Author: WorkCompAcademy

On March 6, 2025, Walgreens announced that it agreed to be acquired by private equity firm, Sycamore. The proposed transaction, which involves over 450 California Walgreens stores. Howevever a settlement was reached under Assembly Bill 853 (AB 853), which requires notice and review by the Attorney General of transactions involving retail pharmacies and grocery stores in order to assess impact on access and labor. AB 853 was authored by former Assemblymember Brian Maienschein (D-San Diego) and went into effect on October 8, 2023. The settlement is subject to court approval.

Walgreens is the last nationwide and statewide independent pharmacy chain – that is, a chain not owned by one of the Big Three Pharmacy Benefit Managers (PBMs), which are CVS Caremark, Optum Rx, and Express Scripts. The proposed transaction between Walgreens and Sycamore includes, but is not limited to, the following Walgreens stores in California: six in Bakersfield, 11 in Fresno, five in Huntington Beach, 13 in Los Angeles, eight in Modesto, five in Riverside, seven in Sacramento, seven in San Diego, 26 in San Francisco, 10 in San Jose, and seven in Stockton.

The California Attorney General announced a settlement with Walgreens Co. and its succeeding owner, Sycamore Partners Management, L.P. (Sycamore), that would operate as an injunction and protect competition, patients, and pharmacy-related workers.

Under the settlement, Walgreens and Sycamore agree to the following conditions for the next seven years:

– – Use best efforts to maintain all California Walgreens stores remaining as of the date of the agreement, as well as all required licenses.
– – Provide 90-day notice of sale or closure of any remaining Walgreens stores.
– – Prohibition from reselling any of the Walgreens stores in California to any of the Big Three PBMs.
– – Prohibition from using any dividend recapitalization or other distribution of profits where such a dividend recapitalization or other distribution of profits would reasonably be likely to materially impair the operations of Walgreens.
– – Use best efforts to continue participation in Medi-Cal and Medicare.
– – Use best efforts to provide financial assistance to patients.
– – Ensure best efforts regarding compliance with state staffing levels.
– – Maintain a hiring list for all employees from stores that close going forward for preferential hiring at other Walgreens stores.
– – Use commercially reasonable efforts to pay retirement contributions if collective bargaining agreements require such payments.
– – Use commercially reasonable efforts to abstain from contesting unemployment for individuals who are laid off as a result of the sale or closure of Walgreens stores if no nearby Walgreens store offers employment.
– – Use commercially reasonable efforts to bargain with any unions in good faith.
– – Comply with nondiscrimination rules in the provision of healthcare services.

This settlement is the second reached by the California Attorney General under AB 853. The first settlement was with Rite Aid and was announced on August 19, 2024. In addition, on April 14, 2025, the California Attorney General joined a bipartisan coalition of 39 attorneys general in urging the leaders of the U.S. House of Representatives and U.S. Senate to enact a law that prohibits PBMs, their parent companies, or affiliates from owning or operating pharmacies.

Created in the late 1960s to process claims for drug companies, PBMs were supposed to help consumers access low-cost pharmaceutical care through negotiated volume-pricing discounts, generic substitution, manufacturer rebates, and other tools. However, PBMs have overtaken the market and now wield outsized power to reap massive profits at the expense of consumers and local community pharmacies.

A Burbank man has pleaded guilty to evading the payment of more than $11.2 million in federal taxes by using a shill to illegally collect Medicare reimbursement payments made to his blood-testing company, and to fraudulently obtaining nearly $100,000 in taxpayer-funded COVID-19 business relief, the Justice Department announced today.

Armen Muradyan, 60, pleaded guilty to one count of conspiracy to commit health care fraud, one count of wire fraud, and one count of tax evasion.

According to his plea agreement, Muradyan owned and operated a Burbank-based blood testing laboratory called Genex Laboratories Inc. Medicare and bank records show that Medicare paid millions of dollars in reimbursements to Genex for blood testing. The reimbursements were wired to bank accounts in the name of an individual identified in court documents as “L.S.” – Muradyan’s long-time friend to whom Muradyan had offered to pay $2,000 per month to pretend to be Genex’s owner.

Muradyan told L.S. that he needed him to submit Medicare enrollment papers to Medicare on Genex’s behalf because Medicare had banned Muradyan from submitting claims.

L.S. and Muradyan opened bank accounts for Genex in L.S.’s name, but which Muradyan controlled. L.S. neither owned nor operated Genex and visited the company’s Burbank office to collect his $2,000 monthly payment and to sometimes sign documents at Muradyan’s direction. Muradyan used the proceeds from the health care fraud conspiracy to pay the mortgage on a property he owned.

