Author: WorkCompAcademy

On May 22, In an important 5-4 decision, the U.S. Supreme Court held that class or collective action waivers, particularly in wage/hour cases, and contained in arbitration agreements between employers and employees are valid and enforceable.

Companies can use arbitration clauses in employment contracts to prohibit workers from banding together to take legal action over workplace issues. The vote was 5 to 4, with the court’s more conservative justices in the majority. The court’s decision in Epic Systems Corp v Lewis could affect some 25 million employment contracts.

And perhaps the first victory for an employer under this new case law involves an Uber driver who claims in a federal case pending in New York that the ride-hailing company illegally charged him and other drivers a workers’ compensation fee. On May 31, the United States District court ordered that he must pursue his argument in arbitration as an individual, not a class action.

Gustavo Camilo agreed to arbitrate any disputes with Uber Technologies Inc. on “an individual basis only,” Judge Alvin K. Hellerstein of the U.S. District Court for the Southern District of New York said. Camilo therefore can’t proceed with a class action alleging various theories against the company.

The drivers sue on three counts; breach of contract, unjust enrichment and unlawful wage deduction. The class action suit was filed in the Supreme Court of the State of New York, and was timely removed to federal court under the Class Action Fairness Act.They demanded a jury trial, and seek reimbursement and restitution.

Uber moved to compel arbitration of the claims alleged against the Uber Defendants, to strike Plaintiff’s class allegation, and to dismiss the Complaint, on the basis of the arbitration and class waiver clause contained in Plaintiffs agreement with Uber.

In first registering as an Uber driver, a prospective driver must agree to a technology services agreement with Uber. Plaintiff signed an agreement with Uber requiring that all disputes or issues, including the question of arbitrability, be resolved through binding arbitration.The arbitration provision contains a class waiver, preventing the arbitrator from considering claims on a class or representative basis

In ruling on the motion, the court referenced the new Supreme Court decision when it said “More recently, and subsequent to the briefing in this case, the Supreme Court held that waivers of class actions are valid and not precluded by Section 7 of the NLRA, 29 U.S.C. § 157. See Epic Sys. Corp. v. Lewis, No. 16-285, 2018 WL 2292444 (U.S. May 21, 2018).”

Accordingly the court ordered “Plaintiff is directed to arbitrate his claims on an individual basis and this action will be stayed pending the arbitration.”

A new report published by CHSWC describes work undertaken by the RAND Corporation for the Department of Industrial Relations (DIR) to evaluate California’s Return-to-Work (RTW) Fund as it approaches its third year of implementation. This research builds directly on a number of past RAND studies for DIR and the Commission on Health and Safety and Workers’ Compensation (CHSWC).

Senate Bill (SB) 863 sought to improve the adequacy of permanent partial disability benefits by raising the maximum weekly PPD benefit and by increasing disability ratings for selected injuries; both changes would lead to more generous PPD benefits. To address remaining concerns about the adequacy and targeting of PPD benefits, SB 863 also instructed the Director of the Department of Industrial Relations (DIR) to design and implement a new $120 million program named the Return-to-Work Supplement Program (RTWSP). It was established on April 13, 2015.

California’s Return-to-Work Supplement Program (RTWSP) is a new benefit for permanently disabled workers who suffer disproportionately high earnings loss in comparison to their workers’ compensation benefits. The RTWSP provides a one-time $5,000 payment to workers who cannot return to work following a permanently disabling workplace injury.

DIR has authority to adjust the design and implementation of the RTWSP through additional regulations. To determine the need for modifications to the program, DIR asked RAND to evaluate the RTWSP’s performance and suggest improvements. RAND conducted an evaluation of the program’s performance and identified options for improving the RTWSP. The study included an environmental scan, stakeholder interviews, and analysis of program data. RAND also held a Technical Advisory Group meeting with key stakeholders.

RAND found that the RTWSP is performing well on several dimensions. The eligibility criteria have accurately targeted workers with more severe disability and program administration is efficient, with little evidence of fraud or abuse.

