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Tag: 2024 News

Federal Judge Vacates New NLRB Joint Employer Rule

On Oct. 26, the National Labor Relations Board (NLRB) issued its much-anticipated final rule addressing the Standard for Determining Joint-Employer Status under the National Labor Relations Act (NLRA). The 229-page rule not only restores the deeply flawed standard first announced during the Obama administration in its 2015 Browning-Ferris decision, but also expands potential liability for employers.

During the Trump administration, the NLRB reversed the Browning-Ferris standard via a final rule, and it required a putative joint employer to “possess and exercise . . . substantial direct and immediate control” over essential terms and conditions of employment to determine that status. The new October 26, 2023 rule rescinds the Trump-era board’s standard and “makes extreme and troubling changes to Board law,” as Member Marvin Kaplan states in his dissent to the new rule.

Joint employment is where two or more employers control the essential terms and conditions of employment for the same employees. The rule makes it easier for the NLRB to declare joint employment status exists in business relationships where it traditionally doesn’t, like franchising, contracting, and supply chains.

The U.S. Chamber of Commerce and a coalition of business groups filed a lawsuit against the National Labor Relations Board (NLRB) in the U.S. District Court for the Eastern District of Texas over its new joint employer rule.

The rule makes it easier for the agency to declare joint employment status exists in business relationships where it traditionally doesn’t, like franchising, contracting, and supply chains. It upends a longstanding precedent by broadening liability for employers and enabling unions to organize across companies rather than store by store. Many companies could find themselves facing liability for workers they don’t employ and workplaces they don’t actually control.

The Chamber is joined by co-plaintiffs: the American Hotel and Lodging Association, Associated Builders and Contractors, Associated General Contractors of America, Coalition for a Democratic Workplace, International Franchise Association, Longview Chamber of Commerce, National Retail Federation, National Association of Convenience Stores, Restaurant Law Center, Texas Association of Business, and Texas Restaurant Association.

According to the Chamber of Commerce “If the rule is allowed to go into effect, it will have far-reaching consequences for businesses of all sizes. A previously expanded joint employer rule was in place from 2015 to 2017 and cost franchise businesses, a majority of which are small businesses, $33 billion per year. That resulted in 376,000 lost job opportunities and led to 93% more lawsuits.”

The new rule was set to take effect March 11, 2024 after two delays. Prior to the effective date, the Chamber of Commerce had a major victory as the court granted their motion for summary judgment in the case, finding that the Board’s reach “exceeds the bounds of the common law and is thus contrary to law.” The judge also held the Board’s rescission of the 2020 rule arbitrary and capricious and reinstated the 2020 rule that requires “direct and immediate control” over the essential terms and conditions of employment of another entity to establish joint-employer status.

The final Judgment of the Court in U.S. Chamber of Commerce et al. v. NLRB et al., No. 6:23-cv-0055 was entered on March 8, 2024. “It is declared that enforcement against plaintiffs or their members of the rule issued by the National Labor Relations Board on October 27, 2023, entitled Standard for Determining Joint Employer Status, 88 Fed. Reg. 73,946, would be contrary to law as to the rule’s addition of a new 29 C.F.R. § 103.40 and arbitrary and capricious as to its removal of the existing 29 C.F.R. § 103.40 (2020). In both respects, the rule is hereby vacated.”

The decision in the lawsuit filed by the Chamber of Commerce sets the stage for an appeal to the US Court of Appeals for the Fifth Circuit, which is known for politically conservative rulings.

In another pending case on this new rule, the Service Employees International Union filed a petition for review of the new rule in the D.C. Circuit, Case No. 23-1309 last November. SEIU is asserting that the new rule on the ground that the Rule was not broad enough..

The U.S. Chamber of Commerce and a number of other employer groups have filed documents as intervenor in the SEIU action. it has asked “the Court to hold these proceedings in abeyance pending the resolution of any appeal of the final judgment entered in Chamber of Commerce of the United States of America v. NLRB,” which vacated the rule challenged in the SEUI petition. The D.C. Circuit has not ruled on this motion, and briefing of the issue remains in progress by the parties.

In addition to these two pending cases, Congress is advancing a Congressional Review Act resolution to block the rule, even though the lawmakers’ effort faces a veto by President Joe Biden. Last January, the House the House passed H.J. Res. 98, a Congressional Review Act resolution by a bipartisan vote of 206 to 177,that will nullify the National Labor Relation Board’s (NLRB) joint employer rule,

The legislative process has now moved to the US Senate where a vote is expected later this year.

