Category: Daily News

Adan Alvarez was employed on June 11, 2015 as a mover by Victor Manuel Martinez, individually and doing business as Bob Williams Moving, and Justine Marie Martinez, individually and doing business as Tristar Moving, and claimed to have suffered injury to multiple areas. It was stipulated by the parties that the employer was uninsured.

After a trial, the WCJ found applicant failed to file a proof of claim in the bankruptcy proceeding against alleged employers Victor Manuel Martinez and Justine Marie Martinez. Applicant did not strictly meet the statutory conditions that would render the Uninsured Employers Fund (UEF) liable for payment, and is now enjoined from obtaining an award in a workers’ compensation proceeding enforceable against Victor Manuel Martinez and Justine Marie Martinez personally or the UEF. Therefore, the undersigned WCJ found good cause to dismiss applicant’s claim with prejudice.

The WCAB granted reconsideration, and reversed in the panel decision of Alvarez-1 v Bob Williams Moving – ADJ10037291 (January 2025).

Applicant argued in Alvarez1 that the trial court’s reliance in Ortiz v. Workers’ Comp. Appeals Bd. (1992) 4 Cal.App.4th 392 is misplaced because the employee in Ortiz, unlike applicant here, had an award of temporary disability and reimbursement for medical treatment. Applicant further argues laches because UEBTF participated in discovery and was aware of the bankruptcy court’s lifting of the automatic stay and applicant’s failure to file a proof of claim in the bankruptcy proceedings. Applicant contends UEBTF should have alerted applicant of the requirements set forth in Ortiz.

The Ortiz court stated: “Assuming the prerequisites to payment by the UEF have been met, if a findings and award in a workers’ compensation proceeding issues prior to a discharge of an employee’s claim in bankruptcy, the UEF would pay the award, become a creditor, and thus be able to file its own proof of claim in the bankruptcy proceeding.” And “The discharge in bankruptcy operates as an injunction prohibiting any proceeding against the employer for personal liability based on the award, however, including the UEF’s right to seek reimbursement pursuant to Labor Code section 3717.”

The WCAB panel noted “The Ortiz court, however, did not address whether an employee is required to file a proof of claim in the bankruptcy proceedings in this situation-when there is no workers’ compensation award before the discharge.” And it went on to find Slali v. Ruiz (2002) 282 B.R. 225 [67 Cal.Comp.Cases 634] instructive.

“In Ruiz, just as in this case, the employee did not file a proof of claim in the Chapter 7 bankruptcy proceedings of the employers. (Id. at p. 636.) The bankruptcy court entered discharges in favor of both employers as there were no assets to distribute. (Ibid.) The employee then petitioned for relief in the bankruptcy proceedings in order to pursue his workers’ compensation claims. (Ibid.) The bankruptcy court provided such relief and entered an order that (1) allowed the employee to pursue an award against the employers in his workers’ compensation case; (2) no personal liability on behalf of the employers to the employee would be created; (3) the employee would not be allowed to seek satisfaction of any award against the employers absent further orders from the bankruptcy court; (4) the employee’s claim remained open and pending before the WCAB and had not been resolved or decided; and (5) the employers’ participation in the litigation before the WCAB would not be affected by the bankruptcy order. (Ibid.)”

The bankruptcy court’s order was appealed to the United States District Court, which affirmed the bankruptcy court’s order.The District Court further explained that although it does not believe that the employee needed relief from the discharge injunction, it was prudent for the employee to seek such relief to serve as a clarification regarding the scope of the discharge injunction and avoid conflict between the workers’ compensation and bankruptcy proceedings. (Ruiz at p. 638.)

“Ruiz instructs us that a failure to file a claim of proof in the bankruptcy proceedings when an employee does not yet have a compensation award from which to file a proof of claim is not fatal. We, therefore, conclude that the trial court’s finding that applicant here is enjoined from pursuing his workers’ compensation claim was in error.”

