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Anti-SLAPP Motion Denial Affirmed in University Retaliation Case

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Hyewon Pechkis and Joseph Pechkis, a married couple, were tenured physics professors at California State University, Chico (Chico State). Hyewon alleged she was subjected to harassment and discrimination by the department chair based on his perceived bias against women and Hyewon’s Korean ancestry and national origin. The chair allegedly confronted Hyewon aggressively enough to cause her to fear for her physical safety, and she was eventually diagnosed with chronic post-traumatic stress disorder, major depressive disorder, and generalized anxiety disorder stemming from the hostile working environment. The couple raised their concerns with the dean of the College of Natural Sciences, but Chico State took no action to address the chair’s behavior.

With no relief forthcoming, the Pechkises accepted employment offers at California Polytechnic State University (Cal Poly), 400 miles away, effectively giving up their tenured positions at Chico State. Shortly after they announced their planned departure, Chico State Vice Provost Mahalley Allen emailed Hyewon claiming the university had “serious concerns” about a potential Family Educational Rights and Privacy Act (FERPA) violation related to old blog postings Hyewon had written in Korean, which the complaint alleged were based on inaccurate translations. The complaint further alleged that Allen contacted Cal Poly to inform them of the unresolved FERPA investigation in what plaintiffs characterized as an attempt to sabotage their transfer. A Chico State dean also allegedly caused unnecessary delays in transferring plaintiffs’ lab equipment to Cal Poly. Despite these efforts, Cal Poly continued to extend employment offers to both professors.

In December 2024, the Pechkises filed suit against the Trustees of the California State University asserting six causes of action: discrimination, retaliation under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.), failure to engage in the interactive process, hostile working environment, failure to prevent discrimination and harassment, and whistleblower retaliation.

In March 2025, defendant filed an anti-SLAPP motion under Code of Civil Procedure section 425.16 seeking to strike the second cause of action (FEHA retaliation) and the sixth cause of action (whistleblower retaliation). The Butte County Superior Court denied the motion. The court found that defendant had satisfied the first prong of the anti-SLAPP analysis — that the challenged claims arose from protected activity — because the FERPA investigation constituted an “official proceeding authorized by law.” However, the court then found that plaintiffs demonstrated a likelihood of success on the merits, concluding that their discrimination complaints were protected activity and that Chico State’s constructive discharge of their tenured employment qualified as an adverse employment action. Defendant appealed.

The Third District affirmed the denial but on different grounds than the trial court in the published case of Pechkis v. Trustees of the California State University, No. C103742 (March 2026),holding that defendant failed to carry its burden on the first prong of the anti-SLAPP analysis in the first place.

The court applied the framework established in Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009, which requires a defendant bringing an anti-SLAPP motion to “identify what acts each challenged claim rests on and to show how those acts are protected under a statutorily defined category of protected activity” through a claim-by-claim elemental analysis. The court found that defendant had instead employed the kind of broad “gravamen” approach that the Supreme Court disapproved of in Bonni — essentially arguing that because the retaliation causes of action were based “in part” on communications between Chico State employees and Cal Poly, both causes of action should be stricken in their entirety. Citing Park v. Nazari (2023) 93 Cal.App.5th 1099, 1108–1109, the court held that when a defendant seeks to strike entire causes of action without identifying specific claims within them that rest on protected activity, the defendant fails to carry its first-step burden so long as the causes of action contain at least one claim that does not arise from protected conduct.

The court identified several allegations of potentially unprotected conduct underlying the challenged causes of action that defendant never addressed. Both causes of action alleged retaliation through constructive discharge — an adverse employment action that courts have recognized as unprotected activity. The court noted that defendant itself effectively conceded constructive discharge was central to these causes of action by making it the sole focus of its second-prong argument, yet defendant never explained how constructive discharge constituted protected activity under the first prong. Similarly, the causes of action alleged retaliation through the initiation of a sham FERPA investigation, and the court observed that under Laker v. Board of Trustees of California State University (2019) 32 Cal.App.5th 745, 773, claims based on the fact of an investigation or its outcome — as opposed to investigation-related speech — are not subject to the anti-SLAPP statute.