DOL Issues New Rule on Employee Representation During OSHA Inspections

The U.S. Department of Labor announced a final rule clarifying the rights of employees to authorize a representative to accompany an Occupational Safety and Health Administration compliance officer during an inspection of their workplace will be published in the Federal Register on April 1. The rule is effective on May 31, 2024.

The Occupational Safety and Health Act gives the employer and employees the right to authorize a representative to accompany OSHA officials during a workplace inspection. The final rule clarifies that, consistent with the law, workers may authorize another employee to serve as their representative or select a non-employee.

For a non-employee representative to accompany the compliance officer in a workplace, they must be reasonably necessary to conduct an effective and thorough inspection.

Consistent with OSHA’s historic practice, the rule clarifies that a non-employee representative may be reasonably necessary based upon skills, knowledge or experience. This experience may include knowledge or experience with hazards or conditions in the workplace or similar workplaces, or language or communication skills to ensure an effective and thorough inspection. These revisions better align OSHA’s regulation with the OSH Act and enable the agency to conduct more effective inspections. OSHA regulations require no specific qualifications for employer representatives or for employee representatives who are employed by the employer.

The rule is in part a response to a 2017 court decision ruling the agency’s existing regulation, 29 CFR 1903.8(c), only permitted employees of the employer to be authorized as representatives. However, the court acknowledged that the OSH Act does not limit who can serve as an employee representative and that OSHA’s historic practice was a “persuasive and valid construction” of the OSH Act. The final rule is the culmination of notice and comment rulemaking that clarifies OSHA’s inspection regulation and aligns with OSHA’s longstanding construction of the act.

Worker involvement in the inspection process is essential for thorough and effective inspections and making workplaces safer,” said Assistant Secretary for Occupational Safety and Health Doug Parker. “The Occupational Safety and Health Act gives employers and employees equal opportunity for choosing representation during the OSHA inspection process, and this rule returns us to the fair, balanced approach Congress intended.”

The Workforce Committee Chairwoman Virginia Foxx (R-NC) issued a statement on the Department of Labor’s (DOL) final Walkaround Rule. “This rule has absolutely nothing to do with keeping workers safe. Rather it weaponizes OSHA inspections – harming workers’ safety while also increasing employers’ costs. This isn’t surprising given this administration’s zeal for regulatory overreach.

“What’s worse, under this rule unionizing efforts and other activist campaigns are put ahead of safety efforts. So much for OSHA’s vital mission of protecting the health and safety of the nation’s workers. It appears the Biden administration’s only concern is propping up Big Labor’s agenda. Mr. President, workers and job creators hear your message loud and clear.”

Senate Committee on Health, Education, Labor, and Pensions (HELP) Committee Ranking Member Bill Cassidy (R-Louisiana) stated: “OSHA inspections are crucial to protect workers’ safety and should never be co-opted to promote a political agenda,” said Dr. Cassidy. “The union has a vested interest in harassing a non-union employer. Giving them the power to influence an inspection is a potential weapon against a workplace that has chosen to be non-union. This is wrong.”

Greg Sizemore, Associated Builders and Contractors vice president of health, safety, environment and workforce development said: “There simply is no business case for this final rule and no benefit during a compliance inspection.”

By allowing outside union agents access to nonunion employers’ private property, OSHA is injecting itself into labor-management disputes and casting doubt on its status as a neutral enforcer of the law,” said Sizemore. “This final rule negatively impacts the rights of employers while simultaneously ignoring the rights of the majority of employees who have not authorized a union to represent them. OSHA’s rule also poses unnecessary risk to the individual joining the inspection and others on the jobsite if the authorized person is not trained to safely walk a construction jobsite.”

More SoCal Poultry Processors Accused of Using Illegal Child Labor

Since 2018, the U.S. Department of Labor has seen a 69 percent increase in children being employed illegally by companies. In the last fiscal year, the department found 835 companies it investigated had employed more than 3,800 children in violation of labor laws. Last year the Department reported it had over 600 child labor investigations underway and continues to field complaints and initiate investigations to protect children.

