Tag: 2025 News

The Fair Warning Act of 2025, introduced as H.R. 5761 in the 119th Congress, represents a significant proposed overhaul of the federal Worker Adjustment and Retraining Notification (WARN) Act, which has remained largely unchanged since its enactment in 1988. Sponsored by Representatives Emilia Strong Sykes (D-OH), Debbie Dingell (D-MI), and Nikki Budzinski (D-IL).

The bill aims to modernize worker protections in response to evolving economic conditions, including surges in layoffs driven by automation, AI, and corporate restructuring. As of January 2026, the bill remains in the early stages, having been referred to the House Committee on Education and the Workforce, with no Republican cosponsors.

Enacted in 1988, the WARN Act requires employers to provide 60 days’ advance notice to affected employees, their representatives (e.g., unions), and certain government officials before implementing a plant closing or mass layoff. It applies to businesses with 100 or more full-time employees (or 100 employees working at least 4,000 hours per week, excluding overtime).

Key triggers include:

– – Plant Closing: The shutdown of a single site (or one or more facilities or operating units within it) resulting in employment loss for 50 or more employees during any 30-day period.
– – Mass Layoff: Employment loss at a single site during any 30-day period for 500 or more employees, or for 50-499 employees if they constitute at least 33% of the active workforce at the site.

“Employment loss” is defined as termination (other than for cause, voluntary departure, or retirement), a layoff exceeding six months, or a reduction in hours of more than 50% during each month of any six-month period. Part-time employees are generally excluded from threshold counts.

Enforcement is primarily through private lawsuits, with remedies limited to up to 60 days’ back pay and benefits for violations. There are no civil penalties, and the statute of limitations varies by state (as it borrows from analogous state laws). Exceptions exist for unforeseen business circumstances, faltering companies seeking capital, and natural disasters, allowing reduced notice if justified.

H.R. 5761 seeks to expand coverage, strengthen enforcement, and close loopholes in the WARN Act by lowering thresholds, extending notice periods, broadening definitions, and enhancing penalties.

For example the existing WARN Act applies to businesses with 100+ full-time employees or 100+ employees working 4,000+ hours/week (excluding part-time). Focuses on single entities.

The proposed law would apply to businesses with 50+ employees (including part-time) or $2M+ annual payroll. Extends liability to parents, affiliates, or contractors based on control factors (e.g., common oownership, shared policies).

These changes would align federal law more closely with state “mini-WARN” acts in places like California, New York, and Illinois, which often have lower thresholds (e.g., 50 employees) and longer notice periods (e.g., 90 days). For employers, this means earlier planning for restructurings, clearer remote work policies, and potential interactions with state laws requiring the most protective standards.

The existing 1988 version of the Federal WARN ACT can be found in 29 USC Chapter 23. Employers are advised to consult legal counsel for guidance on implementation.

Bristol Myers Squibb just announced an agreement with Microsoft for AI-powered radiology and clinical workflow technologies, aiming to accelerate early detection of lung cancer.

Through this digital health collaboration, U.S. FDA-cleared radiology AI algorithms will be deployed via Microsoft’s Precision Imaging Network, part of Microsoft for Healthcare radiology solutions. Today, more than 80% of hospitals in the U.S. use Microsoft’s network to share medical imaging and access third-party imaging AI. AI capabilities available through Precision Imaging Network can automatically analyze X-ray and CT images to help identify lung disease, supporting radiologists in their daily workflow and helping reduce clinical workload. These advanced AI algorithms can help surface hard to detect lung nodules, potentially identify patients at earlier stages of lung cancer, and help triage them for appropriate care.

Lung cancer remains the leading cause of cancer-related deaths in the United States, with approximately 125,000 deaths and 227,000 new cases reported annually. Medically underserved populations experience even higher lung cancer mortality rates and are less likely to receive guideline-concordant screening. With more than half of the patients with incidental findings lost to follow-up, the collaboration leverages workflow management tools to track patients with lung nodules through care pathways and help ensure regular follow-up.

“By combining Microsoft’s highly scalable radiology solutions with BMS’ deep expertise in oncology and drug delivery, we’ve envisioned a unique AI-enabled workflow that helps clinicians quickly and accurately identify patients with Non-Small Cell Lung Cancer (NSCLC) and guide them to optimal care pathways and precision therapies,” said Dr. Alexandra Goncalves, VP and Head of Digital Health, Bristol Myers Squibb. “An integrated, AI-powered platform that streamlines patient flow can significantly improve operational efficiency and patient outcomes.”

