Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Exclusive Remedy Bars Death Claim for Employer’s First Aid. Allstate’s Argument to Avoid Hospital Lien was “Disingenuous”. 9th Circuit Applies SCOTUS Ruling to Affirm Costs in ADA Case. Dismissed Felony Results in City Worker Losing PERS Retirement. Arbitration Fees Must Be Received (Not Just Paid) by Deadline. Sleep Clinic Owner Pleads Guilty to $1 Million Health Care Fraud. Palm Springs Pharmacy Resolves Fraud Claim for $925K. SCIF Alleges it was “Intentionally Mislead” by Dept of Insurance. Hospital Outpatient Costs 58% More than ASCs or Doctors Office. FTC Pushback Over Private Equity Firm’s Medical Practice Buyouts.
Mesa Pharmacy, Mesa Pharmacy, Inc., and Mesa Pharmacy Irvine are admitted to be the same entities. Mesa Pharmacy has been in the workers’ compensation system as a lien claimant who provided compounded pharmaceuticals for many years.
A trial was convened as part of the Special Adjudication Unit to determine the whether John Garbino – who previously plead guilty to Medicare fraud – exercised control of Mesa Pharmacy sufficient to subject them to the stays under Labor Code §4615 and §139.21. Some of the testimony produced at this trial was summarized by the WCJ as follows:
Mytu Do, aka Julie Do, and Benny Leo Birch, aka Ben Birch, met as she was a house flipper and he contracted as her landscaper. Ben Birch has a Federal conviction for Bankruptcy Fraud. At some point they came up with the idea of opening a pharmacy, Pharmacy Development Corporation (PDC), which was the top corporation and all the Mesa iterations were under that umbrella. Ben Birch was the only one who put up any capital for the venture. They formed Mesa in 2005 or 2006, approximately two to three years after Mytu Do’s son, Andrew Do, had graduated from pharmacy school. and he was made the Mesa Pharmacist in Charge.
Although Andrew Do testified that he “formed” the corporation, he had no knowledge of if there was a board or who was on the board, how much money they did or did not make, who actually ran the day to day operations, whether there was stock issued and how he ultimately wound up with Praxsyn stock. He testified at one point that he was the president of Mesa, but then contradicted himself later indicating that this title was “only on paper,” he could not recall ever attending a meeting, seeing a profit or loss statement or doing more than signing checks. Ultimately Andrew Do Ultimately took the Fifth when asked to testify as to whether he ever signed a contract with Trestles Pain Specialists, LLC (TPS) to market the products that he prepared as a pharmacist.
According to Ben Birch, Mesa was introduced to the owners of PAWS Airline in 2013, which had gone “belly up.” Neither Ben Birch, Andrew Do nor Mytu Do were involved in the merger of PAWS and Mesa to become Praxsyn. They just knew they got stock out of the deal. Despite still being “president” of Mesa, Andrew Do did not participate in any of the merger negotiations, did not sign the merger contract.
In 2012 Mesa and a company owned by Garbino, Trestles Pain Specialists, LLC (TPS) entered into their first contracts with each other. None of the other Mesa players were aware of this business arrangement until the contracts were signed. John Edward Garbino plead guilty to a Federal Felony of Healthcare fraud in the fall 2017. Garbino/TPS had contractual business relationships with Ray Riley and David Fish. David Fish was convicted, as part of Premier Medical Management, of Workers’ Compensation kick-back schemes and permanently suspended from participating in the California Workers’ Compensation System. As part of the TPS agreement, Mesa was filling prescriptions through TPS contracts for Andrew Robert Jarminski and Craig Chanin, both of whom were charged with involvement in the Workers’ Compensation kick- back scheme as part of the First Choice and Landmark Medical schemes. This was in addition to Mesa’s already established relationship with Robert Villapania, DC as a referral source for prescriptions. This is the same Villapania who was charged in People of the State of California v. Robert Julian Villapania (Case no. 16CF1360) and who is listed by the DIR on the criminally charged providers list.
