Tag: 2022 News

Less than half of the 139,000 licenses physicians in California are actively engaged in providing patient care. Of this number, only 32% are primary care physicians. The distribution of physicians also varies greatly by region with the San Joaquin Valley, Inland Empire and rural areas suffering the greatest shortages.

While a number of initiatives, including loan forgiveness and expanded residency programs, have focused on improving this situation. But it is not expected that there will be enough interested primary care physicians to meet the need for healthcare in California.

One of the top recommendations from the California Health Workforce Commission, representing thought leaders from business, health, employment, labor and government, after it spent a year looking at how to improve California’s ability to meet workforce demands, was to allow full practice authority for Nurse Practitioners.

The California Legislature responded in 2020 by passing AB 890.

A Nurse Practitioner (NP) is a registered nurse (RN) who has additionally earned a postgraduate nursing degree, such as a Master’s or Doctorate degree, and obtained a certificate from a certifying body.

At the state level, the Board of Registered Nursing (BRN) sets the educational standards for NP certification. According to the BRN, an NP is an advanced practice RN who meets BRN education and certification requirements and possesses additional advanced practice educational preparation and skills in physical diagnosis, psycho-social assessment, and management of health-illness needs in primary or acute care.

As a result of their additional training, NPs tend to perform additional functions through standardized procedures than non-advanced practice RNs. NPs also have specific authorization to furnish controlled substances and medical devices under standardized procedures, except that standardized procedures for Schedules II and III must include patient-specific protocols approved by a treating or supervising physician.

The passage of AB 890 ultimately added Business and Professions code section 2837.103 and 2837.104, which provided for Nurse Practitioners who were suitably trained and certified, to perform certain standardized procedures without physician supervision. The new law could not have effect until the BRN provided suitable regulations.

Taking AB 890 a step further toward implementation, this September the California Board of Registered Nursing (BRN) released a Notice of Proposed Action to the California Code of Regulations.by adding sections 1482.3 and 1482.4.

From the standpoint of California worker’s compensation claims, the implementation of this new law will in essence relieve shortages of physicians elsewhere, presumably adding services available for injured workers, and lowering costs for care. It is possible that the labor code could be later amended to define if and how NPs can directly be involved in care.

The Board has not scheduled a public hearing on this proposed action. The Board will, however, hold a hearing if it receives a written request for a public hearing from any interested person, or his or her authorized representative, no later than 15 days prior to the close of the written comment period.

Charges have been dropped against three people accused of defrauding the state’s compensation insurance fund to save more than $127,000 in workers’ compensation insurance premiums.

El Dorado Superior Court Judge Mark Ralphs dismissed the charges on Tuesday during the fourth week of a jury trial.

According to the report by MSN, the ruling came after last-minute evidence surfaced that showed the defendants were acting on the professional advice of a Roseville insurance agency. A representative of the insurance agency advised the defendants in an email that a carpentry company qualified as a new business and thus lower insurance rates from the State Compensation Insurance Fund.

“In light of this new evidence, the People do not believe we can prove the case beyond a reasonable doubt against the defendants,” stated a Sept. 20 memo by El Dorado County Deputy District Attorney Joddie Jenson asking the judge to drop the case.

Troy Williams, 49 of Angel Camp, John Allison, 63, of Rocklin, and Nanci Morman, 68, of Somerset, were charged last May with multiple counts of insurance fraud after a joint investigation by the California Department of Insurance and the El Dorado County District Attorney’s Office.

“This has been a nightmare for me,” said Williams, who suffers from brain cancer. He said the investigation started back in 2018 and has caused constant anxiety while dealing with his medical issues.

Before this month’s trial, Williams said he was offered a plea deal of paying a $127,000 fine and no jail time if he agreed to plead guilty to misdemeanor charges. Otherwise, he faced a multi-year prison term if found guilty. “I am adamant that I am not going to let my own government try to blackmail me into saying I did something I didn’t do,” Williams said in an interview. While he won’t be paying a fine, his legal bills have cost more than $125,000, he said.

Authorities had contended that Williams, the owner of Archer Building Co. in El Dorado Hills, had conspired with John Allison back in 2016 to move his employees to a new company, Allison Development in Roseville, in order to save on worker’s compensation rates.

