Tag: 2024 News

On June 20 the Occupational Safety and Health Standards Board approved an indoor heat standard to protect indoor workers from heat illness. The new regulation will require indoor workplaces to be cooled below 87 degrees Fahrenheit if feasible when employees are present, and below 82 degrees if feasible in places where workers wear protective clothing that restricts heat removal or work in high radiant heat areas.

Back in March, CalMatters reported that the rule was expected to be finally voted into place by the Occupational Safety and Health Standards Board at a meeting in San Diego. But state officials ordered that it be pulled from the agenda after Gov. Gavin Newsom’s administration suddenly withdrew a required stamp of approval, saying it learned the rule would cost state prisons much more money than anticipated.

For state government, the standards board last year estimated the Department of Corrections would need to pay less than $1 million in the rule’s first year and less than $500,000 annually after that to comply. About half of the state’s 1,500 correctional institutions are either already climate controlled or located in areas that won’t be hot enough to trigger the heat rule, the Department of Industrial Relations stated. That was after finance officials told the department in 2021 that it underestimated prison costs; the department said its updated analysis resulted in double the cost to the state.

But State Department of Finance spokesperson H.D. Palmer told CalMatters the finance department received more updated information in recent weeks that costs to the corrections department would be in the billions of dollars instead. He could not explain what could account for such a drastic difference in estimates in just one year, saying “we’ve been trying to get an understanding of that.”

Then on April 18, Cal/OSHA said it planed to pass rules this summer, except for workers at prisons.

As planned, the Occupational Safety and Health Standards Board, on June 20, 2024, approved California Code of Regulations, Title 8, section 3396, “Heat Illness Prevention in Indoor Places of Employment.” The Office of Administrative Law (OAL) has 30 working days to review and approve or deny the proposal. The Standards Board requested that the regulation take effect immediately after OAL approval.

Local and state correctional facilities as well as emergency operations directly involved in the protection of life or property are exempted from the proposed regulation for indoor heat. Cal/OSHA is in the process of developing an industry-specific regulation for local and state correctional facilities to protect their workers from indoor heat hazards. In the interim, for these exempted employers, Cal/OSHA will continue investigating potential indoor heat violations under existing regulations such as the Injury and Illness Prevention Program (Title 8, Section 3203) and Water Supply (Title 8, Section 3363).

Cal/OSHA’s Heat Illness Prevention in Indoor Places of Employment regulation applies to most indoor workplaces, such as restaurants, warehouses, and manufacturing facilities. For indoor workplaces where the temperature reaches 87 degrees Fahrenheit, employers must take steps to protect workers from heat illness. Some of the requirements include providing water, rest, cool-down areas, methods for cooling down the work areas under certain conditions, and training.

Employers may be covered under both the indoor and outdoor regulations if they have both indoor and outdoor workplaces. See the Comparison Chart of Indoor and Outdoor Heat Illness Prevention Standards.

The Occupational Safety and Health Standards Board, a seven-member body appointed by the Governor, is the standards-setting agency within the Cal/OSHA program. The Standards Board’s objective is to adopt reasonable and enforceable standards that are at least as effective as federal standards. The Standards Board also has the responsibility to grant or deny applications for variances from adopted standards and respond to petitions for new or revised standards.

There are more resources for employers and workers on Cal/OSHA’s Heat Illness Prevention web page and the 99calor.org informational website, as well as a Heat Illness Prevention online tool. The advisory includes a toll free number for workers who have questions about heat illness prevention in indoor and outdoor places of employment can speak with a Cal/OSHA representative, 1-833-579-0927, and information on how to file confidential complaints with Cal/OSHA district offices about workplace safety and health hazards.

Governor Gavin Newsom, in partnership with legislative leadership and business and labor groups, announced an agreement on needed reforms to the Private Attorneys General Act (PAGA) that avoids a contentious ballot measure campaign.

Once the legislation reflecting this agreement is passed and signed into law by the Governor, proponents of the PAGA ballot initiative eligible for the November ballot have agreed to withdraw their measure. Here’s what this PAGA reform proposal would do:

Reform penalty structure

– – Encourages compliance with labor laws by capping penalties on employers who quickly take steps to fix policies and practices, and make workers whole, after receiving a PAGA notice, as well as on employers that act responsibly to take steps proactively to comply with the labor code before even receiving a PAGA notice.
– – Creates new, higher penalties on employers who act maliciously, fraudulently or oppressively in violating labor laws.
– – Ensures that more of the penalty money goes to employees by increasing the amount allocated to employees from 25% to 35%.