The court also rejected defendant’s assumption that because the FERPA investigation qualified as an “official proceeding authorized by law,” all acts associated with it were shielded by anti-SLAPP protection. The statute protects only “written or oral statement[s]” made in connection with such proceedings, not every act undertaken within them. Quoting the Supreme Court’s warning in Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1067, the court cautioned that conflating discriminatory decisions with investigation-related speech in the anti-SLAPP analysis could render the statute “fatal for most harassment, discrimination and retaliation actions against public employers.”

The court acknowledged that individual allegations within the two causes of action might still be protected conduct susceptible to a more targeted anti-SLAPP motion but declined to perform that analysis on defendant’s behalf, concluding that defendant had “wholly failed to ‘propose where to make the incisions.’ “

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SoCal Woman to Serve 3 Years for Diagnostic and Hospice Fraud

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A woman from the Larchmont area of Los Angeles was sentenced to 35 months in federal prison for defrauding Medicare out of more than $14 million by submitting fraudulent claims for hospice care and diagnostic testing services that were either unnecessary or not provided at all.

Sophia Shaklian, 38, was sentenced by United States District Judge Stanley Blumenfeld Jr., who also ordered her to pay $14,103,043 in restitution. Shaklian pleaded guilty in November 2025 to one count of health care fraud.

From March 2019 to August 2024, Shaklian and her co-schemers – often using aliases – used multiple bogus hospice and diagnostic testing providers enrolled with Medicare and submitted fraudulent claims on behalf of companies she owned.

These businesses included a Shaklian-owned hospice company – the Pasadena-based Chateau d’Lumina Hospice and Palliative Care – and several diagnostic testing companies: Saint Gorge Radiology in Sylmar; Hope Diagnostics in North Hollywood; Direct Imaging & Diagnostics and Lab One – both based in Hollywood; and Labtech and Lifescan Diagnostics in Claremont.    

Shaklian and her co-schemers used the information of Medicare beneficiaries, and checked beneficiaries’ Medicare eligibility to knowingly and willfully submit fraudulent claims to Medicare on behalf of beneficiaries who did not need the services, had never received the services, and were not familiar with the fraudulent hospice and diagnostic testing providers, with the intent to defraud Medicare into reimbursing the sham providers for those claimed services.

For example, Shaklian and her co-schemers knowingly and willfully submitted a false and fraudulent claim for $2,000 in November 2022 to Medicare for diagnostic testing purportedly provided to an individual.

Shaklian admitted in her plea agreement that fraudulent claims were submitted on behalf of the sham providers, some by herself and others by her co-schemers during and in furtherance of the above scheme. Because Shaklian was involved in the billing and was familiar with the amounts Medicare paid to the fraudulent providers on the types of claims submitted during this scheme, she caused a loss of at least $14,103,043 to Medicare.

Co-defendant Alex Alexsanian, 48, a.k.a. “Samvel” and “Samo,” of Burbank, pleaded guilty on January 20 to one count of conspiracy to launder monetary instruments. He will face a statutory maximum sentence of 20 years in federal prison at his April 28 sentencing hearing.

The United States Department of Health and Human Services Office of the Inspector General and the FBI are investigating this matter. Assistant United States Attorney Kevin B. Reidy of the Major Frauds Section is prosecuting this case.

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Repayment Funds May be Required if Class Settlement Revoked

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Jessica Garcia worked for The Merchant of Tennis, Inc. (Merchant), a California corporation operating in San Bernardino County, from July through December 2019. In May 2022, she filed a third amended consolidated class action complaint on behalf of herself and other employees, alleging various wage-and-hour violations under the California Labor Code and other federal and state employment laws.

While Garcia’s motion for class certification was pending in 2024, Merchant pulled approximately 954 current and former employees into mandatory meetings with management and asked them to sign individual settlement agreements releasing their wage and hour claims in exchange for cash payments averaging roughly $918 each — over $875,000 in total. Garcia had not signed an agreement, but the vast majority of putative class members had.

