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In April 1999, Julian Rodriguez began working as an hourly machine operator for Lawrence Equipment Inc. a manufacturer of flat bread machinery, and later became a computer numerical control operator. In July 2014, Rodriguez executed an arbitration agreement with Lawrence. The agreement required Rodriguez and Lawrence to submit any dispute related to Rodriguez’s employment to binding arbitration. Lawrence terminated Rodriguez’s employment in October 2015. 1

In December 2015, Rodriguez filed a class action against Lawrence, alleging six different wage-and-hour violations, a seventh cause of action for Unfair Business Practices. He also sought civil penalties and wages in the eighth cause of action pursuant to the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.)1 (PAGA).

The trial court ordered arbitration of Rodriguez’s wage and hour claims, and stayed Rodriguez’s single PAGA cause of action pending the completion of arbitration.

In February 2018, the arbitrator issued an award in favor of Lawrence and against Rodriguez. While acknowledging that Rodriguez’s complaint “alleged that he had not been provided with proper meal and rest periods . . . that he had not been provided with accurate wage statements . . . [and] had not been paid all earned and final wages,” the arbitrator stated Rodriguez only presented evidence related to Lawrence’s alleged nonpayment of hours worked and noncompliant meal and rest breaks. The arbitrator found that Rodriguez had “failed to sustain his burden of proof as to whether he was actually required . . . to be at his work site five minutes” early, and “[e]ven if he had sustained his burden on this issue,” his timesheets failed to show he was actually there before the work shift started. The arbitrator also found that Rodriguez “received a total of thirty minutes of rest breaks each day and a thirty minute meal break,” and thus failed to sustain his burden that he was entitled to additional pay for any alleged failure to provide proper meal and rest breaks. The arbitration award stated that Rodriguez shall take nothing by way of his complaint.

After the trial court entered judgment on the arbitration award, Lawrence brought a motion for judgment on the pleadings asserting that the remaining PAGA cause of action was barred by issue preclusion since Rodriguez’s standing as an aggrieved employee was predicated on the disproven wage and hour violations. The trial court granted the motion and dismissed Rodriguez’s case.

Rodriguez appealed, contending for the elements of issue preclusion have not been satisfied. The Court of Appeal affirmed in the published case of Rodriguez v. Lawrence Equipment, Inc. -B325261 (Nov 2024).

Courts “have frequently used ‘res judicata’ as an umbrella term encompassing both claim preclusion and issue preclusion, which [have been] described as two separate ‘aspects’ of an overarching doctrine. [Citations.] Claim preclusion . . . acts to bar claims that were, or should have been, advanced in a previous suit involving the same parties. [Citation.] Issue preclusion, . . . historically called collateral estoppel, describes the bar on relitigating issues that were argued and decided in the first suit.”

At issue on appeal is whether an arbitrator’s previous adjudication of Labor Code violations in favor of Lawrence precludes Rodriguez from asserting a PAGA cause of action based on those same Labor Code violations.

In Rocha v. U-Haul Co. of California (2023) 88 Cal.App.5th 65, 77 (Rocha), Division One of the Second District Court of Appeal addressed this very issue. The Rocha court considered whether an arbitrator’s finding that the employer did not violate section 1102.5, rendered in the context of the employees’ personal claims for damages, precluded those employees from alleging in a subsequent complaint that they had standing under PAGA to seek civil penalties based on the same purported violation. (Rocha, at pp. 76-78.) Applying general principles of issue preclusion, the appellate court held the employees could not rely on the employer’s alleged section 1102.5 violation to establish PAGA standing. (Rocha, at p. 79.)

The Rocha court expressly disagreed with Gavriiloglou v. Prime Healthcare Management, Inc. (2022) 83 Cal.App.5th 595 (Gavriiloglou), which Rodriguez cites in support of reversal. In Gavriiloglou, Division Two of the Fourth District concluded the arbitrator’s finding that plaintiff had not suffered a Labor Code violation did not preclude that same plaintiff from qualifying as an “aggrieved employee” under the PAGA based on the same alleged Labor Code violations. (Id. at pp. 601-603.) Citing the Restatement Second of Judgments, Code of Civil Procedure section 1908, and several California cases about claim preclusion (not issue preclusion).

“We find persuasive Rocha’s analysis of issue preclusion and thus decline to follow Gavriiloglou.”

“We therefore conclude all of Rodriguez’s wage and hour violations, including those related to sections 226, subdivision (a), and 201, were actually litigated and necessarily decided in the arbitration proceedings.”

“We also note that Rodriguez presented no evidence at arbitration to support his sections 226, subdivision (a), and 201 contentions. The arbitration award observed: ‘The evidence presented at the arbitration hearing dealt solely with the issues of alleged non-payment for all hours worked and the allegation of legally non-compliant meal and rest breaks.’ In other words, Rodriguez chose not to present evidence on these claims at arbitration and now seeks to justify litigation of these claims based on that choice. This is precisely the type of gamesmanship that issue preclusion aims to prevent.”

