Category: Daily News

Jesus Gomez was employed by Adanna Car Wash Corporation located on Crenshaw Blvd, in Gardena California. He filed a wage claim against his employer with the California Labor Commissioner.

After a hearing, the Labor Commissioner awarded Gomez $23,915.59 for overtime earnings, meal period premium pay, rest period premium pay, liquidated damages, interest, and waiting time penalties.

Under Labor Code section 98.2, subdivision (a), a party to a Labor Commissioner proceeding may seek review “of an order, decision, or award by filing an appeal to the superior court, where the appeal shall be heard de novo.” Under subdivision (b) of the statute, if the employer is the appealing party, the employer must post a bond.

Adanna filed with the Los Angeles County superior court a document entitled “Department of Industrial Relations Notice of Appeal De Novo” and a “Notice of Posting Bond Re Department of Industrial Relations Notice of Appeal De Novo.” However Adanna had attached a copy of its Labor Code section 2055 car wash bond rather than a specific bond required section 98.2.

Gomez moved to dismiss the appeal because Adanna “failed to deposit/post an undertaking, which is a jurisdictional prerequisite for [its] appeal under Labor Code section 98.2(b).” In opposition, Adanna argued that the section 2055 bond satisfied the section 98.2 undertaking because the former was intended to benefit car wash employees and Gomez was a car wash employee.

The superior court granted Gomez’s motion and dismissed the appeal. The Court of Appeal affirmed in the published case of Adanna Car Wash Corp. v. Gomez – B313649 (January 2023).

This appeal addresses the relationship between two statutory surety bonds required under different sections of the Labor Code. There are two types of bonds in play here – a section 98.2 appeal bond and a section 2055 car wash bond.

“The appeal bond is forfeited to the employee where the employer’s appeal fails or is withdrawn, and the employer does not timely pay the award. (§ 98.2, subd. (b).)”

“In contrast, a $150,000 car wash bond is a prerequisite to operating a car wash in California. (§ 2055.) On its face, section 2055 makes clear a car wash bond has nothing to do with litigation or appellate proceedings. It is condition that must be satisfied before the car wash employer may obtain a license or permit:”

The Court went on to say “Adanna’s sleight-of-hand attempt to substitute a car wash bond for an appeal bond runs afoul of a rule that applies to bonds in general. Code of Civil Procedure section 995.140, subdivision (b) expressly distinguishes between a licensing bond and one furnished in connection with litigation.”

The Legislative history supports the analysis that the posting of a section 98.2 bond is essential to protect employees in Labor Commissioner appeals filed by employers.

Prior to 2000, section 98.2 did not require employers seeking appellate review of Labor Commissioner awards to post a bond. In that year, the Legislature amended section 98.2 to include the appeal bond requirement to ensure that workers are paid if they prevail at the de novo appeal in cases where employers “disappear or declare bankruptcy” during the appeal.

According to the legislative analysis when the appeal bond was being considered, there was evidence that “unscrupulous employers, particularly those in the underground economy, were filing ‘frivolous’ appeals of [Labor Commissioner] decisions with the superior court in an effort to drag out litigation and hide assets so that workers would not be able to collect on judgments, even if ultimately successful on appeal.”

Thus the Court concluded that “a section 2055 car wash bond is not an appeal bond under section 98.2 subdivision (b).”

In a landmark NLRB decision, the Board broadly expanded the monetary award that may be given to prevailing workers in unfair labor practice disputes. Prior to the new Thryv, Inc. and International Brotherhood of Electrical Workers, Local 1269 – (20-CA-251105) December 2022 decision, monetary damages had been limited to “back pay.” This limit has been expanded by the NLRB to award monetary damages to include “make whole” relief.

To make the employee “whole,”examples of additional forms of relief may include “consequential damages” such as increases in insurance premiums, co-pays, coinsurance, deductibles, and other out-of-pocket expenses, extra medical expenses, expenses incurred in connection with a search for other work, credit card debt interest and late fees on credit card debt, penalties suffered by employees who are forced to make early withdrawals from retirement accounts; and increased transportation or childcare costs.

In this case the California employer, Thryv, Inc., operates a marketing agency engaged in the business of selling Yellow Pages advertising, as well its eponymous product “Thryv,” an application for small businesses. While all parties agree that Yellow Pages advertising has increasingly declined since the advent of the Internet, Thryv still generates annual revenues in excess of $1.1 billion, with print and electronic advertising accounting for 88 percent of that amount.