The Uninsured Employers Benefits Trust Fund (UEBTF) Petition for Reconsideration of Alvarez-1 was denied in In Alvarez-2 v Bob Williams Moving ADJ10037291 (April 2025),

In Alvarez-2 UEBTF contends that the WCAB failed to appreciate the difference between a Chapter 7 asset bankruptcy and a Chapter 7 no asset bankruptcy. According to UEBTF, in the former, a creditor such as applicant is required to file a proof of claim in a bankruptcy proceeding and failure to do so enjoins applicant from later seeking payment from UEBTF. In the latter, a failure to file a proof of claim is not fatal as demonstrated in In re Manuel D. Slali (Bankr. C.D.Cal. 2002) 282 B.R. 225 [67 Cal.Comp.Cases 634]. UEBTF contends that the underlying bankruptcy proceeding here was a Chapter 7 asset bankruptcy and, therefore, applicant was required to file a proof of claim in order to later seek payment from UEBTF.\

UEBFT cites to Duncan v. Workers Compensation Appeals Bd. (1998) 63 Cal. Comp. Cases 309 [1998 Cal. Wrk. Comp. LEXIS 4510] to support its argument. In Duncan, the WCJ found that in order to reinstate a workers’ compensation award, applicant “must obtain a modification of the discharge order in bankruptcy allowing a personal judgment to be entered against the uninsured employer.” (Duncan, at p. 310.)

After reviewing Duncan, the WCAB concluded in Alvarez-2 that the “Duncan court simply held that in a no asset case, it was not necessary to seek modification of the discharge injunctions in the bankruptcy court. Duncan does not stand for the proposition that a failure to file a proof of claim in the bankruptcy proceeding, whether it be an asset or no asset proceeding, enjoins the employee from later seeing payment from UEBTF. As such, we affirm our January 3, 2025 Opinion allowing applicant’s workers’ compensation claim to proceed despite his failure to file a proof of claim in the underlying bankruptcy proceeding.

When the COVID-19 pandemic struck, the Board of Trustees of the California State University (CSU) directed that instruction be provided remotely. To comply with this directive, Patrick Krug, a biology professor at California State University Los Angeles, incurred expenses for a computer and other equipment and necessities which CSU declined to reimburse.

Krug sued CSU on behalf of himself and similarly situated faculty, alleging Labor Code section 2802 obligated CSU to reimburse its employees for necessary work-related expenses. CSU demurred, arguing that as a department of the state it enjoyed broad exemption from Labor Code provisions that infringe on its sovereign powers. Krug appealed from a judgment of dismissal entered after the trial court sustained CSU’s demurrer without leave to amend.

In August 2023 the Court of Appeal affirmed the trial court in the Published case of Krug v. Board of Trustees of the Cal. State Univ – B320588 (August 2023).

The California Supreme Court granted review of Krug pending its decision in Stone v. Alameda Health System (2024) 16 Cal.5th 1040 (Stone), after which it remanded the matter back to the Court of Appeal for reconsideration in light of its holding in that case.

After reconsideration in light of Stone, the Court of Appeal again affirmed the trial judgment in the second published opinion of Krug v. Board of Trustees of the Cal. State Univ – B320588A (April 2025)

The Stone Court examined the language, structure, and history of the statutes and wage order at issue to determine whether the Legislature intended to impose their requirements on public employers. Using this framework, the Court addressed the text and history of relevant Labor Code and wage order provisions to concluded that the hospital was exempt from the employees’ claims.

On remand from the Supreme Court, the Court of Appeal on re-review of Krug followed Stone’s analytical framework to determine whether the Legislature intended to exclude public entity employers from the employment expense reimbursement obligations at issue here.

It then concluded that the statutory structure evinces positive indicia that the Legislature intended to exclude government employers from the terms of section 2802. The legislative history of section 2802 also supports the conclusion that the Legislature intended to exclude government employers from its terms. Later legislative history was also in accord when section 2802 was amended in 2000 by Senate Bill No. 1305 (SB 1305).