Mesa could not handle the amount of business that TPS was bringing in. They needed financing to expand, and that was rectified by obtaining financing through parties such as Javlin III. Garbino discussed Mesa’s business with Javlin and other financers. Andrew Do, although allegedly Mesa’s president, was not involved in any of these meetings. This funding revitalized the Mesa/TPS agreement. Mesa’s sales “exploded” in 2014 as a result of the agreement. Garbino testified that TPS brought in most, if not all, of the sales for Mesa during their relationship. According to Garbino, he, Riley and Fish had a great deal of input into Mesa’s business strategy. Garbino confirmed that he was listed as an officer of Mesa on Exhibit O, but he claimed he didn’t know how his name got there.
Andrew Do testified, then immediately recanted, that Mr. Garbino told him what ingredients should be used in the prescriptions. Mr. Garbino admitted, then immediately recanted, that he had discussions with Mr. Do regarding the compounds and formularies. Garbino did confirm during trial that, as he had testified in his deposition, he had a lot of influence on Mesa – “about one-hundred-million dollars” worth. In 2014 Garbino became aware that Mesa listed him as an officer in filings with the Arizona Pharmacy Board.
PAWS and Mesa merged to become Praxsyn. Garbino was on the board of directors of Praxsyn for about eight months, and it was his testimony that he thought Mesa, PAWS and Praxsyn were all the same, and Mesa business was discussed at the Praxsyn Board Meetings. Garbino testified that he had voting rights in Mesa. Garbino had voting rights in Praxsyn of which Mesa was a wholly owned subsidiary. The ALJ requested that Mesa produce its Board of Director’s Meeting Minutes. Mesa was either unwilling or unable to do so. The court was therefore entitled to, and did, form an adverse inference that those documents contained material adverse to the position of Mesa.
The WCJ found that John Garbino exercised de facto control of Mesa under Labor Code section 139.21, subdivision (a)(3) (section 139.21(a)(3)). The the Findings of Fact was affirmed except it was amended to add an additional exhibit in the case of Melvin Garcia Galdames v Vinyl Technology Inc., -SAU9997873 (September 2023)
After review of the record, based upon that evidence the WCAB panel found that Praxsyn Corporation was not merely a separate parent corporation to Mesa Pharmacy, but rather, that Mesa Pharmacy was the alter ego of Praxsyn Corporation, i.e., that they were one and the same.
The panel also found that as a director of Praxsyn Corporation, Garbino “controlled” Mesa Pharmacy under Labor Code section 139.21, subdivision (a)(3) as an “officer or director.”
The Center for Medicare & Medicaid Innovation (CMMI) was created by the Affordable Care Act (ACA) in 2010. It conducts pilot programs, known as models, that test new ways to deliver and pay for health care in Medicare, Medicaid, and the Children’s Health Insurance Program, with the goal of identifying approaches that reduce spending or improve the quality of care.
In this new report, the Congressional Budget Office presents findings from its analysis of CMMI’s activities during the first decade of operation and uses those findings to update its projections of CMMI’s effects on federal spending. The report explains changes to CBO’s analytic method based on those findings and discusses the agency’s revised approach to estimating the effects of legislative proposals that would change CMMI’s models or operations.
CBO previously estimated that CMMI’s activities would reduce net federal spending but now estimates that they increased that spending during the first 10 years of the center’s operation and will continue to do so in its second decade.CBO currently estimates that CMMI’s activities increased direct spending by $5.4 billion, or 0.1 percent of net spending on Medicare, between 2011 and 2020.1
Specifically, CMMI spent $7.9 billion to operate models, and those models reduced spending on health care benefits by $2.6 billion. The estimates reflect CBO’s review of published evaluations of 49 models initiated over CMMI’s first decade as well as corresponding historical budget data.
By contrast, in 2010, when the ACA was enacted, CBO projected that CMMI would produce net savings over the 2010-2019 period. Extending that earlier approach to the 2011-2020 period, which spans the first full decade of CMMI’s operation, yields an estimated net reduction of $2.8 billion in federal spending, or 0.05 percent of net spending on Medicare during those years. That estimate reflects a projection that CMMI’s models would lower spending on benefits by $10.3 billion, more than offsetting the $7.5 billion that CMMI would spend to operate those models.