In a triad of decisions by three separate Court of Appeal panels, namely, Earley v. Workers’ Comp. Appeals Bd., et al., 94 Cal. App. 5th 1 (2023)(“Earley”), Zurich American Ins. Co. v. Workers’ Comp. Appeals Bd., et al., 97 Cal. App. 5th 1213 (2023)(“Zurich”), and most recently in Mayor v. Workers’ Comp. Appeals Bd., et al., 104 Cal. App. 5th 1297 (2024)(“Mayor”) , the Workers’ Compensation Appeals Board’s “grant for study” orders pursuant to the former version of Labor Code section 5909 (Section 5909) have been found to be unlawful.

And now on November 4, 2024 a new Petition for Writ of Mandate was filed in the California Supreme Court by another representative group of eleven California injured workers all of whom allege they have been unlawfully and unfairly denied their constitutionally guaranteed right to speedy and unencumbered resolution of their claims for workers’ compensation benefits as a result of the WCAB’s prior issuance of so-called “grant for study” orders.

They continue to allege that “By way of these orders, the Board has attempted to grant to itself, sua sponte indefinite extensions of time to render final decisions concerning Petitions for Reconsideration. To make matters worse, Petitioners are precluded from seeking adjudication of any further disputes which may arise until the WCAB finally issues its final decisions in their cases.” And that they are “suffering severe prejudice and irreparable harm due to the Board’s refusal to comply with the above-cited constitutional mandate for expeditious and unincumbered (sic) dispute resolution.”

“Petitioners’ predicament does not represent an isolated, ‘outlier’ phenomenon. Quite to the contrary, pursuant to a California Public Records Act information request in connection with Earley, it was determined that as [of] October 2021 more than five hundred (500) cases remained undecided at that time as a result of ‘grant for study’ orders issued within the preceding three-year period alone. The number of Petitioners in this case give rise to a reasonable inference that a similar number of undecided cases remain ‘on hold’ due to the Board’s issuance of ‘grant for study’ orders.”

They ask the Supreme Court to ” issue a writ of mandate directing the WCAB to issue final decisions in all cases wherein a ‘grant for study’ was issued under the former version of Section 5909.” And should it decide to do so, the “outcome of these proceedings will directly affect the interests of all litigants in the workers’ compensation system, injured workers, employers, insurance carriers and lien claimants alike, since they are all precluded from adjudicating further issues before the WCAB per Rosendin (Rosendin Electric, Inc. v. Workers’ Comp. Appeals Bd., 73 Cal. Comp. Case. 1123 (2008)(writ denied)).until the WCAB issues final decisions regarding the pending, undecided Petitions for Reconsideration.”

These injured workers go on to allege that “this Court possesses original jurisdiction to grant the relief requested by way of this Petition pursuant to Wenke v. Hitchcock, 6 Cal. 3d 746 (1972)(“Hitchcock”); Clean Air Constituency v. State Air Resources Bd., 11 Cal. 3d 801 (1974)(“Clean Air Constituency”); Greener v. Workers’ Comp. Appeals Bd., 6 Cal. 4th 1028 (1993)(“Greener”); Betancourt v. Workers’ Comp. Appeals Bd., 16 Cal. App. 3d 408 (1993)(“Betancourt”); Legislature of State of California v. Padilla (2020) 9 Cal.5th 867 (2020) (“Padilla”); and California Redevelopment Assn. v. Matosantos, 53 Cal. 4th 231 (2011)(“Matosantos”), as well as many other similar cases.”

And that “proper grounds exist for this Honorable Court to exercise original jurisdiction in the above-captioned matter pursuant to California Rules of Court Rule 8.500(b)(1) to settle an important question of law, namely, whether the WCAB should be allowed to continue to delay issuing final decisions regarding Petitions for Reconsideration after having employed the now-determined to be unlawful “grant for study” procedure under former Section 5909 for many months or years at a time thereby prejudicing all litigants involved in workers’ compensation proceedings.

The Workers’ Compensation Appeals Board State of the State of California is named as the Respondent in the case. It will now have an opportunity to respond to the Petition. The major issue here is a determination by the Supreme Court that they will hear the case at all, since the Petition asks for an extraordinary writ, and there is no obligation that the Supreme Court hear and decide it. If it does however, there will likely be substantial requests by other interested parties and organizations in the industry to file briefs as amicus. It would not be unusual for a decision to take far more than a year to be delivered.

Congress enacted the Federal Property and Administrative Services Act of 1949 (FPASA) “to provide the Federal Government with an economical and efficient system for . . . [p]rocuring and supplying property and nonpersonal services, and performing related functions including contracting.” 40 U.S.C. § 101(1).

