Private self-insured claim volume in the California workers' compensation system fell 9.5% in 2023, producing the biggest year-to-year decline in private self-insured claim frequency in more than 15 years, but double-digit increases in the average amounts paid and incurred on these claims drove total paid and incurred losses for private self-insured employers sharply higher according to a California Workers' Compensation Institute (CWCI) review of initial data from the state Office of Self-Insurance Plans (OSIP). OSIP's annual summary of private self-insured data, issued June 27, provides the first look at California private, self-insured claims experience for cases reported in 2023. It includes the total number of covered employees, medical-only and indemnity claim counts, and total paid and incurred losses on those claims through the end of the year. The 2023 summary shows the experience of private self-insured employers who covered 2.34 million California employees last year (down from 2.42 million in the 2022 initial report) and who reported 94,386 claims in 2023, down from 104,278 claims in the 2022 initial report. The distribution by claim type shows private self-insured employers reported 48,404 medical-only claims in 2023 (down 7.4% from 52,300 in 2022, the final year of the pandemic), though that was 10.6% above the 43,779 med-only claims noted in 2020, when COVID closures suppressed med-only claim volume as the state’s economy went through a brief but steep recession. Meanwhile private self-insured indemnity claim volume, which spiked during the pandemic (climbing from 34,307 claims in 2019 to 51,978 claims in 2022, likely due to the influx of lost-time claims involving COVID) fell 13.0% to 45,982 claims in 2023. The latest claim count works out to an overall frequency rate of 4.03 claims (2.07 med-only and 1.96 indemnity) per 100 private self-insured employees in 2023, down from an overall rate of 4.31 in 2022 (2.16 med-only and 2.15 indemnity), marking the first decline in private self-insured claim frequency since the pre-pandemic year of 2019, and the most significant drop in the 16 years covered by the CWCI review. CWCI notes that despite the declines in claim volume and claim frequency, private self-insured’s first report total paid and incurred losses were both up in 2023. Paid losses on 2023 private self-insured claims through the fourth quarter totaled $340.2 million, 9.4% more than the first report total for 2022, as total paid indemnity (primarily temporary disability payments) increased by $10.9 million (6.7%) to $172.8 million, and total paid medical increased by $18.2 million (12.2%) to $167.4 million. The latest results also show that first report total incurred losses (paid benefits plus reserves for future payments) on private self-insured claims rose to $864.0 million in 2023, up $52.2 million, or 6.4% from the comparable 2022 figure, as total incurred indemnity at the first report increased by $16.3 million (4.7%) to $361.4 million and total incurred medical increased by $35.9 million (7.7%) to $502.6 million. Given that there were 9,892 fewer private self-insured claims in 2023 than in 2022 -- including 5,996 fewer indemnity claims -- the increases in private self-insureds’ total paid and incurred amounts in 2023 can be ascribed to the growth in the average paid and incurred losses at the first report, as average paid losses per claim climbed 20.9% to $3,605 while average incurred losses rose 17.6% to $9,153. OSIP's summary of private self-insured’s calendar year 2023 data, follows the December 2023 release of public self-insured claims data for fiscal year 2022/2023. OSIP private and public self-insured claim summaries from the past 20 years are posted at http://www.dir.ca.gov/SIP/StatewideTotals.html. CWCI members and subscribers may log on to the Communications section of the CWCI website www.cwci.org to view a summary Bulletin with more details, analyses, and graphics ...

July 22, 2019, Haoxiao Liu, a Goldengate bus driver trainee, was on a multi-hour bus trip with a Goldengate driving trainer. He sustained a host of injuries on this bus trip, On December 26, 2019, Liu filed an action against Goldengate in small claims court, seeking compensation for injuries sustained on July 22, 2019. Following trial, plaintiff obtained a judgment against Goldengate in the amount of $615. On July 19, 2021, Liu filed the instant lawsuit against Goldengate Bus Inc., and Gang Guo alleging claims for negligence and intentional tort arising out of the injuries sustained on July 22, 2019. In his negligence cause of action, plaintiff alleges that defendants "failed to provide [him with] the necessary work environment," "failed to protect [their] employee," "failed to do anything to care and protect [their] new employee," "failed to pay wage that [they] promised to pay," and "failed to report the injury of the plaintiff to its insurance company." In his intentional tort claim, plaintiff similarly alleges that "[a]s a direct result of defendants’ [negligence], abuse of power, [and] hostile work environment," he suffered injuries. In response, defendants demurred, arguing that plaintiff’s claims were barred by the exclusive remedy rule and the doctrines of res judicata and/or collateral estoppel. The trial court sustained defendants’ demurrer without leave to amend. It found that defendants "established that the workers’ compensation exclusivity rule bars Plaintiff’s claims" and that plaintiff’s claims against Goldengate were barred by the doctrine of res judicata. The Court of Appeal affirmed the dismissal in the unpublished case of Liu v. Goldengate Bus -B320846 (July 2024). Res judicata describes the preclusive effect of a final judgment on the merits. Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. Under the doctrine of res judicata a judgment for the defendant serves as a bar to further litigation of the same cause of action. Claim preclusion applies when (1) the claim raised in the prior adjudication is identical to the claim presented in the later action; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior adjudication. "Here, all elements of res judicata are met. There is a final judgment in favor of plaintiff and against Goldengate arising out of the small claims court action. The claims raised therein are the same as those alleged in this action and involve the same parties. And, there was an adjudication on the merits, namely a trial." "Even though Guo was not a party to the small claims court action, the doctrine of res judicata bars plaintiff’s claims against him. As alleged in the complaint, his liability, if any, is entirely derived from Goldengate’s liability." ...

The California Civil Rights Department (CRD) announced reaching a $14,425,000 proposed settlement with the Microsoft Corporation to resolve allegations of retaliation and discrimination against workers based on their use of protected leave, including parental, disability, pregnancy, and family care taking leave. State and federal law prohibits employers from interfering with an employee’s use of protected forms of leave, such as leave to bond with a new child, address a serious health condition, or care for a family member. As part of the settlement, which is subject to court approval, Microsoft has committed to taking a range of proactive steps to prevent future discrimination and provide monetary relief to employees who used protected leave at the company in California between 2017 and 2024. The settlement resolves a multi-year investigation into Microsoft over claims of discrimination related to the use of protected leave under California’s Fair Employment and Housing Act, the California Family Rights Act, California’s Pregnancy Disability Leave law, Title VII of the Civil Rights Act of 1964, and the Americans with Disabilities Act. In a complaint filed by CRD against Microsoft, the department alleged that women and people with disabilities are overrepresented among the group of workers who use these forms of leave and that workers who used protected leave faced unlawful retaliation and discrimination in compensation and promotion opportunities because of their use of the leave. For example, CRD alleged that employees who used protected leave received lower bonuses and unfavorable performance reviews that, in turn, harmed their eligibility for merit increases, stock awards, and promotions. In addition, CRD alleged that Microsoft failed to take sufficient action to prevent discrimination from occurring, altering the career trajectory of women, people with disabilities, and other employees who worked at the company, ultimately leaving them behind. As part of the agreed settlement, Microsoft has not admitted to any of these allegations and continues to deny them. If approved by the court, the settlement will require Microsoft to: - - Pay $14,200,000 to cover direct relief for workers and $225,000 in costs associated with the department’s enforcement efforts. - - Retain an independent consultant to make recommendations on Microsoft’s personnel policies and practices to ensure managers do not consider time on protected leave in determining annual rewards and promotions. - - Work with the independent consultant to also ensure workers know how to raise complaints in instances where they believe that annual rewards and promotion decisions reflect discrimination or retaliation for the use of protected leave. - - Report annually, via the independent consultant, on compliance with the settlement, including with respect to how complaints of discrimination are received and processed. - - Ensure managers and human resources personnel complete training concerning prohibitions on discrimination based on the use of protected leave. Individuals who took protected leave and worked at Microsoft in California between May 2017 and the date of the court’s entry of the settlement agreement may be eligible to receive compensation. At this time, no action is needed by individuals covered under the proposed agreement and additional information will be posted on CRD’s website upon approval by the court. If the court approves the settlement, covered workers will receive further information and updates from a settlement administrator. CRD may be able to assist victims of employment discrimination, through its complaint process. General information about CRD’s complaint process and how to file a complaint is available on its website. Additional information regarding protections against discrimination and harassment in the workplace is also available. A copy of the proposed consent decree is available as well as a copy of the complaint. The proposed consent decree is subject to court approval ...