In November 2024, Garcia moved to invalidate the settlements, arguing Merchant obtained them through fraud and coercion. The trial court found that Merchant had made “false and misleading” representations to secure the agreements: it gave workers unfounded claims about the low recovery rates in class actions, falsely stated that certain claims had been dismissed, described the releases as limited when they actually covered all claims, marked communications “confidential” to discourage sharing with class counsel, and misleadingly suggested that arbitration agreements barred participation in the lawsuit without disclosing that only 40 percent of workers had such agreements. The court concluded the 954 individual settlement agreements were voidable and ordered a curative notice giving workers 45 days to revoke their agreements and join the class action.

The parties then fought over what the curative notice should say about repayment. Merchant wanted the notice to warn workers that if they revoked their settlements and Merchant ultimately prevailed, they could be required to return the money. Garcia argued that including such language would discourage low-wage workers from joining the suit and that any repayment issue could be addressed later through an offset against recovery.

The San Bernardino County Superior Court sided with Garcia. Finding no binding California authority on point, the court followed two federal cases — Marino v. CACafe, Inc. (N.D. Cal. Apr. 28, 2017) 2017 WL 1540717 and McClellan v. Midwest Machining, Inc. (6th Cir. 2018) 900 F.3d 297 — and ruled that the curative notice would inform workers they would not be required to return any payment, though the amount received might be treated as an offset against any future recovery. The court rejected Merchant’s argument that California’s rescission statutes (Civ. Code, §§ 1689, 1691) required immediate repayment, calling that position “simplistic legal analysis” that ignored the complexity of the employer-employee relationship and the court’s duty to prevent abuses undermining the administration of justice. The court stayed its order to allow Merchant to seek appellate review.

The Court of Appeal granted Merchant’s petition for writ of mandate in a 2–1 decision, directing the trial court to vacate its February 28, 2025 order and reconsider the curative notice in the published case of The Merchant of Tennis, Inc. v. Superior Court  No. E085766 (March 2026).

The majority (Acting Presiding Justice Miller, joined by Justice Codrington) held that California’s rescission statutes govern the situation and require the curative notice to inform workers that repayment of settlement funds may be required at the conclusion of litigation. The court acknowledged that under Civil Code section 1693, repayment need not be immediate and can be delayed until judgment without substantial prejudice to the other party.

But the majority concluded that neither section 1692 nor section 1693 authorizes a trial court to forgive repayment entirely at the outset of litigation. The court read section 1692 — which permits a court to “in its judgment adjust the equities between the parties” — as contemplating equitable adjustments at the time of final judgment, not at the beginning of a case. The majority found the federal authorities relied on by the trial court unpersuasive, noting that Marino provided no analysis of California rescission law, and McClellan addressed a narrow exception for federal Title VII and Equal Pay Act claims brought by an individual plaintiff, not a California wage-and-hour class action.

However, the court stopped short of requiring immediate repayment, holding that the curative notice should inform class members that if they choose to rescind, they could be responsible for repayment at the conclusion of litigation under Civil Code sections 1689, 1691, and 1693, while the trial court retains discretion to adjust equities under section 1692 at the time of judgment.

Justice Raphael dissented, arguing that the majority’s reading of the rescission statutes was too rigid and that section 1692 grants trial courts broad equitable authority to fashion remedies — including excusing repayment — at any stage of a proceeding, not only at final judgment.

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Lumbar Subcutaneous Adipose Classification MRI For Fusion Risk

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For decades, Body Mass Index has been the go-to shorthand for obesity in surgical planning. But anyone who has reviewed a lumbar fusion file knows the frustration: BMI treats a 260-pound powerlifter and a 260-pound sedentary claimant as identical risks. As Orthopedics This Week put it, BMI is “about as precise as estimating blood loss by ‘eyeballing the suction canister.’” Now, a new tool is aiming to change that calculus.

The Lumbar Subcutaneous Adipose Classification (LSAC) is an MRI-based system that goes beyond simply weighing a patient or calculating a ratio. Rather than producing a single number, the LSAC maps the distribution of subcutaneous fat across the lumbar surgical corridor. According to the OTW report, the system doesn’t just measure fat—it classifies its pattern in a way that turns out to be a powerful predictor of post-operative infections and other complications following lumbar interbody fusion.

