Author: WorkCompAcademy

The state of California is suing Uber and Lyft for classifying their drivers as contractors instead of employees. The lawsuit is the first major test of a new state law intended to give gig workers more labor protections, including access to employer-sponsored health insurance.

“Uber and Lyft both claim that their drivers aren’t engaged in the company’s core mission and therefore qualify for benefits,” said Xavier Becerra, the state’s attorney general, at a press conference on Tuesday. “If drivers in California contract the coronavirus or if they lose their job as a result, guess what? They’re the ones that go missing. They’re the ones that don’t know what to do next. They’re the ones who have to worry about how they’ll pay their bills.”

Becerra said the companies are also harming taxpayers by classifying drivers as contractors rather than employees. The companies do not pay “hundreds of millions of dollars in social safety net obligations,” or state payroll taxes, he said.

The state is seeking penalties that it estimates could reach “hundreds of millions of dollars.” It also wants the companies to pay restitution to hundreds of thousands of drivers in California.

The lawsuit escalates an ongoing battle over how companies in the so-called gig economy treat the workers who make their services possible. The coronavirus pandemic has put gig workers in the spotlight and exacerbated the precariousness of their jobs.

Classifying drivers as contractors saves Uber and Lyft a lot of money because they do not provide benefits like health coverage to contractors, or pay into state unemployment insurance systems. The companies say that business model benefits drivers by giving them the flexibility to work when they want.

Becerra was flanked at the press conference by prosecutors from Los Angeles, San Francisco and San Diego, which have joined the lawsuit.

The California prosecutors contend that the companies are flouting the rules – specifically, Assembly Bill 5, a law passed last year that makes it harder for companies to say workers are not employees.

“Misclassification means cheating,” said Mike Feuer, Los Angeles City Attorney, at the press conference.

The law represents a significant threat to the apps’ business models, but Uber and Lyft have argued that it does not apply to them. Along with food delivery app DoorDash, the companies have pledged to spend $90 million on a ballot initiative seeking to overturn AB5.

On Tuesday, Uber said it would fight the lawsuit. “At a time when California’s economy is in crisis with four million people out of work, we need to make it easier, not harder, for people to quickly start earning,” the company said. “We will contest this action in court, while at the same time pushing to raise the standard of independent work for drivers in California, including with guaranteed minimum earnings and new benefits.”

Lyft struck a less combative tone in a statement it released Tuesday. It said: “We are looking forward to working with the Attorney General and mayors across the state to bring all the benefits of California’s innovation economy to as many workers as possible, especially during this time when the creation of good jobs with access to affordable healthcare and other benefits is more important than ever.”

A federal judge on May 4 granted 3M, the maker of N95 masks, an injunction against a New Jersey-based company accused of using 3M’s trademarks and deliberately inflating the price of the face masks.

3M had filed legal action April 10 in federal court in New York City against Performance Supply LLC, alleging price gouging and deceptive trade practices in the sales of N95 respirators used in the fight against the COVID-19 pandemic, according to a news release.

According to 3M, Performance Supply LLC offered to sell $45 million in N95 masks to New York City officials at prices 500-600% over 3M’s list price.

U.S. District Court Judge Loretta Preska ordered Performance Supply LLC to cease using 3M trademarks, stating in her order that the “defendant is trading off the widespread commercial recognition and goodwill of the 3M Marks and 3M Slogan in connection with offering to sell products that 3M is widely known for manufacturing and selling, namely, N95 respirators.”

“Accordingly, it is no surprise that [Performance Supply LLC] confused New York City procurement officials into believing that [Performance Supply LLC] was an authorized vendor of 3M-brand N95 respirators,” the judge added in her order.

The judge’s order marks the first win for 3M in a series of price-gouging lawsuits against companies in Florida, California, Indiana and Wisconsin and elsewhere. There are about ten such cases now pending across the country.

3M accused a company in a California federal lawsuit of infringing its 3M-branded N95 masks by reselling the protective equipment at drastically increased prices. 3M Co. claims Utah-based Rx2Live LLC tried to sell millions of the masks to Community Medical Centers Inc. in Fresno, California, at a “grossly inflated” price that was about four to five times greater than the list price, according to the complaint.

The company doesn’t claim Rx2Live was trying to sell counterfeit versions of 3M’s masks, but was instead falsely asserting that it was a distributor of 3M products – making CMC believe the mask prices were authorized by 3M, according to the lawsuit.