Assistant U.S. Attorney Matthew Yelovich, Deputy Chief of the Criminal Division of the U.S. Attorney’s Office for the Northern District of California, announced criminal charges against four defendants in connection with an alleged scheme to defraud federal health care benefit programs including Medicare and Medicaid. The charges filed in federal court are part of the Department of Justice’s 2024 National Health Care Fraud Enforcement Action, and are part of a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 193 defendants for their alleged participation in health care fraud and opioid abuse schemes that resulted in the submission of over $2.75 billion in alleged false billings. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled to line their own pockets, and the Government, in connection with the enforcement action, seized over $231 million in cash, luxury vehicles, gold, and other assets. The following individuals are charged in the Northern District of California: - - Riley Levy, 30, of Peoria, Arizona, was charged by information with conspiracy to distribute controlled substances in connection with his role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of his work for Done Health, P.C. and Done Global Inc. ("Done"), Levy, Done’s Executive Leader, Operations and Strategy, conspired to distribute Adderall and other stimulants by means of the Internet that were not for a legitimate medical purpose in the usual course of professional practice.. - - Christopher Lucchese, 58, of Plano, Texas, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with his role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of his work for Done Health, P.C. and Done Global Inc., Lucchese, a medical doctor, issued prescriptions for Adderall and other stimulants that were not for a legitimate medical purpose in the usual course of professional practice. - - Yina Cruz, 37, of Glenwood, New Jersey, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with her role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of her work for Done Health, P.C. and Done Global Inc., Cruz, a nurse practitioner, issued prescriptions for Adderall and other stimulants, including to Medicare and Medicaid beneficiaries, that were not for a legitimate medical purpose in the usual course of professional practice. . - - Katrina Pratcher, 70, of Altadena, California, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with her role in an unlawful scheme to distribute Adderall and other stimulants. As alleged, in the course and scope of her work for Done Health, P.C. and Done Global Inc., Pratcher, a nurse practitioner, issued prescriptions for Adderall and other stimulants, including to Medicare and Medicaid beneficiaries, that were not for a legitimate medical purpose in the usual course of professional practice.. The Northern District of California, in particular, worked with the Department’s Criminal Division and other law enforcement organizations to investigate and prosecute the cases filed during the enforcement period: Drug Enforcement Administration, Homeland Security Investigations, the U.S. Department of Health and Human Services Office of Inspector General, and IRS Criminal Investigation. The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force. Prior to the charges announced as part of today’s nationwide enforcement action and since its inception in March 2007, the Health Care Fraud Strike Force, which operates in 27 districts, charged more than 5,400 defendants who collectively billed Medicare, Medicaid, and private health insurers more than $27 billion ...

In May 2018, Thomas Lim began his employment with the City of Downey as a police officer. His probationary period ran for 18 months. During this probationary period, Lim was an at-will employee, and City could release him from employment for any legal reason upon giving him two weeks’ notice prior to the end of the period. After Lim’s probation concluded, City could terminate his employment only for good cause. On December 8, 2018, Lim responded to a traffic collision as part of his official duties. As he investigated the accident, a car struck and injured him. Lim’s personal doctor at Kaiser Permanente provided a list of work restrictions, effective through January 25, 2019. The doctor observed that if the work restrictions could not be accommodated, Lim should be considered temporarily totally disabled. City could not accommodate the work restrictions and placed Lim on temporary total disability leave. In late March 2019, City’s human resources director James McQueen received information suggesting that Lim might be engaging in physical activities associated with a basketball league while on temporary total disability leave. McQueen contacted City’s workers’ compensation third party administrator, AdminSure, and agreed to their recommendation to investigate Lim for possible fraud. AdminSure hired RJN Investigations (RJN) to conduct a sub rosa investigation. While on disability leave, Lim engaged in physical activity that violated his work restrictions and then made sworn statements in a workers’ compensation deposition denying such physical activity. After Lim was cleared to return to work, and while he was still a probationary at-will employee, City terminated Lim’s employment because it believed he had engaged in workers’ compensation fraud. Lim sued City under the Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.) for disability discrimination, retaliation, failure to accommodate, failure to engage in the interactive process, and failure to prevent discrimination or retaliation. City moved for summary judgment, arguing it had a legitimate reason to fire Lim because it believed he had engaged in fraud. City further argued Lim could not prove at least one element of each of his causes of action. The trial court granted the motion. The Court of Appeal affirmed in the unpublished case of Lim v. City of Downey -B326822 (June 2024). Lim does not directly dispute that City could terminate him for any legal reason during his probationary period, including suspected fraud. Instead, he argues he demonstrated a triable issue of material fact as to pretext because (a) City’s explanation was unworthy of credence, (b) his job performance was satisfactory, (c) City’s investigation was inadequate, (d) City decided to discharge him soon after he went out on disability leave (temporal proximity), and (e) City targeted him when it "raced to terminate [him] in November 2019 before the end of his probation." Lim argues City’s proffered reasons for discharging him are not valid because he was not required to use crutches. But this argument that crutches were not part of Lim’s work restrictions does not demonstrate that City’s reason for discharging Lim was unworthy of credence. "The issue is not whether crutches were required but Lim’s inconsistent use of them and the contexts in which he chose to use and not to use crutches. Lim chose to use crutches on May 22, 2019, when he visited his employer, even though he had been observed not using them previously during a sub rosa investigation." "Notably, while at the police station, Lim not only used crutches, but also moved at such a slow pace that motion-activated cameras failed to capture his entire path. From the comparative visual evidence of Lim’s ease of movement in other contexts versus Lim’s plodding path at the police station, Chief Milligan could reasonably conclude that not only had Lim exaggerated the degree of his debilitation, but also that the investigators’ observations were credible. Indeed, Lim offers no explanation why he chose to use crutches during his May 22, 2019 visit to the police station." ...

Payments for medical-legal evaluations and reports used to resolve medical disputes in California work injury claims have increased more than expected since a new Med-Legal Fee Schedule (MLFS) took effect in April 2021 according to a new CWCI study, with the average payment for a comprehensive exam up 52%, primarily due to new per-page fees for record review that are paid on top of flat fees for med-legal evaluations services. When the Division of Workers’ Compensation (DWC) adopted the new schedule, it anticipated it would result in a 25% increase in payment levels to adequately compensate med-legal evaluators In addition, 2023 saw a 6 percent increase in Qualified Medical Evaluators (QMEs) compared with pre-pandemic levels Implementation of the updated MLFS for the California workers’ compensation system three years ago led to a comprehensive overhaul of the payment formulas for med-legal evaluations and reports. Complexity and time-based payments that had been in effect since 2006 were replaced with flat fees and payments for record reviews exceeding specific page thresholds were added. .CWCI’s study, which updates a preliminary analysis from 2021, uses payment data for med-legal evaluations and reports with dates of service from January 2015 through October 2023, valued as of December 2023, to compare the utilization and reimbursement of med-legal services rendered before and after the new schedule’s April 1, 2021, effective date. The study analyzed changes in evaluation and report patterns and payments. One goal of the new MLFS was to attract and retain Qualified Medical Evaluators (QMEs) to conduct medical-legal evaluations to better meet demand. CWCI used DWC data from calendar years 2019 to 2023 to track changes in the number of registered QMEs and the number of QME panel assignments by medical specialty. A review of the mix of med-legal services found that between April 2021 and 2023 there was a big shift in the use of follow-up exams, which was anticipated as the new MLFS calls for the follow-up evaluation code to be used for 18 months after the preceding comprehensive exam, versus 9 months under the 2006 schedule. Other key findings include: - - There has been a 52% increase in the average reimbursement for comprehensive evaluations, and a 29% increase for supplemental reports since the new MLFS took effect. - - Additional charges for excess record review were found on 43.3% of the comprehensive evaluations, 24.9% of the follow-up evaluations, and 30.8% of the supplemental reports. For comprehensive evaluations, the new per-page record review fee added an average of $1,817 to the $2,015 flat fee payment for services with page-review. Page-review payments drove nearly three quarters of the increase in comprehensive evaluation payments under the new schedule. In addition, the per-page record review payments added an average of $1,338 to the flat fee for follow-up evaluations with excess page review and $1,335 to the flat fee for supplemental reports with excess page-review. - - The number of certified QMEs has increased 5.9% from 2,561 in 2019 to 2,712 in 2023. That improvement, however, has been offset somewhat by a 2.9% increase in the number of panel assignments over the same period, resulting in a net gain of about 3 percent. - - Physicians specializing in orthopedic surgery provided 44% of the med-legal services in 2023, followed by chiropractors who provided 11% of the services. CWCI has published its study in a Research Update Report, "Increased Medical-Legal Costs and Current QME Supply - Impact of the 2021 Medical-Legal Fee Schedule." The report is available to CWCI members and subscribers who log on to the Research section at www.cwci.org. Others may purchase the report from CWCI’s online store, here ...