And last year a California poultry processor and supplier to supermarkets and food distributors agreed to pay nearly $3.8 million in back wages, damages and penalties after the Department found the company endangered young workers recklessly in Southern California. Division investigators found that The Exclusive Poultry Inc. and related companies established by owner Tony Bran employed children as young as 14 years old to debone poultry using sharp knives and operate power-driven lifts to move pallets.

On March 4, 2024, Acting Labor Secretary Julie Su filed a petition to enforce the department’s subpoenas for information from L & Y Food, Chen Lu and another business and individual in connection with an investigation of minimum wage, overtime, record keeping and child labor violations. The case was filed in the U.S. District Court for the Central District of California.

In response to the petition to enforce the subpoenas, Court House News Service reported that Gregory Patterson, an attorney for L & Y Food and Chen Lu, called the government’s conduct “shocking and reprehensible.” He went on to say the companies in question haven’t violated a single wage and hour law and are paying their workers bonuses, described as “piece-pay,” based on their output, such as boxes of cut chicken. This, the attorney said, isn’t illegal in California or the U.S. as long as it is more than minimum wage or overtime pay based on guaranteed minimum wage.

Subsequently, on March 20, 2024, investigators with the Wage and Hour Division, U.S. Department of Labor claims it discovered oppressive child labor at a poultry processing facility at 15861 Salvatierra St., Irwindale, California where it observed children deboning poultry, during a March 20, 2024 civil search warrant.

The investigators claim children had been working at the facility for months and the employer continually removed goods from the facility the entire time, including after the search warrant, and over Wage and Hour Division’s objection. It says the goods processed in this facility up to April 19, 2024 are tainted by child labor and are now “hot goods” under the FLSA. “The goods removed from the facility are permanently hot and cannot enter commerce.”

Based on this information, on Saturday, March 30, 2024 the Wage and Hour Division filed a lawsuit in federal court against the three companies named as defendants in the complaint – L & Y Food of El Monte, which operates two poultry processing plants, Moon Poultry of Irwindale and JRC Culinary Group of Monterey Park. Fu Qian Chen Lu, according to the complaint, is the owner of the three businesses and responsible for their management.

Section 12(a) of the FLSA, 29 U.S.C. § 212(a), prohibits Defendants from shipping or delivering for shipment in commerce any goods produced in that establishment in or about which within thirty days prior to the removal of such goods therefrom the oppressive child labor was employed.

The lawsuit seeks to permanently enjoin and restraining Defendants, their officers, agents, servants, employees, and those persons in active concert or participation with them from prospectively violating the FLSA including: Sections 11(a), 12, and 15(a)(4) of the FLSA, 29 U.S.C. §§ 211(a), 212, and 215(a)(4)

It also asks that Defendants “disgorge all ill-gotten profits earned from any sale of goods produced in an establishment where the employed oppressive child labor and movement of this contraband.” And to to pay all civil monetary penalties arising from their violations of the FLSA’s prohibitions against oppressive child labor.

U.S. District Judge Otis Wright II on Monday April 1, 2024 issued a temporary restraining order to force the companies and their owners to stop using child labor, provide the Labor Department with the names of the people they have employed in the past year and their contact information, and not ship any products from the facilities where they used child labor.

Tesla-Freemont to Face Hostile Work Environment Claims in Multiple Forums

The Equal Employment Opportunity Commission filed a lawsuit in September 2023 in the United States District Court for the Northern District of California against Tesla, Inc.under Title VII of the Civil Rights Act of 1964 for claims arising from Tesla’s race-based employment practices.

The Commission alleges Tesla has subjected Black employees at its Fremont, California manufacturing facilities to severe or pervasive racial harassment and has created and maintained a hostile, race-based work environment there since May 2015. The N-word and other racial slurs, epithets, and stereotyping “permeated Tesla’s Fremont Factory.” Non-Black managers, non-managerial employees, and temporary workers directly addressed Black employees individually and collectively using the N-word.Other race-based slurs and insults were frequently used as well.

At work, Black employees allegedly encountered racist graffiti-including swastikas, death threats, and nooses on bathroom walls, desks, elevators, and equipment. Black employees describe the use of slurs and racist imagery as “casual and normal,” “frequent,” “constant,” “a regular thing,” and occurring “too many times to count.”

Non-Black employees allegedly used slurs and epithets openly in high-traffic work areas and hubs. Supervisors and managers witnessed racially offensive conduct but failed or refused to intercede. Black employees reported the slurs, insults, graffiti, and misconduct to Tesla’s human resources, employee relations, and managerial personnel. Tesla failed to investigate complaints of racial misconduct, adopt policies or practices to ensure its temporary workforce did not perpetuate racial harassment at the Fremont Factory, or otherwise take remedial action to end the ongoing racial harassment.