Reducing and streamlining litigation

– – Expands which Labor Code sections can be cured to reduce the need for litigation and make employees whole quickly.
– – Protects small employers by providing a more robust right to cure process through the Labor and Workforce Development Agency (LWDA) to reduce litigation and costs.
– – Codifies that a court may limit both the scope of claims presented at trial to ensure cases can be managed effectively.

Improving measures for injunctive relief and standing

– – Allows courts to provide injunctive relief to compel businesses to implement changes in the workplace to remedy labor law violations.
– – Requires the employee to personally experience the alleged violations brought in a claim.

Strengthening state enforcement

– – Give the Department of Industrial Relations (DIR) the ability to expedite hiring and fill vacancies to ensure effective and timely enforcement of employee labor claims.

“This package provides meaningful reforms that ensure workers continue to have a strong vehicle to get labor claims resolved, while also limiting the frivolous litigation that has cost employers billions without benefiting workers,” said Jennifer Barrera, President & CEO, California Chamber of Commerce. “We thank Governor Newsom, Senate President pro Tempore McGuire and Assembly Speaker Rivas for navigating this agreement, and we encourage the legislature to pass this package quickly.”

“We are happy to have negotiated reforms to PAGA that better ensure abusive practices by employers are cured and that workers are made whole, quicker,” said Lorena Gonzalez, principal officer of the California Labor Federation, AFL-CIO. “PAGA is an essential tool to help workers hold corporations accountable for widespread wage theft, safety violations, and misclassification. We appreciate the work of the Governor’s office and Legislative Leadership to help us reach agreement with the Cal Chamber of Commerce to protect this innovative law and strengthen labor law enforcement.”

“Today’s agreement is critical to the long-term success of workers and businesses here in the Golden State,” said Senate President pro Tempore Mike McGuire (D-North Coast). “Commonsense reform of PAGA has been discussed for years, and thanks to the collaboration of all sides, including the work of the Governor, this agreement will continue to provide strong worker protections and implement long talked-about reforms. Next steps include working with Speaker Rivas to move legislation forward in the days to come.”

“This agreement is important because it protects working people, who are the real engine behind California’s economic strength,” said Speaker of the Assembly Robert Rivas (D-Salinas). “It also recognizes companies that follow labor laws, and it puts more muscle into enforcement. I grew up watching farmworkers and employers find common ground, so it means a lot to me that so many groups came together and found consensus. This is a hard-earned agreement, and that makes the positive outcomes we’ll see for businesses and workers even better.”

The Labor Commissioner’s Office cited Amazon.com Services, LLC $5,901,700 for violations of the Warehouse Quotas law in two of their distribution warehouses in Moreno Valley and Redlands.

This law requires warehouse employers to provide employees written notice of any quotas they must follow, including the number of tasks they need to perform per hour and any discipline that could come from not meeting the quota.

Amazon failed to provide written notice of quotas. The employer argued they did not need a quota system because they use a peer-to-peer evaluation system.

However, this law defines a quota as work that must be performed at a specified speed or the worker suffers discipline. It also places limits on quotas that prevent compliance with meal or rest periods, use of bathroom facilities, or compliance with occupational health and safety laws. A quota may be illegal if it is not disclosed to workers or precludes employees from exercising these statutory rights.

The Labor Commissioner’s Office began its initial inspection on September 22, 2022. The investigation found there were 59,017 violations for the Moreno Valley and Redlands warehouses from October 20, 2023 to March 9, 2024. Penalties were issued under Labor Code 2699(f), which provides penalties of $100 for each violation.

The Warehouse Worker Resource Center (WWRC) assisted the Labor Commissioner’s investigation. WWRC is a nonprofit organization dedicated to improving working conditions in the warehouse industry in Southern California.