An Inland Empire pharmacist has been charged with using his Montclair pharmacy to submit more than $300 million in fraudulent Medi-Cal claims for prescription medications that were medically unnecessary, often not provided to patients, and were obtained through the payment of tens of millions of dollars in illegal kickbacks, the Justice Department announced today. Kyrollos Mekail, 36, of Moreno Valley, is charged with two counts of health care fraud. He is expected to be arraigned in the coming weeks in United States District Court. The charges filed in federal court are part of the Department of Justice’s 2024 National Health Care Fraud Enforcement Action. According to court documents, Mekail is a licensed California pharmacist who owns, operates, and is the pharmacist-in-charge of the Montclair-based Monte VP LLC, which does business as Monte Vista Pharmacy. Monte Vista Pharmacy is a provider under Medi-Cal, a California health care benefit program. In early 2022, Medi-Cal suspended its requirement that health care providers obtain prior authorization before providing certain health care services or medications as a condition of reimbursement. The suspension of the prior authorization requirements was part of an ongoing transition of Medi-Cal’s prescription drug program to a new payment system. From May 2022 to March 2023, Mekail and his co-schemers allegedly exploited Medi-Cal’s prior authorization suspension by billing Medi-Cal tens of millions of dollars per month for dispensing high-reimbursement, non-contracted, generic drugs through Monte Vista Pharmacy. Some prescription medications purportedly were to treat pain and also included Folite tablets, a vitamin available over the counter. Normally, these high-cost reimbursement medications would have required prior authorization under Medi-Cal’s old payment system. The information alleges the medication involved in this scheme was medically unnecessary, frequently was not dispensed to patients, and procured by kickbacks. In less than one year, Monte Vista Pharmacy billed Medi-Cal approximately $306,521,392 for the medications, of which Medi-Cal paid Monte Vista Pharmacy approximately $204,032,151, according to court documents. Mekail allegedly paid two co-schemers more than $36 million of the fraudulently obtained Medi-Cal proceeds as kickbacks for referring the prescriptions. He allegedly disguised these kickbacks as payments for "consulting services." An information is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. If convicted of all charges, Mekail would face a statutory maximum sentence of 10 years in federal prison for each count of health care fraud. The United States Department of Health and Human Services Office of Inspector General (HHS-OIG), the FBI, and the California Department of Justice are investigating this matter. Assistant United States Attorney Roger A. Hsieh of the Major Frauds Section and Assistant Chief Niall M. O’Donnell and Trial Attorney Siobhan M. Namazi of the U.S. Department of Justice, Criminal Division, Fraud Section are prosecuting this case. Assistant United States Attorney James E. Dochterman of the Asset Forfeiture and Recovery Section is handling asset forfeiture matters in this case ...

No one tracks how many of Cal Fire’s 12,000 firefighters and other employees suffer from mental health problems, but department leaders say post traumatic stress disorder and suicidal thoughts have become a silent epidemic at the agency responsible for fighting California’s increasingly erratic and destructive wildfires. In an online survey of wildland firefighters nationwide, about a third reported considering suicide and nearly 40% said they had colleagues who had committed suicide; many also reported depression and anxiety. Nonetheless, CalMatters claims the response of the California workers' compensation system for these injured firefighters is a "total system breakdown." And CalMatters goes on to say "California’s workers’ comp - which is supposed to help people get medical treatment for workplace illnesses and injuries - can be a nightmare for firefighters and other first responders with PTSD. Claims filed by firefighters and law enforcement officers are more likely to involve PTSD than claims by the average worker in California - and they have been denied more often than claims for other medical conditions, according to the research institute RAND. From 2008 to 2019 in California, workers’ comp officials denied PTSD claims filed by firefighters and other first responders at more than twice the rate of their other work-related conditions, such as back injuries and pneumonia, RAND reported. About a quarter of firefighters’ 1,000 PTSD claims were denied, a higher rate than for PTSD claims from other California workers. "It’s a fail-first system. You have to get a broken leg to show you are in need of support. With mental illness, we are constantly having to prove to everybody why we were ill. You have to get to the point of suicide," said Jessica Cruz, the California chief executive officer of the National Alliance on Mental Illness. CalMatters provides an example to back up its claim. Todd Nelson, former Cal Fire captain, "was running on the Foresthill Bridge, the highest in California, fleeing cops and firefighters after his wife reported that he was su icidal. He hurdled a concrete barrier and straddled the railing of the bridge in the Sierra Nevada foothills, staring down at a large rock 730 feet below. As the rescuers closed in, Nelson leaned precariously over the chasm. His strategy - making the fatal plunge appear accidental, allowing his family to collect his life insurance."It was not Nelson’s first suicide attempt, he had tried to take his life many times before. "The incident began the firefighter’s arduous, years-long journey toward wellness, threaded through a bureaucratic labyrinth strewn with more obstacles than he’d ever encountered on a California wildfire: finding qualified medical help, battling an insurance company to pay for it and navigating the tangled morass of California’s workers’ comp. All without going broke or returning to his dark place." Jennifer Alexander, Nelson’s therapist, said patients in acute crisis simply don’t have the mental capacity to ride herd on stubborn workers’ comp claims. Alexander said she was once on hold for more than six hours with Cal Fire’s mental health provider attempting to get one of her bills paid, and she has waited years to get paid for treating firefighters. "People give up. It’s a battle ... They are not fully functional," said Alexander, who for 21 years has specialized in treating first responders with trauma and PTSD and has spent an estimated 25,000 hours treating them. "You are not talking about healthy individuals who can sit on the phone for hours." Cal Fire firefighters and other workers also have trouble finding qualified therapists, especially outside major cities in rural areas, where many are based. In 2021, less than half of people with a mental illness in the U.S. were able to access timely care. Therapists are reluctant to take workers’ comp, or sometimes any type of insurance. because they often have to wait months or years to be reimbursed. Michael Dworsky, a senior economist at the research institute RAND and one of the study’s project leaders, called workers’ comp "challenging and bureaucratic." "Even if the claim is accepted, there can be disputes about the medical necessity of individual bills. Just because your claim is accepted, doesn’t mean you are done fighting with the insurance company," he said. In 2020 lawmakers took a major step,adding a legal shortcut or "presumption" to the state labor code, stipulating that firefighters and other first responders are considered at high risk for PTSD in the course of doing their job. A law enacted last year extended the presumption to 2029. Before enacting the law, state officials asked RAND researchers to report on the scope of the problem. They analyzed nearly 6 million claims filed between 2008 through 2019 and interviewed dozens of experts, including a representative sample of 13 first responders. The researchers found a consistent and troubling trend among the 13: "Nearly all workers said that they had filed a workers' compensation claim for their mental health conditions - yet almost none received PTSD care paid for by workers' compensation." Many therapists say they haven’t seen much, if any, improvement. Nelson’s therapist, Alexander, called workers’ comp a "total system breakdown." A spokesman for the Department of Industrial Relations refused to grant interview requests from CalMatters or answer questions or provide data about firefighters’ mental health claims ...

