Category: Daily News

Elon Musk’s social media company, X Corp, has reached a tentative settlement in a lawsuit filed by former employees who claimed they were owed $500 million in severance pay.

The lawsuit, filed as a proposed class action in the U.S. District Court for the Northern District of California (Case No. 23-03461, McMillian et al. v. Musk et al.), was initiated in July 2023 by former Twitter employees Courtney McMillian (former head of total rewards, overseeing employee benefits) and Ronald Cooper (former operations manager).

They alleged that Twitter’s 2019 severance plan, established under the company’s previous ownership, entitled laid-off employees to substantial payouts: two months of base pay plus one week for each year of service for most workers, and up to six months for senior employees like McMillian.

Following Elon Musk’s $44 billion acquisition of Twitter in October 2022 and the subsequent rebranding to X, approximately 6,000 employees were terminated as part of cost-cutting measures. The plaintiffs claimed that X Corp. violated this plan by offering at most one month of severance pay, with many receiving nothing, resulting in an estimated $500 million in owed benefits.

On July 9, 2024, U.S. District Judge Trina L. Thompson dismissed the case without prejudice. The core of her ruling centered on the inapplicability of the federal Employee Retirement Income Security Act (ERISA), which governs employee benefit plans and provides federal jurisdiction for such disputes. Judge Thompson determined that Twitter’s severance arrangement did not qualify as an ERISA-governed plan because it lacked an “ongoing administrative scheme.

However, Judge Thompson allowed the plaintiffs the opportunity to amend their complaint to pursue alternative claims not reliant on ERISA, such as potential state law breach-of-contract allegations.

The plaintiffs appealed the dismissal to the U.S. Court of Appeals for the Ninth Circuit (Case No. 24-5045, McMillian v. Musk) shortly after the district court’s decision. In their appeal, the former employees argued that Twitter’s severance policy did indeed qualify as an ERISA plan because it involved ongoing benefit payments, even if administered without individualized discretion. They received support from the U.S. Department of Labor, which filed an amicus brief endorsing this view, emphasizing that ERISA coverage applies to plans paying benefits on a continuing basis regardless of administrative complexity.

In response, Musk and X Corp. filed a brief on January 9, 2025, urging the Ninth Circuit to affirm the dismissal. Their key arguments included:

– – No formal ERISA plan existed, as the employees failed to produce official plan documents (e.g., summary plan descriptions) or evidence of widespread communications to workers about the severance terms prior to Musk’s acquisition.
– – References to a “severance matrix” (a confidential document allegedly taken by McMillian) and general corporate statements at most indicated offers of simple lump-sum payments, which do not constitute an ERISA-governed scheme requiring ongoing administration.
– – This lack of a qualifying plan was “fatal” to the class action, as it undermined the basis for federal jurisdiction.

Oral arguments were scheduled for September 17, 2025, in San Francisco.

However, as of August 21, 2025, the parties reached a tentative settlement agreement, the financial terms of which were not disclosed. In a joint court filing, both sides requested a postponement of the hearing to finalize the deal, which would resolve the class action and compensate the affected former employees. The Ninth Circuit granted the delay on August 22, 2025, effectively pausing the appeal process. This settlement does not impact other ongoing related lawsuits, such as those in Delaware and California courts involving different claims or plaintiffs.

In summary, the appeal remains unresolved on the merits due to the impending settlement, marking a potential end to this specific dispute without a full appellate ruling on the ERISA question.

Other related lawsuits, including one by former executives like ex-CEO Parag Agrawal, remain pending. This settlement aims to resolve the dispute over severance pay for the affected former employees.

A new study from the Workers Compensation Research Institute (WCRI) examines the key factors associated with high-cost workers’ compensation claims involving back and shoulder injuries, where medical expenses exceed $65,000 within 36 months of injury.

“In a previous WCRI study, we identified factors that increase the likelihood of high medical payments by looking at all injury types together,” said Sebastian Negrusa, WCRI’s vice president of research. “This new study refines that analysis by focusing on back and shoulder injuries to better understand what contributes to higher claim costs.”

The study looks at four back conditions (neurologic back pain; disc disorders; degenerative back conditions; and sprains, strains, and non-specific pain) and three shoulder injuries (rotator cuff disorders, frozen shoulders, and shoulder osteoarthritis).