However, take-up of the program is low: in a sample of eligible workers, just over half applied to receive the benefit. The most important factor predicting access to the program was legal representation, suggesting that many workers are failing to navigate the process on their own despite the intent of the program’s designers. RAND also found that the eligible population is larger than initially anticipated, a trend driven in part by rising utilization of California’s voucher-based vocational rehabilitation benefit (the Supplemental Job Displacement Benefit).

Based on these findings, RAND recommends that modifications to the RTWSP focus on increasing program take-up among currently eligible workers. DIR could accomplish this by making issuance of the Return-to-Work Supplement automatic, or through outreach and notification efforts. DIR should also improve monitoring of SJDB voucher issuance to track emerging changes in the RTWSP-eligible population and to facilitate oversight of the SJDB.

Drs. William Longton, Ruben Kalra, and Richard Shinaman have agreed to collectively pay $260,000 to settle allegations by the U.S. Department of Justice that they failed to keep and maintain adequate records and other allegations pertaining to controlled substances at their Novato, Pleasant Hill, and Pleasanton offices.

The physicians operate under the name Pain Medicine Consultants, Inc., with offices in multiple Bay Area locations.

The settlement agreement resolves allegations by the government that a January 2014 DEA inspection uncovered multiple violations by Longton, Kalra, and Shinaman of the Controlled Substances Act, 21 U.S.C. § 801.

In the agreement, the physicians acknowledge that they each, at the relevant time, were registered with the DEA as Practitioners, providing them with authorizations to handle Schedules II through V controlled substances. They also acknowledge they had an obligation to “keep and maintain” records related to their receipt and distribution of controlled substances in connection with their practices.

According to the agreement, following the DEA’s inspection, the government concluded that between January 10, 2012, through January 17, 2014, Shinaman, Longton, and Kalra failed to keep and maintain adequate records pertaining to controlled substances, as required by 21 C.F.R. § 1304, et seq.; failed to include the address of the patient on controlled substance prescriptions that they each issued as required by 21 C.F.R. § 1306.05(a); and exceeded the authority of their registrations by filling a prescription for a controlled substance, in violation of 21 C.F.R. § 1306.06.

According to the terms of the agreement, Longton, Kalra, and Shinaman will collectively pay the government $260,000 to resolve all civil claims related to the violations identified in the investigation.

Assistant U.S. Attorney Rebecca A. Falk is handling the matter on behalf of the U.S. Attorney’s Office for the Northern District of California, with assistance from the DEA San Francisco Field Division, Oakland Resident Office Diversion Group.

The California Court of Appeal affirmed the rule that after discovery of undocumented worker status by an employer, the workers are entitled to most of the legal rights and remedies provided to employees by state and federal laws. This includes wage and hour laws.

Juan Luis Lepe, Virgilio Flores-Juarez, and Berna Vargas filed a lawsuit against their former employer, Luft Enterprises, a California Corporation, doing business as Inn-Decor and Otmar Luft, alleging unpaid overtime wages, failure to provide meal and rest periods, and other Labor Code violations and unfair business practices

The Company manufactures furniture for businesses such as restaurants and casinos. Plaintiffs worked 10 or more hours per day without an afternoon or second meal break. The Company failed to pay overtime wages or provide meal and rest periods. Prior to May 2010, defendants were aware that plaintiffs were not authorized to work in the United States due to their immigration status. This was the agreed upon claim period in this case.

The trial court entered judgment in favor of plaintiffs in the total amount of $140,016 (Lepe – $59,776; Flores-Juarez -$59,776; and Vargas – $20,464) and against all defendants jointly and severally. Plaintiffs were also awarded their attorney’s fees and costs.

Defendants appealed and challenge the judgment, contending (1) they may not be compelled, as a matter of law, to pay past wages allegedly due because plaintiffs were not legally authorized to work in the United States; (2) there is insufficient evidence that defendants issued inaccurate wage statements; (3) the trial court erroneously granted plaintiffs’ attorney’s fees motion; and (4) the trial court abused its discretion in awarding certain costs.