However no case has applied the reimbursement obligations set forth in section 2802 to a public employer.

“In sum, although the language of section 2802 is silent on whether “employer” denotes both public and private entities, the statutory structure and legislative history provide positive indicia of legislative intent to exclude public employers from the provision’s reimbursement obligations.” … “Therefore, we conclude section 2802 does not obligate CSU to reimburse employees for work-related expenses, without the need to resort to interpretive maxims.”

Legal Aid at Work (LAAW) reached a settlement agreement with the California Employment Development Department (EDD), the state agency responsible for administering unemployment insurance for millions of people who work in California. The case involves a lawsuit challenging the legality of EDD’s policies for informing unemployment insurance claimants of determinations that the claimant cannot receive benefits or needs to repay benefits that the claimant has already received.

The agreement, which still needs court approval, will dramatically increase the likelihood unemployment insurance claimants will promptly learn about negative decisions, understand them, and know how to challenge them. Among other things, the settlement will require the EDD to start sending information about its decisions by email and text message, and will require the EDD to rewrite its notices so they are written at an eighth-grade level.

During the COVID-19 pandemic, millions of Californians accessed unemployment insurance benefits, and the state paid out nearly $25 billion in benefits in 2020 alone. California’s Legislative Analyst’s Office has estimated that between $500 million and $1 billion in benefits go unreceived each year because the EDD improperly denies claims. Other claimants are ordered to repay benefits when they are retroactively deemed ineligible for benefits. These decisions, which can order claimants to repay $10,000 or more in benefits, are often financially crippling. And the decisions are often wrong. Claimants who appeal EDD’s decisions have historically been able to get those decisions reversed on appeal over 50 percent of the time, according to the same LAO report.

The lawsuit, Okamura v. Employment Development Department, was filed in Alameda County Superior Court. It argues that EDD failed to properly notify claimants when their benefits were denied, when they owed money back, or when they were accused of fraud. As noted in the Complaint, some claimants only learned about these decisions after their wages were garnished or their tax refunds were seized. Even when claimants did receive notices, the notices were so confusing that they didn’t understand why they were being charged with an overpayment, or realize that they could challenge the EDD’s decision.

EDD will make many important changes to improve how it notifies people about unemployment benefit decisions, including:

– – Expanded Digital Notifications – EDD will soon send emails, text messages, and online alerts to make sure people know about benefit denials and overpayments. Currently, the EDD only sends these notices to claimants by mail, even though most of the unemployment insurance process is done online and over the phone.
– – Creating Easier-to-Understand Notices – EDD has agreed that notices revised as part of its longer-term modernization effort will be rewritten at an 8th-grade reading level. Currently, notices are drafted at a college-level reading level, making them difficult to understand for most claimants.
– – Using Address Verification Tools – EDD will implement a system to verify claimants’ mailing addresses by cross-checking the National Registry of New Hires, and eventually the United States Postal Service’s National Change of Address database. These changes will reduce instances of lost or delayed communication, especially when the EDD sends notices to claimants months or years after they stopped collecting unemployment insurance benefits.
– – Clearer Information About EDD’s Decision – Notices will provide additional information on why benefits were denied or overpaid. Currently, notices only provide limited information about the EDD’s decision, leaving claimants guessing about why they were denied or required to pay back benefits.
– – Disclosure About Possibility of Waiver of Overpayment – Importantly, the EDD will also start telling claimants who receive Notices of Overpayment that some claimants are eligible for a waiver of the overpayment. On appeal, the California Unemployment Insurance Appeals Board regularly decides that an overpayment must be waived, and claimants do not need to pay back benefits they were not eligible to receive.

Even though this lawsuit was filed as a potential class action, the settlement only requires the four individual named plaintiffs and Legal Aid at Work, an institutional plaintiff, to release their claims. The lawsuit does not affect other claimants’ right to file their own legal claims if they have been affected by EDD’s practices in the past.