Former licensed insurance agent Brett E. Lovett, 53, of Camarillo was sentenced to 16 years and eight months in jail after being found guilty, after a 9 week jury trial, of 29 felony counts including grand theft, elder abuse, money laundering, and burglary. Translated into real time, that comes to about four years, according to Casey Nelson, who prosecuted the case and argued Lovett should get 28 years. The probation report - citing the utter financial ruin Lovett visited upon his elderly victims - many of whom he met through Carpinteria’s Kingdom Hall of Jehovah’s Witnesses - argued for 26 years. Ultimately, the judge imposed a lighter sentence, citing Lovett’s lack of prior criminal charges. A 15-month California Department of Insurance investigation found he defrauded at least nine victims, including senior citizens, of close to $1.2 million. Lovett was arrested in October 2017 after the Department’s investigation revealed that between 2011 and 2016, he defrauded at least nine victims. Several of his victims were senior citizens whom he met and befriended at a place of worship in Carpinteria. Other victims sought legal advice from Lovett through his legal aid information business. Victims entrusted Lovett with their money for proposed investments that never existed, or for financial management purposes. Lovett then misappropriated the money for his own personal use and to repay some of his victims -- sometimes using his Power of Attorney and Promissory Notes to embezzle funds from victims. Lovett has a history of embezzling money from members of the places of worship he attends. In 2007, doing business as Northwest Asset Fund, he was ordered to pay more than $675,900 in restitution, fines and sanctions by the U.S. Commodity Futures Trading Commission (CFTC). Lovett never paid the fines or restitution. The CFTC entered a permanent injunction against Lovett, who never registered with the CFTC. Between October 2002 and August 2005, Lovett fraudulently solicited money from individuals, purportedly to trade commodity futures, through false promises of high returns from a low-risk investment. Lovett’s license to transact insurance expired in May 2000. He was not acting as an insurance agent during this time, but he was giving financial advice which he was not licensed to give. The Santa Barbara County District Attorney's Office prosecuted this case ...

In 2014, San Marcos Unified School District awarded Lusardi Construction Company a contract to construct the San Marcos K-8 School Project. Lusardi subcontracted with Pro Works to install the iron reinforcing work for the Project.. In 2015, Division of Labor Standards Enforcement (DLSE) opened an investigation into a complaint that Pro Works violated former Labor Code section 1777.5 by failing to: (1) provide contract award information; (2) request dispatch of apprentices from applicable apprentice committees; (3) employ registered apprentices in compliance with a required apprentice to journeyperson ratio; and (4) make certain required training fund contributions to an approved apprenticeship program. Deputy Labor Commissioner Kari Anderson served several documents on Lusardi and Pro Works including a "notice of investigation" and a request that the forward certain listed documents. The entities responded differently to Anderson’s documents request. Anderson issued a "Penalty Review" summarizing her findings. She concluded that in February 2015, Pro Works violated the statutes and regulations relating to apprenticeships by failing to submit compliant DAS 140 and 142 forms and other required information. Anderson found that Pro Works "failed to hire any apprentices." She also concluded Pro Works had a "history" of apprentice violations, and specifically listed their dates and descriptions. Anderson concluded the penalty should be assessed based on Pro Works’s failure to comply with four out of the five factors set forth in former Labor Code section 1777.7, subdivision (f). Penalties were assessed in the amount of $30,800, consisting of $200 per each of 154 days of section 1777.5 violations. Lusardi timely filed a request for review of Anderson’s decision with the Director. Before the review hearing started, the hearing officer ruled the 2014 version of the relevant Labor Code provisions and regulations would apply, based on the Project’s bid advertisement date. He also ruled regarding the burden of proof that "DLSE will have to come forward with sufficient evidence to provide prima facie support for the penalty assessment." If this is done, "Lusardi will have . . . the burden of proof set forth in [California Code of Regulations, title 8, section] 232.50[, subdivision] (b)." On the first day of the hearing, Lusardi’s counsel initially stated three of its representatives as well as Senior Deputy Labor Commissioner Michael Nagtalon who had reviewed and approved the "Penalty Review" would be called to testify. But Nagtalon was not available. DLSE’s sole witness, Anderson, was the only person who testified that day. On the second and last day of the hearing, Lusardi’s counsel sought the testimony of Nagtalon, who was under subpoena. DLSE’s counsel explained Nagtalon was unavailable as he was outside of the country, but he offered to produce Nagtalon for a rescheduled hearing. However, Lusardi elected not to request a continuance to obtain Nagtalon’s testimony or to put on its case. Instead, its counsel stated, "Lusardi will rest without presenting any further evidence and will not move any of Lusardi’s exhibits into evidence in this matter." Counsel explained: "We are not going to present any evidence because we feel very strongly the Labor Commissioner has failed to meet its burden in this matter." Lusardi’s administrative appeal was unsuccessful and the Director affirmed the hearing officer’s findings, concluding DLSE met its burden to present evidence showing prima facie support for the penalty assessment, including that Lusardi knew of Pro Works’s violations and was liable for the penalties. Lusardi filed a petition for writ of administrative mandamus under Code of Civil Procedure section 1094.5, which the superior court denied. The Court of Appeal affirmed the Director in the published case of Lusardi Construction Co. v. Dept. of Industrial Relations - D081704 (June 2024.) On appeal, among other issues Lusardi contended the court erroneously adopted the Director’s "interpretation and unprecedented application of the two prongs of [former] Labor Code section 1777.7, subdivision (d)(1)-(4)." Former section 1777.7, subdivision (d) provided: "If a subcontractor is found to have violated Section 1777.5, the prime contractor of the project is not liable for any penalties under subdivision (a), unless the prime contractor had knowledge of the subcontractor’s failure to comply with the provisions of Section 1777.5 (and the second prong in this case) or unless the prime contractor fails to comply with any of the following requirements" and four additional requirements are listed in this law. The superior court denied Lusardi’s writ petition, interpreting former section 1777.7 subdivision (d) in the disjunctive: "Based on the plain language of the statute, the [c]ourt believes that the Legislature intended for the [Director] to have the burden of establishing that petitioner had knowledge of the subcontractor’s failure to comply with [former section] 1777.5 or that petitioner failed to comply with any [of] the requirements set forth in [former section 1777.7 subdivision] (d)(1)-(4). [¶] . . . [¶] The Director focused on the first prong of [former section] 1777.7[,subdivision] (d), and made a finding that Lusardi had knowledge of the subcontractor’s apprentice violations." The Court of Appeal noted that "Statutory construction is a question of law we decide de novo. [Citation.] Our primary objective in interpreting a statute is to determine and give effect to the underlying legislative intent. [Citation.] " In interpreting the disjunctive parts of former section 1777.7, subdivision (d), The Court turned to one court’s discussion of the challenges in interpreting the conjunction "or": "The fact is that there is nothing very plain about the use of the connective "or" in legal drafting.’ [Citation.] "Sometimes it joins alternatives; sometimes it doesn’t. Sometimes or means and; sometimes it doesn’t[ ]." [Citation.] "Additionally, if 'or' is a disjunctive connector, sometimes it connects words in the inclusive sense (i.e., A or B, or both); other times, it connects words in the exclusive sense (i.e., A or B, but not both). [Citation.] Thus, the potential ambiguity created by ‘or’ is not one dimensional." The Court of Appeal concluded that "the court did not err in interpreting former section 1777.7, subdivision (d). The statute’s plain language provides two inclusive and alternative ways for imposing liability on a prime contractor for penalties resulting from the subcontractor’s violations of former section 1777.5. Specifically, first, the prime contractor is not liable for the penalties 'unless [it] had knowledge of the subcontractor’s failure to comply' with the statute; or, second, it is not liable for the penalties 'unless the prime contractor fails to comply with any of the' requirements set forth in the remainder of section (d)." ...

Healthcare cost payers and employers who pay for health and workers' compensation insurance have been bracing for the effects of the California mandated increase in pay for healthcare workers. It might be with some relief to know that California Gov. Gavin Newsom and state legislators have reached an agreement on the 2024 state budget, which includes delaying the start of minimum wage increases for healthcare workers to at least the fall. Mr. Newsom, Senate President Pro Tempore Mike McGuire, and Speaker of the Assembly Robert Rivas announced the agreement June 22 - less than a month after the governor signed SB 828 in May, which postponed the start of the wage adjustments to July 1, the beginning of the state's fiscal year. The legislation signed last month allowed additional time for the governor's administration to continue to work with state lawmakers and stakeholders to tie provisions related to the healthcare worker minimum wage law, SB 525, to state budget conditions, according to CalMatters. Under the new agreement, the new minimum wage would be delayed until at least Oct. 15, according to Bloomberg. If state lawmakers approve the agreement, healthcare workers could begin seeing raises on that date, provided that state revenues from July to September exceed current estimates by at least 3%, according to the publication. Should that fail to occur, implementation of the raises could be delayed to Jan. 1, Bloomberg reported. Governor Newsom signed SB 525 in October to gradually raise the minimum wage for healthcare workers to $25 per hour through a series of annual increases ranging from $18 to $25 per hour, with healthcare facilities expected to reach a $25 per hour minimum wage by June 1, 2028, or, for some in rural locations, 2033. The governor then indicated he wanted to potentially delay the increases in the face of the state's projected budget shortfall. If delayed until January, the new minimum wage is expected to cost the state general fund approximately $600 million in the next fiscal year, according to Bloomberg, which cited preliminary data from the administration. Mr. Newsom said in a news release that the June 22 agreement "sets the state on a path for long-term fiscal stability - addressing the current shortfall and strengthening budget resilience down the road." Approximately 426,000 workers are expected to benefit from the law, according to the latest estimates from the UC Berkeley Labor Center. This includes medical assistants, front office staff, medical billing personnel, patient techs, janitors, food service workers, among others. The law also applies to contracted workers who work primarily on-site at an eligible facility. The delay preserves a hard-fought victory for one of the state's largest labor unions - and one of Democrats' largest campaign donors. Dave Regan, president of Service Employees International Union-United Healthcare Workers West, said workers are disappointed they won't get raises this summer ...

