Currently, California has the highest unemployment rate in the nation. The Bureau of Labor Statistics reports the California unemployment rate at 5.3% as of February 2024. The unemployment rates shown are a percentage of the labor force.

Meanwhile its unemployment insurance trust fund is empty, relying on nearly $20 billion in loans from the federal government. By contrast, 26 states opted out of pandemic unemployment programs before the 2021 deadline and many of them are solvent and have a surplus, such as Alabama and Utah.

By contrast, 26 states opted out of pandemic unemployment programs before the 2021 deadline and many of them are solvent and have a surplus, such as Alabama and Utah.

The Golden State is facing an impending fiscal earthquake. Since families and businesses are already fleeing the state in record numbers, straining businesses with higher taxes to refill the unemployment insurance trust fund will only make people run away faster. Therefore, California cannot tax its way out of this problem.

The State of California finally published its fiscal year 2022 audited financial statements on March 15, 2024, 350 days later than the March 31, 2023 deadline required by the municipal bond market and the federal government. Even worse, the tardy audit revealed that California had overstated its “Net Position” by about $29 billion.

The FY 2022 filing delay of 350 days represents a slight improvement from FY 2021, reversing a trend toward worsening delays. Further, California State Controller Malia Cohen set out a goal of getting back to timely financial reporting by FY 2025. As she stated in her submittal letter attached to the newly released FY 2022 ACFR:

“The SCO [State Controller’s Office] will continue to work earnestly toward the goal of publishing the 2024–25 ACFR in March 2026. The SCO’s statewide ACFR process improvement initiative will increase efficiencies and data quality to advance the fiscal integrity of the state into a position to support our continued economic growth. These efforts include establishing an ACFR compilation governance structure, streamlining manual processes, and optimizing technology. The SCO will build upon our work with partner agencies to provide departments the technical assistance and resources needed to accurately and timely submit financial reports.”

Information technology problems also plague the state’s Economic Development Department (EDD), which is still struggling to address pandemic-​era unemployment insurance fraud. The state auditor had to give California a qualified audit opinion because:

“The Employment Development Department had inadequate internal control over its financial reporting for federally funded unemployment insurance (UI) benefits, including not properly estimating the total population of ineligible payments. As a result, the department was unable to provide complete and accurate information for certain accounts within the federally funded portion of the UI program. We were therefore unable to obtain sufficient and appropriate audit evidence to conclude that the department’s balances regarding 100 percent of Other Liabilities, 11 percent of Intergovernmental Revenues, and 12 percent of Health and Human Services Expenditures within the Federal Fund are free from material misstatement.”

The California State government was obliged to add $29 billion of net liabilities to its balance sheet to recognize the amount of improper UI payments that may have to be remitted back to the federal government.

Bureau of Labor Statistics found that California was one of the easiest states to access unemployment insurance during the pandemic, with 83% of all applicants (about a tenth of California adults) successfully receiving benefits. Research shows that recipients are likely to wait to get back to work until just before these benefits run out.

According to a recent article in Forbes, in “healthcare, the presence of AI is clearly evident. From optimizing data processing, enhancing patient experience and aiding in medical evaluation and diagnosing, the uses of AI are continuously being tested and expanded.”

At the forefront of AI’s revolution in healthcare is a new executive in the C-suite: the chief AI officer. As this role takes shape, healthcare leaders should be looking closely at the ways AI can be harnessed to responsibly drive patient satisfaction and business objectives.

From saving time to minimizing errors and staying on top of patient communication – a key element of patient satisfaction – chief AI officers should be guiding the ways technology can streamline and automate routine tasks. Through harnessing robotic process automation (RPA), organizations can see significant cost-savings, increases in claims processing, decreases in process times and more. Opportunities to incorporate AI into daily administrative tasks include:

– – Processing insurance claims.
– – Assigning medical and billing codes.
– – Scheduling appointments and coordinating patient reminders/follow-ups.
– – Streamlining employee scheduling.
– – Managing compliance regulation.

Healthcare systems are vast labyrinths that house the clues to how healthcare will continue to evolve. Similar to AI models used in diagnosing that comb through thousands of data sets to quickly identify abnormalities, this technology can also be used to pinpoint trends in how healthy patients are, the services they are utilizing, the ailments they suffer from and how they are interacting with medical professionals. With this data, healthcare executives can engage in forecasting and decision-making for the longevity of their operations and to proactively and holistically approach the healthcare system.