Looking ahead, CBO currently projects that CMMI’s activities will increase net federal spending by $1.3 billion, or 0.01 percent of net spending on Medicare, over the center’s second decade, which extends from 2021 to 2030. If CBO used its 2010 approach instead, it would estimate net savings of $77.5 billion, or 0.8 percent of net spending on Medicare, in the second decade of the center’s operation.
The difference between CBO’s current projections for the second decade and projections using its 2010 approach largely reflects an update in the agency’s expectation about the rate at which CMMI will identify and expand models that reduce spending. For the period spanned by CBO’s current baseline projections, 2024 to 2033, CBO projects that CMMI will increase net federal spending by less than $50 million.3
CBO’s current projections for CMMI’s second decade draw on the net increases in spending that occurred during the center’s first decade of operations and also reflect the expected accumulation of savings in the second decade from both previously and newly certified models. CBO’s findings about the budgetary effects of CMMI’s activities over the first decade and its updated projections are subject to considerable uncertainty.
In estimating the budgetary effects of legislation that would change CMMI, CBO evaluates each proposal individually. In general, legislative proposals fall into one of three categories: changes to specific models, modifications to the parameters within which CMMI operates, and repeal of CMMI’s statutory authority and rescissions of the agency’s funding. CBO’s estimates reflect its overall view of CMMI’s effects on federal spending for both administrative operations and benefits.
CBO will continue to monitor CMMI’s activities and will refine its approach as new information becomes available.
In May 2020, foreshadowing this appeal, the Attorney General of California, joined by city attorneys of the cities of Los Angeles, San Diego, and San Francisco, brought a civil action on behalf of the People of the State of California that alleged Uber and Lyft violated the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) (UCL) by misclassifying their California ride-share and delivery drivers as independent contractors rather than employees, thus depriving them of wages and benefits associated with employee status.
The People sought, and the trial court entered, a preliminary injunction prohibiting Uber and Lyft from misclassifying their drivers as independent contractors in violation of Assembly Bill 5. The Court of Appeal affirmed in an October 2020 opinion (People v. Uber Technologies, Inc., 56 Cal.App.5th 266) .
Following the passage of Proposition 22, which altered the standards for determining whether app-based drivers are independent contractors (Bus. & Prof. Code, § 7451), the People and Uber and Lyft stipulated to dissolve the preliminary injunction, which had been stayed since it was entered. The People’s operative first amended and supplemental complaint clarifies that the People seek injunctive relief to the extent Proposition 22 is unconstitutional or otherwise invalid.
In August 2020, the Labor Commissioner filed separate actions against Uber and Lyft, pursuant to her enforcement authority under the Labor Code. (E.g., Lab. Code, §§ 61, 90.5, 95, 98.3, subd. (b).) The Labor Commissioner alleges Uber and Lyft have misclassified drivers as independent contractors and have thus violated certain Labor Code provisions and wage orders. The Labor Commissioner seeks injunctive relief, civil penalties payable to the state, and unpaid wages and other amounts alleged to be due to Uber’s and Lyft’s drivers, such as unreimbursed business expenses.
The People’s action and the Labor Commissioner’s actions were coordinated (along with other cases not involved in this appeal) as part of Uber Technologies Wage and Hour Cases.
Uber and Lyft filed motions to compel arbitration in the People’s action; and filed similar motions in the Labor Commissioner’s actions, to the extent they seek remedies that Uber and Lyft characterize as “driver-specific” or “individualized” relief, such as restitution under the UCL and unpaid wages under the Labor Code. In their motions, Uber and Lyft relied on arbitration agreements they entered into with drivers.
The trial court denied the motion, and the Court of Appeal affirmed in the published case of In re Uber Technologies Wage and Hour Cases -A166355 (October 2023).
Uber and Lyft contend the arbitration agreements they entered into with their drivers require that portions of the civil enforcement actions brought by the People and the Labor Commissioner be compelled to arbitration.
The trial court correctly concluded there is no basis to compel arbitration here because the People and the Labor Commissioner are not parties to the arbitration agreements Uber and Lyft entered into with their drivers. Uber and Lyft contend arbitration nevertheless should be compelled on the basis of either (1) federal preemption or (2) equitable estoppel.
