Coccidioidomycosis, commonly known as Valley Fever, is a fungal infection caused by the fungus Coccidioides. It primarily affects the lungs but can also spread to other parts of the body, such as the bones, skin, and central nervous system.

Coccidioides fungi are found in soil in certain arid and semiarid regions, particularly in the southwestern United States, Mexico, and parts of Central and South America. When the soil is disturbed, such as through construction, farming, or wind, the fungal spores can become airborne and be inhaled by humans and animals.

Ernest Sanchez was a correctional officer for the State of California. He filed a claim for injury to the respiratory system and musculoskeletal system in the form of coccidioidomycosis. The WCJ issued a Findings and Order of March 30, 2021 finding that he did not sustain the injury as alleged.

The WCAB granted reconsideration, rescinded the WCJ’s decision, and return this matter to the trial level for further development of the medical record and analysis in order for the parties, the reporting physician(s), and the WCJ to consider the applicability of Labor Code section 3212.10 in the panel decision of Sanchez-I v State of California – ADJ12021219 (June 2021).

After further proceedings, the WCJ again issued another Findings and Order on March 3, 2023 finding that the valley fever was again not industrial. And again the WCAB panel granted reconsideration, rescinded the WCJ’s decision and issued a new decision reflecting that applicant sustained presumptive industrial injury in the form of coccidioidomycosis in Sanchez-II v State of California ADJ12021219 (May 2023)

The panel cited Labor Code section 3212.10 as authority for this decision which states: “In the case of a peace officer of the Department of Corrections who has custodial or supervisory duties of inmates or parolees … the term “injury” as used in this division includes … pneumonia, … that develops or manifests itself during a period in which any peace officer covered under this section is in the service of the department or unit.” And that “the … pneumonia … so developing or manifesting itself shall be presumed to arise out of and in the course of employment. “

The panel then cited Lee v. State of California (2017) 2017 Cal. Wrk. Comp. P.D. LEXIS 543 [Appeals Bd. panel]; and Thomas v. State of California (2021) 2021 Cal. Wrk. Comp. P.D. LEXIS 62 [Appeals Bd. panel]),as “previous cases in which valley fever has been found to constitute pneumonia.”

In Lee v State of California the panel noted that “The statutory language in section 3212.10 does not identify or designate a specific type of pneumonia nor does it limit the applicability of the presumption to a specific type of pneumonia. If the Legislature had intended to limit the presumption, it would have done so.”

It then quoted from the AME report from AME Gerald Markovitz, M.D. that stated “”Mr. Lee presented today for AME evaluation in the field of internal medicine. He developed a case of primary pulmonary coccidiomycosis [coccidioidomycosis] (Valley Fever). There is a Presumption for pneumonias in Correctional Officers and he developed a pneumonia, so there is no reason to deny industrial responsibility for his Valley Fever.” From this reporting the panel commenced this trilogy of cases equating valley fever as within the definition of “pneumonia” for purposes of the presumption in Labor Code 3212.10 .

In Thomas v State of California, the second case of the trilogy, PQME Paul J. Grodan, M.D., testified that valley fever constitutes pneumonia. “Therefore, applicant had pneumonia that developed or manifested itself during his service in a custodial role at CDCR. The burden thus shifted to defendant to show that applicant did not develop industrial pneumonia.”

Turning then to Sanchez II v State of California, the third case in the trilogy, after citing Lee and Thomas as authority for application of the “pneumonia” presumption in valley fever cases, the panel noted that the burden of proof shifted to the employer.

The record was developed with two short supplemental reports from qualified medical evaluator Jeffery M. Freesemann, M.D. “However, Dr. Freesemann never states, let alone provides substantial medical evidence, that applicant’s valley fever was probably not contracted at work. Rather, he states that the cause of the injury is “impossible to determine.” Defendant thus did not meet its burden of overcoming the statutory presumption.”

Morris & Dickson Co., LLC is a pharmaceutical wholesaler based in Shreveport, Louisiana. It is one of the largest privately held wholesale drug distributors in the country. The company was founded in 1841 by Alexander Dickson and William Morris, and it has been in continuous operation for over 180 years.

It has since become the nation’s fourth-largest wholesale drug distributor, with $4 billion a year in revenue and nearly 600 employees serving pharmacies and hospitals in 29 states.