On June 20 the Occupational Safety and Health Standards Board approved an indoor heat standard to protect indoor workers from heat illness. The new regulation will require indoor workplaces to be cooled below 87 degrees Fahrenheit if feasible when employees are present, and below 82 degrees if feasible in places where workers wear protective clothing that restricts heat removal or work in high radiant heat areas. Back in March, CalMatters reported that the rule was expected to be finally voted into place by the Occupational Safety and Health Standards Board at a meeting in San Diego. But state officials ordered that it be pulled from the agenda after Gov. Gavin Newsom’s administration suddenly withdrew a required stamp of approval, saying it learned the rule would cost state prisons much more money than anticipated. For state government, the standards board last year estimated the Department of Corrections would need to pay less than $1 million in the rule’s first year and less than $500,000 annually after that to comply. About half of the state’s 1,500 correctional institutions are either already climate controlled or located in areas that won’t be hot enough to trigger the heat rule, the Department of Industrial Relations stated. That was after finance officials told the department in 2021 that it underestimated prison costs; the department said its updated analysis resulted in double the cost to the state. But State Department of Finance spokesperson H.D. Palmer told CalMatters the finance department received more updated information in recent weeks that costs to the corrections department would be in the billions of dollars instead. He could not explain what could account for such a drastic difference in estimates in just one year, saying "we’ve been trying to get an understanding of that." Then on April 18, Cal/OSHA said it planed to pass rules this summer, except for workers at prisons. As planned, the Occupational Safety and Health Standards Board, on June 20, 2024, approved California Code of Regulations, Title 8, section 3396, "Heat Illness Prevention in Indoor Places of Employment." The Office of Administrative Law (OAL) has 30 working days to review and approve or deny the proposal. The Standards Board requested that the regulation take effect immediately after OAL approval. Local and state correctional facilities as well as emergency operations directly involved in the protection of life or property are exempted from the proposed regulation for indoor heat. Cal/OSHA is in the process of developing an industry-specific regulation for local and state correctional facilities to protect their workers from indoor heat hazards. In the interim, for these exempted employers, Cal/OSHA will continue investigating potential indoor heat violations under existing regulations such as the Injury and Illness Prevention Program (Title 8, Section 3203) and Water Supply (Title 8, Section 3363). Cal/OSHA’s Heat Illness Prevention in Indoor Places of Employment regulation applies to most indoor workplaces, such as restaurants, warehouses, and manufacturing facilities. For indoor workplaces where the temperature reaches 87 degrees Fahrenheit, employers must take steps to protect workers from heat illness. Some of the requirements include providing water, rest, cool-down areas, methods for cooling down the work areas under certain conditions, and training. Employers may be covered under both the indoor and outdoor regulations if they have both indoor and outdoor workplaces. See the Comparison Chart of Indoor and Outdoor Heat Illness Prevention Standards. The Occupational Safety and Health Standards Board, a seven-member body appointed by the Governor, is the standards-setting agency within the Cal/OSHA program. The Standards Board's objective is to adopt reasonable and enforceable standards that are at least as effective as federal standards. The Standards Board also has the responsibility to grant or deny applications for variances from adopted standards and respond to petitions for new or revised standards. There are more resources for employers and workers on Cal/OSHA’s Heat Illness Prevention web page and the 99calor.org informational website, as well as a Heat Illness Prevention online tool. The advisory includes a toll free number for workers who have questions about heat illness prevention in indoor and outdoor places of employment can speak with a Cal/OSHA representative, 1-833-579-0927, and information on how to file confidential complaints with Cal/OSHA district offices about workplace safety and health hazards ...

Following a 19-day trial, on Tuesday, a jury convicted Fresno residents Marcus Asay, 68; Antonio Gastelum, 53; and their company, Agricultural Contracting Services Association dba American Labor Alliance (ALA), of committing a multi-year pension fraud scheme, U.S. Attorney Phillip A. Talbert announced. The jury also convicted Asay and ALA of committing separate workers’ compensation and hardship exemption fraud schemes. The hardship exemption fraud scheme involved a supposed exemption from the Affordable Care Act’s requirement that people obtain health insurance or pay a significant shared responsibility payment when they file their taxes. Finally, the jury convicted Asay of laundering money that he received from the pension fraud scheme. According to court documents and evidence presented at trial, Asay was the founder and chairman of ALA, and Gastelum was the company’s Chief Operating Officer, Chief Financial Officer, and Compliance Officer. Gastelum is also the former city manager for the City of Parlier. From 2011 through 2019, the defendants offered three sham products: retirement plan, workers’ compensation coverage, and hardship exemption. Pension Fraud Scheme For the pension fraud scheme, Asay, Gastelum, and ALA falsely represented to over 3,000 people that they would protect and invest their retirement money through a 401(k) Plan when, in fact, they used the money for improper business and personal expenses. The improper expenses included restaurants, travel, credit cards, rare coins, transfers to Asay’s personal retirement account, online companion websites, and rent for Asay’s lakefront house in Fresno. The defendants then covered up the fact that the retirement money was gone by taking money the company received from the workers’ compensation fraud scheme and holding those funds out as pension funds. The loss caused by the pension fraud scheme was over $750,000. Workers’ Compensation Fraud Scheme For the workers’ compensation fraud scheme, Asay and ALA falsely represented that national insurers backed the workers’ compensation coverage that the company offered in several states, including California. The defendants did so by listing the national insurers on the certificates of insurance and policy declarations that the company issued to customers. The accuracy of the certificates of insurance and policy declarations was important to the customers because they needed to present these items to their own customers and regulators as proof of having workers’ compensation coverage in order to continue doing business. When government authorities began investigating the workers’ compensation fraud scheme, the defendants sent letters to customers telling them not to cooperate. The loss caused by the workers’ compensation fraud scheme was over $2,250,000. Hardship Exemption Fraud Scheme For the hardship exemption fraud scheme, Asay and ALA falsely represented that for a few hundred dollars they could provide people with an exemption that would protect them from The Affordable Care Act’s shared responsibility payment for not having health insurance when, in fact, only government agencies could issue such exemptions. Moreover, the exemptions were free to those who qualified. This case is the product of an investigation by the U.S. Department of Labor’s Employee Benefits Security Administration and Office of Labor-Management Standards, the Federal Bureau of Investigation, the IRS Criminal Investigation, and the Social Security Administration Office of Inspector General. Assistant U.S. Attorneys Michael Tierney, Joseph Barton, and Stephanie Stokman are prosecuting the case. The defendants are scheduled to be sentenced on Oct. 21, 2024, by U.S. District Judge Dale A. Drozd. Asay and Gastelum face up to 20 years in prison for each count of conviction as well as maximum fines ranging from $250,000 to $500,000 per count. ALA faces up to an $8.5 million fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables ...