Tesla’s supervisors and human resources officials allegedly retaliated against Black employees by changing their schedules, assigning them less desirable duties, writing them up without justification, and firing them within weeks of reporting the ongoing racial harassment and discrimination.

Tesla filed a motion to stay the proceedings under the Colorado River doctrine and on the grounds the Commission failed to engage in pre-suit conciliation, and also a motion to dismiss based on the Commission’s failure to identify any member of the alleged group of victims. And also because the EEOC did not allege all three elements of a prima facie retaliation claim. On March 29, 2024 the court denied all three motions.

In Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, the U.S.Supreme Court recognized “in exceptional circumstances, considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation can support a stay of federal litigation in favor of parallel state proceedings.

Tesla insists this action is substantially similar to two state court actions now before Alameda County Superior Court Judge Grillo: Department of Fair Employment and Housing v. Tesla, Inc., Alameda County Superior Court No. 22CV006830, and Vaughn, et al. v. Tesla, Inc., et al., Alameda County Superior Court No. RG 17882082.

In the Vaughn Case, filed July 2021, the plaintiffs sue Tesla for race-based harassment and discrimination and failure to prevent race-based harassment and discrimination in violation of California’s Fair Employment and Housing Act. In the Civil Rights Department Case, filed in March 2022, California’s Department of Fair Employment and Housing initiated an enforcement action for group relief against Tesla on behalf of California and aggrieved Black Fremont Factory workers, alleging racial harassment, employment discrimination based on race, retaliation, failure to prevent racial harassment and discrimination, and recordkeeping violations.

Tesla asserts the state court actions are substantially similar to this action because 1) “the putative class in the Vaughn Case and the alleged aggrieved group in the [Civil Rights Department] Case include all African American workers at the Factory within the statutory periods,” and 2) the Commission’s complaint is based on the same factual allegations and seeks to vindicate the same legal rights as some claims in the state court actions.

However the court noted that “a Colorado River stay is inappropriate when the state court proceedings will not resolve the entire case before the federal court. If there is any substantial doubt as to whether the state court actions will completely and promptly resolve the issues between the parties, it would be a serious abuse of discretion to grant the stay or dismissal at all.”

Between July 2022 and June 2023, the Commission engaged in conciliation efforts with Tesla, including a seven-hour, in-person conciliation session on June 13, 2023. So, the Commission tried to engage Tesla in discussions to provide Tesla the opportunity to remedy the allegedly discriminatory practice. A court looks only to whether the EEOC attempted to confer about a charge, and not to what happened.

Tesla’s argument for dismissal based on the Commission’s failure to identify any member of the alleged group of victims failed because the Commission brings this enforcement action in its own name, so the Commission is not required to identify an aggrieved individual to survive Tesla’s motion to dismiss.

The complaint is not required to plead a prima facie case of retaliation as long as it contains “a short and plain statement of the claim showing that the pleader is entitled to relief,” Swierkiewicz v. Sorema N. A., 534 U.S. 506. at 508 (quoting Federal Rule of Civil Procedure 8(a)(2)).

WCIRB Reports on Impacts of Employee Tenure on Claim Frequency

Research shows that employees with shorter tenure are more likely to be involved in work-related injuries, potentially due to newer employees being less skilled and less aware of safety practices than more experienced employees. A 2016 WCIRB study also highlighted a decline in the average tenure of injured workers during a period of increased claim frequency.

More recently, the COVID-19 pandemic further affected employment dynamics, with significant shifts observed between 2020 and 2022. Many shorter-tenured employees lost jobs in 2020, and subsequently, some gained jobs in the same industry while others entered new industries. The recent changes in the labor market and employee tenure may have long-term impacts on work-related injuries.

The WCIRB has conducted a study of employee tenure focusing on several key areas, including a comparison of shifts in employee tenure among injured workers and those among California workers and relative claim frequency and claim characteristics by tenure. For the purpose of this study, employee tenure is defined as the length of time that an employee has been employed by their current employer. The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) has released a new report, Impacts of Employee Tenure on Workers’ Compensation Claim Frequency in California.

