained by NCCI, reports two that have been filed against California employers.

Norma Zuniga, the surviving spouse of Pedro Zuniga, an employee, who died on April 13, 2020, after contracting COVID-19, sued the employer, Safeway and Albertsons on May 13, 2020 in California Superior Court.

For approximately 22 years, decedent Pedro Zuniga was employed by Safeway as a material handler in the produce department at the Safeway Northern California Distribution Center in Tracy, California.

Plaintiff alleges that in March 2020, workers at the Distribution Center began to fall ill with COVID-19. These employees were mandated to continue working not only regular shifts, but also additional shifts (6 days per week, rather than 4 or 5) with longer hours (16 hours per day).

By mid-March 2020, employees at the Distribution Center, including Decedent, began complaining to their supervisors about the dangerous working conditions and their fears associated with the same. These complaints were met by superiors with threats of retaliatory disciplinary action, including the potential for accruing ‘points’ which could lead to termination.

On April 1, 2020, after experiencing a fever and other symptoms, Decedent received a COVID-19 test, which came back positive a few days later. On April 13, 2020, Decedent died in the Intensive Care Unit at Memorial Medical Center in Modesto, California, of cardiopulmonary arrest and hypoxic respiratory failure allegedly caused by COVID-19. I

Plaintiff’s Complaint filed in Alameda County Superior Court in May, asserts six causes of action for: (1) Negligence, (2) Gross Negligence, (3) Violations of Federal Occupational Safety and Health Act of 1970 (29 U.S. Code § 654); (4) Violations of the California Occupational Safety and Health Act of 1973 (Title 8, California Code of Regulations § 3203 and California Labor Code § 6400 et seq.); Fraudulent Concealment of Injury (California Labor Code § 3602(b)(2)); and (6) Wrongful Death.

In July, Safeway removed the case to the United States Federal District Court for the Northern District of California, and filed a 33 page Motion to Dismiss the complaint asserting that the California Workers’ Compensation Act provides the sole and exclusive remedy for the injuries suffered by the employee.

In their motion, Safeway argues that “The rule of workers compensation exclusivity is not any different for the contraction of Coronavirus in the workplace and any resulting harm. To wit, the State of California has established that COVID injuries and death are to be processed via workers compensation. See Executive Order N-62-20.”

Subsequently, the parties completed a private mediation on August 11, 2020, but were unable to resolve the action. Thus, the stay of proceedings in federal court was lifted, and the matter was allowed to proceed.

On November 20, Safeway filed a Motion to Change Venue to the Eastern District. And plaintiff Norma Zuniga filed a Motion to Remand the case back to the state courts. Both motions are scheduled for December 29, 2020.

The Plaintiffs remand motion is based in part on her First Amended Complaint which removed the federal cause of action and any federal law relied upon in her initial complaint, thus rendering Defendants Notice of Removal moot.

The second case reported on the NCCI list, Brooks v. Corecivic of Tennessee the Federal Court granted the employer’s Motion tp Dismiss as to Plaintiff’s claims for negligent supervision and intentional infliction of emotional distress, and denied the motion as to Plaintiff’s wrongful constructive termination claims.