Category: Daily News

In March 2020, because of the reduction in business caused by the COVID-19 pandemic, Hyatt decided to furlough or temporarily lay off over 7,000 employees.

Plaintiffs, Karen Hartstein filed a class action complaint in Los Angeles County Superior Court on behalf of a putative class of California Hyatt employees, asserting claims under California law for failure to pay all wages upon discharge,waiting time penalties, failure to furnish accurate wage statements, unfair business practices, and enforcement under the Private Attorneys General Act (“PAGA”). Hyatt removed the action to federal court.

The district court granted Hyatt’s motion for summary judgment, denied Plaintiff’s motion for partial summary judgment, and dismissed the action with prejudice. The district court concluded that the March 2020 furlough of Hyatt’s employees was not a termination within the meaning of Labor Code § 227.3 because there was not a complete severance of the employer-employee relationship.

The court also rejected Plaintiff’s claim that the value of the complimentary hotel rooms class members were eligible to receive constituted wages they should have received upon discharge. And because it concluded that Hyatt was not required to pay the accrued vacation in March 2020, the district court declined to address whether Hyatt was liable for waiting time penalties under § 203 and whether Hyatt had a good faith dispute about the payments.

The 9th Circuit Court of Appeals reversed as to the vacation pay claim, and affirmed the dismissal of the value of the hotel room claims in the published case of Harstein v Hyatt Corporation -22-55276 (September 2023).

Hyatt did not contest that it was required to pay its employees their accrued vacation pay when the employees were discharged. The question is when the employees were discharged within the meaning of California’s prompt payment provisions. Plaintiff argues that the indefinite layoff in March 2020 was a “discharge” within the meaning of Labor Code § 201(a), triggering Hyatt’s obligation to pay accrued vacation pay. Hyatt contends that it was not required to pay accrued vacation pay until June 2020, when employees were formally terminated.

Section 201 does not define “discharge.” The question accordingly is whether a temporary layoff, with no specified return date, is a discharge for purposes of § 201. “We have not found, and the parties have not cited, any caselaw that addresses this question. However, the California Division of Labor Standards Enforcement (‘DLSE’) has answered the question explicitly.”

The DLSE is the state agency empowered to enforce California’s labor laws. In Opinion Letter 1996.05.30, the DLSE addressed an employer’s question “regarding the obligation of an employer to pay wages due at the time of a ‘temporary layoff.” The DLSE replied that, “if an employee is laid off without a specific return date within the normal pay period, the wages earned to and including the lay off date are due and payable in accordance with Section 201.”

The DLSE cited Campos v. Employment Development Department, 183 Cal. Rptr. 637 (Ct. App. 1982), which addressed “whether workers on indefinite layoff are disqualified from receiving unemployment benefits when they refuse to accept recall offers in the course of a trade dispute.” Campos concluded that, “where the employees have no contractual right to recall within any specified time period, the better approach is to treat such layoffs as indefinite, thereby terminating any employment relationship.”

Thus the Court of Appeals concluded that the prompt payment provisions of the California Labor Code required Hyatt to pay Plaintiffs their accrued vacation pay in March 2020. It therefore reversed the district court’s grant of summary judgment to Hyatt as to the vacation pay claim and remand for the district court to consider whether Hyatt acted willfully in failing to comply with the prompt payment provisions.

However, the complimentary hotel rooms Hyatt provided to employees were excludable from the calculation of employees’ regular rate of pay under the Fair Labor Standards Act (FLSA). It therefore affirmed the grant of summary judgment as to the complimentary hotel room claim.

The California Board of Pharmacy (BOP) has listed medication error as the number one violation resulting in a citation in nearly every year within the last several years. According to the Journal of the American Medical Association, 46 percent of adults cannot understand the information listed on their prescription drug labels. Furthermore, the Institute of Medicine of the National Academies indicates that medication errors are among the most common medical errors, harming at least 1.5 million people annually.

Pharmacists working in chain community pharmacies, particularly those co-located with other retail and grocery stores, have historically complained that it is common for a pharmacist to be the only employee assigned to the pharmacy area.

And according to previously conducted surveys, 83% of pharmacists report being left alone during the workday for an average period of four hours. And a high percentage of pharmacists stated that they do not have enough time to fulfill their professional functions to the extent that they believed necessary. These pharmacists have argued that instead of providing their core pharmacy services, much of their time is instead spent performing clerical tasks and performing non-pharmacy activities on behalf of the business.