In three complaints filed in Florida and a fourth in Indiana, the industrial giant accused a series of small entities of falsely claiming to be affiliated with 3M in order to sell masks to desperate government agencies at jacked-up prices.

In one of the cases, 3M accused an Indiana company of falsely claiming to work directly with 3M and having a whopping 5 billion masks to sell at more than double their shelf price.

In one of the new cases, 3M accused a Georgia entity called 1 Ignite Capital LLC of using misleading language in an attempt to sell 10 million masks to Florida’s Division of Emergency Management at more than four and a half times their actual price.

In another case, 3M accused a company called Zenger LLC and owner Zachary Puznak of even more egregious behavior. Puznak allegedly offered to sell as many as 5 billion N95 masks to the Indiana Economic Development Corporation by claiming to be in direct contact with “executives from 3M.” When pressed for verification, he allegedly accused IEDC of “paranoid irrationality.”

“3M does not – and will not – tolerate price gouging, fraud, deception, or other activities that unlawfully exploit the demand for critical 3M products during a pandemic,” said Denise Rutherford, 3M’s senior vice president, corporate affairs, in a press release.

“3M will not stop here. We continue to work with federal and state law enforcement authorities, and around the world, to investigate and track down those who are illegally taking advantage of this situation for their own gain.”

Amid social distancing, authorities nationwide are reporting a surge in fatal opioid overdoses. Addiction and recovery advocates say the U.S. is now battling two epidemics at once. From 1999 to 2018, opioid overdoses involving prescription and illicit drugs have killed nearly 450,000 Americans. (One recent study found an additional 99,160 opioid deaths, previously unreported because of incomplete medical records.)

Montgomery County, Ohio, was considered the country’s overdose capital in 2017 – is reporting a 50 percent jump in overdoses over last year. Coroner Kent Harshbarger suggested to one local news outlet this increase could be closer to 100 percent: “March had around 42 which, our normal baseline is somewhere in the 20s usually. So 42 is a significant increase.”

Indeed, authorities in counties across Florida, Texas, Pennsylvania and New York are also reporting rises in overdoses during the COVID-19 crisis.

Helen Jones-Kelley, the executive director of Montgomery County Alcohol, Drug Addiction and Mental Health Services, said her agency is redoubling efforts to get in front of the spate of overdoses. That includes delivering naloxone kits to households with a history of drug abuse and reviewing ledgers to see whose kits are expired. She said her task force is penning personal notes for those who might be struggling, and informing people about telehealth treatment options for addiction.

While some Americans struggle to find toilet paper and cleaning supplies during the pandemic, the country’s drug users are also facing a dwindling supply.

COVID-19 has interrupted the global supply chain of illicit drugs, including the synthetic opioid fentanyl. One key supplier in Wuhan, China—the world’s first coronavirus epicenter, and a hub for precursor chemicals used to create synthetic opioids – closed shop earlier this year.

Last week, the Los Angeles Times reported that one of Wuhan’s biggest customers, Mexican drug cartels, are being stymied by a reduction in exports and new travel restrictions to the United States, leading to a hike in illicit drug prices.

The increased cost for drug users is a key concern, according to Glenn Sterner, an assistant professor of criminal justice at Penn State Abington.

“Just like we’re having trouble finding paper products and stuff in grocery stores, traffickers are having issues trying to find the chemicals to make our drugs,” said Sterner, a member of the Opioid Overdose Task Force for the State of Pennsylvania.

“In some ways this is a good thing,” Sterner added. “We’re actually seeing less of these substances in our communities in some areas. If we can’t get on planes, neither can the drugs.”

But Sterner says in places with a shortage of heroin, prices will go up and put a bigger strain on drug users experiencing poverty. That in turn could lead to an increase in criminal activity, as people seek money to buy drugs, and to a spike in the use of other drugs like methamphetamine, which is becoming more widely available. He said addiction treatment for meth, however, isn’t as robust as that for opioids.

Meanwhile, people might unknowingly be consuming less potent versions of drugs like heroin, which could be diluted in face of shortages. Sterner said that once the supply chain reemerges, it could open the floodgates to more overdoses, as drugs will be more potent and come at a cheaper post-coronavirus price.