The Court of Appeal found merit in defendants’ challenge to the award of costs but otherwise affirmed in the unpublished case of Lepe v. Luft Enterprises, Calif. Ct. App., No. E067382 (May 10, 2018).

In support of their contention, defendants rely on the holding in Salas v. Sierra Chemical Co. (2014) 59 Cal.4th 407, 414, 424-425 (Salas). The Court of Appeal found such reliance to be misplaced.

In Salas, the plaintiff sued his former employer under the California Fair Employment and Housing Act (FEHA) alleging defendant employer failed to reasonably accommodate his physical disability and refused to rehire him in retaliation for filing a worker’s compensation claim. After the complaint was filed in Salas, the defendant learned that the plaintiff may have used another man’s Social Security number in order to gain employment. Defendant successfully moved for summary judgment.

The California Supreme Court reversed, holding that the federal Immigration Reform and Control Act of 1986 (8 U.S.C. § 1101 et seq.) did not preempt application of the antidiscrimination provisions of California’s FEHA to workers who are unauthorized aliens, but that “federal preemption does bar an award of lost pay damages under the FEHA for any period of time after an employer’s discovery of the employee’s ineligibility under federal law to work in the United States.”

In reaching this holding, the Salas court noted that its “preemption analysis for the postdiscovery period is limited to employers who discover the plaintiff employee’s unauthorized status after the employee has been discharged or not rehired. . . . Because imposing full liability for lost wages would provide a disincentive for such immigration law violations, thereby furthering the goals of federal immigration law, in these situations arguably federal law would not preempt lost wages remedies for violations of state laws like California’s FEHA.”

Here, defendants concede knowledge of plaintiffs’ unauthorized work status during the “agreed-upon claim period in this case.”

“Since defendants were aware of plaintiffs’ unauthorized work status during the time of their employment, defendants actively joined in the violation of federal immigration law. Under this circumstance, the Salas court holding does not apply, and plaintiffs are not barred from recovering their lost wages.”

The U.S. House of Representatives passed “right to try” legislation that would allow people with life-threatening illnesses to bypass the Food and Drug Administration to obtain experimental medications, ending a drawn-out battle over access to unapproved therapies.

Now the legislation needs approval from the Senate. If so, President Trump is expected to quickly sign the measure, which was praised by supporters as a lifeline for desperate patients but denounced by scores of medical and consumer groups as unnecessary and dangerous.

The FDA would be largely left out of the equation under the new legislation and would not oversee the right-to-try process.  Drug manufacturers would have to report “adverse events” — safety problems, including premature deaths — only once a year. The agency also would be restricted in how it used such information when considering the experimental treatments for approval.

Patients would be eligible for right-to-try if they had a “life-threatening illness” and had exhausted all available treatment options. The medication itself must have completed early-stage safety testing, called Phase 1 trials, and be in active development with the goal of FDA approval.

One Congressman opposing the bill argued that eliminating FDA oversight would “provide fly-by-night physicians and clinics the opportunity to peddle false hope and ineffective drugs to desperate patients,” noting that the bill is opposed by over 100 patient advocacy and consumer groups.

Right-to-try laws exist in 40 states — including California. But this federal bill would introduce legislation across state lines. Right To Try was signed into law in California (Assembly Bill No. 1668) by Governor Jerry Brown on September 27, 2016. It allows very sick patients to plea for experimental treatments directly from drug companies, instead of waiting for years for drugs to hit the market or asking the Food and Drug Administration for early access.

But patients and advocates said the California law does not function well without a federal counterpart. As it stands, if someone experiences adverse effects while taking a drug acquired through California’s Right to Try policy, the FDA can pull the treatment from the clinical trial process. The mismatch has made drug companies reluctant to participate.

The federal right to try law would make California law more effective, or eliminate the need for the California law altogether