For the tax years of 2015 through 2020, Muradyan instructed L.S. to report Genex’s financial activity on L.S.’s personal income tax returns using documents that L.S. provided to his own tax preparer. The documents purportedly showed that Genex had minimal net profit or was operating at a loss, meaning the company had little or no income tax liability.

For the same period, Muradyan submitted income tax returns that reported none of Genex’s financial activity as his own and that he averaged an income of $40,000 per year. In fact, Muradyan personally received and used millions of dollars in Medicare reimbursements to support his own expensive lifestyle. Muradyan also did not file tax returns for the years 2021 through 2023.

In total, Muradyan’s unreported federal taxable income was approximately $23,915,762, resulting in a total federal income tax due and owing by him of approximately $11,236,357.

In July 2020, Muradyan wired a false and fraudulent application for an Economic Injury Disaster Loan (EIDL) that was funded by federal taxpayers. On the application, Muradyan falsely stated that GenMed employed multiple people and generated $800,000 in income for the year 2019. In fact, Muradyan knew GenMed employed no one and generated zero income for that year. The U.S. Small Business Administration (SBA) wired $99,900 to a bank account Muradyan controlled. He then used the money for personal expenses not permitted under the terms of the EIDL. Muradyan admitted he acted with the intent to deceive and cheat the SBA.

United States District Judge John A. Kronstadt scheduled a December 11 sentencing hearing, at which time Muradyan will face a statutory maximum sentence of 20 years in federal prison for the wire fraud count, up to 10 years in federal prison for the health care fraud conspiracy count, and up to five years in federal prison for the tax evasion count. Muradyan remains free on $2.6 million bond.

IRS Criminal Investigation, the FBI, and the United States Department of Health and Human Services Office of Inspector General investigated this matter.

Assistant United States Attorney Mark Aveis of the Major Frauds Section and Trial Attorney Mahana K. Weidler of the Department of Justice’s Tax Division are prosecuting this case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Former Tesla HR execs Linda Peloquin, Adam Chow, Tiara Paulino, Sharnique Martin, Gregory Vass and Ozell Murray just filed a lawsuit against Tesla Inc., in the United States District Court for the Northern District of California Case 3:25-cv-06690-AMO. The lawsuit concerns the automaker’s Fremont, California, facility that has been at the center of several previous discrimination lawsuits.

These former Tesla HR professionals alleged that they were either fired or effectively forced to resign after attempting to surface other employees’ race discrimination and retaliation complaints at the company’s Fremont, California, plant.  

According to the Peloquin complaint, one of Tesla’s HR managers, Nicole Burgers, was a “common denominator” in the various claims made by the plaintiffs. They alleged that the manager, the overall HR manager for the entire Fremont facility, “had an irrational fixation on fostering the delusion that the environment and culture at Tesla is one of tolerance and innovation, rather than racism and retaliation.”

Allegations continue to say that “Much of Tesla’s workplace toxicity stems from its rapid sales growth and manufacturing demand, and the breakneck pace at which it hired employees to work in its plants and overall operation. Since its introduction in 2020, Tesla’s “Model Y,” for instance, has become the Company’s top-selling vehicle line – and, by most estimates, one of the top-selling electric vehicles in the world. Thus, there was, and remains, constant pressure to keep the Model Y’s sales trajectory high.”

“Yet, as a consequence of this desire to produce vehicles at such a rapid pace, the Company has failed to cultivate a healthy working environment at the Fremont facility, and instead fostered one that is beset with racism, sexism, cronyism, and outright physical violence.”

Plaintiffs claim “even employees that had been terminated for instances of workplace violence were loopholed back in via temp agencies. That meant, then, that oftentimes the employee who had been previously victimized had to actually resume working with their attacker and tormentor.”

“In fact, that Senior Security Manager himself was attacked and suffered a serious injury when he attempted to stop a loopholed employee – one who had been returned to work after being terminated for cause – after that employee came back aboard and attacked another worker.”

At some point plaintiffs allege that Tesla “turned its ire on the HR professionals that had merely investigated and substantiated the bases of the complaints. So, oddly, in most instances it was the HR official that wound up being penalized and pushed out for substantiating the alleged wrongdoing rather than the wrongdoer themselves. Consequently, a dizzying number of HR professionals – the Plaintiffs here: Peloquin, Chow, Paulino, Martin, and Vass, among them – have either been outright fired for substantiating complaints of discrimination and retaliation, or resigned because they saw a termination coming and did not want that type of disciplinary stain on their job history.