Key questions the study explores include the following:

– – How prevalent are high-cost claims for these injuries, and how do they compare in terms of medical costs and duration of temporary disability
– – What characterizes high-cost claims versus other claims within each injury category?
– – What factors are associated with elevated medical payments?
– – How do degenerative conditions and comorbidities influence treatment choices and affect costs?

The analysis is based on about 194,000 workers’ compensation claims with more than seven days of lost time, from 32 states. These claims involve injuries that occurred between October 1, 2015, and March 31, 2019, with detailed treatment and billing data tracked for up to 36 months after the injury, through March 31, 2022.

The full report, Patterns and Trends of High-Cost Claims Involving Back and Shoulder Injuries, is authored by Dongchun Wang, Kathryn L. Mueller, and Randall D. Lea. It is available to WCRI members and can be purchased by nonmembers at www.wcrinet.org.

Laurance Iloff lived and worked in an unincorporated area of Humboldt County known as Bridgeville, on property owned by Bridgeville Properties, Inc. and managed by Cynthia LaPaille.

Iloff’s employers rented out the property, which includes small houses, cabins, and other structures. For several years, Iloff performed maintenance on Bridgeville’s structures, grounds, and water system, and LaPaille provided him instructions, directions, and approvals in relation to this work. Under an informal arrangement, Iloff’s employers allowed him to live rent-free in one of the houses but did not provide him any other benefits or compensation for his services.

After his employers terminated this arrangement, Iloff filed claims against them with the Labor Commissioner, initiating a process for adjudicating wage claims informally known as “the Berman process.” The employers argued that Iloff was an independent contractor, but the Labor Commissioner determined that he was an employee and as such, was entitled to unpaid wages, liquidated damages, penalties, and interest.

The employers appealed, seeking de novo review of the Labor Commissioner’s ruling in the superior court. In response, Iloff — now represented by an attorney from the Labor Commissioner’s office — filed a notice of claims. In this notice, Iloff reasserted the wage claims he had raised before the Labor Commissioner and added new claims, including a claim for penalties under the Paid Sick Leave law.

Following a bench trial, the superior court found that Iloff was an employee. Applying the framework set out in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903, the court reasoned that Iloff was properly classified as an employee, rather than an independent contractor, because he was not “free from [the employers’] control and direction” and he performed work that was within the “usual course” of their business. (Id. at p. 964.) The court ruled that Iloff was entitled to unpaid wages, penalties, and interest.

On the two issues addressed by the California Supreme Court in this case, the superior court ruled in favor of the employers. First, the court ruled that Iloff was not entitled to liquidated damages because his employers had acted in “good faith” in not paying him and had “reasonable grounds for believing” they were complying with the law governing minimum wages. (§ 1194.2, subd. (b).) The court based this ruling on its findings that the employers and Iloff intended and expected Iloff to perform his services in exchange for free rent and that neither he nor the employers understood or believed, at any time before his termination, that he would be paid wages or treated as an employee. Second, the court rejected Iloff’s claim for penalties under the Paid Sick Leave law, concluding that the statute did not authorize Iloff to seek those penalties in the context of the employers’ Berman appeal. (§§ 246, subd. (i), 248.5, subds. (a) & (b).)

Iloff appealed, and the Court of Appeal affirmed in part and reversed in part, affirming the trial court’s judgment in the employers’ favor on the liquidated damages and Paid Sick Leave law issues. (Seviour-Iloff v. LaPaille (2022) 80 Cal.App.5th 427, 447–451 (Seviour-Iloff).) The Supreme Court granted review to address these two issues.

This case addresses two issues concerning the rights of California workers whose employers fail to pay them the minimum wage or provide them paid sick leave benefits. The first issue relates to the good faith defense to the default rule that employees who prove minimum wage violations are entitled to liquidated damages. (Labor Code, § 1194.2.) The Supreme Court held that to establish the good faith defense, an employer must show that it made a reasonable attempt to determine the requirements of the law governing minimum wages; proof that the employer was ignorant of the law is insufficient.

The second issue relates to the process for raising claims under the Healthy Workplaces, Healthy Families Act of 2014 (§ 245 et seq.; the “Paid Sick Leave law”). Specifically, we must determine whether a court may consider a Paid Sick Leave law claim that an employee raises in the context of their employer’s appeal to the superior court of a Labor Commissioner ruling. (§ 98.2, subd. (a).) We hold that a court may do so.