And an article in Modern Healthcare also claimed “As more healthcare organizations adopt artificial intelligence, there’s a newcomer in some C-suites: the chief AI officer.”

According to Becker’s Hospital Review, Cleveland Clinic is hiring for a chief artificial intelligence officer, hoping to harness the power of the growing technology for healthcare. The new chief AI officer will guide the integration of the technology across Cleveland Clinic, “ensuring AI innovations align with our vision and objectives,” according to a March job posting.

“Our ambition is to embrace and leverage AI to transform not just the Cleveland Clinic but the industry at large,” the health system wrote.

A handful of other health systems have named AI chiefs in recent months, including Mayo Clinic Arizona, UC San Diego Health and Atlanta-based Emory Healthcare.

At Cleveland Clinic, the chief AI officer will work closely with other C-suite executives, as well as IT, data science and clinical leaders and build a team of AI specialists, data scientists and analysts. The health system is looking for someone with a master’s or PhD in computer science, AI, data science or a related field. The hourly pay ranges from $125.61 to $257.52, or about $261,000 to $537,000 annually.

Despite fears that artificial intelligence would kill jobs, the technology has helped create the “hottest new role in corporate America”: the chief AI officer, The New York Times reported Jan. 29.

“It helps to have a coordinating function with the depth of expertise,” Richard Gray, MD, CEO of Mayo Clinic in Arizona, told the newspaper. “We’re really trying to foster some of these data and AI capabilities throughout every department, every division, every work group.”

In 2023, 122 chiefs or vice presidents of AI joined a forum on company review site Glassdoor, compared to 19 the year prior, The Times reported. However, a 2023 Harvard Business Review article contended that chief AI officers are “set up for failure” because of the risks of the new technology, while LinkedIn’s chief economist told the newspaper that AI-specific job titles will eventually go away because the technology will become so ubiquitous.

Stern Produce Co., an Arizona-based company, operates a wholesale produce distribution center in Phoenix. Since at least 2015, United Food and Commercial Workers, Local 99, has been trying to unionize Stern Produce’s warehouse employees and truck drivers.

In 2015 and 2016, this union filed unfair labor practice charges against Stern Produce, alleging that the company interfered with a scheduled representation election. In 2020, the union again lodged charges against the company. Stern Produce had laid off all its hourly workers at the start of the COVID-19 pandemic and then brought back some drivers when business resumed. The union claimed that Stern Produce had selectively failed to recall pro-union employees and had done so in order to dilute union support in its workforce. These charges were resolved by litigation and/or settlement.

In this current case one of the charges against Stern Produce involves a text message a supervisor sent to delivery truck driver Jose Ruiz. The other charge relates to a written warning a supervisor issued to another driver, Uvaldo Ponce. The evidence with respect to each charge was as follows.

While driving a truck for the company in July 2021, Ruiz parked to take a lunch break and covered the truck’s inward- facing camera. Ruiz’s truck, like virtually all Stern Produce trucks, was equipped with a system transmitting real-time data to the company about the vehicle’s location and operation. The truck was also fitted with one camera with a street view and another with a view of the driver and the truck’s cab. At some point later, Ruiz’s supervisor, transportation manager Nick Barr, sent Ruiz a text message: “Got the uniform guy for sizing bud, and you cant cover the camera it’s against company rules.” When Ruiz saw the message several hours later he replied: “OK Bud muy [sic] lunchtime.” The evidence showed that manager Barr did not know that Ruiz was on a lunch break. There was no set time for drivers to stop for lunch. Ruiz testified that after this solitary incident, manager Barr “never once touched the subject ever again.”

In August 2021, Ponce was at the Stern Produce facility when he heard two fellow drivers, Joe Metzgar and Mohamed Chayko, jokingly call each other “baby.” Ponce told Chayko, “you know they kill people like that in your country.” When Chayko asked Ponce to clarify, Ponce replied, “gays.” Chayko then asked Ponce where he thought Chayko was from. Ponce guessed Afghanistan and then Iraq; Chayko told Ponce he was wrong and left the room.

After concluding their investigation, owner Stern and manager Barr consulted with human resources and concluded that because Ponce had insulted Chayko based on his perceived race, ethnicity, and sexual orientation, Ponce’s conduct warranted a written warning. The written warning stated that Ponce’s comments violated “company policy around the use of disparaging or abusive words, phrases, slurs, and negative stereotyping.”

