Category: Daily News

The San Francisco Chronicle reports that three women who say they were sexually assaulted by an Oakland doctor who reviewed their cases for workers’ compensation claims have sued the state of California and several insurance providers, alleging the agencies were aware of the doctor’s abuse and continued sending patients to him anyway.

The women, who are not identified in the complaint, were required to see Dr. John Warbritton after being injured while at work and filing for workers’ compensation with the state. They each said they reported the alleged abuse by Warbritton and were told they would have to continue seeing him for their claims to proceed.

Warbritton was a QME, and an orthopedic specialist in the East Bay since 1982 but lost his medical license in April 2017, after two of the women accused him of sexual misconduct. Warbritton voluntarily gave up his license.

At the time, Warbritton’s license was already suspended because of charges filed against him in 2016 for transporting child pornography images on his phone and a laptop while flying from Thailand to San Francisco. Warbritton pleaded guilty to the child pornography charges and was sentenced to seven years in prison in September 2018.

The new complaint, filed Jan. 22 in Alameda County Superior Court, alleges that Warbritton’s history of abuse toward female patients was so well known that the agencies that worked with him should be held accountable. The complaint is filed as a class action, and attorney Waukeen McCoy said he expects more women to join the case as it becomes public.

Three insurance providers also are named as defendants: Travelers Indemnity Company in Hartford, Conn.; JT2 Integrated Resources in Oakland; and York Risk Services Group in Jersey City, N.J. Officials from those companies did not respond to requests for comment on the complaint.

Warbritton was suspended as a QME in February 2018, 10 months after he lost his medical license and while the child pornography charges were under investigation.

All of the women said they reported being molested by Warbritton to their lawyers, and in some cases to other doctors treating them and to the insurance providers. One woman said in an interview that her attorney had heard similar complaints about Warbritton before.

In the complaint, the women describe multiple incidents of inappropriate language and touching. All of the women said he touched them on the breast, thigh or between the legs in an inappropriate way. They say Warbritton made comments about their bodies and their undergarments. They say he talked about his sex life and made references to having sex with employees when they were underage.

In a unanimous opinion decided this January, the United States Supreme Court continued its expansive reading of the Federal Arbitration Act and arbitration provisions, rebuffing an effort by some to erect an additional hurdle that would interfere with an employers’ ability to enforce arbitration agreements. The case is Henry Schein Inc. v. Archer and White Sales Inc.

By rejecting the “wholly groundless” exception that courts had used to “spot-check” whether a claim of arbitrability was plausible before compelling arbitration, all lower federal courts must now compel arbitration in all cases where the parties have agreed to delegate the issue of “who decides what is arbitrable” to an arbitrator.

The Court’s decision – the first authored by Justice Brett Kavanaugh – extinguishes a conflict among various circuit courts of appeal and provides uniform guidance to employers who use arbitration agreements throughout the country. Employers should familiarize themselves with the ruling in order to ensure that their dispute resolution plans are fully compliant and in line with this decision.

In keeping with its recent interest in defining the contours of the FAA, the Court accepted the case to clear up the conflict among the circuit courts. A unanimous Court reiterated that it meant what it said in the 2009 Rent-A-Center, West Inc. v Jackson case and that the parties are certainly free to delegate issues of arbitrability to an arbitrator: “The FAA does not contain a ‘wholly groundless’ exception, and we are not at liberty to rewrite the statute passed by Congress and signed by the President.” The Court went further and confirmed it saw no reason to “engraft our own exceptions onto the statutory text.”

There’s a double dose of good news for employers in the Henry Schein ruling. First off, the decision clears up conflicting case law in the various circuits, and employers now know there is a uniform interpretation as to the enforceability of parties’ delegations of arbitrability to an arbitrator. Second, the decision sweeps aside a possible hurdle that might have otherwise existed in trying to enforce an arbitration agreement with employees.

However, liberal legislators are very unhappy with the broad rights to arbitrate agreements. Congress has once again proposed legislation that would seek to ban mandatory workplace arbitration of employment claims, despite a string of United States Supreme Court decisions upholding arbitration and class/collective action waivers as a lawful and appropriate mechanism to resolve workplace disputes.