Governor Gavin Newsom, in partnership with legislative leadership and business and labor groups, announced an agreement on needed reforms to the Private Attorneys General Act (PAGA) that avoids a contentious ballot measure campaign. Once the legislation reflecting this agreement is passed and signed into law by the Governor, proponents of the PAGA ballot initiative eligible for the November ballot have agreed to withdraw their measure. Here’s what this PAGA reform proposal would do: Reform penalty structure - - Encourages compliance with labor laws by capping penalties on employers who quickly take steps to fix policies and practices, and make workers whole, after receiving a PAGA notice, as well as on employers that act responsibly to take steps proactively to comply with the labor code before even receiving a PAGA notice. - - Creates new, higher penalties on employers who act maliciously, fraudulently or oppressively in violating labor laws. - - Ensures that more of the penalty money goes to employees by increasing the amount allocated to employees from 25% to 35%. Reducing and streamlining litigation - - Expands which Labor Code sections can be cured to reduce the need for litigation and make employees whole quickly. - - Protects small employers by providing a more robust right to cure process through the Labor and Workforce Development Agency (LWDA) to reduce litigation and costs. - - Codifies that a court may limit both the scope of claims presented at trial to ensure cases can be managed effectively. Improving measures for injunctive relief and standing - - Allows courts to provide injunctive relief to compel businesses to implement changes in the workplace to remedy labor law violations. - - Requires the employee to personally experience the alleged violations brought in a claim. Strengthening state enforcement - - Give the Department of Industrial Relations (DIR) the ability to expedite hiring and fill vacancies to ensure effective and timely enforcement of employee labor claims. "This package provides meaningful reforms that ensure workers continue to have a strong vehicle to get labor claims resolved, while also limiting the frivolous litigation that has cost employers billions without benefiting workers," said Jennifer Barrera, President & CEO, California Chamber of Commerce. "We thank Governor Newsom, Senate President pro Tempore McGuire and Assembly Speaker Rivas for navigating this agreement, and we encourage the legislature to pass this package quickly." "We are happy to have negotiated reforms to PAGA that better ensure abusive practices by employers are cured and that workers are made whole, quicker," said Lorena Gonzalez, principal officer of the California Labor Federation, AFL-CIO. "PAGA is an essential tool to help workers hold corporations accountable for widespread wage theft, safety violations, and misclassification. We appreciate the work of the Governor’s office and Legislative Leadership to help us reach agreement with the Cal Chamber of Commerce to protect this innovative law and strengthen labor law enforcement." "Today’s agreement is critical to the long-term success of workers and businesses here in the Golden State," said Senate President pro Tempore Mike McGuire (D-North Coast). "Commonsense reform of PAGA has been discussed for years, and thanks to the collaboration of all sides, including the work of the Governor, this agreement will continue to provide strong worker protections and implement long talked-about reforms. Next steps include working with Speaker Rivas to move legislation forward in the days to come." "This agreement is important because it protects working people, who are the real engine behind California’s economic strength," said Speaker of the Assembly Robert Rivas (D-Salinas). "It also recognizes companies that follow labor laws, and it puts more muscle into enforcement. I grew up watching farmworkers and employers find common ground, so it means a lot to me that so many groups came together and found consensus. This is a hard-earned agreement, and that makes the positive outcomes we’ll see for businesses and workers even better." ...

After issuing a notice of intent on April 10, 2024, and having received and reviewed the responses of Susan Garrett and Lance Garrett, on May 16, 2024, the Appeals Board issued an en banc order imposing sanctions and costs in eight cases collectively of $20,000.00 against attorney Susan Garrett (CA BAR #195580) in eight (8) instances where she filed petitions for reconsideration with willful intent to disrupt or delay the proceedings of the Workers’ Compensation Appeals Board or with an improper motive, or where it appeared that such actions were indisputably without merit. The Appeals Board issued a second order imposing costs and sanctions collectively of $20,000.00 against hearing representative Lance Garrett in eight (8) instances where he filed petitions for reconsideration with willful intent to disrupt or delay the proceedings of the Workers’ Compensation Appeals Board or with an improper motive, or where it appeared that such actions were indisputably without merit. Prior to these orders the Garretts were provided with a Notice of Intent and were given an opportunity to present their defense to the charges. The WCAB characterized the response by writing "Susan Garrett and Lance Garrett’s responses trivialize the act of filing multiple frivolous petitions for reconsideration as an 'inconvenience.' However, their conduct here goes far beyond inconvenience. The filing of frivolous petitions for reconsideration significantly hampers the work of the Appeals Board. Each petition costs significant time and resources and delays the issuance of other decisions pending at the Appeals Board. More significantly, it delays a determination of applicant’s benefits in each of the cases at bar." And that may have precipitated the WCAB to seek even more than the $40,000 total sanction imposed thus far. The WCAB just announced two new groups of cases where it intends to impose even more sanctions, and has issued it's Notice of Intent, En Banc, accordingly. On June 17, 2024, in Abel Hidalgo, et al vs. Roman Catholic Archbishop, permissibly self-insured, Case Nos. ADJ13332737, ADJ15218980, ADJ12640295, the Appeals Board issued an en banc order consolidating three cases and issued a notice of intention to impose costs and sanctions collectively up to $7,500.00 against attorney Susan Garrett (CA BAR #195580) in three (3) instances where it appeared that she filed petitions for reconsideration with willful intent to disrupt or delay the proceedings of the Workers’ Compensation Appeals Board or with an improper motive, or where it appeared that such actions were indisputably without merit. In the same case the Appeals Board issued a second notice of intention to impose costs and sanctions collectively up to $7,500.00 against hearing representative Lance Garrett in three (3) instances where it appeared that he filed petitions for reconsideration with willful intent to disrupt or delay the proceedings of the Workers’ Compensation Appeals Board or with an improper motive, or where it appeared thaIt such actions were indisputably without merit. Garrett has 20 plus 5 days to file a response to the notice. And also in Guillermo Gonzalez, et al vs. The Bicycle Casino; Arch Indemnity Ins. Co., administered by Gallagher Bassett, et al.Case No. ADJ12226694, ADJ12414651, ADJ12414992, ADJ12414993, two nearly identical Notices of Intent for two instances of alleged sanctionable conduct, and each are subject to an additional $5000. They both have 25 days to respond to the Notice of Intent ...

The Labor Commissioner’s Office cited Amazon.com Services, LLC $5,901,700 for violations of the Warehouse Quotas law in two of their distribution warehouses in Moreno Valley and Redlands. This law requires warehouse employers to provide employees written notice of any quotas they must follow, including the number of tasks they need to perform per hour and any discipline that could come from not meeting the quota. Amazon failed to provide written notice of quotas. The employer argued they did not need a quota system because they use a peer-to-peer evaluation system. However, this law defines a quota as work that must be performed at a specified speed or the worker suffers discipline. It also places limits on quotas that prevent compliance with meal or rest periods, use of bathroom facilities, or compliance with occupational health and safety laws. A quota may be illegal if it is not disclosed to workers or precludes employees from exercising these statutory rights. The Labor Commissioner’s Office began its initial inspection on September 22, 2022. The investigation found there were 59,017 violations for the Moreno Valley and Redlands warehouses from October 20, 2023 to March 9, 2024. Penalties were issued under Labor Code 2699(f), which provides penalties of $100 for each violation. The Warehouse Worker Resource Center (WWRC) assisted the Labor Commissioner’s investigation. WWRC is a nonprofit organization dedicated to improving working conditions in the warehouse industry in Southern California. The Warehouse Quota law went into effect on January 1, 2022 pursuant to the provisions of AB 701, which created 13 new sections of the Labor Code (2100 - 2112) regulating the use of quotas by "Warehouse Distributions Centers.The key provisions of this law include: - - Locations: Facilities covered by the law are defined in Labor Code section 2100 by referring to North American Industry Classification System (NAICS) codes. These include General Warehousing and Storage, Durable Goods Merchant Wholesalers, Nondurable Goods Merchant Wholesalers, and Electronic Shopping and Mail-Order Houses. Section 2100 specifically exempts Farm Product Warehousing and Storage from the warehouses covered by the new law. - - Employers: The law covers employers with 100 or more employees in a single warehouse or 1,000 warehouse employees in California. Included in staff totals are staffing agency hires if they are under control of the warehouse operator. - - Disclosure: As of January 1st 2022, employers must provide written descriptions of all quota systems to employees. The details should describe the task and timeframe of quotas and potential repercussions of not meeting a quota. All new hires must receive disclosures at time of employment. - - Repercussions or Adverse Employment Action: Any employer action that negatively impacts employment, including negative reviews, are considered repercussions. Reduction in pay, reduction in hours, termination, and negative reviews are all adverse employment actions. - - Quota Limitations: Quotas cannot make it harder for employees to take meal breaks, rest breaks, use the bathroom, or comply with health and safety regulations or standards. Quotas that impact these are illegal. - - Employee Rights: Employees can request copies of their data for the last 90 days, the quotas they are subject to and records on their performance. Employers have 21 days to comply. - - No Retaliation: Employers are not to retaliate against request for data, and employers are not to retaliate against employees who fail to meet an undisclosed quota. A penalty of $750 will be applied to employers who do not meet the required data disclosure requests in a timely fashion. Similar protective laws were adopted by New York and Washington, triggered by the rapid growth of e-commerce during the pandemic. Amazon was a specific example of abuse noted by the Legislative Analysis prepared when AB 701 was introduced. The Analyst noted " the National Employment Law Project (NELP) reported that Amazon, Inc., "relies on an extreme high-churn model, continually replacing workers in order to sustain dangerous and grueling work pace demands." This report further found that workers who can't keep up with extreme productivity goals are fired or encouraged to quit and many workers leave their jobs due to injuries. Additionally, NELP analyzed publicly available Census Bureau data for five California counties where Amazon fulfillment centers have had a significant presence in the warehouse sector between 2011 and 2017 and concluded that "turnover for all California warehouse workers (including Amazon) grew from 42.1% in 2011 to 83% in 2017." ...