The Court of Appeal reached the opposite conclusion on both issues, thus the Supreme Court reversed in the published case of Iloff v. LaPaille – S275848 (August 2025).

The Blue Cross Blue Shield Association (BCBSA) and its 33 member companies reached a $2.8 billion settlement in October 2024 to resolve a 12-year antitrust lawsuit filed by healthcare providers, including hospitals, physicians, and other professionals. Preliminary approval was granted on December 4, 2024, by Judge R. David Proctor, with final approval on August 19, 2025. The lawsuit, In re: Blue Cross Blue Shield Antitrust Litigation (MDL No. 2406), began in 2012 in the U.S. District Court for the Northern District of Alabama.

Providers alleged that BCBSA and its affiliates violated the Sherman Antitrust Act by engaging in anticompetitive practices, specifically by dividing the U.S. into exclusive “service areas” and agreeing not to compete in those regions, which suppressed competition, increased insurance costs, and reduced provider reimbursements. They also claimed price-fixing through the BlueCard program, which processes claims for out-of-network patients. BCBSA denied the allegations but agreed to the settlement to avoid further litigation costs and risks.

The settlement, the largest antitrust agreement in U.S. healthcare history, includes a $2.8 billion fund and operational reforms to enhance transparency and efficiency in the BlueCard program, such as faster claims processing, a cloud-based platform, and prompt payment guarantees. Eligible providers who treated Blue Plan patients from July 24, 2008, to October 4, 2024, could file claims until July 29, 2025, though nearly 6,500 providers opted out to pursue separate lawsuits.

A court document indicated that nearly 6,500 provider organizations chose to opt out of the settlement. These providers include a range of healthcare entities such as hospital systems, physician groups, clinics, and other healthcare facilities across the United States. Notable organizations that opted out include the University of Pennsylvania Health System, Geisinger, MedStar, CommonSpirit, Bon Secours Mercy Health, Temple University Health, and physician staffing firm TeamHealth.

Providers who opted out likely did so to preserve their right to pursue individual lawsuits against BCBS, believing they could achieve greater financial recovery or address specific grievances through separate legal action. The settlement required providers to release claims against BCBS for the same antitrust issues (e.g., market allocation and price-fixing through exclusive service areas and the BlueCard program). Opting out allows these providers to file their own claims, potentially seeking higher damages than what they would receive from the settlement’s $2.8 billion fund, where 92% is allocated to healthcare facilities and only 8% ($160 million after fees) to professionals like individual practitioners.

Many of the providers who opted out filed new lawsuits in federal courts in states like Pennsylvania, California, and Illinois. For example, a group led by Temple Health and Penn State Health filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania. These lawsuits echo the original allegations, claiming BCBS’s anticompetitive practices, such as colluding to limit competition and underpaying providers, violated antitrust laws. The plaintiffs argue that BCBS’s actions resulted in payments far lower than what they would have received in a competitive market. California providers who reportedly opted out include:

– – Providence St. Joseph Health: A large nonprofit health system with extensive operations in California (e.g., hospitals in Los Angeles, Orange County, and Northern California). They opted out to seek potentially larger recoveries, including treble damages under antitrust law.
– – The Regents of the University of California (UC Health): The governing body for the University of California’s health system, which operates major academic medical centers and hospitals across the state (e.g., UCLA Health, UCSF Health). They cited concerns over the settlement’s release of future claims and the potential for higher individual damages.
– – NorthBay Healthcare Corporation: A community-based health system headquartered in Fairfield, California, serving Solano County with hospitals and clinics. They opted out due to dissatisfaction with the settlement’s monetary allocation (e.g., only 8% for professionals after fees) and to preserve litigation rights.
– – CommonSpirit Health: While headquartered in Chicago, this system has a major presence in California through its Dignity Health division (operating dozens of hospitals statewide, including in Sacramento, San Francisco, and Southern California). They opted out for similar reasons, focusing on allegations of BCBS’s “take-it-or-leave-it” contracting and reimbursement penalties.

Lance Miraco filed Application for Adjudication of Claim against the City of Salinas and Corvel Corporation alleging cumulative injury arising from his employment as a police officer with the City. The City and its claims administrator, Corvel, filed an answer denying the allegations of the application. The matter proceeded to trial before the WCJ.

