Tag: 2023 News

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.

In 2019 , health insurance giant Humana filed an arbitration claim against Walgreens, a major drugstore chain, alleging that Walgreens had submitted millions of falsely-inflated prescription drug prices for more than a decade. This case arises from Walgreens’ longstanding contracts with Humana to reimburse Walgreens for prescription drugs it dispensed at its pharmacies to people insured by Humana.

The dispute centered on the way that Walgreens calculates the “usual and customary” price of prescription drugs. Humana alleged that Walgreens had been inflating these prices in order to overcharge the insurer. Walgreens denied these allegations and said that it was simply following the terms of its contracts with Humana.

The arbitrator was Elliot Gordon, a retired federal judge. After a lengthy hearing, the arbitrator ruled in favor of Humana and awarded the insurer $642 million in damages.

Walgreens has filed a petition in federal court to vacate the arbitration award, arguing that the arbitrator “rewrote” its contracts with Humana and used a flawed model to assess alleged damages. Walgreens acknowledges that the bar for vacating an arbitration award is high. But they say “it is not insurmountable, however.”

According to the Federal Arbitration Act (FAA), a party can appeal an arbitration award if the original award contains material and prejudicial errors of law of such a nature that it does not rest upon any appropriate legal basis, or is based upon factual findings clearly unsupported by the record; or if the original award is subject to one or more of the grounds set forth in Section 10 of the FAA for vacating an award.

Walgreens also claims that law firm Crowell & Moring should not have been allowed to represent Humana after previously advising Walgreens years earlier on drug pricing matters at the heart of Humana’s 2019 arbitration. Crowell has denied any conflict of interest in representing Humana against the law firm’s former client Walgreens2.

Walgreens last year sued Crowell & Moring in District of Columbia Superior Court to immediately stop the large law firm from representing insurer Humana Health Plan Inc in the arbitration with Walgreens over drug pricing, contending Crowell, as its former firm, has violated its ethical duty. A judge in May 2021 ruled that Walgreens’ push for a preliminary injunction against Crowell belonged in front of the arbitrator. Walgreens appealed, and the drug-pricing arbitration moved ahead with Crowell remaining as counsel to Humana.

Washington, D.C.-based Crowell has denied any conflict of interest in representing Humana against the law firm’s former client Walgreens. A spokesperson for Crowell on Monday in a statement reviewed by Reuters called Walgreens’ ethics claim “meritless” and said the firm was “confident that the arbitrator’s thorough and well-reasoned award will be affirmed.”

Walgreens also argues that the arbitrator’s award is “manifestly unjust” and should be vacated on that ground as well.

Humana has responded to Walgreens’ petition, arguing that the arbitrator’s award should be confirmed. Humana argues that the arbitrator correctly found that Walgreens breached its contracts and that the damages award is supported by the evidence. Humana also argues that the arbitrator did not abuse its discretion and that the award is not manifestly unjust.

The outcome of the case could have a major impact on the pharmaceutical industry and the cost of prescription drugs.If the arbitrator’s award is upheld, it could set a precedent that would make it more difficult for pharmacies to inflate prescription drug prices. This could lead to lower prices for patients and could help to reduce the overall cost of healthcare.

The outcome of the case is also significant because it could impact the way that arbitration is used to resolve disputes in the pharmaceutical industry.

Cedars-Sinai Medical Center operates a nonprofit academic medical center in Los Angeles. Its total workforce exceeds 15,000 employees, including approximately 2,100 doctors and 2,800 nurses. Together, these employees provide medical care to thousands of patients per day and perform related administrative and operational functions.

Deanna Hodges began working for Cedars in 2000. Throughout her tenure, she worked in an administrative role with no patient care responsibilities. Her office was in an administration building Cedars owned about a mile from the main Cedars medical campus, though she occasionally visited the main medical campus in her capacity as an employee. A shuttle bus ran continuously between the main medical campus and the administration building, and many Cedars employees traveled between the two sites on a daily basis.

In 2007, Hodges was diagnosed with stage III colorectal cancer. She stopped working for a year and a half to undergo treatment, which included chemotherapy. The treatment was effective to rid her of cancer but left her with lingering side effects. These included unspecified allergies, a weakened immune system, and neuropathy – damage to the nerves resulting in an ongoing “tingling sensation” in her fingers and toes. None of these side effects limited her ability to perform her job functions, and she successfully returned to work for Cedars in 2009.