The union filed unfair-labor-practice charges based on these two incidents. The Board’s General Counsel issued a complaint, alleging that Stern Produce had created an impression of surveillance of organizing activities by making Ruiz aware that he was being watched, and that Ponce’s union support motivated Stern Produce’s decision to give him a written warning for a first-time offense.

The Administrative Law Judge sided with Stern Produce. The ALJ found that the message to Ruiz did not create an impression of surveillance, since manager Barr had engaged in “mere observation” in line with “longstanding company policies” about truck cameras. As for the warning to Ponce, the ALJ determined that it had not been motivated by Ponce’s prounion activities. The ALJ found that Stern Produce had issued the warning without knowing if Ponce was still involved with the union, and that the company had acted based on Ponce’s offensive and discriminatory comments, rather than any antiunion animus.

The National Labor Relations Board reversed the ALJ on both issues. Stern Produce Co., 372. N.L.R.B. No. 74, 2023 WL 2913118 (Apr. 11, 2023). Stern Produce’s petition for judicial review by the Court of Appeals for the D.C. Circuit presents the question whether the Board’s conclusions are “supported by substantial evidence on the record as a whole.”

The D.C. Circuit reversed the NLRB and found that the “Board lacked substantial evidence to find that Stern Produce violated the National Labor Relations Act. Stern Produce’s petition for judicial review is therefore granted, and the Board’s decision and order are vacated. The Board’s cross-application for enforcement was therefore denied in the case of Stern Produce Compay Inc., v NLRB – No. 23-1100 (March 2024).

“The Board’s misguided attempt to find a labor-law violation in one text message is ‘the product of a familiar phenomenon’: years ago the Board took an expansive view of the scope of the Act and then, over time, it ‘presse[d] the rationale of that expansion to the limits of its logic.” NLRB v. Int’l Bhd. of Elec. Workers, Loc. 340, 481 U.S. 573, 597 (1987) (Scalia, J., concurring in judgment). The Board then focused its analysis here not on the statutory text – the ‘authoritative source of the law’ – but on its own constructions of (its own constructions of) the Act. Id. at 597-98. The Board extended the Act’s prohibition on ‘coerc[ing]’ employees to first reach acts that ‘reasonably tend’ to coerce, e.g., Blue Flash Express, Inc., 109 N.L.R.B. 591, 593 (1954); then acts that create an impression of surveillance, e.g., Harrington & Richardson, Inc., 136 N.L.R.B. 1095, 1098 (1962); and then ‘out of the ordinary’ actual or perceived surveillance of pro-union activity, e.g., Metal Indus., Inc., 251 N.L.R.B. 1523, 1523 (1980).”

“Relying on that logical progression, the Board here went one step further, asserting that a single communication to a prounion employee referencing a generally applicable policy of employee monitoring fell within Section 8(a)(1)’s ambit as ‘out of the ordinary’ surveillance. That argument, as explained, stretches Board precedent so far that not even ‘fidelity to [the] logic’ of those prior decisions can sustain the Board’s finding.”

The Court of Appeals concluded by commenting “that the Board’s majority and its General Counsel, at least at the time of these proceedings, should have brushed up on the ancient and wise legal doctrine de minimis non curat lex – that is, the law does not concern itself with trifles. Or should not.”

The Contractors State License Board (CSLB), along with the Kern County District Attorney’s Office and California Department of Insurance, recently conducted a successful undercover operation targeting unlicensed contractors.

This sting operation took place in Bakersfield on March 20 and 21 where CSLB cited 12 individuals for allegedly conducting contracting activities without the required license. These offenders were issued Notices to Appear in criminal court and could face legal consequences, including fines up to $15,000 and/or jail time. Engaging in contracting work without a contractor’s licnse is a misdemeanor offense in California.

The individuals targeted during this operation submitted bids ranging from $600 to $6,500 for home improvement projects including fencing, landscaping, plumbing, painting, and concrete work. A California contractor’s license is required to bid or contract for construction work exceeding $500 in value, including materials and labor.

In addition, nine stop orders were issued during the operation, halting work at job sites where contractors failed to provide workers’ compensation insurance for their employees.

Unlicensed contractors apprehended in this operation may also face additional charges for advertising their construction services without the necessary license. It is illegal in California to advertise construction or home improvement work without a valid license in the advertised classification. If unlicensed individuals advertise contracting services, they must explicitly disclose their lack of licensure and cannot bid or contract for work valued at more than $500.

