Tag: 2025 News

The plaintiffs, Bo Avery, Phoebe Rogers, Kristy Camilleri, and Jill Unverferth, alleged that TEKsystems, a professional staffing agency that places IT consultants with business clients, had misclassified them as exempt from overtime laws, failing to pay overtime wages or provide required meal and rest breaks in violation of California labor laws. The case was filed initially in California state court but was removed to federal court by TEK. Over the ensuing months, the parties engaged in extensive discovery.

In September 2023, TEK internally approved expanding its longstanding mandatory arbitration policy – previously applied only to external consultants – to include internal employees like the recruiters.

The rollout communications criticized class actions as wasteful, inefficient, and primarily benefiting attorneys, while emphasizing arbitration’s efficiency. They were sent during the holiday season, contained inconsistencies about opt-out procedures and deadlines, and suggested employees consult their own attorneys at personal expense without mentioning free access to class counsel. A separate email targeted putative class members with an opt-out form specifically for remaining in the class action.

Plaintiffs moved for class certification on October 6, 2023, with briefing completing by December 14, 2023. Just five days later, on December 19, 2023, TEK rolled out a new mutual arbitration agreement to its internal employees, including putative class members. This agreement, which covered the claims in the lawsuit, was presented via email and deemed accepted through continued employment after December 31, 2023, unless employees opted out or quit.

Of 164 recipients, only 41 opted out to stay in the class. The class was certified on February 13, 2024, with notices issuing on April 16, 2024, and an opt-out deadline of June 15, 2024. On June 10, 2024 – after plaintiffs had moved for partial summary judgment and just days before the notice period closed – TEK filed a motion to compel arbitration against class members bound by the agreement.

The federal district court in the Northern District of California, denied TEK’s motion to compel arbitration. It found that TEK’s communications rolling out the arbitration agreement threatened the fairness of the litigation by being misleading and omitting key information, such as the availability of free consultation with class counsel and the status of the ongoing class certification process.

The court concluded that these actions subverted Federal Rule of Civil Procedure 23’s opt-out mechanism for class actions, effectively turning it into an opt-in process where inaction bound employees to arbitration and excluded them from the class. Invoking its broad authority under Rule 23(d) to manage class proceedings and ensure fairness, the district court refused to enforce the agreement. As an alternative basis, it also determined that TEK had waived its right to arbitrate by delaying the rollout for over 22 months into the litigation, engaging in a “wait-and-see” approach.

The Ninth Circuit Court of Appeals affirmed the district court’s denial of the motion to compel arbitration, declining to address the waiver issue and focusing instead on the Rule 23(d) grounds in the published case of Avery v TekSystems -3:22-cv-02733-JSC (January 2026)

The panel held that district courts possess the duty and expansive authority under Rule 23(d) to oversee class actions, including the power to invalidate arbitration agreements obtained through communications that undermine the integrity of the proceedings.

The appellate court’s rationale emphasized adherence to Supreme Court precedents, such as Gulf Oil Co. v. Bernard, 452 US 89 – Supreme Court 1981 and Hoffmann-La Roche Inc. v. Sperling, 493 US 165 – Supreme Court 1989 which grant district courts discretion to regulate contacts with class members and protect against abuses that could coerce or mislead them. The panel found TEK’s rollout communications to be inherently threatening to fairness: they disparaged class actions repeatedly as inefficient and attorney-enriching, were timed disruptively during the holidays, included conflicting instructions on how to opt out (such as deeming acceptance via continued employment while also requesting signatures), and implied personal legal costs without disclosing class counsel’s role.

These elements, combined with omissions about the lawsuit’s progress, risked confusing or pressuring class members into forgoing their rights under Rule 23’s opt-out framework, which presumes inclusion unless affirmatively excluded.

The court aligned its holding with similar decisions from the Fourth, Sixth, and Eleventh Circuits, rejecting TEK’s argument that the Federal Arbitration Act preempted such oversight by noting that Rule 23(d) applies neutrally to all contracts and does not disfavor arbitration. Furthermore, the arbitration agreement’s delegation clause – incorporating JAMS Rule 11(b), which assigns arbitrability disputes to the arbitrator – did not preclude the district court’s review, as the challenge targeted the agreement’s overall enforceability under procedural fairness rules rather than a specific provision.

Ultimately, the Ninth Circuit concluded that invalidating the agreement was a narrowly tailored remedy to restore the proper opt-out process, affirming the district court’s decision to safeguard the class action’s integrity.