As an administrative employee without direct patient contact, plaintiff was under no obligation to get a flu vaccine when she was hired or when she returned from cancer treatment in 2009. This changed in 2017. That September, Cedars announced a new policy requiring all employees, regardless of their role, to be vaccinated by the beginning of flu season. This was the latest expansion to Cedars’s longstanding efforts to limit employee transmission of flu, which had become more urgent in recent years following multiple patient deaths relating to flu.

The expanded 2017 policy aligned with the recommendation of the United States Department of Health and Human Services Centers for Disease Control and Prevention (CDC) “that all U.S. health care workers get vaccinated annually against influenza.”

Her doctor wrote a note recommending an exemption for various reasons, including her history of cancer and general allergies. None of the reasons was a medically recognized contraindication to getting the flu vaccine.

Cedars denied the exemption request. Hodges still refused to get the vaccine. Cedars terminated her. Hodges sued Cedars for disability discrimination. Her complaint contained six causes of action, each alleged as a violation of FEHA or the public policy it manifests.

The trial court granted Cedars’s motion for summary judgment. The court of appeal affirmed in the published case of Hodges v. Cedars-Sinai Medical Center – B297864 (May 2023).

In her appellate briefing she identifies the elements of her prima facie discrimination claim as being those of a claim for physical disability discrimination. Citing Arteaga v. Brink’s, Inc. (2008) 163 Cal.App.4th 327, 344-345, a physical disability case which recites the elements of her prima facie claim as follows: “that she (1) suffered from a disability, or was regarded as suffering from a disability; (2) could perform the essential duties of the job with or without reasonable accommodations[;] and (3) was subjected to an adverse employment action because of the disability or perceived disability.”

Plaintiff argues her cancer history and neuropathy amount to a physical disability because they “make it impossible for her to work as she cannot work as she cannot get vaccinated. Her disabilities limited her ability to safely receive the vaccine.” To be clear, plaintiff admits her cancer history and neuropathy in no way otherwise limited her ability to work in 2017.

In moving for summary judgment, Cedars introduced evidence that plaintiff was not disabled and could not prove she was disabled. It offered official guidance from the CDC and testimony from Dr. Grein that there were only two medically recognized contraindications for getting the flu vaccine. None of the conditions listed on her exemption form were recognized contraindications for getting the flu vaccine.

The court of appeal concluded that “Judgment was proper on plaintiff’s disability discrimination cause of action because she failed to produce evidence sufficient to create a fact issue concerning an essential element of her prima facie case, i.e., her claimed disability or the perception by Cedars of disability. We therefore need not address the other elements of plaintiff’s prima facie case.”

“Even if plaintiff had made a prima facie case for discrimination of any kind (e.g., physical disability, medical condition, or otherwise), summary adjudication of her disability discrimination cause of action would still have been proper because Cedars presented a legitimate, nondiscriminatory reason for her termination, and plaintiff fails to argue the reason was pretextual.”

Elizabeth Castelo was employed by Xceed as its Controller and Vice President of Accounting. In November 2018, Xceed informed Castelo her employment would be terminated effective December 31, 2018. On November 19, 2018, the parties entered into an agreement entitled “Separation and General Release Agreement”, in which Xceed agreed to pay Castelo a severance payment in consideration for a full release of all claims, including “a release of age discrimination claims that she has or may have under federal and state law, as applicable.”

The release extended to all claims known and unknown “arising directly or indirectly from Employee’s employment with [Xceed] [and] the termination of that employment” including (among many other listed claims) “wrongful discharge[;] violation of public policy[;] . . . [and] violation of the California Fair Employment and Housing Act.” The parties agreed to waive the protections of Civil Code section 1542.

Castelo and Xceed signed the Separation Agreement on November 19, 2018. Attached as Exhibit A to the Separation Agreement was a document entitled “Reaffirmation of Separation and General Release Agreement” which was to be signed on the date of her separation, which was December 31, 2018.

It was undisputed Xceed management intended that Castelo would sign the Reaffirmation on the date of her separation. However, Castelo signed it on the same date she signed the main Separation Agreement, on November 19, 2018, and Xceed did nothing to correct that error. She was paid $137,334 for her signing this agreement as of the date of her separation.

