Category: Daily News

On Labor Day, Gavin Newsom signed the Fast Food Standards and Accountability Recovery Act – Assembly Bill 257 – giving the state’s 550,000 fast food workers a seat at the table and bargaining power.

In his signing statement Newsom said the new law “gives hardworking fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry. I’m proud to sign this legislation on Labor Day when we pay tribute to the workers who keep our state running as we build a stronger, more inclusive economy for all Californians.”

In the process of passing this law, the legislature specifically found that “For years, the fast food sector has been rife with abuse, low pay, few benefits, and minimal job security, with California workers subject to high rates of employment violations, including wage theft, sexual harassment and discrimination, as well as heightened health and safety risks.”

The legislature went on to establish its remedy. This new law will establish the Fast Food Council within the Department of Industrial Relations until January 1, 2029. It will be composed of 10 members to be appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee, and would prescribe its powers.

The 10 members include one from the Department of Industrial Relations. Two representatives of fast food restaurant franchisors. two representatives of fast food restaurant franchisees. Two representatives of fast food restaurant employees. Two representatives of advocates for fast food restaurant employees. And one representative from the Governor’s Office of Business and Economic Development.

The code defines a “Fast food chain” to mean “a set of restaurants consisting of 100 or more establishments nationally that share a common brand, or that are characterized by standardized options for decor, marketing, packaging, products, and services.”

The purpose of the council is to establish sectorwide minimum standards on wages, working hours, and other working conditions related to the health, safety, and welfare of, and supplying the necessary cost of proper living to, fast food restaurant workers.

If a conflict exists between council’s standards, rules, or regulations and those issued by another state agency, the standards, rules, or regulations issued by the council would apply to fast food restaurant workers and fast food restaurant franchisees and franchisors, and the conflicting rules or regulations of the other state agency would not have force or effect with respect to these parties.

The Act would except from this application proposed standards within the jurisdiction of the Occupational Safety and Health Standards Board and would prescribe a process for the council to petition the board to adopt, amend, or repeal a standard.

The council must submit a report to the Legislature for a standard, or repeal or amendment of a standard, to become effective, and would specify that a standard, repeal, or amendment shall not take effect before October 15 of the same year.

A fast food restaurant operator is prohibited from discharging or in any manner discriminating or retaliating against any fast food restaurant employee for specified reasons, and would create a cause of action and right to reinstatement for employees in this connection, as well as a presumption of unlawful discrimination and retaliation in certain circumstances.

The law received widespread support from labor unions and worker advocacy organizations, with Mary Kay Henry, the president of the Service Employees International Union (SEIU), arguing that the bill addresses “challenges that workers have faced when trying to change policies by unionizing store by store.”

The law was opposed by franchise owners, fast food companies and the California Restaurant Association. Joe Erlinger, the President of McDonald’s posted an open letter which opposed the law, and he claimed “Economists say it could drive up the cost of eating at a quick service restaurant in California by 20% at a time when Americans already face soaring costs in supermarkets and at gas pumps.”

A gender discrimination class action lawsuit has just been filed in California against Amazon, which alleges its fulfillment centers are tailored for men, making it difficult for women to reach items on an 8 foot automated pod used in its fulfillment warehouses.

The lead plaintiff in this case is Amy Fujishige a woman, five feet in height, who worked for Amazon at its Fulfillment Center in Sacramento, California from about September 16, 2020, through about July 8, 2021 as a picker and counter. Fujishige alleges she began to run into issues regarding her Productivity Score almost immediately. Being five feet tall, she was not able to pick and scan items at the top of each pod without assistance from a Process Assistant or violating the safety policy against overreaching for items over her head.

But she had to meet the strict Productivity Score standards and stay out of the bottom 5% of Productivity Scores, Thus she would often try to grab highup items without using the stepladder to keep the amount of time spent retrieving an item at a minimum. When caught doing so, she would be reprimanded by a Learning Ambassador or people from the safety department for “overreaching.”