In 2014, President Obama invoked the FPASA to issue an executive order requiring federal contractors to pay employees a $10.10 per hour minimum wage. Exec. Order No. 13658, 79 Fed. Reg. 9851 (Feb. 12, 2014). Following notice and comment, the Department of Labor (DOL) issued a rule implementing the executive order. Establishing a Minimum Wage for Contractors, 79 Fed. Reg. 60,634 (Oct. 7, 2014). The rule was not challenged.

In 2018, President Trump issued an executive order that excluded contracts related to seasonal recreational services from the minimum wage requirements of President Obama’s 2014 executive order. Exec. Order No. 13838, 83 Fed. Reg. 25,341 (May 25, 2018). But President Trump’s executive order maintained the minimum wage requirement for “lodging and food services associated with seasonal recreational services.” Id. DOL again issued an implementing rule following notice and comment. Minimum Wage for Contractors; Updating Regulations to Reflect Executive Order 13838, 83 Fed. Reg. 48,537 (Sept. 26, 2018). This rule was also unchallenged.

About three months after taking office, President Biden issued Executive Order 14026 which required federal contractors to pay employees a $15 minimum wage. 86 Fed. Reg. 22,835 (Apr. 27, 2021). President Biden also rescinded President Trump’s 2018 exemption for seasonal recreational services. Id. at 22,836. The executive order noted that “[r]aising the minimum wage enhances worker productivity and generates higher-quality work by boosting workers’ health, morale, and effort; reducing absenteeism and turnover; and lowering supervisory and training costs.” Id. at 22,835.

Five states challenged the wage mandate immediately after it took effect. The states alleged that the wage mandate violated the FPASA, the Administrative Procedure Act (APA), the major questions doctrine, the non-delegation doctrine, and the Spending Clause. They sought to enjoin and vacate both the executive order and DOL’s implementing rule. The states sought a preliminary injunction, and the Government sought dismissal or summary judgment.

Nebraska, Idaho, and Indiana had minimum wages of between $7.25 and $9.00 per hour when the mandate took effect. Arizona had a minimum wage of $12.80 per hour. And South Carolina lacked a state-specific minimum wage. In January 2024, the mandated minimum wage increased to $17.20 because of inflation, which exceeded the minimum wage in every Plaintiff State.

The district court denied a preliminary injunction and granted Defendants’ motion to dismiss.It concluded that the wage mandate did not violate the FPASA, and the major questions doctrine did not apply because the economic impact was too small.

Four of the five states (Appellants) appealed. Appellants are affected by the wage mandate because they sometimes act as federal contractors.They assert that the executive order and implementing rule violate the FPASA and the major questions doctrine, and that the implementing rule violates the APA.

The 9th Circuit Court of Appeals (which governs California) reversed the trial court, finding that Executive Order 14026 exceeds the power granted to Biden under the Federal Property and Administrative Services Act of 1949. in the published case of State of Nebraska v Su No. 23-15179 (9th Cir. Nov. 2024)

It concluded that the Plaintiff States have stated legally sufficient claims and therefore reversed the district court’s order dismissing the complaint. It also vacated the district court’s order denying the Plaintiff States a preliminary injunction and remanded for further proceedings consistent with this opinion.

The 61-page opinion (which covers California) runs contrary to the 10th Circuit’s opinion on the same issue. Last April The Tenth Circuit recently addressed a slightly different scenario: whether the DOL minimum wage mandate rule is permissible as applied to recreational services permittees. See Bradford v. U.S. Dep’t of Lab., 101 F.4th 707, 732 (10th Cir. 2024), petition for cert. filed, No. 24-232 (U.S. Aug. 28, 2024).

The Tenth Circuit majority held that the FPASA authorizes the President to implement policies he considers necessary to promote an economic and efficient procurement system, pointing to § 101 as the only source for this authority. Id. at 721.3 The majority then upheld the rule because it “advances the statutory objectives of economy and efficiency.” Id. at 714.

These two decisions now set the framework for the possible intervention by the U.S. Supreme Court to resolve these two conflicting opinions.

The Justice Department, together with the Federal Trade Commission (FTC), announced that Lyft Inc.has agreed to resolve allegations that it made false and misleading statements about how much Lyft drivers would earn. The settlement includes an agreement to pay $2.1 million in civil penalties and a permanent injunction prohibiting such false and misleading earnings claims.

Lyft operates a mobile app ride-hailing platform that connects consumers seeking rides with those who provide rides with their own personal vehicles. Through marketing campaigns and advertisements, Lyft recruits drivers. After a driver is hired, Lyft sets the rates the driver charges and collects a portion of the fare for each ride.