The LSAC is the latest evolution in a line of research that has steadily chipped away at BMI’s dominance. In 2018, Shaw and colleagues published their Subcutaneous Lumbar Spine (SLS) Index, which measured the ratio of subcutaneous adipose depth to spinous process height at the surgical site using preoperative MRI. Studying 285 patients who underwent laminectomy or lumbar fusion, the team found that the SLS Index was significantly associated with total complications, perioperative complications, and the need for revision surgery—outperforming both BMI and raw fat depth measurements alone.

Then came the Spine Adipose Index (SAI), published in The Spine Journal in 2021. A multicenter case-control study of posterior instrumented lumbar fusion patients found that the SAI was more sensitive than either BMI or subcutaneous fat thickness in predicting deep surgical site infections, and it demonstrated excellent inter-observer reliability—meaning different radiologists reading the same MRI would reach the same conclusion.

A 2024 study in Global Spine Journal further validated the approach, finding that the Subcutaneous Lumbar Spine Index (SLSI) was a superior predictor of early surgical site infection after transforaminal lumbar interbody fusion across a cohort of over 3,600 patients. The researchers noted that each millimeter increase in subcutaneous fat thickness corresponded to roughly a six percent increase in infection odds—but that accounting for the spinous process height relationship made the prediction even stronger.

Where the SLS Index and SAI each produced a single numerical ratio, the LSAC takes the concept further by generating a classification of adipose distribution pattern across the lumbar corridor. Think of the difference between taking a patient’s temperature (one data point) versus mapping the inflammation across an entire joint (a diagnostic picture). The LSAC leverages data already sitting in every preoperative lumbar MRI—no additional imaging, no extra cost—and converts it into an actionable risk category.

This matters for the workers’ compensation world because the research base is now clear: site-specific fat distribution is a far better predictor of lumbar surgical complications than BMI. A recent meta-analysis pooling data from seven studies confirmed that localized adiposity measures showed stronger associations with post-operative infection than BMI in spinal fusion procedures.

For the Workers’ Compensation Industry, this development touches several pressure points. First, preoperative risk stratification: carriers and utilization review teams may soon have a tool that more precisely identifies which claimants face elevated surgical risks—well before the scalpel touches skin. That creates opportunities for prehabilitation protocols, targeted weight-management programs, or frank conversations about risk-benefit tradeoffs that go beyond a generic BMI threshold.

Second, causation disputes. When a post-fusion infection develops, the question of whether the infection was a foreseeable surgical complication versus an independent intervening cause is already a common battleground. A preoperative LSAC classification showing high-risk adipose distribution could strengthen the argument that the complication was predictable—and perhaps even that authorization should have required additional safeguards.

Third, the “obesity defense” gets more nuanced. Defense counsel have long pointed to BMI as a comorbidity that contributed to poor outcomes. But the LSAC’s ability to differentiate between patients at the same BMI—one with favorable fat distribution, one without—could undercut blanket arguments and demand more granular expert testimony on both sides of the aisle.

The LSAC doesn’t replace clinical judgment. No classification system does. But what it does is extract meaningful, reproducible risk information from imaging that is already being ordered in virtually every lumbar fusion case. For an industry that spends billions annually on spinal surgery claims, a better way to identify which patients are heading toward complications—before they get there—is the kind of incremental advance that compounds over thousands of files.

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Express Language in Arbitration Agreement Required for Use of FAA

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Kathleen Charles, a dementia patient who was otherwise in good health, was admitted to the memory care wing of WellQuest Elk Grove, a residential care facility in Sacramento County. Her family informed staff that Kathleen was a “wanderer” who needed monitoring, and WellQuest’s own service plan noted she required frequent supervision. Three days after admission, Kathleen was found sitting unattended in an outdoor courtyard in direct sunlight on a day when the temperature reached 102 degrees. She had burns covering roughly a quarter of her body and an internal temperature of about 105 degrees. She fell into a coma and died four days later.