Last month, with deep sadness and heavy hearts, the firm of Floyd Skeren Manukian and Langevin announced the death of our colleague and friend, Anthony (Tony) Macauley, who passed away on Saturday May 11, 2024. His cause of death was cardiac related and was unexpected. He was survived by his wife, Nancy and one brother Ben Gulli and his wife Kim and their two children, Max and Hana. The services of Anthony Macauley have now been scheduled, will be held on Saturday, June 29th at 4pm at: - - Storrier Stearns Japanese Garden - - 270 Arlington Dr, Pasadena, CA 91105 - - (626) 399-1721 Valet parking for the memorial will be provided as there is no parking on the street. If you wish to send cards, flowers or other offerings they may be sent to: 514 South Arroyo Blvd., Pasadena CA 91105 The Floyd Skeren firm will miss him more than words can express. He was a kind and gentle soul. He loved his family deeply and always aimed to please. Tony was a valued member and contributed to the firm in many ways. Besides being a dedicated FSML family member, he was always good-humored and considerate towards his colleagues. His sense of humor and laughter were infectious and he was the consummate gentleman. The void he left is immeasurable. He practices workers’ compensation defense over the entire Los Angeles basin. Mr. Macauley was admitted to the State Bar of California in 1987 and became a certified specialist in the field of worker’s compensation in 1993. He worked at the workers' compensation defense firms of Hanna Brophy for years as well as Kegal Tobin before finding his home at Floyd Skeren Manukian and Langevin. He was one of the most well respected attorneys in the industry. He was a zealous advocate for his clients and developed a stellar reputation amongst peers, judges, and opposing counsel. Tony was a fellow of the College of Workers’ Compensation Lawyers and a member of the American Bar Association, as well as its Tort Trial and Insurance Practice Sections (TIPS), where he is in leadership on three TIPS committees, which focus on Workers’ Compensation, Medicine, Law and Insurance regulations." ...

Plaintiff Maria Chavez is the widow of Leodegario Chavez Alvarado, who worked for Alco Harvesting, LLC as a foreman and bus driver. Alco provided decedent and other Alco workers housing at the Hotel Santa Maria. The company, 210 Nicholson, LLC, operated the hotel. Plaintiff filed a wrongful death case against her husband's employer and alleged her husband died of COVID-19 complications after contracting the disease while working for Alco. Plaintiff claimed that some of the Alco employees were placed in close living quarters that precluded social distancing. Alco was aware such placement facilitated the transmission of COVID-19. Alco was aware such placement facilitated the transmission of COVID-19. According to the allegations in her second amended complaint it "was no surprise that a COVID-19 outbreak soon began at the Hotel Santa Maria." Alco and 210 Nicholson became aware of a COVID-19 outbreak at the hotel well before decedent’s viral exposure. The outbreak was unknown to decedent. Alco failed to report the outbreak to the health department, notify its employees, or "implement adequate safety measures or measures to prevent or curb the outbreak." Decedent began feeling ill on or about June 26, 2020, and his symptoms "were those associated with a COVID-19 infection." Decedent immediately reported feeling unwell to his supervisors. Plaintiff alleged that by virtue of their superior knowledge regarding the outbreak, "Defendants knew, even before [d]ecedent, that he had contracted the virus." Plaintiff further alleged decedent "was unaware that he had contracted COVID-19. However, upon notifying them of his symptoms, Alco and 210 Nicholson had actual knowledge of [d]ecedent’s illness . . . ." Alco nonetheless failed to inform decedent of the outbreak or that his symptoms were that of COVID-19." Decedent tested positive for COVID-19 on July 2, 2020, a week after he had reported his symptoms to Alco. On that date, decedent was placed at a Motel 6. Decedent waited for medication to arrive, but none did. On July 7, 2020, he died of COVID-19 complications. Plaintiff alleged that because of the outbreak, decedent "was exposed to COVID-19 and fell ill. Alco’s deliberate concealment of the outbreak and the nature of decedent’s illness resulted in the aggravation of his illness to the point that he was unable to recover and succumbed to the disease." The trial court sustained Alco’s demurrer to the second amended complaint without leave to amend. Plaintiff appealed. The Court of Appeal reversed in the published case of Chavez v. Alco Harvesting, LLC -B329282 (June 2024). Plaintiff argued that her second amended complaint sufficiently pleaded all elements of the fraudulent concealment exception to the workers’ compensation exclusivity rule. The Court of Appeal agreed. As a general rule, an employee injured in the course of employment is limited to the remedies available under the Workers’ Compensation Act. An exception exists "[w]here the employee’s injury is aggravated by the employer’s fraudulent concealment of the existence of the injury and its connection with the employment . . . ." (Lab. Code, § 3602, subd. (b)(2).)2 Thus, three elements comprise this exception: "(1) the employer knew that the plaintiff had suffered a work-related injury; (2) the employer concealed that knowledge from the plaintiff; and (3) the injury was aggravated as a result of such concealment." (Palestini v. General Dynamics Corp. (2002) 99 Cal.App.4th 80, 90 (Palestini); see also Jimenez v. Mrs. Gooch’s Natural Food Markets, Inc. (2023) 95 Cal.App.5th 645, 658.) The employer must have actual knowledge of the injury; constructive or imputed knowledge is insufficient. (Hughes Aircraft Co. v. Superior Court (1996) 44 Cal.App.4th 1790, 1796.). In Foster v. Xerox Corp. (1985) 40 Cal.3d 306 (Foster), the California Supreme Court analyzed the pleading requirements for the fraudulent concealment exception. The Court recognized the statutory injunction to "liberally construe pleadings with a view to achieving substantial justice between the parties. (Ibid.; Code Civ. Proc., § 452.) " Thus, with respect to the first element of the exception, the Court of Appeal concluded that "Construing the pleadings liberally as Foster did, plaintiff’s SAC fairly apprised Alco of the action’s basis - namely, that Alco knew decedent had contracted COVID-19 from his employment and concealed that knowledge from him, thereby aggravating his illness." With respect to the second element of the exception, Alco also argues plaintiff does not allege it "fraudulently concealed the alleged massive outbreak with the intent to induce [d]ecedent to continue working for any benefit." The Court of Appeal disagreed, and said this "argument fails because the intent to extract more labor is simply not a requirement of the fraudulent concealment exception." The SAC sufficiently pleaded the final element of aggravation. The SAC alleged a week elapsed between decedent reporting his symptoms to Alco and a positive COVID-19 test. He died five days after that positive test. The SAC alleged "Alco’s deliberate concealment of the outbreak and the nature of [d]ecedent’s illness resulted in the aggravation of his illness to the point that he was unable to recover and succumbed to the disease." Alco faults the SAC’s references to aggravation as conclusory. The Court of Appeal responded by saying this "critique ignores Foster’s guidance that we should liberally construe the SAC, which may be pleaded in general terms. (Cf. Palestini, supra, 99 Cal.App.4th at pp. 89-90.) "In sum, the SAC survives Alco’s demurrer because it states a cause of action under section 3602, subdivision (b)(2)." ...