Highlights of the report include:

About 40% of workers’ compensation claims come from workers with <1 year of tenure. Service-providing industries have a higher share of claims from these short-tenured workers than other industries.
– – From 2020 to 2022, all industry groups experienced a rise in the share of claims from workers with <1 year of tenure, largely driven by a strong labor market with increased job openings. This might have resulted in a higher number of new hires with less experience or training, who were more susceptible to work- related injuries.
– – Workers with longer tenure tend to have a higher share of cumulative trauma (CT) indemnity claims, mostly because it takes time for CT injuries to occur. Health care & education and office workers with increased tenure tend to have a higher likelihood of CT injuries than workers in other industries.
– – Workers with <1 year of tenure are more than 2X as likely to have a claim relative to the statewide average, largely driven by those in physical labor and service-providing industries.
– – Workers with <1 year of tenure are more likely to have fall, struck or cut injuries, while longer-tenured workers tend to have more strain injuries.
– – Workers with longer tenure tend to have a higher share of cumulative trauma (CT) indemnity claims, mostly because it takes time for CT injuries to occur. Health care & education and office workers with increased tenure tend to have a higher likelihood of CT injuries than workers in other industries.
– – For injured workers aged 16-34, the share of indemnity claims involving temporary disability (TD) only decreases with increased tenure; however, the share of claims involving permanent disability (PD) increases. The correlation between tenure and both TD and PD weakens for older workers within the 35-54 and 55+ age groups.
– – After adjusting for age, the average incurred losses on indemnity claims, valued at approximately 18 months from policy inception, are generally higher for longer-tenured workers.

Members of the WCIRB Actuarial and Research Teams will host a free webinar to discuss this new report on Thursday, April 18, 2024, 10:00-11:00 AM PT. The WCIRB presenters are Julia Zhang, PhD, Vice President, Data Analytics and Sean Cooper, FCAS, MAAA, Executive Vice President and Chief Actuary.

Click on this registration link to sign up.

Significant Panel Decision Clarifies Rules on “Timely” Petition for Recon

On March 27, 2024, the Appeals Board issued its opinion in Sandra Ja’Chim Scheuing v Lawrence Livermore National Library -ADJ8655364; -ADJ14830172, and designated it as a significant panel decision.

Significant panel decisions are not binding precedent in workers’ compensation proceedings; however, they are intended to augment the body of binding appellate court and en banc decisions and, therefore, a panel decision is not deemed “significant” unless, among other things: (1) it involves an issue of general interest to the workers’ compensation community, especially a new or recurring issue about which there is little or no published case law; and (2) all Appeals Board members have reviewed the decision and agree that it is significant.

In Ja’Chim Scheuing, the Appeals Board discussed its approach to cases where a petition for reconsideration is timely filed, but the case is not timely received by the Appeals Board, and clarified that the Appeals Board will continue to follow the long-time precedent in Shipley v. Workers’ Comp. Appeals Bd. (1992) 7 Cal.App.4th 1104, 1108 [57 Cal.Comp.Cases 493].

Sandra Ja’Chim Scheuing requested reconsideration of the Findings & Award issued by a WCJ who found her injury caused permanent disability of 28%. Applicant contends on reconsideration that she is 100% permanently and totally disabled, and that the WCJ failed to fully consider all of the medical and vocational evidence in making his determination. In this case, the WCJ issued the Findings & Award on December 1, 2023, and applicant filed a timely Petition for Reconsideration on December 18, 2023 at the Oakland district office. As required by Rule 10205.4 (Cal. Code Regs., tit. 8, § 10205.4).

Her paper Petition was scanned into the Electronic Adjudication Management System (EAMS). (See Cal. Code Regs., tit. 8, §10206 [electronic document filing rules], § 10205.11 [manner of filing of documents].)  When a petition is filed, a task is sent to the WCJ through EAMS so that the WCJ receives notice that a Report is required. (See Cal. Code Regs., tit. 8, §10206; 10962.) No such notice is provided to the Appeals Board. Thereafter, the district office electronically transmits the case to the Appeals Board through EAMS and notifies the Appeals Board that it has been transmitted.