H.R. 7109, the Restoring Justice for Workers Act, was introduced by Representative Jerrold Nadler, D-N.Y., and Representative Bobby Scott, D-Va., with 58 Democratic co-sponsors. Similar legislation is expected to be introduced in the Senate by Senator Patty Murray, D-Wash, with eight Democratic co-sponsors. The proposed legislation would overturn the U.S. Supreme Court’s decision in Epic Systems, and would amend the National Labor Relations Act to specifically prohibit class and collective action waivers under a new “Section 8(a)(6).”

The Orange County District Attorney’s Office obtained a $1.6 million judgment in the civil case against a plastics manufacturer for willfully endangering employees by maintaining hazardous work environment.

Beginning in 2007, Solus Industrial Innovations operated a plastics manufacturing plant in Rancho Santa Margarita. Solus willfully, knowingly, and intentionally maintained an unsafe and hazardous work environment for their employees.

When the business relocated certain operations from Pennsylvania to Orange County in 2007, the defendants intentionally discarded a commercial boiler to avoid the cost and permitting requirements of proper installation. Solus instead purchased and installed an inexpensive residential water heater, knowing that it was not equipped to function at a commercial level.

In March 2009, the water heater exploded, senselessly killing two employees.

The Division of Occupational Safety and Health investigated and “determined the explosion had been caused by a failed safety valve and the lack of ‘any other suitable safety features on the heater due to ‘manipulation and misuse’ because Solus used a residential water heater instead of a commercial one.”

In March 2012, the OCDA filed a criminal suit against Solus’s plant manager and its maintenance supervisor for felony violations of Labor Code section 6425 subdivision (a) for knowingly operating an unsafe work environment, which resulted in the death of two employees.

The OCDA also filed the present civil action against Solus and its successor corporations.

The first cause of action “allege[d] that Solus’s failure to comply with workplace safety standards amount[ed] to an unlawful, unfair and fraudulent business practice under Business and Professions Code section 17200, and the district attorney request[ed] imposition of civil penalties as a consequence of that practice, in the amount of up to $2,500 per day, per employee, for the period from November 29, 2007, through March 19, 2009.”

The second was a claim that Solus “made numerous false and misleading representations concerning its commitment to workplace safety and its compliance with all applicable workplace safety standards, and as a result of those false and misleading statements, Solus was allegedly able to retain employees and customers in violation of Business and Professions Code section 17500.” The district attorney requested imposition of civil penalties in the same amount for the same period.

On Jan. 29, 2019, the defendants were ordered to pay $1.6 million, $1.5 million of which will go toward civil penalties and $100,000 for additional victim restitution.

Deputy District Attorney Kelly Ernby of the OCDA’s Environmental Protection Unit is the assigned prosecutor on the case.

A Ventura County man has been sentenced to 168 months in federal prison for participating in a massive fraud scheme that used dozens of nonexistent companies to collect nearly $5 million in unemployment benefits for phony employees who never performed any work at the fake entities.

Jack Benjamin Hessiani, a.k.a. “Jack Herrera,” 40, of Camarillo, was sentenced today by United States District Judge John A. Kronstadt. Hessiani pleaded guilty in August 2018 to one count of mail fraud.

According to court documents, Hessiani created numerous fictitious businesses for the sole purpose of defrauding the Employment Development Department (EDD), the state agency that administers the federal unemployment insurance program in California.

After he and his co-schemers filed documents with EDD that showed made-up earnings for the fictitious workers, Hessiani and the co-schemers submitted claims for unemployment insurance benefits for laid-off “employees.” In fact, many of the “employees” were people who had agreed to provide their personal identifying information in exchange for a portion of the unemployment insurance benefits. Some of the benefit portions would go to drug users who likely used the funds to enable future drug purchases, while others were poor students who later faced criminal exposure as a result of the actions of Hessiani and his co-schemers, court papers state.