A core objective of the collaboration is to expand access to early detection in medically underserved communities, including rural hospitals and community clinics across the United States. By harnessing advanced AI tools, especially in resource-limited settings, this initiative promotes earlier diagnosis and follow-up, enabling more equitable care for all patients.

“This new Microsoft collaboration reflects our commitment to breaking down barriers and addressing healthcare challenges,” said Andrew Whitehead, VP and Head of Population Health, Bristol Myers Squibb. “At BMS, health equity is not a standalone initiative – it is embedded in everything we do. By deploying this solution and bringing advanced AI tools to the front lines, together we will help to address health disparities in lung cancer.”

The early detection strategy for lung cancer directly supports BMS’ commitment to health equity and its focus on scalable, sustainable solutions to improve patient outcomes.

“With Microsoft’s AI-powered radiology technology platform widely deployed within healthcare delivery organizations across the country and operating behind the scenes, clinicians can more easily identify patients who may be showing early signs of cancer—often before they are aware of any symptoms—and help guide them into the appropriate care pathway sooner,” said Peter Durlach, Corporate Vice President and Chief Strategy Officer, Microsoft Health and Life Sciences. “This is a clear win for both patients and providers and aligns with Microsoft’s goals to utilize technology to unlock insights, increase efficiencies, and improve patient care.”

The “grant-for-study” orders issued by the California Workers’ Compensation Appeals Board (WCAB) have been the subject of multiple appellate challenges for violating the statutory 60-day deadline to act on petitions for reconsideration (under Labor Code § 5909). As of January 2026, at least two related cases are pending before the California Supreme Court:

– – Mayor v. Workers’ Compensation Appeals Board (2024) 104 Cal.App.5th 713 (S287261): Review was granted on December 11, 2024. The case remains pending, with no oral arguments scheduled or decision issued. It presents the following issues: (1) May the WCAB apply equitable tolling to act upon a petition for reconsideration beyond the 60-day period provided in Labor Code § 5909, when the WCAB did not receive the petition for reconsideration until after the 60-day period has elapsed? (2) Did the Court of Appeal act in excess of its jurisdiction in granting relief under traditional mandate (Code Civ. Proc., § 1085), where petitioner did not file a timely petition for writ of review pursuant to Labor Code § 5909?

– – City of Salinas v. Workers’ Compensation Appeals Board (Miraco) (2025) 113 Cal.App.5th 801 (S293212): Review was granted on November 19, 2025, but briefing has been deferred pending a decision in the lead case of Mayor v. Workers’ Compensation Appeals Board (S287261). No oral arguments are scheduled, and no decision has been issued.

Citing the above two decisions, as well as Zurich American Ins. Co. v. Workers’ Comp. Appeals Bd. (2023) 97 Cal.App.5th 1213 – yet another consistent appellate case arrived from the Sixth Appellate District this week in the unpublished case of Zenith Insurance Co. v. Workers’ Compensation Appeals Bd. CA6 – (January 2026)

In this newest case, Kin Chan worked for New Sam Kee Restaurant, LLC as a prep cook. Chan’s coworkers included chef Ha Xu Huynh. On September 15, 2020, Chan and Huynh were preparing dishes in the restaurant when they began to argue. The argument escalated. Huynh struck Chan in the right eye, causing a broken eye socket, among other injuries.

Chan filed an application for workers’ compensation claim in October 2020. The restaurant and its insurance carrier, Zenith, filed an answer denying the allegations and asserting affirmative defenses, including the “initial physical aggressor defense under” section 3600, subdivision (a)(7).

After trial, the WCJ issued written findings and order, finding that Chan “sustained a specific injury” which “occurred during an affray with a co-worker in which [Chan] was the initial physical aggressor.” The WCJ ordered that Chan “shall take nothing by reason of this claim.” The Board acted on Chan’s petition for reconsideration within 60 days and, on March 3, 2023, issued an order granting the petition for reconsideration for purposes of “further study” (grant-for-study order).

Approximately one year and eight months after the grant-for-study order, on November 1, 2024, the Board issued an opinion and decision after reconsideration and rescinded the WCJ’s findings and order denying compensation and substituted a new finding that Chan’s injury was not barred from compensation because the restaurant and Zenith “failed to prove that [Chan] was the initial physical aggressor.”