There are 25 days allowed within which to file a petition for reconsideration from a “final” decision that has been served by mail upon an address in California. (Lab. Code, §§ 5900(a), 5903; Cal. Code Regs., tit. 8, § 10507(a)(1).) This time limit is extended to the next business day if the last day for filing falls on a weekend or holiday. (Cal. Code Regs., tit. 8, § 10508.) To be timely, however, a petition for reconsideration must be filed (i.e., received) within the time allowed; proof that the petition was mailed (posted) within that period is insufficient. (Cal. Code Regs., tit. 8, §§ 10845(a), 10392(a).)

Here, according to Events in EAMS, which functions as the “docket,” although the Petition for Reconsideration was timely filed on December 18, 2023 at the Oakland district office, the district office transmitted the case to the Appeals Board on February 21, 2024. Thus, the first notice to the Appeals Board of the Petition was on February 21, 2024. Thereafter, the WCJ issued the Report on February 27, 2024. Due to this lack of notice by the district office, the Appeals Board failed to act on the Petition within 60 days, through no fault of the parties.

Therefore, considering that applicant filed a timely Petition for Reconsideration and that the Appeals Board’s failure to act on that Petition was a result of administrative error, “we conclude that our time to act on applicant’s Petition was tolled until 60 days after February 21, 2024.”

Once a case is pending at the Appeals Board, parties may not submit new evidence or raise new issues, unless the Appeals Board specifically provides notice and orders further proceedings to consider further evidence and/or issues. (See Lab. Code, §§ 5906, 5907, 5908(a).)

Here, applicant did not seek permission to file supplemental pleadings as required by WCAB Rule 10964. While WCAB Rule 10964 does not require the Appeals Board to accept supplemental pleadings, the Appeals Board may exercise its discretion to accept a supplemental pleading and consider it. Here the WCAB accepted applicant’s letters of February 22, 2024 and March 1, 2024 for filing as supplemental pleadings and considered them.

We believe that as a matter of due process, once a party has confirmed timely filing of a petition under WCAB Rule 10615 (Cal. Code Regs., tit. 8, § 10615), they should be able to reasonably expect that the petition will be considered by the Appeals Board. As explained above, until it is transmitted to the Appeals Board, the case remains at the district office level, and all status inquiries should be directed to the district office. When the 60- day period in section 5905 has expired and there has been no response by the Appeals Board, we recommend that the parties contact the district office to confirm that the case has been transmitted to the Appeals Board and that notice was provided to the Appeals Board. Once they have received this confirmation from the district office, they may follow up by email with the Appeals Board’s Control Unit at”

This time limit is jurisdictional and therefore, the Appeals Board has no authority to act upon or consider an untimely petition for reconsideration. (Maranian v. Workers’ Comp. Appeals Bd. (2000) 81 Cal.App.4th 1068, 1076 [65 Cal.Comp.Cases 650, 656];  Rymer v. Hagler(1989) 211 Cal.App.3d 1171, 1182; Scott v Workers’ Comp. Appeals Bd. (1981) 122 Cal.App.3d 979, 984 [46 Cal.Comp.Cases 1008, 1011]; U.S. Pipe & Foundry Co. v. Industrial Acc. Com. (Hinojoza) (1962) 201 Cal.App.2d 545, 549 [27 Cal.Comp.Cases 73, 75-76].)

In contrast, here, applicant’s Petition for Reconsideration was timely filed on December 18, 2023, seventeen days after the WCJ’s decision of December 1, 2023. Thus, as explained above, the Appeals Board has the authority to act upon the Petition and to consider it.

Five San Diego Residents Face Disability Insurance Fraud Charges

Tyler Andrew Liebowitz, 45, of San Diego, was arraigned on 15 felony counts of insurance fraud after an investigation by the California Department of Insurance and the San Diego County District Attorney’s Office found he allegedly conspired with others to receive insurance benefits they were not entitled to by submitting dozens of fraudulent insurance documents for a long-term disability policy.

Liebowitz conspired with four other individuals who were also arraigned for their role in the scheme, including his brother, Dean Craig Liebowitz, 52, of Del Mar, who was arraigned on six felony counts of insurance fraud.

The investigation found they conspired to defraud the insurance company by filing fraudulent claims against the long-term disability policy of the Liebowitz brothers’ mother.

Detectives learned that 63 fraudulent claims documents were submitted for insurance benefits reporting the defendants as her caregivers. Analysis of the claim documentation, bank records, mobile phone records, and other data revealed that many of the payments they attempted to receive were for times caregivers were not present.

The investigation also found that suspects made false statements about the amount of money paid to the reported caregivers and the number of hours worked. In certain instances, narcotics were provided in exchange for insurance benefit money derived from false claims of work performed.