The Warehouse Quota law went into effect on January 1, 2022 pursuant to the provisions of AB 701, which created 13 new sections of the Labor Code (2100 – 2112) regulating the use of quotas by “Warehouse Distributions Centers.The key provisions of this law include:

– – Locations: Facilities covered by the law are defined in Labor Code section 2100 by referring to North American Industry Classification System (NAICS) codes. These include General Warehousing and Storage, Durable Goods Merchant Wholesalers, Nondurable Goods Merchant Wholesalers, and Electronic Shopping and Mail-Order Houses. Section 2100 specifically exempts Farm Product Warehousing and Storage from the warehouses covered by the new law.
– – Employers: The law covers employers with 100 or more employees in a single warehouse or 1,000 warehouse employees in California. Included in staff totals are staffing agency hires if they are under control of the warehouse operator.
– – Disclosure: As of January 1st 2022, employers must provide written descriptions of all quota systems to employees. The details should describe the task and timeframe of quotas and potential repercussions of not meeting a quota. All new hires must receive disclosures at time of employment.
– – Repercussions or Adverse Employment Action: Any employer action that negatively impacts employment, including negative reviews, are considered repercussions. Reduction in pay, reduction in hours, termination, and negative reviews are all adverse employment actions.
– – Quota Limitations: Quotas cannot make it harder for employees to take meal breaks, rest breaks, use the bathroom, or comply with health and safety regulations or standards. Quotas that impact these are illegal.
– – Employee Rights: Employees can request copies of their data for the last 90 days, the quotas they are subject to and records on their performance. Employers have 21 days to comply.
– – No Retaliation: Employers are not to retaliate against request for data, and employers are not to retaliate against employees who fail to meet an undisclosed quota. A penalty of $750 will be applied to employers who do not meet the required data disclosure requests in a timely fashion.

Similar protective laws were adopted by New York and Washington, triggered by the rapid growth of e-commerce during the pandemic. Amazon was a specific example of abuse noted by the Legislative Analysis prepared when AB 701 was introduced.

The Analyst noted ” the National Employment Law Project (NELP) reported that Amazon, Inc., “relies on an extreme high-churn model, continually replacing workers in order to sustain dangerous and grueling work pace demands.” This report further found that workers who can’t keep up with extreme productivity goals are fired or encouraged to quit and many workers leave their jobs due to injuries. Additionally, NELP analyzed publicly available Census Bureau data for five California counties where Amazon fulfillment centers have had a significant presence in the warehouse sector between 2011 and 2017 and concluded that “turnover for all California warehouse workers (including Amazon) grew from 42.1% in 2011 to 83% in 2017.”

Plaintiff Maria Chavez is the widow of Leodegario Chavez Alvarado, who worked for Alco Harvesting, LLC as a foreman and bus driver. Alco provided decedent and other Alco workers housing at the Hotel Santa Maria. The company, 210 Nicholson, LLC, operated the hotel.

Plaintiff filed a wrongful death case against her husband’s employer and alleged her husband died of COVID-19 complications after contracting the disease while working for Alco. Plaintiff claimed that some of the Alco employees were placed in close living quarters that precluded social distancing. Alco was aware such placement facilitated the transmission of COVID-19. Alco was aware such placement facilitated the transmission of COVID-19.

According to the allegations in her second amended complaint it “was no surprise that a COVID-19 outbreak soon began at the Hotel Santa Maria.” Alco and 210 Nicholson became aware of a COVID-19 outbreak at the hotel well before decedent’s viral exposure. The outbreak was unknown to decedent. Alco failed to report the outbreak to the health department, notify its employees, or “implement adequate safety measures or measures to prevent or curb the outbreak.”

Decedent began feeling ill on or about June 26, 2020, and his symptoms “were those associated with a COVID-19 infection.” Decedent immediately reported feeling unwell to his supervisors. Plaintiff alleged that by virtue of their superior knowledge regarding the outbreak, “Defendants knew, even before [d]ecedent, that he had contracted the virus.” Plaintiff further alleged decedent “was unaware that he had contracted COVID-19. However, upon notifying them of his symptoms, Alco and 210 Nicholson had actual knowledge of [d]ecedent’s illness . . . .” Alco nonetheless failed to inform decedent of the outbreak or that his symptoms were that of COVID-19.”

Decedent tested positive for COVID-19 on July 2, 2020, a week after he had reported his symptoms to Alco. On that date, decedent was placed at a Motel 6. Decedent waited for medication to arrive, but none did. On July 7, 2020, he died of COVID-19 complications. Plaintiff alleged that because of the outbreak, decedent “was exposed to COVID-19 and fell ill. Alco’s deliberate concealment of the outbreak and the nature of decedent’s illness resulted in the aggravation of his illness to the point that he was unable to recover and succumbed to the disease.”