During a 4-year period, from 2016 to 2020, the three defendants were alleged to have saved more than $127,000 in insurance premiums.

Allison had been a senior employee of Williams at Archer Building Co. Archer had seen its worker compensation rates spiral because of several accidents on construction sites. Morman was the bookkeeper for both companies.

The three defendants had insisted the movement of employees from Archer to Allison wasn’t to save on workers’ compensation rates but to keep several dozen Archer workers including Allison employed in case of Williams death.

Williams in the interview said his business partner Jay Young had died in 2016 and that he was receiving chemotherapy that prevented him from managing his business adequately. He said he also wanted to reduce his workload and not have any direct employees. So. Williams said he continued his business without direct employees, relying on subcontracted workers from Allison Development.

The Department of Insurance and The El Dorado County District Attorney had contended until this week it was all a ploy between the three individuals to save on their workers’ compensation premiums.

In a statement, El Dorado County District Attorney Vern Pierson said defense attorneys for the three individuals did not disclose the email from the insurance broker. Pierson maintained that defense attorneys had the email in their possession the entire time this case was pending, despite repeated requests and an order from the court to provide discovery of their files.  “If they had disclosed this information earlier, we would not have filed charges,” he said. “If they had disclosed this information prior to trial, we would have dismissed.”

But Travis Owens, the lead attorney for the three charged individuals, said he had not seen the email until last week. He said the prosecutor’s office and state fraud investigators had done “an inadequate investigation.” Owens said the email from insurance broker Chad Watts that Allison Development could file for workers’ compensation insurance as a new business, which resulted in lower rates than Archer was paying, was only discovered by bookkeeper Morman in her files in the last few days.

Both officials of Pierson’s office and Owens said that Watts had previously been interviewed as part of their due diligence. But that the prior interviews had not turned up the information or the email that Watts had given the three defendants his professional advice that ended up resulting in lower insurance premiums for Allison Development.

Governor Newsom signed AB 1783, a law inspired by a $2 million bounty that was to be paid to influence the California insurance commissioner, Ricardo Lara, in a transaction involving Applied Underwriters proposed sale. The new law expands California’s lobbying laws to limit this practice.

Companies and interest groups spend hundreds of millions of dollars each year to lobby lawmakers and the governor on issues related to proposed laws and regulations. Most of the money is subject to strict lobbying disclosure rules, including that the people paid to lobby register with the state and that the companies that pay them file regular public disclosures.

An investigation by The Sacramento Bee, however, revealed that loopholes allowed some companies to pay bounties called “success fees” to influence some decisions by state officials without having to report them.

A lawsuit by former California lawmakers Fabian Núñez and Rusty Areias revealed one such payment and provided details on how they work. Nothing in California law required public disclosure of such an incentive. It came to light only because of this publicly accessible civil lawsuit.

The former lawmakers who left public service for private consulting say they were hired by a workers compensation company to convince the Department of Insurance to allow an acquisition deal to proceed. If they succeeded, they say they were promised a $2 million bounty fee.

In their lawsuit, Areias and Núñez’s former firm Mercury say Applied Underwriters and two men seeking to acquire parts of the company hired the former lawmakers in 2019 to help close out the acquisition deal.

Núñez and Areias were tasked with helping the company either secure approval from the California Department of Insurance for the deal or get the department to agree to let the company re-domicile its subsidiary. If they succeeded, they would get $1 million, according to a written contract submitted as evidence in court filings. If they did not, they would not be paid, and the CEO of Applied Underwriters would lose a $50 million deposit he had made contingent on the acquisition deal receiving regulatory approval, according to the lawsuit.

In the suit, they allege that the company and the men they are suing later upped the success fee to $2 million.

Applied Underwriters argued in court filings it does not owe Núñez and Areias money because they did not meet the terms in their contract.

Under existing law, lobbyists are prohibited from charging success fees for achieving a desired outcome for their clients. But because Núñez and Areias’ work wasn’t technically lobbying, they were able to negotiate a bounty fee and would not have to disclose it to the public. Once this was discovered, the scandal attracted much media attention, and more litigation under the Freedom of Information Act by Consumer Watchdog. And ultimately to AB 1783 which claims to limit or put restrictions on this practice.