In a civil complaint filed in the U.S. District Court for the Northern District of California, the government alleges that, as early as 2021, Lyft made false and misleading claims in its advertising and marketing regarding potential earnings and incentives to be earned by drivers who signed up to drive for Lyft in violation of Section 5 of the FTC Act, 15 U.S.C. § 45, in connection with its false, misleading, or unsubstantiated claims regarding driver earnings.

Lyft allegedly continued these practices even after it received a Notice of Penalty Offenses in October 2021 that placed the company on notice that false and misleading earnings claims were unlawful.

The complaint alleges that Lyft disseminated advertisements promoting specific hourly amounts that drivers throughout the United States could earn. The company, however, did not disclose that the potential hourly amounts were based on the earnings of the top 20% of its drivers.

The complaint also further alleges that Lyft also tried to induce drivers to offer more rides by promoting “earnings guarantees,” which guaranteed that drivers would be paid a set amount if they completed a specific number of rides in a certain time.

These guarantees allegedly did not clearly disclose that drivers were paid only the difference between what they otherwise earned for the rides and Lyft’s advertised guaranteed amount, rather than receiving the full guaranteed amount in addition to their regular earnings for the rides.

In the stipulated order entered by the United States District Court Northern District of California , Lyft is required to pay a $2,100,000 civil penalty. The order also enjoins Lyft from making any misrepresentations regarding driver earnings and includes other monitoring and reporting provisions aimed at promoting Lyft’s compliance with the order.

“The Justice Department will vigorously enforce the law to stop companies from misleading Americans about their potential earnings in the gig economy,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to work with the FTC to stop unfair and deceptive marketing practices.”

“Lyft drivers deserve accurate information about how much they will be paid for the work they do,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Our settlement with Lyft bans exaggerated earnings claims and underscores the FTC’s commitment to ensuring gig workers are treated fairly.”

Trial Attorney Paulina Stamatelos and Assistant Director Zachary Dietert of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney Ekta Dharia for the Northern District of California, and Abdiel Lewis and Evan Rose of the FTC’s Bureau of Consumer Protection handled the matter.

The California Attorney General joined a coalition of 50 states and territories in announcing two significant cooperation agreements and settlements with Heritage Pharmaceuticals and, in the near future, Apotex totaling $49.1 million to resolve allegations that both companies engaged in widespread, long-running conspiracies to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade on numerous generic prescription drugs.

As part of the settlement agreements, both companies have agreed to cooperate in the ongoing multistate litigations against 30 corporate defendants and 25 individual executives. Both companies have further agreed to a series of internal reforms to ensure fair competition and compliance with antitrust laws.

A motion for preliminary approval of the $10 million settlement with Heritage was filed in the United States District Court for the District of Connecticut in Hartford. A settlement with Apotex for $39.1 million is contingent upon obtaining signatures from all necessary states and territories and will be finalized and filed for approval in the U.S. District Court soon.

The three cases against these companies stem from a series of investigations built on evidence from several cooperating witnesses at the core of the different conspiracies alleged in each case, a database of over 20 million documents, and a separate database containing millions of call detail records and contact information for over 600 sales and pricing individuals in the generics industry.

Each complaint addresses a different set of drugs and defendants and shows how an interconnected web of industry executives meant to be competitors met up for industry dinners, “girls’ nights out,” lunches, cocktail parties, golf outings, and communicated through frequent telephone calls, emails, and text messages, sowing the seeds for their illegal agreements.

Defendants used terms like “fair share,” “playing nice in the sandbox,” and “responsible competitor” to describe how they unlawfully discouraged competition, raised prices, and enforced an ingrained culture of collusion. Among the records obtained by the coalition is a two-volume notebook containing the contemporaneous notes of one of the coalition’s cooperators that memorialized his discussions during phone calls with competitors and internal company meetings over a period of several years.

The first complaint included Heritage and 17 other corporate defendants, two individual Defendants, and 15 generic drug manufacturers. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have since entered into settlement agreements and are cooperating.

The second complaint was filed against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers. The complaint names 16 individual senior executive defendants. The third complaint, which will be tried first, focuses on 80 primarily topical generic drugs that account for billions of dollars of sales in the United States and names 26 corporate defendants and 10 individual defendants.

Six additional pharmaceutical executives have entered into settlement agreements with the coalition and have been cooperating to support the coalition’s claims in all three cases.  Connecticut led a coalition of nearly all states and territories in filing the three antitrust complaints, starting with the first in 2016.

If a party purchased a qualifying generic prescription drug between 2010 and 2018, they may be eligible for compensation. To determine eligibility, call 1-866-290-0182 (Toll-Free), email info@AGGenericDrugs.com, or visit www.AGGenericDrugs.com.

The California Attorney General joined the attorneys general of Alaska, Arizona, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, U.S. Virgin Islands, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and Puerto Rico.