The trial court sustained Alco’s demurrer to the second amended complaint without leave to amend. Plaintiff appealed. The Court of Appeal reversed in the published case of Chavez v. Alco Harvesting, LLC -B329282 (June 2024).

Plaintiff argued that her second amended complaint sufficiently pleaded all elements of the fraudulent concealment exception to the workers’ compensation exclusivity rule. The Court of Appeal agreed.

As a general rule, an employee injured in the course of employment is limited to the remedies available under the Workers’ Compensation Act.

An exception exists “[w]here the employee’s injury is aggravated by the employer’s fraudulent concealment of the existence of the injury and its connection with the employment . . . .” (Lab. Code, § 3602, subd. (b)(2).)2 Thus, three elements comprise this exception: “(1) the employer knew that the plaintiff had suffered a work-related injury; (2) the employer concealed that knowledge from the plaintiff; and (3) the injury was aggravated as a result of such concealment.” (Palestini v. General Dynamics Corp. (2002) 99 Cal.App.4th 80, 90 (Palestini); see also Jimenez v. Mrs. Gooch’s Natural Food Markets, Inc. (2023) 95 Cal.App.5th 645, 658.)

The employer must have actual knowledge of the injury; constructive or imputed knowledge is insufficient. (Hughes Aircraft Co. v. Superior Court (1996) 44 Cal.App.4th 1790, 1796.). In Foster v. Xerox Corp. (1985) 40 Cal.3d 306 (Foster), the California Supreme Court analyzed the pleading requirements for the fraudulent concealment exception. The Court recognized the statutory injunction to “liberally construe pleadings with a view to achieving substantial justice between the parties. (Ibid.; Code Civ. Proc., § 452.) ”

Thus, with respect to the first element of the exception, the Court of Appeal concluded that “Construing the pleadings liberally as Foster did, plaintiff’s SAC fairly apprised Alco of the action’s basis – namely, that Alco knew decedent had contracted COVID-19 from his employment and concealed that knowledge from him, thereby aggravating his illness.”

With respect to the second element of the exception, Alco also argues plaintiff does not allege it “fraudulently concealed the alleged massive outbreak with the intent to induce [d]ecedent to continue working for any benefit.” The Court of Appeal disagreed, and said this “argument fails because the intent to extract more labor is simply not a requirement of the fraudulent concealment exception.”

The SAC sufficiently pleaded the final element of aggravation. The SAC alleged a week elapsed between decedent reporting his symptoms to Alco and a positive COVID-19 test. He died five days after that positive test. The SAC alleged “Alco’s deliberate concealment of the outbreak and the nature of [d]ecedent’s illness resulted in the aggravation of his illness to the point that he was unable to recover and succumbed to the disease.” Alco faults the SAC’s references to aggravation as conclusory.

The Court of Appeal responded by saying this “critique ignores Foster’s guidance that we should liberally construe the SAC, which may be pleaded in general terms. (Cf. Palestini, supra, 99 Cal.App.4th at pp. 89-90.)

“In sum, the SAC survives Alco’s demurrer because it states a cause of action under section 3602, subdivision (b)(2).”

From 1944 through the 1970s, Kaiser Cement and Gypsum Corporation manufactured asbestos-containing products at numerous different facilities. By 2004, more than 24,000 claimants had filed product liability suits against Kaiser alleging that they had suffered bodily injury (primarily asbestosis or cancer) as a result of exposure to Kaiser’s asbestos products. Truck Insurance Exchange, is a primary insurer for Kaiser.

Kaiser tendered these claims to Truck, one of several primary insurers that had issued commercial general liability (CGL) policies to Kaiser during this time period. The subsequent litigation has generated multiple appellate decisions that have addressed a wide range of complex questions regarding insurance coverage and policy interpretation.

In 2001, Truck initiated this insurance coverage action to determine its indemnity and defense obligations to Kaiser. Several years later, Truck amended its complaint to add a cause of action for contribution against several of Kaiser’s excess insurers that had issued first-level excess policies to Kaiser for policy years where the directly underlying primary policy had been exhausted.