The Division of Workers’ Compensation (DWC) has posted proposed ranges for attorney deposition fees to its online forum where members of the public may review and comment on the proposals.

In the California workers’ compensation system, the Workers Compensation Appeals Board (WCAB), a workers’ compensation judge, or any party to the action or proceeding may request the deposition of a witness in matter before the WCAB, pursuant to Labor Code section 5710. If either the employer or the insurance carrier requests that an injured employee be deposed, that injured employee is entitled to receive, among other benefits, “a reasonable allowance for attorney’s fees” if they are represented by an attorney.

Judges have discretion when awarding the fees, which are required to be paid by employer or its insurer. Fees are currently governed by local policy established by presiding judges in each district, which serve as a guide to the parties, but individual attorneys’ fees awards are subject to litigation before WCAB judges. Pursuant to section 5710(b)(4) the Administrative Director of the Division of Workers’ Compensation (DWC) is charged with determining “the range of reasonable fees to be paid.”

The proposed regulation will establish the range of reasonable fees allowable for attorneys representing injured employees when employers or insurers request their depositions. The deposition shall not exceed the following amounts:

(1) An amount not to exceed $500 per hour for attorneys certified as Workers’ Compensation Specialists by the State Bar of California;
(2) An amount not to exceed $450 per hour for attorneys with five or more years of experience in Workers’ Compensation matters in the state of California;
(3) an amount not to exceed $400 per hour for attorneys with fewer than five years of experience in workers’ compensation matters in the state of California;
(4) an amount not to exceed $250 per hour for non-attorney representatives as identified pursuant to Labor Code section 10751.

Incremental Billing Requirements:

(1) Fees authorized under this section shall be billed on an incremental, time-based basis, reflecting actual time reasonably spent preparing the injured employee for deposition and attending the deposition.
(2) Billing increments shall not exceed one-tenth (0.1) of an hour.
(3) Minimum or flat fees are not permitted, and attorneys or representatives shall not bill for time not actually expended.

Fees shall not be sought or awarded for activities including, but not limited to:

(1) General file review;
(2) Travel time or travel expenses;
(3) Review of deposition transcripts;
(4) Administrative or clerical tasks.

The forum can be found online on the DWC forums web page under “current forums.” Comments will be accepted until 5 p.m. on February 13, 2026.

California’s 2005 heat standard was an important first step to protect workers. Yet critics argued that the standard contained ambiguous wording that enabled employers to avoid improving working conditions, relied on vulnerable workers to demand breaks, and was not actively enforced by the California Division of Occupational Safety and Health.

In 2010, California responded by launching a statewide initiative aimed at educating workers about their rights, improving compliance among employers, and increasing inspections and enforcement. Labor unions and worker advocates continued to argue for changes, and in 2015, California revised the standard to close loopholes related to rest, water, shade, and enforcement.

Several US states have followed California’s example. Since 2022, Colorado, Maryland, Nevada, Oregon, and Washington have passed new laws that mandate water, shade, and regular rest breaks for all outdoor workers on hot days. In August 2024, the Occupational Safety and Health Administration (OSHA) proposed a new standard that would require similar protections for workers throughout the United States.

A new study just published by Health Affairs compared heat-related deaths among outdoor workers in California with those in neighboring states without standards during the period 1999–20. Researchers obtained data for all 126 counties in Arizona, California, Nevada, and Oregon for the period 1999–20. They identified 6,145 heat-related deaths among outdoor workers during the study period.

Arizona had the highest cumulative number of deaths (2,546), followed by California (2,207), Nevada (1,124), and Oregon (268). The county-year with the highest number of heat-related deaths among outdoor workers was Maricopa County, Arizona, with 233 deaths in 2020. Among counties that reported heat-related deaths among outdoor workers, the mean annual death rate was 0.91 deaths per 100,000 residents. All fifty-eight counties in California were covered by a heat standard starting in 2005, whereas none of the sixty-eight counties in the neighboring states was covered by a heat standard during the study.

Results suggest that the effectiveness of California’s heat standard increased substantially over time. Researchers found no decrease associated with the policy during the initial implementation period (2005–09), but point estimates suggested a 33 percent decrease in heat-related deaths among outdoor workers after increased enforcement (2010–14) and a 51 percent decrease after California’s heat standard revisions went into effect (2015–20). Although these individual period estimates were not statistically significant, a Wald test confirmed that California’s enhanced approach from 2010 onward was associated with a statistically significant decrease in worker deaths.