The other defendants include:

– – Ashlin Nerisa Prol, 37, of San Diego, who was arraigned on six counts of felony insurance fraud.
– – Ali Jamal Ibrahim, 21, of San Diego, who was arraigned on five counts of insurance fraud.
– – Audra Jane Birndorf, 55, of San Diego, who was arraigned on three felony counts of insurance fraud.

Tyler Liebowitz was arrested on March 11, 2024 and Dean Liebowitz was arrested on March 18, 2024. The other defendants self-surrendered at their arraignments. The San Diego County District Attorney’s Office is prosecuting this case.

Camarillo Insurance Agent Found Guilty of $1.2M Grand Theft

Former licensed insurance agent Brett E. Lovett, 53, of Camarillo was found guilty of 29 felony counts including grand theft, elder abuse, money laundering, and burglary after a 15-month California Department of Insurance investigation found he defrauded at least nine victims, including senior citizens, of close to $1.2 million.

Lovett was arrested in October 2017 along with Robert C. Burlisonnof La Canada after the Department’s investigation revealed that between 2011 and 2016, Lovett defrauded at least nine victims. Several of his victims were senior citizens whom he met and befriended at a place of worship in Carpinteria. Other victims sought legal advice from Lovett through his legal aid information business.

Burlison, a licensed California attorney and owner of Burlison Law Group in Pasadena, California, was alleged in the felony complaint to have aided and conspired with Lovett. According to an article in the Los Angeles Times, Burlison denied any wrongdoing and said he has “no connection at all” to Lovett – that he was also a victim of his fraud.

“Somehow, the Department of Insurance thinks he’s a bad guy, and that I conspired with him, and that’s the furthest from the truth,” Burlison said in an interview. “That is not me, it did not occur.”

Victims entrusted Lovett with their money for proposed investments that never existed, or for financial management purposes. Lovett then misappropriated the money for his own personal use and to repay some of his victims — sometimes using his Power of Attorney and Promissory Notes to embezzle funds from victims.

“This former licensed insurance agent preyed on innocent senior citizens to line his pockets with no regard for his victims’ wellbeing,” said Insurance Commissioner Ricardo Lara. “Thanks to the hard work by my Department investigators and the Santa Barbara County District Attorney’s Office his victims will have justice.”

Lovett has a history of embezzling money from members of the places of worship he attends.

In 2007, doing business as Northwest Asset Fund, he was ordered to pay more than $675,900 in restitution, fines and sanctions by the U.S. Commodity Futures Trading Commission (CFTC). Lovett never paid the fines or restitution.

The CFTC entered a permanent injunction against Lovett, who never registered with the CFTC. Between October 2002 and August 2005, Lovett fraudulently solicited money from individuals, purportedly to trade commodity futures, through false promises of high returns from a low-risk investment.

Lovett’s license to transact insurance expired in May 2000. He was not acting as an insurance agent during this time, but he was giving financial advice which he was not licensed to give.

Lovett is scheduled to return to court for sentencing on May 9, 2024. The Santa Barbara County District Attorney’s office is prosecuting the case.

State Bar records reflect that Burlison was disbarred in 2019 after he stipulated to committing three acts of professional misconduct related to a single client matter.

Fresno Restaurant Resolves Wage-Hour Case for $2M

The Labor Commissioner’s Office has reached a $2 million settlement against Pearl B-Star, Inc. DBA Lin’s Fusion Restaurant in Fresno for underpaying 32 workers. Pearl B-Star, Inc.’s violated state labor laws governing recordkeeping, payroll timekeeping and cash pay without wage statements.

The restaurant has a 20 year history serving the Fresno community.

The Bureau of Field Enforcement (BOFE) was referred this case by the Fresno County District Attorney’s Office. BOFE’s investigation began in 2019 and found that workers, many of them immigrants, were paid a salary in cash and were not compensated for overtime, split shifts, meal periods and contract wages.

The Employment Development Department (EDD) and the Joint Enforcement Strike Force (JESF) also participated in the investigation.

Any one that worked at Lin’s Fusion between September 26, 2016, and September 26, 2019, should immediately contact LCO at (619) 767-2039 as they may be entitled to owed wages and damages under the settlement agreement.

All workers in California are protected under the California labor code, regardless of immigration status. If you work in California, you have rights. Workers should not be afraid to come forward with allegations of wage theft.