After trial, the WCJ issued her written findings, award, and order (findings and order), finding that Miraco “sustained injury arising out of and in the course of employment during the period from January 1994 through December 31, 2013, to his low back, right leg, and sustained gastritis, gastroesophageal reflux disease, insomnia and hypertensive cardiac disease.”

Applying Labor Code § 5412, the WCJ found the date of injury for Miraco’s hypertensive cardiac disease was June 14, 2013, while the date of injury for his orthopedic injuries and related conditions (including gastritis, reflux, and insomnia) was December 16, 2020.

The findings and order explained that based on the date of injury, Miraco’s workers’ compensation claim for hypertensive cardiac disease, filed on December 24, 2020, “is barred and is not compensable, as beyond the statutory limitation imposed by [section] 5405.”3 Based on these findings, the WCJ awarded future medical treatment for Miraco’s “injuries to his low back, right leg, gastritis, gastroesophageal reflux disease, and insomnia” but not for his cardiac disease.

On October 16, 2023, Miraco timely submitted a petition for reconsideration of the findings and order. The petition for reconsideration challenged the WCJ’s finding that the claim for hypertensive cardiac disease was time barred. The City and Corvel answered the petition for reconsideration within 10 days. On Nov ember 7, 2023, the WCJ served on the parties a report and recommendation on the petition for reconsideration.

Under former Labor Code § 5909, based on Miraco’s filing of the petition for reconsideration on October 16, 2023, the Board had until December 15, 2023, to “act[] upon” the petition before it was “deemed to have been denied.

The Board did not issue its decision until March 12, 2024, when it granted the petition for reconsideration. In deeming its March 12 order timely, the Board invoked the judicially created exception to the 60-day deadline articulated in Shipley v. Workers’ Comp. Appeals Bd. (1992) 7 Cal.App.4th 1104 (Shipley) for petitions that are not received by the Board due to procedural irregularity.

On the merits, the Board granted the petition for reconsideration and substituted its findings for that of the WCJ. It set the date of injury for Miraco’s injuries, including hypertensive cardiac disease, as December 11, 2020, and determined that compensation for those injuries was not time- barred.

The City and Corvel filed a petition for writ of review to challenge the lawfulness of the Board’s order granting the petition for reconsideration after the expiration of the 60-day statutory deadline delineated by former § 5909.

The Court of Appeal ruled that former § 5909 did not preclude the application of equitable tolling, and the facts warrant its use here. It therefore affirmed the order and opinion of the appeals board in the published case of City of Salinas v Workers’ Comp. Appeals Bd. –H052062 (August 2025).

During the briefing period for this writ proceeding, the Legislature amended § 5909, effective July 2, 2024. In addition, the California Supreme Court granted review of similar issues in Mayor v. Workers’ Comp. Appeals Bd. (2024) 104 Cal.App.5th 713 (Mayor), review granted December 11, 2024, S287261.

The question presented here on appeal is whether the Board may apply equitable tolling to act upon a petition for reconsideration after expiration of the 60-day timeline set forth in former section 5909, and, if so, whether the facts of this case warrant the application of tolling principles.

It was noted that the Court of Appeal in Zurich American Ins. Co. v. Workers’ Comp. Appeals Bd. (2023) 97 Cal.App.5th 1213 (Zurich) disagreed with Shipley.

It went on to say “neither Zurich nor Mayor decided whether the Board’s failure to act on a petition for reconsideration within 60 days meant only that it acted in excess of its jurisdiction, or whether it lost fundamental jurisdiction to consider the petition. Instead, both decisions recognized that, even if the expiration of the 60-day deadline did not affect the Board’s fundamental jurisdiction, the circumstances of those cases did not support the application of equitable tolling. (Zurich, supra, 97 Cal.App.5th at p. 1236, fn. 17; Mayor, supra, 104 Cal.App.5th at pp. 1310–1311, review granted.)”

And it went on to say “We discern no express prohibition in the statutory language of former section 5909 that would preclude, as a matter of law, the application of traditional equitable doctrines like tolling.”

“Our conclusion that the appeals board retains the authority to exercise equitable powers where appropriate, and in the absence of legislative direction to the contrary, is consistent with the judicial powers vested in it.”