“Our findings offer important lessons for other states regarding the potential promise and pitfalls of heat standards meant to protect outdoor workers. On the one hand, California’s experience suggests that heat standards can reduce heat-related deaths among outdoor workers. On the other hand, it highlights that such policies may have little impact unless they are carefully designed and effectively enforced. A review of recently implemented heat standards suggests that variation in effectiveness is likely: Although Maryland’s 2024 law closely mirrors California’s revised standard, for example, Nevada’s 2024 version lacks a trigger temperature for enforcement”

In early 2026, pharmaceutical companies have implemented list price increases on at least 350 branded medications in the US, up from around 250 at the same point in 2025. The median hike is approximately 4%, consistent with the prior year’s average, despite ongoing political pressure from the Trump administration, which secured “most favored nation” (MFN) pricing deals with 14 major drugmakers in late 2025 to align certain US prices with those in other developed countries.

These deals primarily affect Medicaid and cash-paying patients for specific drugs treating conditions like diabetes, arthritis, and cancer, but they do not broadly prevent list price increases, as companies often maximize list prices while offering rebates to insurers and setting separate discounts for direct sales.

Key examples of 2026 price increases include:

– – Pfizer, which leads with hikes on about 80 products, including a 15% increase on its COVID-19 vaccine Comirnaty, as well as rises on the cancer drug Ibrance, migraine treatment Nurtec, and COVID-19 therapy Paxlovid.
– – GSK with increases on around 20 drugs and vaccines, ranging from 2% to 8.9%.
– – Other notable hikes on vaccines for COVID-19, RSV, and shingles, plus some hospital drugs like morphine and hydromorphone (with increases exceeding 400% in certain cases).

At least five companies that signed Most Favored Nation deals – Pfizer, Sanofi, Boehringer Ingelheim, Novartis, and GSK – proceeded with these increases anyway, highlighting that the agreements address only a fraction of the factors driving high US drug costs (where patients pay nearly three times more than in other developed nations). Industry stakeholders predict continued single-digit annual rises through the end of Trump’s term, largely fueled by expensive new therapies for cancer, diabetes, obesity, and gene/cell treatments.

Currently efforts to regulate pharmacy benefit managers (PBMs) have accelerated at both federal and state levels, driven by bipartisan concerns over their role in inflating drug costs, reducing pharmacy access, and prioritizing profits through practices like spread pricing (where PBMs charge payers more than they reimburse pharmacies) and rebate retention.

Congress is on the verge of passing significant PBM reforms as part of a bipartisan $1.2 trillion appropriations “minibus” package released on January 20, 2026, which funds agencies like HHS through fiscal year 2026. This deal revives elements of stalled 2024-2025 proposals, including those from Senate Finance Committee leaders Ron Wyden (D-OR) and Mike Crapo (R-ID), and is expected to be signed into law to avert a government shutdown.  Key provisions include:

– – Medicare Part D Reforms (Effective 2028-2029): Bans PBMs from pocketing manufacturer rebates or kickbacks, requiring full pass-through to plan sponsors or patients. Delinks PBM compensation from drug prices or utilization, shifting to flat service fees to reduce incentives for favoring high-cost drugs. Reinforces “any willing pharmacy” rules to prevent exclusion of independent pharmacies from networks.
– – Medicaid Changes (Effective Immediately or 2026): Bans spread pricing entirely and mandates direct payments to pharmacies.
– – Commercial Market Requirements: Mandates rebate pass-throughs to employers and updates pharmacy network standards for fairness.
– – Enforcement and Studies: Allocates $188 million to CMS for oversight, requires a government study of PBM business models, and updates the National Average Drug Acquisition Cost (NADAC) survey for accurate pricing benchmarks.
– – Other Bills: The PBM Reform Act of 2025 (H.R. 4317), introduced in July 2025, remains in the “introduced” stage but influenced the appropriations package. Separate proposals like the Patients Before Monopolies Act (introduced in 2024 and reintroduced in 2025) seek to prohibit PBM-pharmacy co-ownership by major players like UnitedHealth, CVS, and Cigna, with divestiture timelines, but have not advanced beyond committee.

These reforms target the “Big Three” PBMs (CVS Caremark, Express Scripts, and OptumRx), which control about 80% of the market and are often vertically integrated with insurers and pharmacies. A July 2024 FTC report highlighted how these entities pay affiliated pharmacies up to 40 times more for certain drugs than competitors, exacerbating costs.