Hundreds of COVID-19-related scams, many of which operated from websites that advertised fake vaccines and cures, operated fraudulent charity drives, delivered malware, or hosted various other types of scams, have been disrupted by US law enforcement, according to an announcement by the Department of Justice.

As of April 21, 2020, the FBI’s Internet Crime Complaint Center has received and reviewed more than 3,600 complaints related to COVID-19 scams, said the DOJ statement.

Federal agencies then worked to analyze the complaints and investigate the scams, ultimately shuttering hundreds of malicious domains.

Among the scams closed were a fraudulent site claiming to be soliciting donations for the American Red Cross. Several other sites were impersonating government programs to trick people into entering sensitive personal information such as banking details and others which distributed malicious software.

“The department will continue to collaborate with our law enforcement and private sector partners to combat online COVID-19 related crime,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.

To combat the scams, the DOJ worked with agents and investigators from the FBI, the Secret Service, as well as others in both the public and private sector.

“Keeping pace with the growing threat of cyber-enabled COVID-19 scams requires an alliance between the private sector and our law enforcement partners to safeguard our nation from this sort of nefarious conduct,” said Director James M. Murray of the U.S. Secret Service.

According to the statement, The DOJ is also working with international partners to support similar initiatives in other countries.

“In one Justice Department-supported action, a state prosecutor in Brazil took down a fake site purporting to belong to a leading Brazilian brewery,” said the statement. “The website publicized the distribution of free sanitizer, but in fact was infecting the computer systems of numerous Brazilian consumers with malware.”

Across the Atlantic, the UK’s National Cyber Security Center (NCSC) has also taken on COVID-19 related scams. Within a day of establishing a reporting service for suspicious emails, the NCSC took down 80 malicious web based campaigns, according to a statement released Wednesday.

“While we have not seen a rise in email scams in the last month, coronavirus is the top lure currently used to conduct cyber crime, exploiting public unease and fear of the pandemic,” said NCSC Chief Executive Officer Ciaran.

“We hope the success of the Suspicious Email Reporting Service deters criminals from such scams, but if you do receive something that doesn’t look right forward the message to us – you will be helping to protect the UK from email scams and cyber crime,” he added.

Legislators return to the state Capitol on May 5 for the first time in nearly two months, confronting an urgent need to deal with coronavirus legislation including workers’ compensation, and a formidable budget deficit.

The coronavirus pandemic has blown a multibillion-dollar hole in California’s budget, one that is likely to force Gov. Gavin Newsom and lawmakers to make difficult decisions in the years to come.

The story published in the San Francisco Chronicle claims that the shortfall is likely to total roughly $35 billion in 2020-21 alone, the nonpartisan state legislative analyst told senators who convened a special budget hearing on the coronavirus Thursday in Sacramento. The shortfall could snowball by an additional $85 billion in the years that follow, Legislative Analyst Gabriel Petek said.

“If budget problems of this magnitude were to emerge, they would exceed the state’s reserves,” Petek said, in something of an understatement.

The surplus that the Legislature, Newsom and former Gov. Jerry Brown accumulated over the past decade totals about $21 billion, about $4 billion of which will probably be needed this year to meet the constitutional requirement of a balanced state budget.

And they don’t have much time to get it all done. They must pass a balanced budget by June 15 or go without pay, and will have only a couple of months after that to consider other bills before the legislative session is scheduled to end.

California still faces problems that existed before the pandemic, Rendon said, including the lack of affordable housing, widespread homelessness, climate change and lack of access to clean water in some parts of the state.

Assembly Bill 664, would amend LC 4663 and add LC 3212.8 to re-define “injury,” for certain state and local firefighting personnel, peace officers, certain hospital employees, and certain fire and rescue services coordinators who work for the Office of Emergency Services. The bill would create a conclusive presumption, that a communicative disease injury arose out of and in the course of the employment.

Senate Bill 1159, would make changes to LC 3202.86 to make disputable (rather than conclusive) presumptions pertaining to injury caused by COVID-19. The bill would apply to anyone deemed to be a “critical worker.”

Since most first responders such as firefighters and peace officers are employed by governmental entities, the costs of these two measures for the most part will be paid by taxpayers, and will be a burden on existing overburdened governmental budgets.

They must also handle bills ranging from compensation for sick essential workers to planning for a November election that’s likely to be done mostly by mail.