The Union represents a unit of employees that includes the Thryv outside sales force, which in turn consists of three subsets of “premise” representatives, so named because they go to customer premises to solicit advertising sales.

Around mid-July of 2019, Thryv began implementing its proposal to lay off all of its New Business Advisors in the Northern California Region.

The Assistant Vice President of Labor Relations emailed the Union stating that Thryv “will administer a force adjustment” and lay off the six New Business Advisors in the Northern California Region effective September 20. The email stated, “[i]f the Union desires to exercise its right to meet and discuss the Company’s plan within the 30-day period, please contact [Labor Relations Manager] Ralph Vitales to arrange such discussions.”

The Union and Thryv met several times to discuss the layoff of the New Business Advisors, but failed to arrive at an agreement. And Thryv then unilaterally implemented its layoff decision just nine days after the first bargaining session.  While the trial judge did not find this to be unlawful, the NLRB reversed, and found that Thryv “violated Section 8(a)(5) and (1) by unilaterally laying off six New Business Advisors” without responding to the union request for additional documentation it needed to evaluate the offers made by Thryv.

In concluding the appeal, the NLRB next turned to the issue of “the proper remedy.” It went on to conclude “that it is necessary for the Board to revisit and clarify our existing practice of ordering relief that ensures affected employees are made whole for the consequences of a respondent’s unlawful conduct.”

Previously, the Board had issued a Notice and Invitation to File Briefs, which sought briefing on whether the Board should include, as part of its make-whole remedy, “relief for consequential damages.”

In it’s amicus brief, the U.S. Chamber of Commerce pointed out that ” By its terms, Section 10(c) identifies “back pay” as the only monetary relief that the Board can award to employees who suffer harm from an unfair labor practice. On finding that a person has committed an unfair labor practice, the Board “shall issue . . . an order requiring such person to cease and desist from such unfair labor practice, and to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of [the Act]” 29 U.S.C. § 160(c). That language has been present e unchanged since the Wagner Act’s adoption in 1935.”

Despite arguments by amicus to the contrary, the Board concluded that “in all cases in which our standard remedy would include an order for make- whole relief, the Board will expressly order that the respondent compensate affected employees for all direct or foreseeable pecuniary harms suffered as a result of the respondent’s unfair labor practice.”

In rejecting the argument of the Chamber of Commerce (and several other amicus briefs) the Board supported their ruling by noting “The Supreme Court has held that our authority to fashion such a remedy “is a broad discretionary one.” NLRB v. J. H. Rutter-Rex Manufacturing, 396 U.S. 258, 262-63 (1969), and several other case decisions.

“Make-whole relief” is more fully realized when it consistently compensates affected employees for all direct or foreseeable pecuniary harms that result from a respondent’s unfair labor practice.

Where, as here, employees have been laid off in violation of the Act or been the targets of other unfair labor practices, they may be forced to incur significant financial costs, such as out-of-pocket medical expenses, credit card debt, or other costs simply in order to make ends meet. We cannot fairly say that employees have been made whole until they are fully compensated for these kinds of pecuniary harms if the harms were direct or foreseeable consequences of the respondent’s unfair labor practice. The Board has a “statutory obligation to provide meaningful, make-whole relief for losses incurred by discriminatees . . . . ”

KCRA-TV is a television station in Sacramento,affiliated with NBC. It is owned by Hearst Television.

For months, KCRA 3 Investigates producer Dave Manoucheri and Photographer Victor Nieto traveled across California and interviewed people in other states as part of an unprecedented documentary project that revealed a wave of failures at California’s Employment Development Department, or EDD. With nearly 15 hours of interviews from 17 people – and dozens of hours of news footage – the documentary tells the story of what is being called the worst fraud in California history.

And the documentary seems to have triggered a federal investigation of the EDD. On Friday, James Comer, head of the Committee on Oversight and Accountability sent two letters, one to Nancy Farias, head of the EDD, and one to Martin Walsh, head of the U.S. Department of Labor.

The letters both cite KCRA and the documentary “Easy Money: Fraud Fortune and Failures” in the need for an investigation of fraud against the California unemployment system.

From 2020 onward, the department had seen massive numbers of fraudulent applications for unemployment and for the CARES Act era program “Pandemic Unemployment Assistance” (PUA). That program would allow freelancers and gig workers to apply for lost wages, something they had never been eligible for before.