The Political Reform Act of 1974 was created by California voters when they approved Proposition 9, in 1974. Existing provisions of the PRA impose requirements on lobbyists and lobbyist employers involved in administrative actions, and generally define “administrative action” to mean, among other things, the proposal, drafting, development, consideration, amendment, enactment, or defeat by any state agency of any rule, regulation, or other action in any ratemaking or quasi-legislative proceeding.

Bob Stern, who co-wrote the California lobbying laws approved by voters in 1974, said he doesn’t know how often consultants in Sacramento charge success fees to influence decisions like the one before the state Department of Insurance because there’s no required disclosure.

The new law created by AB 1783 expands the definition of “administrative action” under the Political Reform Act of 1974 to include any decision or approval by the Insurance Commissioner or the Director of the Department of Managed Health Care under these provisions. Both are required to approve certain transactions involving insurers and health care service plans, respectively. The changes in the law appear in Section 82002 of the Government Code.

Numerous legislative attempts were unsuccessfully made over the years to close these loopholes.

One of then, AB 1200 (Gordon) of 2016, would have provided that communicating with state governmental officials in order to influence state governmental procurement, as defined, could result in a person being considered a “lobbyist” under the PRA. It was vetoed by Governor Brown. In his veto message, he stated “[g]iven that the laws regulating state procurement are voluminous and already contain ample opportunity for public scrutiny, I don’t believe this bill is necessary.”

The June 2022 U.S. Supreme Court decision in Viking River Cruises, Inc. v. Moriana – 142 S.Ct. 1906 – was a landmark decision in favor of California employers, on the vigorously contested issue of the right to agree to arbitration of labor code disputes with employees. But many employment law attorneys predicted that California appellate courts would limit Viking River in various ways, and tip the scales back in favor of employees. A new California appellate case partially published this week, may be the first case, of potentially many,in that anticipated scale tip.

Eleni Gavriiloglou brought a civil action against her former employer Prime Healthcare Management. She alleged individual claims for damages based on several Labor Code violations, such as overtime pay etc., and a representative claim for civil penalties for Labor Code violations under the Private Attorneys General Act (Lab. Code, § 2698 et seq.), (PAGA).

Gavriiloglou had signed an arbitration agreement, thus the trial court compelled her to arbitrate her non-PAGA claims and stayed her PAGA claim while she did. The parties selected an arbitrator jointly.The arbitrator found that the alleged Labor Code violations had not occurred.

The trial court then granted judgment on the pleadings against Gavriiloglou on her PAGA claim; it ruled that the arbitrator’s findings established that she was not an “aggrieved employee” within the meaning of PAGA, and therefore that she lacked standing to bring a PAGA claim.

The Court of Appeal reversed and held that the arbitration did not bar the PAGA claim because Gavriiloglou was acting in different capacities and asserting different rights in the partially published case of Gavriiloglou v Prime Healthcare Management Inc., E076832 (September 2022).

Gavriiloglou made four arguments in her favor including that preclusion did not apply because she was acting in different capacities in the arbitration and in the litigation of the PAGA claim. The Court of Appeal did not discuss three of the four, since they said that this argument alone was dispositive of the issue.

Prime cited the U.S. Supreme Court decision in Viking River Cruises, Inc. v. Moriana – 142 S.Ct. 1906 – which they say distinguished between an “individual PAGA claim,” which it defined as a claim for Labor Code violations suffered by the plaintiff employee, and a “representative PAGA claim,” which it defined as a claim for Labor Code violations suffered by other employees. (Id. at p. 1916.) It then held that the Federal Arbitration Act preempts a state-law rule that precludes the arbitration of an individual PAGA claim separately from a representative PAGA claim. (Id. at pp. 1923-1926.).

In Prime’s view, Viking River “explicitly recognizes an individual claim under PAGA . . . .” The Court of Appeal disagreed and responded by saying this “is mere wordplay. What the Supreme Court called, as shorthand, an “individual PAGA claim” is not actually a PAGA claim at all. It would exist even if PAGA had never been enacted. It is what we are calling, more accurately, an individual Labor Code claim.”