The motion for settlement approval and entry of judgment was filed in Alameda County Superior Court. If approved, EDD will begin implementing the agreed-upon changes over the next year.

Billey Ford worked as a security guard for The Silver F, Inc., doing business as Parkwest Casino Lotus (Parkwest) from September 2018 to December 2021.

Upon his hiring, Ford signed an arbitration agreement, pursuant to which he agreed to arbitrate any employment-related disputes. However, the arbitration agreement expressly “does not apply” to claims for workers’ compensation or unemployment compensation, specified administrative complaints, Employment Retirement Income Security Act (ERISA) claims, or, as relevant here, “representative claims under [PAGA].”

In addition to the arbitration clause, the arbitration agreement contains a class, collective, and representative action waiver. It provides: “Except where prohibited by federal law, [Parkwest] and I agree that we expressly waive the right to commence arbitration or to file a complaint in court in the form of a class, collective, or representative action on behalf of others. . . . In the event a court determines this waiver is unenforceable with respect to any claim, then this waiver shall not apply to that claim, that claim must be filed in a court of competent jurisdiction, and such court shall be the exclusive forum for that claim.”

In February 2022, Ford filed a complaint against Parkwest, alleging a single cause of action under PAGA for Labor Code violations suffered by him and by other employees. Ford specifically alleged that Parkwest unlawfully required its employees to undergo mandatory, off-the-clock health screenings prior to the start of their work shifts and, consequently, issued inaccurate wage statements and failed to pay all the wages due to its employees.

Parkwest moved to compel arbitration of Ford’s “individual” PAGA claims (i.e., those arising from Labor Code violations that Ford personally sustained) and to dismiss Ford’s “representative” PAGA claims (i.e., those arising from Labor Code violations suffered by other employees). Parkwest’s motion was based on Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, 648-649 (Viking River). After a hearing, the trial court denied the motion. This appeal followed.

The Court of Appeal affirmed the trial court denial of the motion in the unpublished case of Ford v The Silver F  -C099113 (March 2025).

The issue presented in this appeal is one of contract interpretation, i.e., whether the parties’ arbitration agreement requires arbitration of Ford’s PAGA claims. There is no dispute that while the arbitration agreement generally applies to all employment-related disputes, it specifically excludes “ ‘representative claims under [PAGA].’ ” The parties disagree on how to interpret this exclusion.

Parkwest argues that, under Viking River, PAGA claims are “representative” in two ways: First, all PAGA claims are “representative” in the sense that a plaintiff brings a PAGA claim as an agent or proxy for the state. Second, some PAGA claims are “representative” in the sense that they are predicated on code violations suffered by employees other than the plaintiff. Because the term “representative” has two possible meanings, Parkwest argues the exclusion for “representative claims under [PAGA]” is, at best, ambiguous about whether it was intended to exclude all PAGA claims or only those nonindividual claims that the plaintiff might assert on behalf of other employees. Thus, Parkwest contends, we must apply the FAA’s presumption of arbitrability and construe the agreement to permit arbitration of Ford’s individual PAGA claims.

Ford does not dispute that, under the reasoning of Viking River, the exclusionary clause is ambiguous as to the meaning of the term “representative,” but Ford argues the trial court correctly resolved this ambiguity against Parkwest as the drafter of the arbitration agreement. Ford also argues that because the waiver of “representative” claims is unenforceable, any PAGA claim must proceed in court instead of arbitration.

The trial court, in contrast, found that “the agreement is not reasonably susceptible to an interpretation that ‘representative claims under [PAGA]’ means anything other than all PAGA claims.” Thus, the court concluded that Ford’s PAGA claims were unambiguously excluded from the scope of arbitration.

The Court of Appeal wrote that it was not “persuaded by either party’s position.” Instead, it agreed with the trial court’s interpretation.

“Here, both the waiver and the exclusionary clause use the term ‘representative,’ but only the waiver adds the qualifying phrase ‘on behalf of others.’ This supports our interpretation that the parties intended the phrase ‘representative claims under [PAGA]’ to refer broadly to all PAGA claims, not just those brought on behalf of other employees.”