The Court of Appeal disagreed. The United States Supreme Court has emphasized that, while the FAA embodies a strong federal policy in favor of enforcing parties’ agreements to arbitrate, that policy is founded on the parties’ consent, and there is no policy in favor of requiring arbitration of disputes the parties have not agreed to arbitrate. (Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. __, __ [142 S.Ct. 1906, 1918].
“We reject Uber’s and Lyft’s suggestion that the People and the Labor Commissioner should be bound because they allegedly are mere proxies for Uber’s and Lyft’s drivers.” … “The relevant statutory schemes expressly authorize the People and the Labor Commissioner to bring the claims (and seek the relief) at issue here. (Bus. & Prof. Code, §§ 17203, 17204, 17206).
“The order denying Uber’s and Lyft’s motions to compel arbitration of, and to stay, the People’s and the Labor Commissioner’s actions is affirmed.”
A federal grand jury has charged a doctor who operated clinics in Westminster and Garden Grove with defrauding a COVID-19 program for uninsured patients by submitting more than a quarter billion dollars in claims – ultimately receiving about $150 million in payments – for services not covered under the program or simply not provided.
Anthony Hao Dinh, 64, of Newport Coast – a licensed doctor of osteopathy who was an ear, nose and throat specialist, as well as a facial plastic surgeon – was charged in an 18-count indictment with defrauding the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program.
Dinh was initially charged in this case in a criminal complaint filed April 10. The new indictment this month significantly expands the case by increasing the total amount of fraudulent claims allegedly submitted to HRSA, adding money laundering charges and further allegations about other schemes to defraud pandemic relief programs, and charging Dinh with obstructing the government’s investigation into improper health care billing.
The indictment charges Dinh with 12 counts of wire fraud, five counts of money laundering (with two of those charges alleging the transfer of more than $11 million to personal stock trading accounts) and one count of obstructing justice. Dinh, who is free on a $7 million bond, is scheduled to be arraigned on the indictment on October 30 in United States District Court in Santa Ana.
This is the largest fraud scheme in the nation targeting the HRSA COVID-19 Uninsured Program uncovered at this time.
Two other defendants charged with Dinh in April also face new charges:
– – Hanna (“Hang”) Trinh Dinh, 65, of Lake Forest, who is Dinh’s sister, has agreed to plead guilty to conspiracy to commit wire fraud and admitted helping submit fraudulent Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) applications that sought more than $260,000 in COVID relief funds; and
– – Matthew Hoang Ho, 66, of Melbourne, Florida, was charged on May 2 in a grand jury indictment with conspiracy to commit wire fraud, wire fraud and money laundering in relation to the PPP and EIDL applications, and he is scheduled to go on trial on February 6, 2024.
In relation to the fraud against HRSA, over the course of about nine months – from July 2020 to March 2021 – Dinh allegedly submitted fraudulent claims for the treatment of patients who were insured, services that were not rendered, and services that were not medically necessary. As a result of these false and fraudulent claims, HRSA made payments to defendant Dinh, through [his medical] practices, in the approximate amount of $150 million.
The Uninsured Program was designed to prevent the further spread of the pandemic by providing access to uninsured patients for testing and treatment. The Uninsured Program was also designed to provide financial support to health care providers fighting the COVID-19 pandemic by reimbursing them for services provided to uninsured individuals.
In relation to the PPP and EIDL program, the indictment alleges that Dinh submitted, or caused to be submitted, approximately 65 fraudulent loan applications that sought nearly $8 million and caused the programs to disburse approximately $2.8 million in funds.
An indictment contains allegations that a defendant has committed a crime. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If he were to be convicted in this case, Dinh would face up to 20 years in prison for the wire fraud and three of the money laundering charges, up to 10 years for two of the money laundering charges, and up to 20 years for the obstruction of justice charge that alleges he submitted false patient records in response to a grand jury subpoena.
The California Workers Compensation Insurance Rating Bureau has released its COVID-19 in California Workers’ Compensation 2023 Update. Key highlights from the report are as follows:
Through July, a total of nearly 324,000 COVID-19 claims have been reported to the Division of Workers’ Compensation. Self-insured employers have reported more than half of the COVID-19 claims, whereas self-insured employer claims make up about one-third of non-COVID-19 claims. More than half of 2022 claims were reported in January during the Omicron surge, after which there was a notable and rapid decline to around 2% of claims.