Nonetheless Castelo sued her former employer Xceed Financial Credit Union (Xceed) for wrongful termination and age discrimination in violation of the Fair Employment and Housing Act (FEHA)

On October 3, 2019, the parties stipulated the action would be submitted to binding arbitration pursuant to an arbitration agreement executed in 2013. The court then dismissed the action without prejudice but retained jurisdiction to enter judgment on any arbitration award.

The matter was submitted to binding arbitration before Hon. Enrique Romero (ret.). Xceed filed a response to Castelo’s complaint alleging, among other things, Castelo’s action was barred by the release. Xceed also filed a cross-complaint and first amended cross-complaint, asserting claims for (1) breach of the Separation Agreement and Reaffirmation; (2) unjust enrichment; (3) reformation; (4) declaratory relief; and (5) promissory estoppel.

The arbitrator rejected Castelo’s assertion that since the release was signed on November 18, and that she was not wrongfully terminated until December 31, the release violated Civil Code section 1668, which prohibits pre-dispute releases of liability in some circumstances. The arbitrator granted summary judgment in favor of Xceed on the ground Castelo’s claims were barred by a release in her separation agreement.

Castelo moved to vacate the arbitration award, arguing the arbitrator exceeded his powers by enforcing an illegal release. The trial court denied the motion to vacate and entered judgment confirming the arbitration award. The Court of Appeal affirmed in the published case of Castelo v. Xceed Financial Credit Union – B311573 (May 2023).

The parties disagreed as to the proper scope of the court of appeal’s review. “Where, as here, an arbitrator has issued an award, the decision is ordinarily final and thus ‘is not ordinarily reviewable for error by either the trial or appellate courts.’ [Citation.] The exceptions to this rule of finality are specified by statute.

As relevant here, the [California Arbitration Act (CAA)] provides that a court may vacate an arbitration award when “[t]he arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted.”

Castelo contends on appeal that the release, as interpreted and applied by the arbitrator, violates Civil Code section 1668 because it purported to release claims that accrued after Castelo signed the document. Castelo claims that the arbitrator exceeded his authority in giving effect to the illegal release and that this court must review the arbitrator’s and trial court’s decisions de novo.

The court of appeal noted that “Castelo does not claim the entire Separation Agreement and Reaffirmation is illegal. She does not seek to rescind the agreement and does not propose she return the $137,334.00 she received as consideration. Rather, she seeks to invalidate only the release, and only to the extent the arbitrator applied the release to claims that accrued on or after the date of its execution. Castelo’s argument that the arbitrator’s decision is subject to judicial review simply because the release is alleged to be illegal thus fails.”

The arbitrator explained the basis for this conclusion at length. Among other things, the arbitrator reasoned: “[T]he objectively-manifested intent of the Agreement was for Castelo to release all claims as of the date of signature (defined as the ‘Effective Date’ in the Agreement) in exchange for the payment of $5,000.00, and then extend that release through the Separation Date, December 31, 2018, for an additional $132,334.00.”

When the arbitrator then turned to whether the release, as interpreted, violated Civil Code section 1668 because Castelo executed the release before the claim for wrongful termination had fully accrued. “[¶] Even assuming arguendo that Castelo’s claim for wrongful termination did not accrue until her termination on December 31 and that the release affects the ‘public interest,’ this argument gains no traction.”

“The Agreement did not have, as its purpose, the immunization of Xceed from liability for a future violation of law. Rather, it clearly intended to, on December 31, 2018, effect the release of claims which had accrued on or before that date (i.e., an accrued claim for wrongful termination, and any other employment-related claim Castelo could bring). The Arbitrator declines to permit Castelo – who accepted the benefits under the Reaffirmation – to use her mistakenly-premature execution of the Reaffirmation to leverage this statute as a weapon against Xceed.”

Here the court of appeal noted “Castelo has not cited a single case in which section 1668 was invoked to invalidate a release of a claim that was known to the releasor at the time the release was executed and after a dispute had already arisen between the parties, and our review has revealed none.“

The court of appeal concluded “the arbitrator did not commit clear legal error in enforcing the release and the trial court did not err in denying the motion to vacate. The arbitrator’s enforcement of the release did not violate section 1668 because Castelo signed the release after the allegedly discriminatory decision was made and after Castelo had already concluded that she was being wrongfully terminated because of age discrimination.”