Brian Prahl was involved in a multiple vehicle accident in March 2016 while insured by with Allstate Northbrook Indemnity Co. with a policy that contained uninsured motorist coverage. The available insurance proceeds from two drivers at fault were insufficient to fully compensate Prahl for the injuries and damages he suffered. Prahl settled with these drivers and then sought to initiate arbitration of his underinsured motorist claim.

Allstate agreed to arbitration on May 29, 2018. Arbitration was scheduled for November 2022 but was continued based on Prahl’s counsel’s unavailability.

In August 2023, Prahl’s counsel contacted counsel for Allstate to reset the arbitration. Allstate asserted that the five-year limitation set forth in Insurance Code section 11580.2, subdivision (i), had expired in May 2023. Prahl submitted a memorandum of points and authorities explaining his position that Emergency Rule 10 extended the deadline to conclude arbitration by six months.

The matter was heard on October 26, 2023. The court denied the petition, and Prahl filed a timely appeal.The Court of Appeal affirmed the trial court in the published case of Prahl v. Allstate Northbrook Indemnity Co. – C099904 (March 2025).

Insurance Code section 11580.2, subdivision (i)(2)(A) provides, as relevant to this proceeding, that any uninsured motorist arbitration must be concluded “[w]ithin five years from the institution of the arbitration proceeding.” Prahl argues this five-year deadline is extended by Emergency Rule 10.

On March 27, 2020, Governor Newsom issued an executive order acknowledging that ‘ “the Judicial Branch retains extensive authority, statutory and otherwise, to manage its own operations as it deems appropriate to mitigate the impacts of COVID-19 . . . .” (Exec. Order No. N-38-20.) “The order suspended any limitations in Government Code section 68115 or any other provision of law that limited the Judicial Council’s ability to issue emergency orders or rules, and suspended statutes that may be inconsistent with rules the Judicial Council may adopt.”

On April 6, 2020, the Judicial Council issued various emergency rules. Among those was Emergency Rule 10, which provided: “Notwithstanding any other law, including Code of Civil Procedure section 583.310, for all civil actions filed on or before April 6, 2020, the time in which to bring the action to trial is extended by six months for a total of five years and six months.”

Prahl contends an uninsured motorist arbitration is a “civil action” to which Emergency Rule 10 applies.

The rules applicable to interpretation of the rules of court are similar to those governing statutory construction. [Citation.] Under those rules of construction, the primary objective is to determine the drafters’ intent. This analysis begins with the plain language of the rule.

The phrase “civil action” is plain and not reasonably susceptible to more than one interpretation. In context, the term “civil action” unambiguously refers to a court action. The Code of Civil Procedure defines an “action” as “an ordinary proceeding in a court of justice by which one party prosecutes another for the declaration, enforcement, or protection of a right, the redress or prevention of a wrong, or the punishment of a public offense.” (Code Civ. Proc., § 22).

Courts have explained that arbitration is an “alternative” to a civil action. (Leshane v. Tracy VW, Inc. (2022) 78 Cal.App.5th 159, 164-165; accord Sargon Enterprises, Inc. v. Browne George Ross LLP (2017) 15 Cal.App.5th 749, 767 [“[A] party to an arbitration agreement may elect to initiate a civil action, rather than an arbitration proceeding”].).

Prahl relies on the general definitions set forth in California Rules of Court, rule 1.6. However the Court of Appeal noted that it “does not appear that these definitions alter what is otherwise a settled understanding of ‘civil action.’ ” …. “We agree with the trial court that ‘[g]iven Emergency Rule 10’s use of terminology from the Code of Civil Procedure, [Prahl]’s argument that the general definitions found in the California Rules of Court should apply is not persuasive.’ “

“Because the trial court did not err in concluding Prahl lost the right to compel arbitration by failing to conclude it within five years of initiation, we affirm the trial court’s denial of his petition to compel arbitration.”