During the first few months of the pandemic, COVID-19 claims accounted for nearly one in every seven indemnity claims in California. In December 2020, amid the peak of the initial winter surge, nearly one-third of all indemnity claims were attributed to COVID-19. Subsequently, following the vaccine rollout and a significant decline in spring 2021, the proportion of COVID-19 claims began to increase again, with the emergence of the Delta variant and the Omicron variant. This surge peaked in January 2022, with one-third of reported indemnity claims stemming from COVID-19.
Throughout the pandemic, the healthcare sector consistently had the highest proportion of indemnity claims related to COVID-19 within the insured sector. Public administration, which includes some first responders, also saw a significant number of COVID-19 claims. The share of indemnity claims related to COVID-19 has decreased across all industries. Through 2021, Manufacturing held the second highest share of COVID-19 claims among sectors. However, as the economy rebounded late in 2021 and during 2022, the second highest share of claims were from the Accommodation and Food Services sector.
Workers between the ages of 16 and 39 accounted for over half of all COVID-19 claims, a slightly higher proportion than that seen among all indemnity claims for younger workers. Throughout the pandemic, 80% of all COVID-19 death claims have been incurred by workers aged 50 years or older in contrast to less than one-third of all indemnity claims in this age group.
For AY 2022, approximately 70% of incurred losses on COVID-19 claims have originated from Temporary Disability (TD) only claims compared to less than half of the incurred losses on non-COVID-19 claims. A quarter of incurred losses on COVID-19 claims in AY 2022 are on death and PD claims. This marks a significant decrease from AY 2021 when half of the incurred losses on COVID-19 claims at first report (18 months) were related to death and PD claims.
Nearly all indemnity-only claims from AY 2022 have an incurred value below $5,000. While the incurred loss distribution for non-COVID-19 claims remained similar to that of AY 2021, a higher proportion of COVID-19 claims have less than $1,000 of incurred losses. In prior AYs, the shares of COVID-19 claims exceeding $500,000 were several times greater than that of non-COVID-19 indemnity claims. In AY 2022, the shares are similar, indicating a reduced filing of large COVID-19 claims in 2022.
Denial rates on COVID-19 claims have been higher than on non-COVID-19 claims, as on average, only about 8% of non-COVID-19 claims are denied and this has continued throughout the pandemic. Many COVID-19 claims are denied due to the lack of a positive test result for a COVID-19 infection. Generally, denial rates have been higher during the period Senate Bill No. 1159 has been in effect, with its less expansive presumption of compensability than early in the pandemic, when the Governor’s Executive Order was in effect.
Virtually all COVID-19 indemnity-only claims close quickly, as they typically involve only short durations of TD with nearly all claims closed by 18 months. COVID-19 claims with both indemnity and medical on average close more quickly than non-COVID indemnity claims as more have relatively small incurred values and have shorter TD durations.
Both indemnity and medical COVID-19 paid losses have developed less since year-end 2022 than non-COVID-19 claims paid losses. This lower paid loss development of COVID-19 claims has occurred because many AY 2022 COVID-19 claims close quickly and with shorter TD duration than non-COVID-19 claims.
The Labor Commissioner’s Office (LCO) has cited five Kern County Wingstop restaurants and their owner, Clinton Lewis, $3,161,606 for wage theft violations affecting 551 workers.
The LCO opened its investigation in November 2020 after receiving a Report of Labor Law Violation for one of the locations. The investigation revealed that, between 2019 and 2022, five Wingstop locations were each operating as separate corporate entities, although Lewis owned and operated each of them and shared employees between the multiple locations.
Treating each location as a separate employer, Lewis paid the workers the lower minimum wage for small employers with 25 or fewer employees. LCO determined that legally, Lewis’s restaurants were a single employer at the five locations, and the workers should have been paid the higher minimum wage for employers with 26 or more employees.
Workers scheduled to work at more than one Wingstop in one day were denied overtime pay when they worked more than eight hours in a workday or 40 hours in a workweek. Lewis avoided paying missed meal break premiums to workers when scheduling them to work at more than one location.
The employees also lost out on getting paid for off-the-clock work for their time traveling from one worksite to another during the workday.