When Kathleen was admitted, her niece Erika Wright – acting under a durable power of attorney for Kathleen’s health care – signed an arbitration agreement on Kathleen’s behalf. The agreement provided that “any and all claims or disputes arising from or related to this Agreement or to your rights, obligations, care, or services at WellQuest of Elk Grove shall be resolved by submission to neutral, binding arbitration in accordance with the Federal Arbitration Act.” It also contained a delegation clause stating that “an arbitrator will decide any question about whether a claim or dispute must be arbitrated.” The agreement designated JAMS as the arbitration administrator but did not reference any specific JAMS rules or provide a link to them.

Eight months after Kathleen’s death, her family filed suit. On Kathleen’s behalf (as survivor claims), plaintiffs alleged elder neglect, negligence, fraud, and a criminal elder abuse tort. Her brother Raymond, niece Erika, and nephew Thomas also brought individual claims for wrongful death and negligent infliction of emotional distress.

WellQuest moved to stay proceedings and compel arbitration. The Superior Court Judge denied the motion on multiple grounds. First, the court found that the delegation clause did not “clearly and unmistakably” assign threshold arbitrability questions – including enforceability and unconscionability – to the arbitrator, so the court resolved those issues itself. Second, the court determined that the arbitration agreement was not unconscionable. Third, it held that Raymond, Erika, and Thomas were not parties to the agreement, so their individual wrongful death and emotional distress claims were not arbitrable. Finally, turning to Kathleen’s survivor claims, the court exercised its discretion under Code of Civil Procedure section 1281.2, subdivision (c), and declined to compel arbitration, finding that if those claims went to arbitration while the family’s individual claims proceeded in court, there was a risk of conflicting rulings on common factual and legal issues. The court also rejected WellQuest’s argument that the FAA’s procedural provisions governed the agreement, concluding that the phrase “in accordance with the Federal Arbitration Act” did not expressly incorporate the FAA’s procedural rules.

The Third District affirmed the trial court on all issues in the published case of Wright v. WellQuest Elk Grove -C105070 (March 2026)

On the delegation clause, the court held that the language – providing that “an arbitrator will decide any question about whether a claim or dispute must be arbitrated” – fell short of the “clear and unmistakable” standard required to delegate threshold arbitrability issues away from the court. The court contrasted the agreement with the provision upheld in Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 892, where the clause explicitly covered “the interpretation, validity, or enforceability” of the agreement and incorporated specific JAMS rules that expressly assigned arbitrability to the arbitrator. Here, the clause said nothing about enforceability, unconscionability, or interpretation of the agreement itself, and the JAMS reference included no link to or copy of the applicable rules. Drawing on the reasoning in Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 783, the court explained that when delegation language is susceptible to multiple reasonable interpretations — one covering only substantive disputes and the other reaching threshold enforceability questions — the ambiguity cannot satisfy the heightened “clear and unmistakable” standard.

On the FAA preemption issue, the court held that the phrase “in accordance with the Federal Arbitration Act” did not expressly designate the FAA’s procedural provisions as controlling. Relying on the California Supreme Court’s holdings in Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, Cable Connection, Inc v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, and most recently Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562, 582, the court reaffirmed that the California Arbitration Act’s procedural rules – including section 1281.2, subdivision (c) – apply by default in state court proceedings, and parties must use express language to opt out of them in favor of the FAA’s procedural framework. The court acknowledged the contrary result in Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, where the phrase “pursuant to the FAA” was found sufficient, but disagreed with that reasoning, finding it inconsistent with the principle that a departure from the default CAA framework requires more exacting language. Following Valencia v. Smyth (2010) 185 Cal.App.4th 153, 177, the court concluded the agreement implicitly incorporated the CAA’s procedural provisions, leaving the trial court free to apply section 1281.2, subdivision (c), to keep all claims together and avoid conflicting rulings.

Because these two holdings disposed of the appeal, the court did not reach the parties’ remaining arguments regarding unconscionability or whether Raymond’s statutory right to trial preference would independently override arbitration.

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Man Indicted for $90M Medical Equipment Medicare Advantage Fraud

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United States Attorney Craig H. Missakian announced criminal charges against an individual for perpetrating a large-scale fraud targeting federal health care funds distributed through the Medicare Advantage program.