Amazon’s fulfillment centers have utilized pods, (i.e., movable stacks of shelves with “bins” of various sizes brought to and from workstations by automated robots) to store items that are “picked” for shipping when orders come in. These pods are eight feet (96 inches) in height.

In her lawsuit she alleges that Amazon has implemented employment policies and procedures at its fulfillment centers that, in operation, discriminate against female employees by inflicting significant adverse impacts upon them when compared to Amazon’s male employees assigned to the same tasks and positions.

Her attorneys allege that on average, in the United States, including California, adult men are significantly taller than adult women, and Amazon unnecessarily places female employees at its fulfillment centers at a significant disadvantage compared to male employees, in effect, punishing them for their generally shorter stature. And the safety policies and Amazon’s Quality and Productivity Performance Policies “are seemingly tailored to the height and strength of the male physique, rather than the female physique.”

Amazon sets targets for productivity each day and ranks warehouse employees by their “Productivity Score” on a weekly basis, which takes into consideration, among other things, the number of units (i.e., warehoused items to be stowed away in pods, counted for inventory, or picked for shipping to customers) scanned per hour.

Employees who need to use the stepladders or to wait for the assistance of Process Assistants more often allegedly will take more time to complete a task, on average, than those who do not, lowering the “Units Per Hour” or “UPH” and increasing their “Time Off Task” or “TOT”. This allegedly “confers an advantage to taller people over shorter people in achieving higher Productivity Scores.”

She goes on to allege that essentially “these policies and procedures operate to unfairly punish the bottom 5% of Amazon’s warehouse employees ranked by Productivity Scores, eventually culling them from the employment roster. Those subject to this cruel policy of decimation are disproportionately women due to their overall smaller stature compared to men in the general population. This includes Plaintiff, who stands five feet tall and was disciplined and eventually terminated for her low Productivity Scores.”

Ms. Fujishige claims she raised these issues to her managers whenever she was disciplined and written up for being the bottom 5% of Productivity Scores.

“Defendants have discriminated against Plaintiff and the putative class of similarly situated female employees in violation of FEHA because Amazon’s policies subjected them to different and adverse employment actions as a result of their sex, and they have suffered disparate impacts as a result of Amazon’s Quality and Productivity Performance Policy, including but not limited to its policies or practices regarding UPH, TOT, and Productivity Scores, in conjunction with the design of its pods and safety policies and procedures at its fulfillment centers.”

A neurosurgeon pleaded guilty to a federal criminal charge for accepting approximately $3.3 million in bribes for performing spinal surgeries at a now-defunct Long Beach hospital whose owner later was imprisoned for committing a massive workers’ compensation system scam.

55 year old Lokesh Tantuwaya, who lives in San Diego, pleaded guilty to one count of conspiracy to commit honest services fraud and to violate the federal Anti-Kickback statute. He has been in federal custody since May 2021. He was initially free after he was ordered to hand over his passport, a million dollars and the jet.

Later it was ruled he was a flight risk and confined him to Santa Ana jail only after federal agents learned he’d purchased his own private plane and had discussed “fitting it with an extended fuel tank, just in case he needed to go far away,” according to a motion to revoke bond.

According to his plea agreement and statements at his change-of-plea hearing, from 2010 to 2013, Tantuwaya accepted money from Michael Drobot, who owned Pacific Hospital in Long Beach, in exchange for Tantuwaya performing spinal surgeries at that hospital. The bribe amount varied depending on the type of spinal surgery.

Pacific Hospital specialized in surgeries, especially spinal and orthopedic procedures. Drobot conspired with doctors, chiropractors and marketers to pay kickbacks and bribes in return for the referral of thousands of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California workers’ compensation system. During its final five years, the scheme resulted in the submission of more than $500 million in medical bills for spine surgeries involving kickbacks.