The LCO’s Bureau of Field Enforcement issued citations to Hot Wing Holdings Group, Inc., The Northwest Bakersfield Wing Company Inc., The East Bakersfield Wing Company Inc., The Bakersfield Wing Company, Inc., The Southeast Bakersfield Wing Company Inc., and Clinton Lewis dba Wingstop, located in Kern County.
The five corporate entities and Lewis, as an individual, are each jointly and severally liable for $190,741 in minimum wage violations, $4,323 for contract wages, $57,312 for overtime, $87,656 for meal premiums, $238,569 for liquidated damages, and $1,307,980 for waiting time penalties for a total of $1,886,581.
The citations also include interest on those penalties totaling $77,124, all of which are payable to the 551 employees. The five corporate entities and Lewis, as an individual, are also jointly and severally liable for civil penalties totaling $1,197,900.
Enforcement investigations typically include a payroll audit of the previous three years to determine minimum wage, overtime, and other labor law violations, and to calculate payments owed and penalties due. When workers are paid less than minimum wage, they are entitled to liquidated damages that equal the amount of underpaid minimum wages plus interest.
In July 2016 Anel Perez filed a civil complaint against Galt Joint Union Elementary School District. which alleged that she was acting as a volunteer for the spelling bee held at River Oaks Elementary School, which is owned or in the possession of the Galt Joint Union Elementary School District.
The complaint alleges that on December 4, 2015, while attending the event, she fell off the school’s auditorium stage and down an adjacent stairway, causing catastrophic injury to her.
The School District filed an answer to the compliant in November 2016, but the affirmative defenses in this initial answer did not include anything regarding the availability of workers’ compensation coverage. In late 2018, the District filed a successful motion for leave to amend its answer to the complaint which added an affirmative defense of the workers’ compensation exclusive remedy.
The litigation was bifurcated, and Phase 1 involved only the applicability of the exclusive remedy defense, and would address if a resolution adopted under Labor Code section 3364.5 applied to the School District, such that Perez’s sole and exclusive remedy would be workers’ compensation.
Dr. Karen Schauer, who testified that she was the superintendent of the “Galt Joint Union Elementary School District.” . Schauer’s testimony and the evidence she presented touched on three key issues: the 1968 adoption of a resolution pursuant to Labor Code section 3364.5 by the governing board of the “Galt Joint Union School District,” the names by which the district identifies itself, and her use of school principals as her designees.
Plaintiff testified she had two children who attended River Oaks Elementary at the time of the accident, and she was a frequent volunteer at the school. She was vice president of the PTA. Plaintiff testified that the PTA president asked her to volunteer at the bee the day before the event. Plaintiff agreed that during the time of the spelling bee and before her fall, she “understood that [she] w[as] under the direction and control of Ms. Yount who was in essence running the spelling bee.”
Lois Yount has worked for “Galt Joint Union Elementary School District” for 20 years. She used to work as a school administrator at River Oaks Elementary. As a school administrator, she would oversee every aspect of the school, including student safety and staff safety, day-to-day happenings, and school functions. She would serve as a leader of instruction, maintenance, and operation. Her direct supervisor, with whom she would communicate on an on-going basis, was the district superintendent.
After conclusion of the Phase 1 trial, the court entered judgment in favor of the District on the ground that a resolution passed under Labor Code section 3364.5 in 1968 by the “Governing Board of Galt Joint Union School District of Sacramento and San Joaquin Counties” for the “Galt Joint Union School District” converted plaintiff’s status to that of an employee under the Act, rendering workers’ compensation the sole and exclusive remedy to compensate plaintiff for her injuries.
The Court of Appeal affirmed the trial court in the published case of Perez v. Galt Joint Union Elementary School District -C092691 (September 2023).
Generally, a person “performing voluntary service[s] for a public agency . . . who does not receive remuneration for the services” is excluded from the definition of “employee” under the Workers Compensation Act. (Lab. Code, § 3352, subd. (a)(9).)