“CSLB is unwavering in our dedication to protect homeowners from the risks posed by unlicensed contractors,” said CSLB Registrar David Fogt. “Our commitment includes providing continuous consumer education on the critical significance of hiring licensed contractors. We urge homeowners to verify a contractor’s license on CSLB’s website before embarking on any construction project in California.”

Unlicensed contractors often use workers from the underground economy, who are paid in cash, and not protected by worker’s compensation policies of insurance. Licensed contractors are required to provide worker’s compensation coverage information to the Contractors State License Board as part of the regulatory process.

Jasmin Vazquez started working for SaniSure through a staffing agency in July 2019. She was hired directly by the company as an at-will employee that November. Her employment was “for no definite period,” and either she or SaniSure could terminate the employment relationship at any time.

As part of her hiring, SaniSure provided Vazquez with onboarding documents, including agreements to “utilize binding arbitration as the sole and exclusive means to resolve all disputes that may arise out of or be related in any way to [her] employment.” Subject to limited exceptions, she agreed that any claim she had against the company would “be submitted to and determined exclusively by binding arbitration.” She also agreed to bring any claim individually, waiving her right to pursue a class or collective action. Changes to these agreements, if any, could be made only in writing.

Vazquez terminated her employment with SaniSure when she resigned in May 2021. Four months later, she negotiated a new employment offer and returned to work for the company. During negotiations the parties did not discuss whether Vazquez would be required to sign arbitration agreements again or whether claims related to her employment would be subject to arbitration. Vazquez’s second stint of employment with SaniSure ended in July 2022.

In October, Vazquez filed a class action complaint alleging that SaniSure failed to provide accurate wage statements during her second stint of employment. She also alerted both SaniSure and the Labor and Workforce Development Agency (LWDA) of her intent to add a derivative action under the Labor Code Private Attorney Generals Act (PAGA) (Lab. Code, § 2698 et seq.).

SaniSure moved to compel arbitration. The trial court denied the motion. All the claims in Vazquez’s complaint arose out of her second stint of employment with SaniSure. But SaniSure failed to show that Vazquez agreed to arbitrate claims arising from that stint of employment.

The court of appeal affirmed in the published case of Vazquez v SaniSure, Inc., -B329219 (April 2024.)

SaniSure contends the trial court should have granted its motion to compel arbitration because it showed the existence of an arbitration agreement covering Vazquez’s second stint of employment. The court of appeal disagreed.

“Here, we cannot say that SaniSure’s evidence was so uncontradicted, so unimpeached, and of such a character that it left no room for a judicial determination that it was insufficient to support the existence of an arbitration agreement governing Vazquez’s second stint of employment. “An arbitration agreement is tied to the underlying contract containing it.” (Moritz v. Universal City Studios LLC (2020) 54 Cal.App.5th 238, 246 (Moritz).) Such an agreement can be revoked “upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.) At-will employment contracts can be revoked upon reasonable notice. (Consolidated Theatres, Inc. v. Theatrical Stage Employees Union (1968) 69 Cal.2d 713, 727, fn. 12.)”

“Vazquez signed arbitration agreements during her first stint of at-will employment with SaniSure. But she revoked these agreements by terminating her employment in May 2021. The causes of action in Vazquez’s lawsuit are based on events that allegedly occurred only during her second stint of employment with SaniSure.”

“Thus, for her claims to be subject to arbitration, SaniSure must show that the parties agreed that the agreements Vazquez signed during her first stint of employment would apply to her second. (See Code Civ. Proc., § 1280, subd. (i) [arbitration agreement can be extended by implied agreement]; see also Litton Financial Printing Div. v. NLRB (1991) 501 U.S. 190, 205- 206 (Litton) [cause of action that arises after contract terminates may be subject to arbitration if arbitration agreement survives termination of the remainder of the contract].)”

“SaniSure has not done so. Vazquez testified that she never agreed that the agreements she signed during her first stint of employment would govern her second. She also said that SaniSure never told her that getting rehired was contingent on agreeing to arbitration. And the documents she signed upon rehiring do not mention arbitration. SaniSure points to no evidence to the contrary. It has thus failed to carry its – ‘almost impossible’ – burden of showing that the trial court erred as a matter of law when it denied the motion to compel arbitration. (Gamboa, supra, 72 Cal.App.5th at p. 166.)”