Tantuwaya entered into contracts with Drobot and Drobot-owned companies. Tantuwaya admitted in his plea agreement that he knew or deliberately was ignorant that the payments were being given to him in exchange for bringing his patient surgeries to Pacific Hospital.  In furtherance of the scheme, Tantuwaya met with Drobot and Drobot’s employees. Tantuwaya further admitted to depositing bribe checks into his bank accounts.

Tantuwaya admitted that he knew the receipt of money in exchange for the referral of medical service was illegal and that he owed a fiduciary duty to his patients to not accept money in exchange for taking their surgeries to Pacific Hospital.

In total, Tantuwaya received approximately $3.3 million in illegal payments.

In April 2013, law enforcement searched Pacific Hospital, which was sold later that year, bringing the kickback scheme to an end. To date, 23 defendants have been convicted for participating in the kickback scheme.

Tantuwaya, was also named as a defendant in a civil federal lawsuit ( 8:13-cv-00956-AG-CW) filed by the State Compensation Insurance Fund involving a workers’ compensation fraud scheme at the Pacific Hospital of Long Beach.

The Los Angeles Times recently ran a feature story about how the California Medical Board protects negligent doctors. The Times cited at least ten California physicians, including Tantuwaya, as examples. The article pointed out that “license remains valid as he sits in jail awaiting trial.”

United States District Judge Josephine L. Staton scheduled a December 9 sentencing hearing, at which time Tantuwaya will face a statutory maximum sentence of five years in federal prison.

The FBI, IRS Criminal Investigation, United States Postal Service Office of Inspector General, and the California Department of Insurance investigated this matter. Assistant United States Attorneys Joseph T. McNally and Billy Joe McLain of the Violent and Organized Crime Section are prosecuting this case.

Scars of the Mind Picture Company, LLC is a motion picture production company specializing in low-budget independent films. In the spring of 2018, it was engaged in filming a theatrical motion picture titled “Acts of Desperation.” Filming took place at various locations within the “30-mile” zone centered in Hollywood, including Elysian Park in Los Angeles.

Not until Scars of the Mind applied for a permit to film in Elysian Park did it learn that the conditions of the permit for each day’s shooting included the presence of at least two police officers for traffic control. To fill this function they used active or retired Los Angeles Police Department officers who worked as traffic control officers at an on-location film shoot that occurred over three days in Elysian Park, Los Angeles. They learned of the job, where to go and when to start from Eddie Esparza, principal of Pacific Production Services (PPS), not from anyone at Scars of the Mind.

Each of the LAPD officers completed W-9 forms as individuals/sole proprietors, and each demanded and received an additional 15 percent of their daily compensation as reimbursement for anticipated self-employment taxes along with the $75 kit box rental fee. They were paid directly by Scars of the Mind. Each check provided for their services was returned unpaid because of insufficient funds.

Once she was informed of the bounced checks, Leslie Bates, an individual respondent and a producer of the film, wrote checks from her personal account to each officer, in an amount equal to the compensation owed as well as bank charges incurred by each officer. All three testified that they felt they had received what was owed from Scars of the Mind.

Nonetheless, the three officers retained counsel and filed suit to recover various remedies afforded to employees under the Labor Code, as well as attorney’s fees. Their claims included a demand for 30 days’ wages for each of the three officers, pursuant to Labor Code section 203; a similar demand for paying wages with a bad check, pursuant to Labor Code section 203.1; failure to pay minimum wage and overtime under Labor Code sections 510 and 1194; failure to provide pay stubs in violation of Labor Code section 226, subdivision (a); failure to provide employment records in violation of Labor Code sections 226, subdivision (b), and 1198.5; for restitution under Business and Professions Code section 17200, and for civil penalties under the Private Attorneys General Act (Lab. Code, § 2698 et seq.).