Today’s action builds on multiple other enforcement actions announced this year including reaching a $1 million settlement for warehouse workers who were victims of wage theft, another $1 million settlement for janitors who cleaned Cheesecake Factory restaurants, and a new $18 million grant program to prosecute wage theft.

Labor Commissioner Lilia García-Brower said “When enforcement agencies work together, we are best able to protect workers. In this case systemic violations were detected, the perpetrating employer was held accountable, and workers are receiving owed wages. We look forward to continuing to collaborate on many cases to protect workers and law-abiding employers.”

Worker Entitled to Attorney Fees Irrespective of Amount Recovered

Elinton Gramajo worked as a delivery driver for Joe’s Pizza from February 2014 to June 2015.

In February 2018,he sued Joe’s Pizza on Sunset, Inc.; Joe’s Pizza on Sunset, LLC; and Giuseppe Vitale for failure to pay minimum and overtime wages (Lab. Code, §§ 510, 558, 1194), failure to provide rest and meal periods (Lab. Code, §§ 512, 226.7), failure to pay wages due at time of termination (Lab. Code, §§ 201, 202, 203), failure to reimburse for business expenses (Lab. Code, § 2802), and unfair business practices (Bus. & Prof. Code, § 17200). Gramajo also sought declaratory and injunctive relief.

After nearly four years of litigation and extensive discovery, the matter was set for trial in October 2021. Gramajo sought $26,159.33 in unpaid minimum and overtime wages, missed meal and rest breaks, waiting time penalties, and unreimbursed expenses. After a seven-day trial, the jury found in favor of Gramajo on his minimum wage and overtime causes of action. The jury awarded Gramajo $2.17 in unpaid minimum wages and $3,340 in unpaid overtime wages. In total, Gramajo recovered $7,659.63, consisting of the unpaid minimum and overtime wages; $2,115.59 in statutory interest; $2,100 in waiting time penalties calculated at the daily wage rate of $70 per day for thirty days per Labor Code section 203; $2.17 in liquidated damages; and $100 in statutory penalties.

Gramajo moved for attorney fees totaling $296,920 for 228.4 hours billed at $650 per hour and applying a multiplier of two. Gramajo also requested $26,932.84 in costs. Joe’s Pizza opposed the fee request and moved to tax Gramajo’s costs in their entirety.

The trial court denied Gramajo’s fee request and granted Joe’s Pizza’s motion to tax costs, ultimately awarding Gramajo nothing. The trial court found Gramajo acted in bad faith by artificially inflating his damages figure and including equity claims he never intended to pursue to justify filing the case as an unlimited civil proceeding. The trial court noted Gramajo sought $26,159.33 at trial, just over the jurisdictional amount, which included $10,822.16 in unreimbursed expenses.

In trial, however, Gramajo never introduced any evidence to support his expense claim. Similarly, Gramajo never pursued injunctive or declaratory relief at trial despite requesting that relief in his complaint. The trial court also found the case was severely over litigated, noting Gramajo had propounded 15 sets of written discovery requests and noticed 14 depositions despite only admitting 12 exhibits at trial.

On appeal, Gramajo argues the trial court should have awarded him reasonable litigation costs under Labor Code section 1194, subdivision (a), and abused its discretion by applying Code of Civil Procedure section 1033, subdivision (a), to deny those costs in their entirety.

The Court of Appeal agreed with Gramajo in the published case of Gramajo v. Joe’s Pizza on Sunset, Inc. -B322697 (March 2024).

Code of Civil Procedure section 1033 gives the trial court discretion to deny litigation costs based on the amount recovered while Labor Code section 1194 provides for a mandatory cost award regardless of that amount. Neither statute address the question of which one should control in this area of overlap.

The Court of Appeal held the “Labor Code section 1194, subdivision (a), controls given the legislative intent behind Labor Code section 1194, subdivision (a), and because that statute is more recently enacted and more specific relative to Code of Civil Procedure section 1033.”

It concluded that ” employees who prevail in actions to recover unpaid minimum and overtime wages are entitled to their reasonable litigation costs under Labor Code section 1194, subdivision (a), irrespective of the amount recovered.

It however expressed no opinion on the reasonableness of Gramajo’s requests for litigation costs. Accordingly, it reversed and remanded the matter for the trial court to determine a reasonable fee and cost award.