Anar Rustamov, a national of Azerbaijan who appears to have entered the United States illegally, was indicted by a federal grand jury and charged with health care fraud for a scheme involving thousands of false claims for medical equipment totaling more than $90 million.

According to the indictment, Rustamov, 38, formerly of Sunnyvale, California and a national of Azerbaijan, was part of a scheme to submit thousands of fraudulent claims to Medicare Advantage Organizations (“MAOs”) on behalf of unsuspecting beneficiaries for medical equipment such as blood glucose monitors and orthotic braces.  

The indictment alleges that Rustamov, from October 2024 through June 2025, executed a scheme through an entity Rustamov created, Dublin Helping Hand, to submit large volumes of claims to MAOs offering Medicare Part C benefit plans.  The indictment alleges the scheme sought reimbursement of more than $90 million for medical equipment that was not provided, not needed by patients, and not authorized by a medical provider.  The listed patients were unaware that Rustamov and others were submitting the claims, and the referring medical provider listed on the submissions did not authorize the claims, according to the indictment.  The defendant is at large.

Rustamov remains at large (a fugitive). No arrests have been reported, and authorities are seeking him.

This appears to be a standalone case based on available public information, with no named co-conspirators or additional arrests announced as of March 23, 2026. Details come primarily from the official DOJ press release and contemporaneous reporting; no public court docket or full indictment text is yet widely available beyond these summaries.

United States Attorney Craig H. Missakian added that when “the Administration declared a War on Fraud, it meant to target exactly this kind of conduct. Rustamov participated in a scheme to steal nearly $100 million in taxpayer funds from a program intended to help those who truly need medical care.”

The case is being prosecuted by Assistant U.S. Attorney Maya Karwande with the assistance of Lynette Dixon.  The prosecution is the result of an investigation by the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.

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March 16, 2026 – News Podcast

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Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Court Strikes $1M Worker’s Punitive Damages for Lack of Evidence. DOI, Consumer Watchdog and State Farm Reach Settlement. Man To Serve 7 Years for Threatening to Kill Orange County Judge. Owners of SoCal Towing Companies Arrested for $6M Comp Fraud. DWC posts proposal to update ADA accommodation regulations. Quiet Knee Protocol – Less Is More After Surgery. Insurance Carriers May Face Private Credit Meltdown Risk. Medicare Advantage Overpayments Inflate Premiums for All.

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EEOC Rescinds 2024 Enforcement Guidance on Workplace Harassment

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On April 29, 2024, the EEOC published its Enforcement Guidance on Harassment in the Workplace – the first update to the agency’s harassment guidance since 1999. The guidance replaced five prior guidance documents issued between 1987 and 1999 and was approved by a partisan 3-2 vote. The guidance was a sweeping, roughly 90-page document that addressed harassment across every protected characteristic under federal EEO law.

The next year, on January 28, 2025, EEOC Acting Chair Andrea Lucas rolled back much of the EEOC’s Biden-era guidance related to gender identity discrimination and harassment, aligning with President Trump’s Executive Order 14168 signed on Inauguration Day. However, Lucas could not formally rescind guidance that had been previously approved by a majority vote of the Commission, and she was limited to removing certain materials from the EEOC’s internal and external websites and other public documents. At that time, the EEOC lacked a quorum, so a formal rescission vote was not possible.

Along the way, the State of Texas and the Heritage Foundation sued to enjoin the guidance, arguing it was contrary to law, arbitrary and capricious, and in excess of the EEOC’s statutory rulemaking authority. In the case of Texas v. Equal Employment Opportunity Commission, No. 2:24-CV-173 (N.D. Tex. May 15, 2025) a federal district court in Texas agreed, and struck down portions of the 2024 guidance addressing bathroom, dress, and pronoun accommodations, finding the EEOC had exceeded its statutory authority by expanding the definition of “sex” beyond the biological binary.

Following up on the announced Andrea Lucas roll back, on January 22, 2026, the EEOC officially voted 2-1 along party lines to formally rescind its 2024 Enforcement Guidance on Harassment in the Workplace in its entirety. Chair Lucas and Commissioner Brittany Panuccio (confirmed in October 2025, restoring the quorum) voted for rescission, while Democratic Commissioner Kalpana Kotagal dissented.