In October 2017, DEA became aware of the high-volume sales of Oxycodone and Hydrocodone from Morris and Dickson Company to five of the top ten purchasing pharmacies within the state of Louisiana. DEA records indicated that Morris and Dickson Company had not filed any suspicious order reports on any of the pharmacies in question in Louisiana.

A review of the purchases made by these high-volume independent pharmacies showed that these pharmacies were purchasing quantities which were not indicative of the pharmaceutical market. Not only were numerous “independent” retail pharmacies purchasing more Oxycodone and Hydrocodone than the largest chain pharmacies operating within the state, they were purchasing more narcotics than several of the largest chain pharmacies combined within the same zip code. In some instances, DEA noted these “independent” pharmacies were purchasing more than ten times the amount of narcotics the average Louisiana pharmacy purchased per month.

While Morris & Dickson wasn’t the only drug distributor who the DEA accused of fueling the opioid crisis, it was unique in its willingness to challenge those accusations in the DEA’s administrative court. In a scathing recommendation in 2019, Administrative Law Judge Charles W. Dorman said Morris & Dickson’s argument that it has changed its ways was too little, too late.

This month DEA announced it has suspended the DEA Certificate of Registration as a drug distributor pursuant to Title 21, United States Code, Sections 823 and 824. The DEA’s investigation of Morris and Dickson Company determined that the continued registration of this company constitutes a substantial likelihood of imminent danger to public health and safety. This action only applies to the distribution of controlled substances and will not affect non-controlled pharmaceutical drugs distributed by the company.

Morris and Dickson Company received written notice of the factual and legal basis for this action. In addition, they will be given the opportunity for an administrative hearing within the next 60 days. After the hearing, the DEA Acting Administrator will make a final decision on whether Morris and Dickson Company’s registration should be permanently revoked.

DEA Administrator Anne Milgram said in the 68-page order that Morris & Dickson failed to accept full responsibility for its past actions. Milgram specifically cited testimony of then-president Paul Dickson Sr. in 2019 that the company’s compliance program was “dang good” and he didn’t think a “single person has gotten hurt by (their) drugs.”

“Those statements from the president of a family-owned and operated company so strongly miss the point of the requirements of a DEA registrant,” she wrote. “Its acceptance of responsibility did not prove that it or its principals understand the full extent of their wrongdoing … and the potential harm it caused.”

In a statement, the company said it has invested millions of dollars over the past few years to revamp its compliance systems and appeared to hold out hope for a settlement.

“Morris & Dickson is grateful to the DEA administrator for delaying the effective date of the order to allow time to settle these old issues,” it said. “We remain confident we can achieve an outcome that safeguards the supply chain for all of our healthcare partners and the communities they serve.”

The DEA has been highly criticized in the delay it has taken to conclude this investigation.

A.C.R. worked as a bartender at Kolla’s, Inc., a nightclub in Orange County. In 2014, A.C.R. complained to Gonzalo Estrada that she had not been paid wages owed for her previous three shifts of work. Estrada responded by threatening to report A.C.R. to immigration authorities, terminating her employment, and telling her never to return to the club.

In June 2014, A.C.R. filed a complaint against Estrada and Kolla’s with Department of Labor Relations, Division of Labor Standards Enforcement (DLSE), which opened an investigation.

After determining that Estrada’s immigration-based threats and termination of A.C.R. violated California law, DLSE notified Estrada and Kolla’s of proposed remedies, including payment of lost wages to A.C.R., reinstatement of A.C.R.’s previous position, and payment of civil penalties to A.C.R. and DLSE. After Estrada and Kolla’s declined to accept DLSE’s proposed remedies, the Labor Commissioner sued them for violations of the Labor Code, including retaliation in violation of section 1102.5(b).

The trial court entered an order granting in part the Labor Commissioner’s application for default judgment but ruled against the Labor Commissioner on the section 1102.5(b) claim. The court held that the Labor Commissioner did not state a valid cause of action under section 1102.5(b) because A.C.R. reported her complaints to her employer rather than a government agency. The Labor Commissioner appealed.