A new law just signed by Governor Newsom, – Assembly Bill 1286 – is aimed at reducing the estimated 5 million mistakes pharmacists make each year.

According to the Author of AB 1286: “The root cause of medication errors in the community chain setting can be tied to pharmacy working conditions, like insufficient staffing, unsanitary conditions, or lack of autonomy to make clinical decisions in the best interest of the patient. Unfortunately, there is no requirement under current law for pharmacies to track medication errors or to consider the pharmacy working conditions that lead to medication errors.

AB 1286 will establish a first in the nation mandatory reporting of medication errors to allow for robust evaluation of the causes of medication errors. It also gives licensed pharmacy staff autonomy over their working conditions so they can provide better patient care and services for Californians.”

The new law empower the pharmacist-in-charge or pharmacist on duty to report conditions to the Board of Pharmacy (BOP) that present an immediate risk of death, illness, or irreparable harm to patients, personnel, or pharmacy staff.

If store management does not resolve those conditions within 24 hours, the pharmacist-in-charge or pharmacist would be required to notify the BOP. The BOP would then be authorized to issue an order to the pharmacy to immediately cease and desist those pharmacy operations that are affected by the conditions at issue.

This cease and desist order would remain in effect until either the executive officer of the BOP determines that the conditions that presented an immediate risk of death, illness, or irreparable harm to patients, personnel, or pharmacy staff have been abated, or for no more than 30 days, whichever date is earlier.

This new law seeks to improve the state’s understanding of the causes of medication errors by requiring community pharmacies to report all medication errors to an entity approved by the BOP. A community pharmacy or its designated third party would be required to submit the report no later than 14 days following the date of discovery of the error.

Reports would be deemed confidential and not subject to discovery, subpoena, or disclosure pursuant to the California Public Records Act, though the BOP would be authorized to publish deidentified data.

The BOP would not be allowed to subject a community pharmacy to discipline or other enforcement action based solely on the report; however, if the BOP receives other information regarding the medication error, that may serve as basis for enforcement by the BOP.

Bobby Levell Gilbert, Jr., 66 of Santa Ana, and owner of B & J Tree Service, has been charged with 96 felony counts for alleged wage theft, denial of workers’ compensation benefits to employees, workers’ compensation fraud, failure to pay taxes and perjury.

Gilbert’s Office Manager, Bertha Rubi Sanchez, 30 of Anaheim, has also been charged with multiple felonies for her alleged role in committing these crimes. Gilbert and Sanchez’ arraignment was continued until December 13, 2023.

An investigation by the Department of Insurance revealed that Gilbert took advantage of his workers by denying them what they rightfully earned or were entitled to, for his own enrichment. In total, 32 workers were identified that were either denied the wages they had earned through their hard work, or the workers’ compensation benefits they were entitled to when injured on the job, or both.

According to Department Detectives, between October 2013 and August 2021, Gilbert and Sanchez conspired together to underreport payroll to their insurance carriers by approximately $1.3 million. The failure to report employee payroll resulted in the illegal reduction of workers’ compensation insurance premiums, leading to approximately $248,757 in premium owed. The underreported payroll also resulted in an unpaid payroll tax to Employment Development Department of approximately $140,485.

“Workers’ compensation insurance is required by law in order to ensure that injured employees can receive the care they need,” said the California Insurance Commissioner. “Cases like this one are particularly egregious, employees were not only put at great risk, but they were denied their hard earned wages. We remain committed to working with our partners, including the Orange County District Attorney’s Office, Employment Development Department, and the Department of Industrial Relations to ensure employees get the protections they deserve.”

This is a joint investigation with Employment Development Department, Department of Industrial Relations and the Orange County District Attorney’s Office. The Orange County District Attorney’s Office is prosecuting the case.

Gabriella Santibanez, 59, and her sister Lisa Hazard, 55, both of Temecula, were sentenced Monday to 15 months in prison and ordered to pay over $7.5 million in restitution for health care fraud.

According to court documents, between Dec, 1, 2015, and Dec, 1, 2020, Santibanez and Hazard ran a mobile phlebotomy company, PhlebXpress Inc. (NPI  1174906432) that provided phlebotomy and other medical collection services at patients’ homes and long-term care facilities in Sacramento and elsewhere.