It had been anticipated that the EEOC might limit the rescission to portions addressing sexual orientation and transgender status, but the Commission voted to rescind the guidance in its entirety – including sections on race, color, pregnancy, disability, and other protected categories that were largely uncontroversial. Some employment law commentators have theorized that the Trump EEOC chose a complete rescission because it would be easier than making piecemeal edits, and that any replacement guidance might emphasize religious-based harassment and so-called “reverse” harassment.

The rescission does not amend Title VII itself or overturn existing Supreme Court precedent, including the Bostock v. Clayton County, Georgia, 590 U.S. 644 (2020) decision holding that Title VII prohibits discrimination based on sexual orientation and gender identity.

The guidance was nonbinding and provided stakeholders with information on how the EEOC planned to enforce the law – it did not change employers’ underlying legal obligations. Employees can still pursue harassment claims, courts interpret the law independently, and state and local anti-discrimination laws remain unaffected.

California’s primary anti-discrimination and anti-harassment statute is the Fair Employment and Housing Act (FEHA), codified at Government Code § 12900 et seq. FEHA is one of the most expansive employment civil rights laws in the nation, and it operates entirely independently of the EEOC’s guidance. The EEOC’s rescission does not alter any California employer’s obligations under FEHA.

FEHA does not rely on judicial interpretation to extend protections to gender identity and sexual orientation – they are expressly listed in the statute. California law prohibits workplace discrimination and harassment based on gender identity, gender expression, sexual orientation, marital status, sex/gender (including pregnancy, childbirth, breastfeeding and related medical conditions), reproductive health decisionmaking, race (including traits associated with race, such as hair texture and hairstyle), religion (including religious dress and grooming practices), national origin, age, disability, medical condition, genetic information, military or veteran status, and other protected characteristics.

The consensus among employment law practitioners is that while the federal enforcement landscape has shifted significantly, employers should not treat the rescission as a green light to relax their anti-harassment programs.

The rescission has prompted federal lawmakers to introduce legislation – such as the BE HEARD Act of 2026 – that would amend Title VII to expressly include sexual orientation, gender identity, sex stereotypes, sex characteristics, and pregnancy in the definition of sex.

In practical terms, employment lawyers advising California employers are counseling them to maintain their existing anti-harassment policies, training programs, and complaint procedures without any weakening in response to the EEOC’s action – because California law independently requires everything the EEOC guidance recommended and more.

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FDA Gives “Breakthrough” Status to AI Chatbot for Surgical Recovery

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On March 3, 2026, a San Francisco company called RecovryAI announced that the FDA has granted Breakthrough Device Designation to its AI-powered “Virtual Care Assistants” – software designed to guide patients through recovery after joint replacement surgery.

The announcement, which coincided with the company’s emergence from more than two years of stealth development, signals a potentially significant shift in how post-operative orthopedic care is delivered and documented.

The product works like this: after a total knee or hip replacement, the surgeon prescribes the Virtual Care Assistant to the patient. During the first 30 days of recovery at home, the AI checks in with the patient twice daily about sleep, activity levels, diet, pain, and other recovery milestones. It provides guidance drawn from established clinical protocols. When it detects that a patient’s recovery is deviating from expected patterns – signs of possible infection, blood clot, wound complications, or functional decline – it escalates to the care team with the relevant clinical context.

The FDA’s Breakthrough Device Designation is reserved for technologies that address serious conditions and show potential to meaningfully improve existing standards of care. The designation does not mean the product is approved – it means the FDA has agreed to provide the company with earlier and more frequent regulatory engagement as it moves toward authorization. RecovryAI is pursuing clearance under a Class II pathway for patient-facing Software as a Medical Device, and is currently running a multi-site pivotal study at locations including OrthoArizona, one of the nation’s largest orthopedic practices, and Mercy Medical Center in Baltimore. If ultimately authorized, the FDA’s decision would create an entirely new device classification for patient-facing AI systems in clinical care.