The Court of Appeal held that the trial court had relied on an outdated version of section 1102.5(b) and that the current version of the law protects disclosures made to one’s employer. The Court of Appeal nonetheless affirmed the trial court’s judgment on the section 1102.5(b) claim, concluding that a private employee’s report of unlawful activity directly to his or her wrongdoing employer is not a protected disclosure under section 1102.5(b).

The Court of Appeal explained that Estrada, as the owner of the nightclub, “was at least aware of – if not responsible for – the non-payment of wages” and that an ” ’employee’s report to the employee’s supervisor about the supervisor’s own wrongdoing is not a “disclosure” and is not protected whistleblowing activity, because the employer already knows about his or her wrongdoing.’ ”

The California Supreme Court reversed and remanded, and held that a protected disclosure under section 1102.5(b) encompasses reports or complaints of a violation made to an employer or agency even if the recipient already knows of the violation. It further concluded that complainant A.C.R. made a disclosure protected by section 1102.5(b) in the case of P. ex rel. Garcia-Brower v. Kolla’s, Inc. – S269456. (May 2023).

The Legislature enacted section 1102.5 in 1984 to provide whistleblowers with protection from employer retaliation. In 2003, in the wake of a “recent spate of false business reports and other illegal activity by Enron, WorldCom and others,” the Legislature amended section 1102.5(b) to include several additional employee protections.

In 2013, the Legislature again amended section 1102.5(b), expanding its protections to include an employee’s disclosure made “to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance.”

The Supreme Court has repeatedly held that section 1102.5(b) “reflects the broad public policy interest in encouraging workplace whistle-blowers to report unlawful acts without fearing retaliation.” (Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 77 (Green); Lawson v. PPG Architectural Finishes, Inc. (2022) 12 Cal.5th 703, 709 (Lawson); Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 287.)

It is undisputed that the employer’s conduct was prohibited by the Labor Code. The question here is whether a report of unlawful activities made to an employer or agency that already knew about the violation was a protected “disclosure” within the meaning of section 1102.5(b).

The Supreme Court concluded that it was, noting that “Applying the Court of Appeal’s reasoning here would result in outcomes contrary to the Legislature’s purpose.”

And it disapproved Mize-Kurzman v. Marin Community College Dist., 202 Cal.App.4th 832 to the extent it is inconsistent with its opinion. Mize-Kurzman rested on federal precedent subsequently abrogated by Congress. In 2012, Congress passed the Whistleblower Protection Enhancement Act of 2012 (WPEA) (Pub.L. No. 112-199 (Nov. 27, 2012) 126 Stat. 1465), an update to the Whistleblower Protection Act (WPA), that “clarif[ied] the broad meaning” of disclosure to correct Federal Circuit precedent that had “wrongly accorded a narrow definition to the type of disclosure that qualifies for whistleblower protection.”

Late Friday, a Santa Clara County jury awarded $2 million to Younes Mchaar, a deaf, low-wage, former FedEx Ground part-time package handler who was repeatedly denied reasonable accommodations and the interactive process at the company’s San Jose facility.

The jury verdict also found that FedEx failed to prevent this discrimination against him despite FedEx Ground having previously been sued by the U.S. Equal Employment Opportunity Commission (EEOC) on behalf of deaf package handlers nationwide.

According to a press release by his attorneys, Mr. Mchaar, who has been deaf since birth, began working at FedEx Ground in 2011 as a part-time package handler in Virginia.

Mchaar alleged in his lawsuit, filed in 2020, that after FedEx in Virginia denied him promotions and proper interpretive services from 2011 to 2017, he moved to the San Jose position – anxious, stressed and frustrated but seeking a better workplace and higher pay.

Mr. Mchaar transferred to the company’s San Jose, California facility in April 2017, anticipating reasonable accommodations to assist in routine communications. But it took until December 2017 for the company to arrange a meeting with him about reasonable accommodations.

At that point, FedEx agreed to provide American Sign Language (ASL) interpreters for all safety meetings and Video Remote Interpreting VRI for daily meetings. Nonetheless, the ASL interpreters were often not present at safety meetings, and the VRI did not even arrive at the facility until June 2018 – after which, it was glitchy.

He also discovered that just as in Virginia, “FedEx promoted and assigned important projects to less-qualified, non-deaf employees,” according to his lawsuit.