During the pandemic, EDD had a massive number of both legitimate and illegitimate applications for money. In an effort to get money out the door, the leadership at EDD and in the administration lifted fraud controls and allowed people to back-date their claims, assuming that they could catch fraud on the back end. However, EDD had no back-end fraud prevention mechanisms.

The letter quotes the head of California Labor and Workforce at the time, Julie Su, as saying “there is no sugar coating the reality, California did not have sufficient security measures in place to prevent this level of fraud,” something she said during a press call highlighted by Easy Money.

Su would go on to become a deputy secretary of labor in the Biden administration.

Comer, a Republican Congressman from Kentucky, took over the Committee on Oversight and Accountability with the changeover in the House of Representatives, now controlled by a Republican majority.”Despite the unexpected and unprecedented nature of the coronavirus pandemic, California’s problems cannot be blamed on COVID alone,” Comer wrote in the letter to Nancy Farias

As part of their investigation, the committee is asking for:

  “1. All processes and procedures related to the disbursement of unemployment insurance benefits during the pandemic, including policies and procedures intended to ensure payments are made to the proper individual, and to ensure that the individual is a qualified recipient of unemployment insurance;
  2. All documents and communications between employees of the California EDD and employees of the U.S. Department of Labor regarding the state’s UI benefit program;
  3. All documents and communications related to efforts to prevent payment of fraudulent UI claims;
  4. All documents and communications related to efforts to recoup UI claims paid improperly; and
  5. All documents and communications related to identifying the total number of improperly paid UI benefits and documents sufficient to show whether those funds remain in the United States or were transferred to entities outside the United States.”

They are asking for similar information from the U.S. Department of Labor. The documents are requested no later than Jan. 27. The committee is holding its hearing into the matter on Feb. 1.

Wendy Johnson was injured while employed by the Santa Ynez Valley Journal, who was insured by SCIF. Her case proceeded to trial in 2019.The WCJ issued a Findings & Award, finding Johnson was permanently totally disabled and allowing an attorney fee of 20%. SCIF sought reconsideration and the Appeals Board granted the petition for further study and the matter was referred to mediation.

As a result of the mediation, the parties entered into a Compromise and Release in the total amount of $685,000.00.

Paragraph 7 of the C&R provides that “The parties agree to settle the above claim(s) on account of the injury(ies) by the payment of the SUM OF: $685,000.00 The following amounts are to be deducted from the settlement amount: $25,300.00 for permanent disability advances through [June 26, 2013[;] $121,058.93, payable to WENDY THOMPSON FOR NON-SUBMIT MSA[;][and] $137,000.00 request as applicant’s attorney’s fee.”

The $137,000.00 attorney fee amounts to 20% of the settlement. Applicant and applicant’s attorney signed the C&R on October 12, 2022 and the attorney for defendant State Compensation Insurance Fund (SCIF) signed it on October 14, 2022.

The Appeals Board rescinded the August 14, 2019 Findings of Fact and Award and remanded this matter to the WCJ for consideration of the C&R. The WCJ issued an Order Approving Compromise and Release on October 24, 2022, approving the settlement terms agreed to by the parties, including the attorney fee of $137,000.00.

SCIF again filed a Petition for Reconsideration, arguing that the WCJ’s finding that an attorney’s fee of $137,000.00 is unreasonable and not supported by evidence. The WCAB denied reconsideration of the attorney fee award in the panel decision of Thompson v Santa Ynex Valley Journal – ADJ8004567 (January 2023).

In its Opinion Denying Reconsideration, the panel noted that a stipulation between the parties need not be supported by substantial evidence citing County of Sacramento v. Workers’ Comp. Appeals Bd. (Weatherall) (2000) 77 Cal.App.4th 1114, 1121 [65 Cal.Comp.Cases 1]),”

A stipulation is an agreement between opposing counsel … ordinarily entered into for the purpose of avoiding delay, trouble, or expense in the conduct of the action, and serves ‘to obviate need for proof or to narrow range of litigable issues in a legal proceeding.(Weatherall, supra, 77 Cal.App.4th at p. 1119.)

Stipulations are designed to expedite trials and hearings and their use in workers’ compensation cases should be encouraged. (Robinson v. Workers’ Comp. Appeals Bd. (Robinson) (1987) 194 Cal.App.3d 784, 791 [52 Cal.Comp.Cases 419].)

Stipulations are binding on the parties unless, on a showing of good cause, the parties are given permission to withdraw from their agreements. (Weatherall, supra, at p. 1121.)