However, under certain circumstances, usually upon the governing board’s adoption of a resolution, volunteers of statutorily identified organizations can be deemed employees under the Act. (See, e.g., Lab. Code, §§ 3361.5-3364.7.) One such exception to the exclusion of volunteers from the definition is contained in Labor Code section 3364.5, and applies “upon the adoption of a resolution of the governing board of the school district” to “person[s] authorized by the governing board of a school district or the county superintendent of schools to perform volunteer services for the school district” who are injured “while engaged in the performance of any service under the direction and control of the governing board of the school district or the county superintendent.” (Lab. Code, § 3364.5.)
In response to the plaintiff’s arguments against application of § 3364.5 the Court of Appeal concluded: (1) that so long as a resolution has been passed at some point by the governing board of a district and not later rescinded, Labor Code section 3364.5 does not require that district board members and staff be aware of the statute at the time a volunteer is injured in order for it to apply; (2) district board members do not need to know about and authorize a specific volunteer’s involvement in a specific activity for the exception to apply; and (3) district board members do not need to directly control and direct a volunteer’s actions for the exception to apply.
“The broad purpose of Labor Code section 3364.5, reflected in the legislative history, reinforces our decision that the statute does not apply just in the narrow circumstances and to the narrow class of volunteers to which plaintiff’s reading would have us apply the statute.”
The U.S. Department of Labor announced that its Occupational Safety and Health Administration awarded approximately $12.7 million in grants to 100 non-profit organizations across the nation to support education and training to help workers and employers recognize serious workplace hazards, employ injury prevention and understand workers’ rights and employers’ responsibilities under federal law.
Funded through the Susan Harwood Training Grant Program, the grants are being awarded in three categories, namely Targeted Topic Training, Training and Educational Materials Development and Capacity Building grants.
“The award of Susan Harwood Training Grants remind us of Dr. Harwood’s important contributions to making our nation’s workplaces safer and healthier for countless U.S. workers,” said Acting Secretary of Labor Julie Su. “Dr. Harwood’s dedication to educating workers and employers continues to inspire those of us at the Department of Labor and those whose organizations will use these grants to help save lives.”
The program’s name and purpose reflect the legacy of the former director of OSHA’s Office of Risk Assessment. In 17 years with OSHA, the late Dr. Harwood was instrumental in developing federal standards that today protect people from workplace hazards, including asbestos, benzene, bloodborne pathogens, cotton dust, formaldehyde and lead.
“These grants are one of our most effective resources for providing training and education to hard-to-reach workers in high-hazard industries. More than a third of the awardees will be conducting training in the south, improving our training footprint in an area with a large, underserved workforce,” said Assistant Secretary for Occupational Safety and Health Doug Parker. “Training should be a key part of ensuring vulnerable workers are in safe and healthy environments and that they feel safe at work.”
OSHA awards grants to non-profit organizations, including community and faith-based groups, employer associations, labor unions, joint labor-management associations, Native American tribes and local and state-sponsored colleges and universities. Target trainees include small-business employers and underserved vulnerable workers in high-hazard industries.
Many of the recipients of fiscal year 2023 Susan Harwood Training Grants will provide training and education in their regions and across the nation. Several of them are in California such as the University of California San Diego ($159,946), Port of San Diego Ship Repair Association ($81,016), Asian Immigrant Women Advocates in Oakland ($55,000), National Day Laborer Organizing Network in Pasadena ($160,000), and Community Services & Employment Training Inc. in Visalia ($160,000),
The complete list of Grant Recipients is available online.
The California Flats Solar Project is a large solar power plant built on part of a former cattle ranch in the southeastern corner of Monterey County. Granite Construction was involved as a subcontractor in the construction of this project.
The Monterey County Planning Department required the primary project contractor to prepare and implement a worker training program about Valley fever before any grading activity. Consistent with these requirements, the owner of the project site created a Valley fever fact sheet, a Valley fever training program, and a Valley fever management plan for the project. The project general contractor, in turn, created a safety plan that identified Valley fever as a potential risk and described methods for mitigating this risk. Granite Construction also discussed Valley fever in safety instructions to its employees.
In May 2017, Cal/OSHA began an inspection of the project worksite, which ultimately centered on the potential exposure of Granite Construction’s employees to Coccidioides, the fungus which causes Valley fever. During their site visits, Cal/OSHA staff did not wear respiratory protection to prevent their own potential exposure to Coccidioides. Nor did they test the site for Coccidioides, though staff assumed that tests were available to determine the presence of the fungus. No evidence in the record shows that any Granite Construction employee contracted Valley fever. Nor does any testimony show that any person who visited the worksite contracted Valley fever.