A bill that would give a presumption of compensability to farmworker heat-related injury claims if the employer is found to be out of compliance with Cal/OSHA’s outdoor heat illness prevention standard would likely create more challenges than it would solve, entail significant administrative friction costs, and is unlikely to have an appreciable impact on agricultural worker safety according to a California Workers’ Compensation Institute (CWCI) study. CWCI’s analysis of SB 1299 (Cortese), examines the population of agricultural workers covered by the legislation, measures the percentage of workers’ compensation claims filed by agricultural workers that involve heat-related injuries, and compares the percentage of heat-related claims in the agriculture sector to the percentage for non-agricultural workers covered by the high-heat procedures in the Cal/OSHA Outdoor Heat Illness Prevention Standard. In addition, the analysis considers the impact of the legislation on the California workers’ compensation system. Among the findings: - - Despite global warming and climate change, there are very few agricultural heat illness claims in California workers’ compensation. CWCI’s review of more than 3.2 million claims filed by California workers from 2019 through 2023 found that only 659 of the 100,777 claims filed by agricultural workers (0.65%) were due to heat-related illness. That proportion was comparable to other industries covered by the Cal/OSHA high heat standard, such as landscaping (0.65%), construction (0.67%) and mining, oil and gas extraction (0.56%). - - The small percentage of claims involving heat illnesses likely reflects the success of Cal/OSHA’s outdoor heat illness prevention standard, enacted in 2005 and amended in 2015. The standard requires, among other things, access to shade and water, active monitoring of employees who need to acclimatize to heat, supervisor and employee training, and a heat illness plan. In addition, it requires employers to initiate high heat procedures if the temperature exceeds 85 degrees, and if the temperature crosses 95 degrees, agricultural workers must take a mandatory 10-minute cool-down break every two hours. Employers also must inform their workers that they may exercise their rights under the standard without fear of retaliation and advise them of acclimatization procedures and appropriate first aid and emergency responses to heat illness. - - While several studies have found that increases in temperature lead to increases in injuries overall, a recent UCLA study that focused on California exclusively found that this phenomenon largely ceased following implementation of the Cal/OSHA Outdoor Heat Illness Prevention Standard in 2005. - - Outdoor agricultural workers have a workers’ compensation claim denial rate of 11.0%, which is lower than the 12.4% to 13.3% denial rates for other outdoor occupations covered by the Cal/OSHA outdoor heat standard, and lower than the 14.7% denial rate for all claims. - - The presumption created by SB 1299 would shift the initial determination of whether a Cal/OSHA heat injury illness standard violation occurred from the Occupational Safety and Health Appeals Board to the Workers’ Compensation Appeals Board (WCAB). Given the lack of subject matter expertise on the part of WCAB judges, and the challenge of determining violations without citations from Cal/OSHA, the administrative burden and frictional costs of SB 1299 would be significant. Workers’ compensation presumptions shift the burden of proof that a claim is work-related from the employee to the employer. Because they represent an exception to the grand bargain of workers’ compensation, they have historically been limited to police and firefighters for specific injuries such as cancer or heart disease that that may arise from the unique risks inherent in their public service jobs, and even then, only when there is clear and compelling evidence of a lack of hazard abatement, a high incidence of injury, and a high denial rate. In the case of SB 1299, which would open the door to private sector presumptions, CWCI’s analysis indicates such evidence is lacking. The Institute has issued its analysis as an Impact Analysis report that is available for free under the Research tab at www.cwci.org ...

From 1944 through the 1970s, Kaiser Cement and Gypsum Corporation manufactured asbestos-containing products at numerous different facilities. By 2004, more than 24,000 claimants had filed product liability suits against Kaiser alleging that they had suffered bodily injury (primarily asbestosis or cancer) as a result of exposure to Kaiser’s asbestos products. Truck Insurance Exchange, is a primary insurer for Kaiser. Kaiser tendered these claims to Truck, one of several primary insurers that had issued commercial general liability (CGL) policies to Kaiser during this time period. The subsequent litigation has generated multiple appellate decisions that have addressed a wide range of complex questions regarding insurance coverage and policy interpretation. In 2001, Truck initiated this insurance coverage action to determine its indemnity and defense obligations to Kaiser. Several years later, Truck amended its complaint to add a cause of action for contribution against several of Kaiser’s excess insurers that had issued first-level excess policies to Kaiser for policy years where the directly underlying primary policy had been exhausted. Relying on the California Supreme Court's reasoning in Montrose Chemical Corp. of California v. Superior Court (2020) 9 Cal.5th 215 (Montrose III), Truck argued that the excess insurers’ indemnity obligations were triggered immediately upon exhaustion of the directly underlying primary policies. Truck further reasoned that because the excess insurers owed a coverage duty to Kaiser, they were effectively responsible for indemnifying the same loss as Truck and should therefore be required to contribute to Truck’s coverage costs. According to the excess insurers, Montrose III’s analysis is limited to excess policies that sit over other excess policies, not first-level excess policies that sit over primary insurance. The Court of Appeal agreed with the excess insurers that Montrose III did not extend to excess policies that sit over primary insurance, which has characteristics that are distinct from excess insurance including immediate coverage and defense obligations. In so ruling, the court rejected SantaFe Braun, Inc. v. Insurance Co. of North America (2020) 52 Cal.App.5th 19 (SantaFe), which held that Montrose III’s reasoning does apply in the context of first-level excess policies. The court further concluded that because the excess insurers had no coverage obligation under their policies until all primary insurance had been exhausted (including Truck’s primary policy), Truck was not entitled to contribution. The appeal of this decision to the California Supreme Court required it to resolve the question that it left open in Montrose III: whether standard language in commercial general liability policies that are excess to primary insurance policies should be interpreted to require vertical or horizontal exhaustion. In other words, can an insured access a first-level excess insurance policy upon exhaustion of underlying primary insurance obtained for the same policy period (vertical exhaustion), or is the insured required to exhaust all primary policies issued during the continuous period of damage (horizontal exhaustion)? Contrary to the Court of Appeal reasoning, the California Supreme Court in Truck Ins. Exchange v. Kaiser Cement & Gypsum Corp.-S273179 (June 2024) concluded that its analysis in Montrose III applies equally here and reversed the Court of Appeal. In the context of standard "occurrence based" CGL insurance policies, California has adopted what is known as the "all-sums-with-stacking" approach to continuous injuries. This approach has three primary components. First, in Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645, 656 (Montrose I), the Supreme Court adopted the "continuous injury trigger of coverage" principle (id. at p. 685), under which "bodily injury and property damage that is continuous or progressively deteriorating throughout several policy periods is potentially covered by all policies in effect during those periods." (Id. at p. 655.) In other words, the insured may call upon any policy that was in effect during the continuous period of injury. Second, in Aerojet-General Corp. v. Transport Indemnity Co. (1997) 17 Cal.4th 38, the Supreme Court adopted "the 'all sums' rule" (State of California v. Continental Ins. Co. (2012) 55 Cal.4th 186, 191 (Continental)), pursuant to which each policy triggered during a long-tail injury is potentially liable for the total amount of the loss, regardless of whether a portion of the loss occurred outside the policy’s coverage period. The rule "envisions that each successive insurer is potentially liable for the entire loss up to its policy limits. When the entire loss is within the limits of one policy, the insured can recover from that insurer, which may then seek contribution from the other insurers on the risk during the same loss." (Id. at p. 200.) Third, in Continental, supra, 55 Cal.4th 186, the Supreme Court construed language in standard CGL policies to permit "stacking," which allows an insured "to add together the maximum limits of all consecutive policies that [were] in place during the [period of continuous injury]." (12 Couch on Insurance (3d ed. 2010) § 169:5; see Continental, at p. 200 ["stacking’ generally refers to the stacking of policy limits across multiple policy periods that were on a particular risk"].) In other words, " '[w]hen the policy limits of a given insurer are exhausted, [the insured] is entitled to seek indemnification from any of the remaining insurers [that were] on the risk [during the continuous period of injury].' " (Continental, at p. 200.) If, for example, an insured purchased 10 annual policies that each had a coverage limit of $1 million, and all the policies were triggered by a continuous injury, the insured would be permitted to stack all of the policies to collect up to $10 million in total coverage. In this current case involving Kaiser, the language of the first-level excess policies is essentially identical - and in some cases actually identical - to the policy language in the higher-level excess policies that the Supreme Court considered in Montrose III. The policies also share many of the same characteristics that it found "strongly suggest[ive]" of vertical, rather than horizontal, exhaustion. "Thus, as in Montrose III, we believe the first-level excess policies are most reasonably construed as requiring only vertical exhaustion." ...