After Mr. Mchaar vigorously complained about denied reasonable accommodations, he was written up 10 times in 2 ½ months and proposed for termination, at which point he resigned.

According Mercury News, FedEx said in an emailed statement Tuesday that it disagreed with the verdict and was reviewing its options for an appeal. The firm said it “remains committed to the fair and equal treatment of all team members, including our employees who are deaf and hard of hearing, for whom we strive to provide every opportunity for success.”

Throughout Mchaar’s employment in San Jose, the package-delivery titan had been fighting the U.S. Equal Employment Opportunity Commission in federal court over its treatment of deaf package handlers.

“Shipping giant FedEx Ground Package System, Inc., (FedEx Ground) violated federal law nationwide by discriminating against a large class of deaf and hard-of-hearing package handlers and job applicants for years”, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit it announced.

The EEOC says that FedEx Ground failed to provide needed accommodations such as American Sign Language (ASL) interpretation and closed-captioned training videos during the mandatory initial tour of the facilities and new-hire orientation for deaf and hard-of-hearing applicants. The shipping company also failed to provide such accommodations during staff, performance, and safety meetings. Package handlers physically load and unload packages from delivery vehicles, place and reposition packages in FedEx Ground’s conveyor systems, and scan, sort and route packages.  

The EEOC charges that, in addition to failing to provide communications-based accommodations for mandatory meetings, FedEx Ground refused to provide needed equipment substitutions and modifications for deaf and hard-of-hearing package handlers, such as providing scanners that vibrate instead of beep and installing flashing safety lights on moving equipment.  

The EEOC, after a nationwide investigation, sued FedEx in 2014 (No. 2:15-cv-00256 (W.D. Pa. May 18, 2020) ) under the Americans with Disabilities Act. The agency alleged the company failed to provide reasonable accommodations for deaf and hard-of-hearing package handlers that would let them perform essential job functions, communicate with managers, and participate in meetings. The agency further alleged that FedEx failed to provide flashing lights for safety on motorized moving equipment.

In 2020, to resolve the nationwide lawsuit, FedEx agreed to pay $3.3 million to up to 229 people, and agreed in a consent decree to provide deaf and hard-of-hearing package handlers with live and video American Sign Language interpreting, and scanning equipment with non-audible cues, such as vibration. The company also agreed to put warning lights on motorized equipment such as forklifts.

The company said Tuesday it has fully complied with the terms of the EEOC settlement agreement, which enabled the deal to expire in May 2022.

The lawsuit is Santa County Superior Court Case No. 20CV366270.

Part II of a California Workers’ Compensation Institute research series on low-volume/high-cost drugs used to treat California injured workers identifies three Dermatological drugs, three Opioids, and three Antidepressants that represent a relatively small share of the prescriptions within their therapeutic drug group, but due to high average reimbursements, have become cost drivers, consuming a disproportionate share of the payments.

The report reveals that Dermatologicals were the fourth most prevalent drug category in 2021, with 9.3% of the workers’ comp prescriptions, but ranked second (behind Anti-Inflammatories) in total drug spend, consuming 17.3% of all prescription drug payments. That was up from 12.8% in 2012, which the study ascribes to increased utilization and the emergence of high-priced topical analgesics. Diclofenac sodium topicals jumped from 0.5% of all workers’ comp prescriptions in 2012 to 5.4% in 2021 – fourth among all drugs dispensed that year, and they represented 58.1% of the 2021 Dermatological prescriptions, but with inexpensive generics widely available, their average reimbursement was a relatively low $65, so they consumed only 23.5% of the Dermatological dollars. In contrast, the study notes three other low-volume/high-priced drugs that have become Dermatological cost drivers:

– – Diclofenac sodium and adhesive sheets (dispensed as Xrylix kits, in 2021 these kits accounted for just 0.3% of the Dermatological prescriptions, but with an average payment of $4,126, they consumed 7.2% of the dermatological drug spend).
– – Lidocaine/menthol (this drug was dispensed in various forms, but NuLido gel and Terocin patches were key cost drivers. Lidocaine/menthol represented only 1% of the Dermatologicals dispensed in 2021, but at an average of $1,050 per prescription, it accounted for 6.2% of the Dermatological payments.
– – Diclofenac epolamine (dispensed as Flector patches at an average of $570 per prescription, or as generic equivalents at an average of $577, diclofenac epolamine comprised just 1.7% of the 2021 Dermatological prescriptions, but 5.9% of the payments within the group).