Santibanez and Hazard agreed to bill Medicare for services provided that were not reimbursable by Medicare. Santibanez and Hazard also agreed to bill Medicare for overstated mileage that PhlebXpress phlebotomists traveled. On average, Santibanez and Hazard caused false billing to Medicare of over 140 miles for each patient seen by PhlebXpress. Santibanez and Hazard caused a loss to Medicare of at least $7.5 million based on false billing by PhlebXpress.

In November 2020, due to “credible allegations of fraud” at PhlebXpress, Medicare instituted a payment suspension for PhlebXpress under which Medicare ceased paying PhlebXpress for the services it continued to bill Medicare.

According to court documents, between July 1, 2021, and Dec. 31, 2021, Santibanez and Hazard agreed to circumvent the payment suspension by representing to Medicare that services provided to Medicare patients were done by another company, Phlebotomy Solutions, when they were in fact being provided by PhlebXpress through its contractors and employees from PhlebXpress’s offices.

Through Phlebotomy Solutions, Santibanez and Hazard agreed to bill Medicare for a non-reimbursable service, misrepresenting that it was for another reimbursable service and overstating the mileage traveled by phlebotomists in order to receive additional money from Medicare. For example, in September 2021, Phlebotomy Solutions billed Medicare for 124.6 miles of travel by a phlebotomist when in fact the phlebotomist travelled 1.4 miles. Santibanez and Hazard caused a loss to Medicare of at least $50,000 based on false billing by Phlebotomy Solutions.

This case was the product of an investigation by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services Office of Inspector General. Assistant U.S. Attorney Lee Bickley prosecuted the case.

The California Department of Insurance announced two settlement agreements with Go Maps, Inc. and its insurance underwriter, Topa Insurance Company, after an investigation into complaints that consumer claims were mishandled for more than two dozen drivers.

As part of the agreement, Go Maps agreed to surrender its insurance license, pay a $150,000 fine, pay $50,000 in cost reimbursement, and provide the Department all the information necessary to ensure statutory requirements are fulfilled in regards to existing policyholders.

Topa was fined $2,108,000, and agreed to ensure it has permanent access to all policies managed by any future general agents, certify all general agents and entities hired by general agents are properly licensed, and not to seek any money from consumers who may have been undercharged as a result of rating mistakes in the Go Maps/Topa program.

Go Maps is an “insurtech” company that used an app-based marketing platform to sell and transact its insurance business for Topa. Insurtech companies and insurance companies that use them to market and manage their products must follow California consumer protection laws and have the insurance expertise and licensed individuals in place to properly transact insurance in this state.

In 2019, Go Maps entered into an agreement with Topa to perform all the functions necessary for the sale, service, management, and claims handling of Topa’s private passenger automobile policies that were sold to the public through the Go Maps app. At one point, the Go Maps/Topa program had more than 10,000 California customers representing the vast majority of its approximately 12,000 policies nationwide.

In June 2022, the Department announced it was taking action against Go Maps and Topa in order to protect the public from further harm caused by the companies’ repeatedly violating various consumer protection laws relating to insurance claims.

Go Maps’ and Topa’s failures to follow California’s consumer protection rules forced drivers to pay for rental car expenses and other costs while their insurance claims were delayed. Among other violations Go Maps and/or Topa:

– – Failed to pay claims within 30 days after the coverage was determined or a settlement was reached. For one consumer, the companies missed the deadline by 52 days. The average delay was more than 24 days beyond the legal 30-day claims payment deadline.
– – Failed to acknowledge claims, provide necessary forms or instructions, or begin investigations within the statutory 15-day requirement. For one consumer, the companies missed the deadline by 30 days. The average delay was more than 8 days beyond the legal 15-day requirement.
– – Failed to respond to consumers’ inquiries about their claims within 15 days. For one consumer, the companies missed the deadline by 25 days. The average delay was more than 11 days beyond the legal 15-day requirement.
– – Failed to deny or accept claims within 40 days. For one consumer, the companies missed the deadline by 66 days. The average delay was more than 25 days beyond the legal 40-days deadline.
– – Hired an unlicensed insurance adjusting firm to adjust claims.

“These settlements represent an important victory for California consumers as we hold all companies accountable and ensure that they comply with our strong consumer protection laws,” the Insurance Commissioner said. “While we encourage new products and innovation in our marketplace, our top priority is protecting policyholders and making sure insurance companies deliver on their promises.”