Details of the complaint allege “A common denominator in many of these terminations is a HR Manager named Nicole Burgers. By all accounts, Burgers has had an irrational fixation on fostering the delusion that the environment and culture at Tesla is one of tolerance and innovation, rather than racism and retaliation. By all accounts, given that Burgers was the overall HR manager for the entire Fremont facility, she believed that she would be held accountable for further instances of racism and misconduct at the Fremont location – particularly in light of the pending State, Federal, and private litigation against the Company. Thus, rather than undertake to change the culture and environment that fostered those types of instances of racism, Burgers instead undertook to weed out the HR professionals beneath her that merely investigated and substantiated the occurrence of that type of depravity.”

Page 24 of the 159 page complaint continues to provide details by writing “Karen Draper was one of the first dominos to fall in what became a long line of retaliatory terminations by Burgers and her Texas-based counterparts – Allie Arebalo, Bert Somsin, Jenifer Romero, and Leah Allen – or, instances where other HR professionals simply resigned under protest because they knew Burgers had begun to target them.

Elon Musk’s social media company, X Corp, has reached a tentative settlement in a lawsuit filed by former employees who claimed they were owed $500 million in severance pay.

The lawsuit, filed as a proposed class action in the U.S. District Court for the Northern District of California (Case No. 23-03461, McMillian et al. v. Musk et al.), was initiated in July 2023 by former Twitter employees Courtney McMillian (former head of total rewards, overseeing employee benefits) and Ronald Cooper (former operations manager).

They alleged that Twitter’s 2019 severance plan, established under the company’s previous ownership, entitled laid-off employees to substantial payouts: two months of base pay plus one week for each year of service for most workers, and up to six months for senior employees like McMillian.

Following Elon Musk’s $44 billion acquisition of Twitter in October 2022 and the subsequent rebranding to X, approximately 6,000 employees were terminated as part of cost-cutting measures. The plaintiffs claimed that X Corp. violated this plan by offering at most one month of severance pay, with many receiving nothing, resulting in an estimated $500 million in owed benefits.

On July 9, 2024, U.S. District Judge Trina L. Thompson dismissed the case without prejudice. The core of her ruling centered on the inapplicability of the federal Employee Retirement Income Security Act (ERISA), which governs employee benefit plans and provides federal jurisdiction for such disputes. Judge Thompson determined that Twitter’s severance arrangement did not qualify as an ERISA-governed plan because it lacked an “ongoing administrative scheme.

However, Judge Thompson allowed the plaintiffs the opportunity to amend their complaint to pursue alternative claims not reliant on ERISA, such as potential state law breach-of-contract allegations.

The plaintiffs appealed the dismissal to the U.S. Court of Appeals for the Ninth Circuit (Case No. 24-5045, McMillian v. Musk) shortly after the district court’s decision. In their appeal, the former employees argued that Twitter’s severance policy did indeed qualify as an ERISA plan because it involved ongoing benefit payments, even if administered without individualized discretion. They received support from the U.S. Department of Labor, which filed an amicus brief endorsing this view, emphasizing that ERISA coverage applies to plans paying benefits on a continuing basis regardless of administrative complexity.

In response, Musk and X Corp. filed a brief on January 9, 2025, urging the Ninth Circuit to affirm the dismissal. Their key arguments included:

– – No formal ERISA plan existed, as the employees failed to produce official plan documents (e.g., summary plan descriptions) or evidence of widespread communications to workers about the severance terms prior to Musk’s acquisition.
– – References to a “severance matrix” (a confidential document allegedly taken by McMillian) and general corporate statements at most indicated offers of simple lump-sum payments, which do not constitute an ERISA-governed scheme requiring ongoing administration.
– – This lack of a qualifying plan was “fatal” to the class action, as it undermined the basis for federal jurisdiction.

Oral arguments were scheduled for September 17, 2025, in San Francisco.

However, as of August 21, 2025, the parties reached a tentative settlement agreement, the financial terms of which were not disclosed. In a joint court filing, both sides requested a postponement of the hearing to finalize the deal, which would resolve the class action and compensate the affected former employees. The Ninth Circuit granted the delay on August 22, 2025, effectively pausing the appeal process. This settlement does not impact other ongoing related lawsuits, such as those in Delaware and California courts involving different claims or plaintiffs.

In summary, the appeal remains unresolved on the merits due to the impending settlement, marking a potential end to this specific dispute without a full appellate ruling on the ERISA question.

Other related lawsuits, including one by former executives like ex-CEO Parag Agrawal, remain pending. This settlement aims to resolve the dispute over severance pay for the affected former employees.