All 50 states now have PBM regulations, with 26 enacting new laws in 2025 alone, focusing on licensing, transparency, and curbing predatory practices. As of January 1, 2026, several bans and requirements are in effect:

– – Spread Pricing Bans: Implemented in states like California (via Senate Bill 41) and multiple Medicaid programs, prohibiting PBMs from retaining the difference between payer charges and pharmacy reimbursements.
– – PBM-Pharmacy Ownership Bans: Arkansas led with Act 624 in April 2025, barring PBMs from owning pharmacies; it’s under federal injunction but inspired similar laws in at least five other states (e.g., Massachusetts with transparency mandates under Senate Bill 3012).
– – Transparency and Reporting: Over 23 states require real-time drug pricing disclosure and rebate reporting; 12 have prescription drug affordability boards to review costs. Illinois and others ended “predatory practices” like clawbacks.
– – Other Measures: Bans on gag clauses (preventing pharmacists from discussing cheaper options), limits on audits, and “any willing pharmacy” protections are common.

States like Arkansas and California are testing models that could influence national policy, though PBMs are litigating aggressively, with some laws delayed by courts. Projections for 2026 indicate continued state experimentation, potentially filling federal gaps.

The California Worker Adjustment and Retraining Notification Act (Cal-WARN), often referred to as the California WARN Act, provides protections for employees in the event of mass layoffs, relocations, or terminations by requiring advance notice from employers. It expands on the federal WARN Act by covering smaller employers, including additional triggers like relocations, and incorporating part-time employees in certain counts.

Cal-WARN applies to “covered establishments,” defined as any industrial or commercial facility (or part thereof) that employs, or has employed within the preceding 12 months, 75 or more full- or part-time persons. This threshold is lower than the federal WARN Act’s 100-employee requirement. Other provisions specify:

– – Employer: Any person who directly or indirectly owns and operates a covered establishment; includes parent corporations for subsidiaries they control.
– – Employee: A person employed for at least 6 of the 12 months preceding the notice date; includes part-time workers in the 75-employee threshold count.
– – Layoff: Separation from a position due to lack of funds or work.
– – Mass Layoff: Layoff of 50 or more employees at a covered establishment during any 30-day period (no percentage-of-workforce requirement, unlike federal WARN).
– – Relocation: Removal of all or substantially all operations to a location 100 or more miles away. – – Termination: Cessation or substantial cessation of operations at a covered establishment.

The Act does not apply to project-based or seasonal employment where workers were hired with the understanding of limited duration.

As of January 1, 2026, amendments from Senate Bill 617 (approved October 1, 2025) have expanded the required content of notices under the Act. The Act is codified in California Labor Code sections 1400 through 1408, which outline definitions, triggers, notice requirements, penalties, exceptions, and enforcement.

The primary amendments effective in 2026 involve California Labor Code Section 1401, which governs the notice requirements for mass layoffs, relocations, or terminations at covered establishments. As amended by SB 617 notices must also include:

– – Whether the employer plans to coordinate support services (e.g., rapid response orientation for job search, resume help, training) through the local workforce development board, another entity, or not at all. If coordinating, services must be arranged within 30 days of the notice.
– – Contact info (email and phone) for the local workforce development board, plus a standardized description: “Local Workforce Development Boards and their partners help laid off workers find new jobs. Visit an America’s Job Center of California location near you. You can get help with your resume, practice interviewing, search for jobs, and more. You can also learn about training programs to help start a new career.”
– – A description of the statewide food assistance program known as CalFresh (California’s version of the Supplemental Nutrition Assistance Program, or SNAP, under Welfare and Institutions Code Chapter 10, commencing with § 18900), along with the CalFresh benefits helpline and a link to the CalFresh website. This addition aims to inform workers about access to food benefits during potential unemployment.
– – A functioning employer email and phone number for contact.

SB 617 introduces new subsections (c), (d), and (e) to Labor Code § 1401, while renumbering the prior subsection (c) (regarding exceptions for physical calamity or war) to (f). The notices must still include all elements required by the federal WARN Act (29 U.S.C. § 2101 et seq.), such as the expected date of the action, affected job titles, and contact details, but now incorporate additional employee-focused information.

For the full statutory text, refer to the chaptered version of SB 617 on the California Legislative Information website. Employers are advised to consult legal counsel or the Employment Development Department for guidance on implementation.