While the Appeals Board has the authority to reject parties’ stipulations, this “discretion does not validate capricious decisionmaking.” (Weatherall, supra, 77 Cal.App.4th at p. 1119.)

The panel concluded by stating: “Permitting a party to subsequently withdraw from an agreement because they have changed their mind endangers the finality of approved settlements and undermines transactional stability in the workers’ compensation system and risks discouraging future settlements. Defendant here has not even alleged grounds in its petition that could constitute good cause to set aside the C&R.”

AMTCR, Inc., AMTCR Nevada, Inc., and AMTCR California, LLC have been collectively operating as a single employer and/or integrated enterprise in Nevada, Arizona, and California, and have common management and ownership, centralized control of labor operations, and interrelation operations.

These three entities Collectively own, manage, and operate approximately twenty-two McDonald’s fast food restaurants in this tri-state region, and are collectively doing business as “McDonald’s.” The 22 restaurants operate under the common ownership and management of President/Owner Abelardo “Abe” Martinez III. And they share common managers, such as Director of Operations Theresa Hernandez and Area Supervisor Ruben Benitez, who both oversee employees throughout the tri-state region.

They share a common corporate headquarters and/or main office and human resources department for the entire tri-state region located in Kingman, Arizona.

And the EEOC just announced that this major McDonald’s franchisee has agreed to pay nearly $2 million to settle an EEOC sexual harassment lawsuit.

Prior to filing the civil action, the EEOC investigated a charge of discrimination that had been filed with the Commission. Following the investigation, the Commission issued Letters of Determination to the employer, finding reasonable cause to believe that Title VII was violated and inviting them to join with the Commission in informal methods of conciliation to endeavor to eliminate the discriminatory practices and provide appropriate relief.

But the Commission was unable to secure from Defendants a conciliation agreement acceptable to the Commission. Therefore, in September 2021, the U.S. Equal Employment Opportunity Commission filed a civil lawsuit against the companies in the United States District Court District of Nevada, charging them with sexual harassment and constructive discharge in stores/restaurants in Nevada, Arizona, and California.

The EEOC alleged in general that the “sexual harassment included, but was not limited to, constant groping, grabbing, and rubbing of the arms, shoulders, thighs, and buttocks; offensive comments and gestures regarding male genitalia; sexual advances; and sexual ridicule, intimidation, and insults.” And that due to the employer’s failure to remedy the ongoing sexual harassment, “the Charging Party and many other adversely affected employees could no longer tolerate the hostile and abusive work environment and were subjected to constructive discharge.”

One of the several specific instances of misconduct listed in the Complaint involved a twenty-six-year-old female Shift Manager, and another by a twenty-one-year-old male Cook. Both were employed at Defendants’ McDonald’s store in Blythe, California. Both claimed to be sexually harassed by the at Defendants’ McDonald’s store in Blythe, California, the by same General Manager, and who was also the hiring manager at this McDonald’s store.

This Blythe General Manager was in charge of receiving and reviewing job applications, interviewing applicants, and making hiring decisions. He was allegedly particularly fond of the young male applicants. After conducting interviews, The General Manager would message young male applicants via Facebook and send them sexually inappropriate messages and requests for dates. The General Manager admitted to Claimant 5 that he informed these male applicants via Facebook that if they refused to sexually engage with him and/or date him, he would not hire them.

During 2017 to mid-2019, many employees complained to “Claimant 5” about the General Manager’s sexual comments and conduct. Claimant 5 would relay these employee complaints to upper management, but Defendants did nothing to stop the harassment.

In July 2019, Claimant 5 felt compelled to compile a list of all the sexual harassment complaints that she had received. Claimant 5 submitted the list of complaints to upper management with a request for an investigation and remedial action. Later in July 2019, an employee meeting was held at the store where Defendants required employees were required to sign an agreement regarding sexual harassment. However, allegedly no other remedial action was taken.

After the July 2019 employee meeting, Claimant 5 continued to receive complaints from employees about being subjected to sexually offensive comments by male managers and co-workers. These comments often related to co-workers’ body parts such as breast size.

The company has agreed to pay $1,997,500 to resolve the sexual harassment lawsuit. And it has agreed to provide significant, franchise-wide injunctive relief aimed at preventing discrimination and harassment in the workplace.

AMTCR has also agreed to retain an outside third-party EEO monitor who will conduct internal audits of AMTCR’s practices in handling harassment and retaliation complaints; establish a centralized tracking system for discrimination, harassment, and retaliation complaints; and ensure accountability and appropriate disciplinary action occur.