Opioid use in workers’ comp has been falling for more than a decade and with the adoption of Opioid and Pain Management Treatment Guidelines in late 2017 and a Formulary in 2018, Opioids’ share of the prescriptions continued to drop, falling to 9.4% in 2021 (down from 29.4% in 2012), while their share of the total drug spend fell to 5.8% (down from 26.7% a decade earlier). At the same time, the mix of Opioids used to treat injured workers shifted. The study noted three low-volume/high-priced Opioids that have become cost drivers within their group:

– – Buprenorphine, typically used to treat Opioid Use Disorder for patients in Medication-Assisted Treatment plans, in 2021, it accounted for 5.2% of the workers’ comp Opioids, and with an average payment of $363, it consumed 35.4% of the total Opioid reimbursements – more than any other Opioid.
– – Tapentadol HCl, used when other pain medications do not work well or cannot be tolerated, but only available as a brand drug (Nucynta or Nucynta Extended Release) it represented just 0.6% of the Opioid prescriptions, but at $590 per prescription, it accounted for 6.4% of the total Opioid drug spend.
– – Oxycodone, prescribed for moderate to severe pain, is available in a variety of generic and brand formulations, including extended-release and abuse-deterrent varieties. In 2021, 5.9% of Opioid prescriptions were for oxycodone, and at $145 per prescription, it consumed 16.0% of all Opioid payments.

The top four Antidepressants dispensed to injured workers in 2021 represented nearly 2/3 of the Antidepressants used, but all four were relatively low-cost drugs, so they accounted for only 42.5% of the payments in this drug group. In contrast, the study identified three low-volume/high-priced drugs that consumed a disproportionate share of the Antidepressant drug spend:

– – Vortioxetine HBr, used to treat Major Depressive Disorder, remains under patent and is only available as brand-name Trintellex. Available in 5, 10, and 20 mg tablets, this drug carries a black box warning noting an increased risk of suicidal thoughts and behaviors. In 2021, only 1.0% of the Antidepressant prescriptions in California workers’ compensation were for Vortioxetine HBr, but with an average reimbursement of $476, this drug comprised 12.4% of all Antidepressant payments.
– – Desvenlafaxine, an extended-release tablet that comes in various strengths, is used to treat major depression. It is available as a brand drug (Khedezla, Pristiq), with average payments as high as $642 per prescription, but since the introduction of generic versions in 2017, brand versions have declined to 14 to 15% of the prescriptions. Payments for generic desvenlafaxine averaged $58 to $66 from 2019 to 2021, which helped drive down the average reimbursement for this drug. In 2021, desvenlafaxine represented 1.0% of workers’ comp Antidepressants, but the average payment was still $131, so it accounted for 3.5% of the Antidepressant payments.
– – Bupropion HCl is used to treat depression, anxiety, and other mood disorders, and to aid smoking cessation. Available as a brand drug (Wellbutrin, including an extended-release version that tends to be very expensive), or in generic versions, which accounted for 98% of the Bupropion HCl dispensed to injured workers in 2021. Unlike generics, where the average payment declined from $121 in 2012 to $25 in 2021, over that same decade average reimbursements for brand versions of bupropion HCl increased nearly 10-fold from $267 to $2,614. The dominance of generic buproprion HCl has helped contain the total payments for this drug, but the 2% of the prescriptions dispensed as high-cost brand drugs drove the average payment up to $77 in 2021 — more than three times the $25 average paid for generics. As a result, bupropion HCl, which accounted for 7.6% of the Antidepressant prescriptions in 2021, consumed 16.3% of the Antidepressant payments.

CWCI has published more details and analyses on these drugs in a Spotlight Report, Cost-Driver Medications in the Top California Workers’ Comp Therapeutic Drug Groups: Part II, Dermatologicals, Opioids, and Antidepressants. Institute members and subscribers can log on to www.cwci.org and access the report under the Research tab, others can purchase a copy from the CWCI’s online store. Part III of CWCI’s research on low-volume/high-cost medications will focus on medications found in the Musculoskeletal and Ulcer drug categories.