Following a two-day bench trial, the court entered judgment in favor of the film company, finding that the officers were independent contractors rather than employees, and that the statutes under which they sought relief were inapplicable to independent contractors. The Court of Appeal affirmed the trial court in the unpublished case of Estrada v Scars of the Mind Picture Company, LLC. B314136 (August 2022).

At trial, both sides agreed that the ABC test adopted in Dynamex and subsequently codified at Labor Code section 2775, subdivision (b)(1) is the applicable legal test, and this is the legal standard that the trial court applied.

However the Court of Appeal noted that “the claim under Labor Code section 203.1 for paying wages with a bad check was governed by the so-called common-law test under Borrello.” (S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations (1989) 48 Cal.3d 341) And the opinion went on to say “we deem any such objection to be waived by appellants, and we will review the trial court’s findings of fact using the ABC test.”

The question of what legal standard or test applies in determining whether a worker is an employee or, instead, an independent contractor is a question of law, and in this case the “ABC” test outlined in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 is the controlling standard. The new Labor Code provisions codifying the ABC test expressly apply only “to work performed on or after January 1, 2020” (Lab. Code, § 2785, subd. (c)), making those statutes inapplicable to this case.

The Court went on to review the evidence in great detail for each of the three criteria in the “ABC” test and concluded that the evidence was sufficient to support the trial court’s finding in favor of Scars of the Mind.

Matthew Mehdi Rafat was a Technology Credit Union (TCU) customer. He had had an interaction with a TCU employee M.L. on March 24 2021 and had made a video recording of the interaction, which he posted on his YouTube channel. A Technology Credit Union employee identified in this case by the initials “M.L” . believed that, due to Rafat’s “aggression” and “later efforts to cause [her] harm by posting videos of the incident on the internet,” Rafat “will come back and seek [her] out at the branch.”

California’s Code of Civil Procedure section 527.8 allows an employer to obtain a workplace violence restraining order (WVRO) on behalf of an employee who has been subjected to a credible threat of violence at the workplace.

On April 5, 2021, TCU filed a petition for a WVRO restraining Rafat and protecting TCU’s employee, M.L.. TCU claimed that Rafat had made a credible threat of violence against M.L.

M.L.’s declaration, which was attached to the petition, described a single March 24 encounter between her and Rafat at a TCU branch. M.L. declared that Rafat “became visibly angry and became aggressive towards” her while she was assisting him, made a video recording of her “without her consent,” “made several rude and inappropriate statements questioning [her] mental competency,” repeatedly refused her request to stop video recording her, and “assaulted [her] when he forced a pen and paper back towards [her] and demanded that [she] write down his number.”

On April 7, the trial court issued a temporary WVRO and set a hearing. The court’s temporary WVRO included personal conduct and stay away orders barring Rafat from contacting or harassing M.L. or visiting her workplace except for legitimate business.

On April 13, Rafat filed a response to the petition.and denied that he had made a credible threat of violence. At subsequent hearings the video was received into evidence, and several witnesses including M.L. provided details of the encounters with Rafat. The court issued a WVRO that, like the temporary WVRO, included both a personal conduct order and a stay away order, and the court ordered the WVRO to remain in effect until December 31, 2022. Rafat timely filed a notice of appeal from the order.

The Court of Appeal reversed in the published case of Technology Credit Union v Rafat H049471 (August 2022).

CCP 527.8 provides that a “Credible threat of violence’ is a knowing and willful statement or course of conduct that would place a reasonable person in fear for his or her safety, or the safety of his or her immediate family, and that serves no legitimate purpose.”

“Our careful review of the record discloses insufficient evidence that could support such a finding. Rafat’s conduct on March 24 was indisputably rude, impatient, aggressive, and derogatory. Further, he had a history of using aggressive language, including making offensive remarks.”

“However, while he appeared angry and frustrated during the March 24 incident and its aftermath, there was not sufficient evidence produced by TCU linking any of Rafat’s statements or conduct to any implied threat of violence. The only threats he made were of litigation and complaints to a federal agency.”