The unemployment benefits were sent in the form of checks and debit cards to “mail drops” that Hessiani and the co-schemers established in the names of other individuals, according to court documents. After EDD began issuing unemployment benefits, Hessiani ensured that documents were filed that falsely stated that the laid-off “workers” were still unemployed, and he later sought “extended benefits” to obtain unemployment insurance benefits for the sham workers beyond the normal six-month period. These extended benefits were ultimately funded by the United States Treasury.

According to court documents, Hessiani and his co-schemers submitted approximately 725 unemployment insurance claims – including 521 original claims and 204 claims for extended benefits – in the names of 384 “employees.” The investigation identified 43 fictitious companies based in Ventura County that were used to further the scheme, which caused EDD to suffer actual losses of $3.96 million and the United States Treasury to suffer actual losses of approximately $900,000. Hessiani enlarged his scheme by inducing the people whose names were already being used to obtain fraudulent benefits to “recruit” others who would be identified as additional false employees at the fictitious companies, and he paid referral fees for each new fake worker brought into the scheme.

Three other defendants in the case have pleaded guilty to criminal charges and are pending sentencing. They are Hessiani’s brother, James Manuel Herrera, 30, of Camarillo; Eduardo Josue Garcia, 27, of Camarillo; and Daniel Ayala-Mora, 29, formerly of Camarillo.

The Division of Workers’ Compensation has posted the 2018 DWC Audit Unit annual report on its website. The annual report provides information on how claims administrators audited by the DWC performed and includes the Administrative Director’s ranking report for audits conducted in calendar year 2017.

The 2018 Audit Unit annual report details the results of audits conducted in 2017 and provides the name and location of each insurer, self-insured employer, and third-party administrator audited during that time.

The DWC Audit & Enforcement Unit completed 41 profile audit reviews (PAR audits). Of the PAR audits, 40 were routinely selected and there was 1 target audit, which would have been conducted based upon failure of a prior audit. The total number of PAR audit subjects included 5 insurance companies, 11 self-administered / self-insured employers, 21 third-party administrators (TPA), and 4 insurance companies / third-party administrators combined claims adjustinglocations.

Thirty-seven audit subjects (90%) met or exceeded the PAR 2017 performance standard and therefore had no penalty citations assessed in accordance with Labor Code section 129.5(c) and CCR, Title 8, Section 10107.1(c)(4). These audit subjects were, however, ordered to pay all unpaid compensation.

Four audit subjects (10%) failed to meet or exceed the PAR standard and their audits expanded into a full compliance audit of indemnity claims (FCA stage 1). One of these audit subjects (25% of those failing to meet or exceed the PAR standard) met or exceeded the FCA 2017 performance standard and therefore had penalty citations assessed for unpaid and late payment of indemnity in accordance pursuant to Labor Code section 129.5(c)(2) and CCR, Title 8, Sections 10107.1(d).

The remaining three of the four audit subjects (75% of those failing to meet or exceed the PAR standard) failed to meet or exceed the FCA 2017 performance standard and their audits expanded into full compliance audit of indemnity claims (FCA stage 2) and added a sample of denied claims to be audited. These audit subjects were assessed administrative penalties for all penalty citations in accordance with Labor Code section 129.5(c) and CCR, Title 8, Section 10107.1(d) and 10107.1(e).

The audit findings, by law, must detail the number of files audited, the number and type of violations cited, and the amount of an undisputed compensation found due and unpaid to the injured worker. The audit findings presented in this report are statistical and do not identify any individual injured worker. The Labor Code provides that contents of the claim files and the Audit Unit working papers are confidential.

The DWC Administrative Director’s 2017 Audit Ranking Report is part of this annual report. The Ranking Report provides the performance ratings for the 41 audit subjects listed in order, from the best to worst performer.

Congratulations to Zenith Insurance Company – Pleasanton for having the best score in the Ranking Report.  The ranking of the remaining 40 organizations are listed by name on the Ranking Report.

Performance of insurers, self-insured employers, and third party administrators subject to profile audit review and full compliance audit is rated in accordance with the performance standards set annually by the Administrative Director. The DWC Administrative Director’s 2018 Audit Ranking Report lists, in ascending order by performance rating, the administrators audited in calendar year 2017.