The timing is significant. More than 80 percent of surgical procedures in the United States are now performed on an outpatient basis, meaning patients are sent home during the critical early window when most post-surgical complications develop. Joint replacement patients – many of them workers’ compensation claimants recovering from workplace injuries – are increasingly navigating that early recovery period without daily clinical oversight. The traditional model of a follow-up visit at two weeks or four weeks leaves a substantial gap that this technology is designed to fill.

Why this matters: If this class of technology gains FDA authorization and enters clinical practice, it will generate a continuous, timestamped record of a patient’s post-surgical recovery – what the patient reported about their pain, activity, and symptoms, and what guidance they received, twice a day for 30 days. That is a data trail that did not previously exist in most cases.

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Janitorial Company Arbitration Clause Passes Unconscionability Tests

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Jazmin Ayala-Ventura worked as a janitor for CCS Facility Services–Fresno Inc., a commercial janitorial company, from June 2021 to March 2022.

When she was hired, CCS emailed her links to an online onboarding system where she reviewed and electronically signed several company policies, including a five-page “Mutual Agreement to Arbitrate.” The system required employees to scroll through each document before they could click “yes” to agree, and offered the option to view the agreement in English or Spanish. The agreement covered “all claims, disputes, and/or controversies … whether or not arising out of Employee’s employment or the termination of employment,” contained a class action waiver, survived termination of employment, and could only be revoked by a writing signed by both the employee and a CCS human resources representative. CCS agreed to bear all arbitration costs except each party’s own legal fees.

In August 2024, Ayala-Ventura filed a putative class action against CCS alleging a battery of wage-and-hour violations under the California Labor Code – including unpaid wages, missed meal and rest breaks, failure to reimburse expenses, and unfair business practices under Business and Professions Code section 17200.

CCS moved to compel individual arbitration and dismiss the class claims. Ayala-Ventura opposed, arguing the agreement was both procedurally and substantively unconscionable – specifically that its scope was overbroad, it lacked mutuality, and it was indefinite in duration. She relied heavily on Cook v. University of Southern California (2024) 102 Cal.App.5th 312, a Second District opinion that struck down a similar-looking arbitration agreement with USC.

The Fresno County Superior Court granted CCS’s motion. The court found procedural unconscionability was minimal, distinguished Cook on the facts, and concluded the agreement was not substantively unconscionable. It ordered arbitration of Ayala-Ventura’s individual claims, dismissed the class claims, and stayed the case pending arbitration.

Because an order compelling arbitration is generally not directly appealable, the Fifth District Court of Appeal treated the appeal as a petition for writ of mandate and denied the petition on the merits in the published case of Ayala-Ventura v. Superior Court –F089695 (March 2024).

On procedural unconscionability, the court agreed with the trial court that the degree was minimal. The agreement was adhesive in form, and an employee might reasonably fear losing a job offer by declining it. But the agreement was a clearly labeled standalone document (not a buried clause), was available in two languages, used legible formatting, and there was no evidence of deception or time pressure.

On substantive unconscionability, the court addressed each of Ayala-Ventura’s arguments. First, on overbreadth, the court acknowledged the agreement’s language could be read to reach claims unrelated to employment, but applied Civil Code section 1643 to construe the ambiguity in a way that rendered the agreement lawful – limiting it to employment-related claims. Even under Ayala-Ventura’s broader reading, the court found the agreement distinguishable from Cook because CCS is a janitorial services company, not a sprawling university with hospitals and stadiums, making the prospect of wide-ranging non-employment claims far less realistic.

Second, on duration, the court found that the agreement’s survival clause was not unconscionable in context, again because CCS’s limited operations made the concern about perpetual exposure largely speculative.

Third, on mutuality, the court found the agreement sufficiently bilateral: unlike the Cook agreement, CCS’s version expressly bound the company’s related entities and limited claims against employees and agents to acts taken in their capacity as such. Both employer and employee were subject to arbitration on equivalent terms.

Finally, the court addressed stare decisis. It clarified that all published Court of Appeal decisions bind all superior courts statewide – the trial court was wrong to suggest Cook was not binding simply because the Fifth District had not yet cited it. However, the court confirmed that trial courts may fairly distinguish binding precedent on the facts, and the Fifth District itself found Cook factually distinguishable for the reasons discussed above.

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