Cal/OSHA issued a citation to Granite Construction for allegedly violating three regulations. It alleged Granite Construction violated one regulation because it required its employees to wear masks without first providing a medical evaluation to determine their fitness to wear them. And it alleged the company violated two other regulations because it exposed its employees to dust containing a harmful fungus – namely, Coccidioides, the fungus that causes Valley fever – and failed to implement adequate measures to limit this exposure.
After Granite Construction disputed these allegations, an ALJ rejected the Division’s claims. The ALJ reasoned that no credible evidence showed that Granite Construction required its employees to wear masks and no reliable evidence showed that Coccidioides was present at the worksite.
But after the Cal/OSHA petitioned for reconsideration, the Occupational Safety and Health Appeals Board reversed on these issues and ruled for Cal/OSHA. The trial court later denied Granite Construction’s petition for writ of administrative mandate seeking to set aside the Board’s decision.
On appeal from the trial court, the Court of Appeal reversed in the published case of Granite Construction Co. v. Occupational Safety and Health Appeals Bd. – C096704 (September 2023). It agreed with Granite Construction’s claim that insufficient evidence shows its employees were exposed to Coccidioides. But it ejected its additional claim that it allowed (rather than required) its employees to wear masks, finding sufficient evidence supports the Board’s contrary ruling on this point.
Granite Construction challenged the Board’s finding that it violated California Code of Regulations, title 8, section 5144(a)(1) – a finding that was largely premised on the Board’s conclusion that the company exposed its employees to Coccidioides because no evidence showed Coccidioides was present at the worksite.
Over the years, the Board has discussed two competing standards for evaluating whether an employee has been exposed to an atmospheric contaminant within the meaning of this regulation. It established the first standard – the “harmful exposure” standard – decades ago. Under this standard, the Division must show “ ‘[a]n exposure to dusts, fumes, mists, vapors, or gases . . . [o]f such a nature by inhalation as to result in, or have a probability to result in, injury, illness, disease, impairment, or loss of function.’ ”
The Board has since suggested that an alternative standard – the “zone of danger” standard – might be more appropriate in evaluating alleged violations of section 5144(a)(1). Under this alternative standard, the Division must show either that the employees have been or are in the zone of danger or ‘that it is reasonably predictable by operational necessity or otherwise, including inadvertence, that employees have been, are, or will be in the zone of danger.
To date, the Division has yet to decide which of these two standards – the “harmful exposure” standard or the “zone of danger” standard – is the appropriate one in cases involving alleged violations of section 5144(a)(1). It has instead, in each case it has considered these standards, found it unnecessary to decide between the two standards because it concluded that both favor the same result.
In its decision here, the Board noted that the “harmful exposure” standard is the one it has applied in past decisions involving section 5144(a)(1). But at the same time, it noted it might have reason to “overrule” this approach and apply the “zone of danger” standard – which it characterized as its “typical exposure analysis.”
The Court of Appeal concluded that under either standard, the Board’s finding that employees were exposed to dusts containing Coccidioides lacks evidentiary support.
“Here, however, nothing we have found in the record shows that any part of the worksite “present[ed] [a] danger to employees.” The CDC, to be sure, has said Coccidioides is endemic in California. But that does not mean that the fungus is present everywhere in the state (or for that matter, everywhere in Monterey County) – which even Division staff conceded.”
“The Department of Industrial Relations, moreover, has indicated that Monterey County and seven other counties have relatively high rates of Valley fever, with rates over 10 per 100,000 people. But that does not mean that Coccidioides was present (or even likely present) at the worksite here. Nor does it even show a meaningful probability that the fungus was present.”
And although Monterey County and even Granite Construction demonstrated concerns about Valley fever and took steps to limit potential exposure, that too does not show that Coccidioides was actually present. All this evidence instead only shows, with no degree of certainty, that the worksite might have presented a danger to employees because Coccidioides might have been present in the soil. That, however, is insufficient to support the Board’s finding that the worksite was in fact a zone of danger.”