Relying on the California Supreme Court’s reasoning in Montrose Chemical Corp. of California v. Superior Court (2020) 9 Cal.5th 215 (Montrose III), Truck argued that the excess insurers’ indemnity obligations were triggered immediately upon exhaustion of the directly underlying primary policies. Truck further reasoned that because the excess insurers owed a coverage duty to Kaiser, they were effectively responsible for indemnifying the same loss as Truck and should therefore be required to contribute to Truck’s coverage costs.

According to the excess insurers, Montrose III’s analysis is limited to excess policies that sit over other excess policies, not first-level excess policies that sit over primary insurance.

The Court of Appeal agreed with the excess insurers that Montrose III did not extend to excess policies that sit over primary insurance, which has characteristics that are distinct from excess insurance including immediate coverage and defense obligations. In so ruling, the court rejected SantaFe Braun, Inc. v. Insurance Co. of North America (2020) 52 Cal.App.5th 19 (SantaFe), which held that Montrose III’s reasoning does apply in the context of first-level excess policies. The court further concluded that because the excess insurers had no coverage obligation under their policies until all primary insurance had been exhausted (including Truck’s primary policy), Truck was not entitled to contribution.

The appeal of this decision to the California Supreme Court required it to resolve the question that it left open in Montrose III: whether standard language in commercial general liability policies that are excess to primary insurance policies should be interpreted to require vertical or horizontal exhaustion. In other words, can an insured access a first-level excess insurance policy upon exhaustion of underlying primary insurance obtained for the same policy period (vertical exhaustion), or is the insured required to exhaust all primary policies issued during the continuous period of damage (horizontal exhaustion)?

Contrary to the Court of Appeal reasoning, the California Supreme Court in Truck Ins. Exchange v. Kaiser Cement & Gypsum Corp.-S273179 (June 2024) concluded that its analysis in Montrose III applies equally here and reversed the Court of Appeal.

In the context of standard “occurrence based” CGL insurance policies, California has adopted what is known as the “all-sums-with-stacking” approach to continuous injuries. This approach has three primary components. First, in Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645, 656 (Montrose I), the Supreme Court adopted the “continuous injury trigger of coverage” principle (id. at p. 685), under which “bodily injury and property damage that is continuous or progressively deteriorating throughout several policy periods is potentially covered by all policies in effect during those periods.” (Id. at p. 655.) In other words, the insured may call upon any policy that was in effect during the continuous period of injury.

Second, in Aerojet-General Corp. v. Transport Indemnity Co. (1997) 17 Cal.4th 38, the Supreme Court adopted “the ‘all sums’ rule” (State of California v. Continental Ins. Co. (2012) 55 Cal.4th 186, 191 (Continental)), pursuant to which each policy triggered during a long-tail injury is potentially liable for the total amount of the loss, regardless of whether a portion of the loss occurred outside the policy’s coverage period. The rule “envisions that each successive insurer is potentially liable for the entire loss up to its policy limits. When the entire loss is within the limits of one policy, the insured can recover from that insurer, which may then seek contribution from the other insurers on the risk during the same loss.” (Id. at p. 200.)

Third, in Continental, supra, 55 Cal.4th 186, the Supreme Court construed language in standard CGL policies to permit “stacking,” which allows an insured “to add together the maximum limits of all consecutive policies that [were] in place during the [period of continuous injury].” (12 Couch on Insurance (3d ed. 2010) § 169:5; see Continental, at p. 200 [“stacking’ generally refers to the stacking of policy limits across multiple policy periods that were on a particular risk”].) In other words, ” ‘[w]hen the policy limits of a given insurer are exhausted, [the insured] is entitled to seek indemnification from any of the remaining insurers [that were] on the risk [during the continuous period of injury].’ ” (Continental, at p. 200.) If, for example, an insured purchased 10 annual policies that each had a coverage limit of $1 million, and all the policies were triggered by a continuous injury, the insured would be permitted to stack all of the policies to collect up to $10 million in total coverage.

In this current case involving Kaiser, the language of the first-level excess policies is essentially identical – and in some cases actually identical – to the policy language in the higher-level excess policies that the Supreme Court considered in Montrose III. The policies also share many of the same characteristics that it found “strongly suggest[ive]” of vertical, rather than horizontal, exhaustion.

“Thus, as in Montrose III, we believe the first-level excess policies are most reasonably construed as requiring only vertical exhaustion.”