Prime also argues that reversing the trial court conflicts with the 2009 California Supreme Court decision in Arias v. Superior Court, 46 Cal.4th 969.  Prime characterizes Arias as holding “that issue preclusion can apply to the result of the PAGA action even as to non-PAGA claims. Arias held that “with respect to the recovery of civil penalties, nonparty employees as well as the government are bound by the judgment in an action brought under the act.” In other words, the PAGA plaintiff’s capacity is not controlling.” The Court of Appeal rejected this argument as well.

The Court of Appeal said that according to the Restatement (Second) of Judgments, section 36(2), “[a] party appearing in an action in one capacity, individual or representative, is not thereby bound by or entitled to the benefits of the rules of res judicata in a subsequent action in which he appears in another capacity.” And “California follows this rule.”

In conclusion the Court of Appeal said “in the arbitration, Gavriiloglou was litigating her own individual right to damages for Labor Code violations, whereas in the present PAGA action, she is litigating the state’s right to statutory penalties for Labor Code violations. It follows that the arbitrator’s findings cannot have preclusive effect.”

On September 15, 2022, the California Labor Commissioner requested publication of the non-published opinion which was originally filed this August. The Court of Appeal agreed that portions of the opinion meet the standard for publication as specified in California Rules of Court, rule 8.1105(c). Hence this case is partially published so that certain provisions become controlling California law.

Gavin Newsom has signed several measures to strengthen California’s cannabis laws, One of the ten cannabis related legislative bills he signed – AB 2188 – might be a significant problem for California employers.

The legislative analysis provided the backstory to this new law. In March 2021, when the State Personnel Board heard a case regarding the dismissal of a CalTrans maintenance worker for testing positive for THC upon his return to duty after a leave of absence. In upholding the Administrative Law Judge’s decision to revoke his termination, the Board ruled that a positive urinalysis test for marijuana, on its own, is not grounds for dismissal. In this case, there was no evidence that the worker was “under the influence of marijuana when he reported for duty or on standby for duty or that he possessed or used marijuana while on duty or on standby.”

The State Personnel Board also found that the test had limited probative value because it could only show marijuana use at some point in time prior to the worker reporting to work. Thus, a positive drug test for off the job and past use of marijuana cannot be a basis for proving employee impairment.

AB 2188 appears to be a solution for what happened in the CalTrans case.

Under the terms of this new law, after January 1, 2024, it will be unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalizing a person, if the discrimination is based the person’s use of cannabis off the job and away from the workplace.

Or to discriminate based upon an employer-required drug screening test that has found the person to have “nonpsychoactive cannabis metabolites” in their hair, blood, urine, or other bodily fluids.

The new law declares that after “tetrahydrocannabinol is metabolized, it is stored in the body as a nonpsychoactive cannabis metabolite. These metabolites do not indicate impairment, only that an individual has consumed cannabis in the last few weeks” And while “there is consensus that an employee should not arrive at a worksite high or impaired, when most tests are conducted for cannabis, the results only show the presence of the nonpsychoactive cannabis metabolite and have no correlation to impairment on the job.”

And there are several exceptions to the application of this new law. It “does not prohibit an employer from discriminating in hiring, or any term or condition of employment, or otherwise penalize a person based on scientifically valid preemployment drug screening conducted through methods that do not screen for nonpsychoactive cannabis metabolites.

But it does not specify what these allowable alternative screening tests might be. Employers will have slightly more than one year to discover this for themselves.

The law “does not apply to an employee in the building and construction trades.” And it “does not apply to applicants or employees hired for positions that require a federal government background investigation or security clearance in accordance with regulations issued by the United States Department of Defense…”

And finally the new law “does not preempt state or federal laws requiring applicants or employees to be tested for controlled substances, including laws and regulations requiring applicants or employees to be tested, or the manner in which they are tested, as a condition of employment, receiving federal funding or federal licensing-related benefits, or entering into a federal contract.”

California NORML was the sponsor of the bill. Supporters of AB 2188 included the California Cannabis Industry Association, the California Employment Lawyers Association and other similar stakeholders. The legislation was opposed by a large number of employer related organizations including the California Chamber of Commerce, the National Federation of Independent Business and many other groups.