In support of applying equitable tolling to the instant occasion, the Board invoked Shipley v. Workers’ Comp. Appeals Bd. (1992) 7 Cal.App.4th 1104, 1108 (Shipley) for the proposition that “ ‘the burden of the system’s inadequacies should [not] fall on [a party].’ ”

In response the Opinion said “The Board in this case has not attempted to explain the significant delay of 22 months between its receipt of the transmitted case file in January 2023 and the November 2024 order after reconsideration. The timing and nature of the orders issued by the Board in this case stand in contrast with City of Salinas and do not present circumstances suitable to the narrow, equitable remedy intended for “ ‘special situations’ ”

The November 1, 2024 opinion and decision after reconsideration of the Workers’ Compensation Appeals Board was reversed. “We decline to revisit the statutory analysis in City of Salinas and agree with petitioners that the Board exceeded its jurisdiction in granting Chan’s petition for reconsideration. We also agree with petitioners’ alternative argument that the narrow grounds for the Board to exercise equitable tolling have not been met in this case.”

West Coast Dental Administrative Services, LLC, a Delaware corporation, manages a network of dental facilities throughout California. The company provides administrative and support services to affiliated dental practices and professional corporations via support services agreements. It sources materials from outside California and, at the time relevant to this case, maintained offices and employees in both California and Washington until January 2022, with differences in employee benefits outlined in its handbook.

West Coast Dental hired Sinedou S. Tuufuli as a collector and customer service representative. Tuufuli electronically signed an arbitration agreement that stipulated that any disputes related to her employment or termination would be resolved through final and binding arbitration. It explicitly stated that the agreement “shall be governed by the Federal Arbitration Act and, to the extent permitted by such Act, the laws of the State of California.”

In April 2023, Tuufuli filed a lawsuit against West Coast Dental, asserting eight individual and class claims for violations of various provisions of the California Labor Code and Business and Professions Code. These claims alleged labor-related issues, such as unfair compensation and working conditions, on behalf of herself and a class of similarly situated employees.

West Coast Dental filed a motion to compel arbitration of Tuufuli’s individual claims and to dismiss her class claims. In support, the company’s human resources manager submitted a declaration affirming its Delaware incorporation, former offices in Washington, and sourcing of out-of-state materials. West Coast Dental also provided a copy of the employee handbook given to Tuufuli, which detailed interstate operations and benefits differences. Tuufuli opposed the motion, arguing that the Federal Arbitration Act (FAA) did not apply because there was no evidence of interstate commerce involvement or contemplation thereof, and that West Coast Dental operated exclusively in California. Tuufuli worked exclusively in California and testified that she rarely interacted with individuals or entities outside the state in performing her duties.

The trial court granted West Coast Dental’s motion. It determined that the FAA governed the agreement, relying on the evidence of West Coast Dental’s interstate activities (e.g., Delaware incorporation, Washington offices, and out-of-state sourcing) as well as the explicit provision in the agreement stating it was governed by the FAA. Finally, the court dismissed Tuufuli’s class claims, citing the agreement’s express prohibition on class arbitration or litigation.

Tuufuli appealed, challenging only the trial court’s finding that the FAA applied to the arbitration agreement. She did not contest the agreement’s validity or the dismissal of class claims on other grounds.

The Court of Appeal affirmed the trial court’s order compelling arbitration of Tuufuli’s individual claims and dismissing her class claims in the published case of Tuufuli v West Coast Dental Administrative Services, LLC -B338584.PDF (January 2026).

The appellate court agreed with the trial court that the FAA applied, but primarily because the parties had explicitly agreed to it in the arbitration agreement’s governing law provision. It rejected Tuufuli’s argument that parties cannot contractually invoke the FAA without proving interstate commerce involvement, emphasizing that arbitration under the FAA is a matter of consent, not coercion, and parties are generally free to structure their agreements as they see fit (citing Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University (1989) 489 U.S. 468, 479).

The court distinguished the U.S. Supreme Court’s decision in Allied-Bruce Terminix Cos. v. Dobson (1995) 513 U.S. 265, which held that the FAA applies to contracts that in fact involve interstate commerce, even if not contemplated by the parties. The appellate court clarified that Allied-Bruce did not prohibit parties from voluntarily electing FAA governance; it merely addressed the scope of “involving commerce” under 9 U.S.C. § 2. Similarly, the court rejected Tuufuli’s analogy to 9 U.S.C. § 1, which expressly exempts transportation workers’ contracts from the FAA regardless of agreement. Section 2, by contrast, contains no such exemption for non-interstate contracts and simply enforces arbitration provisions in contracts involving commerce (or, by extension, where parties consent to FAA application).

Given this consent-based reasoning, the appellate court declined to address whether the agreement independently involved interstate commerce based on West Coast Dental’s operations.

California’s Insurance Frauds Prevention Act (IFPA) Insurance Code § 1871-1871.10 provides tools to address insurance fraud, but it distinguishes between specific types of fraud:

Section 1871.4 is limited exclusively to workers’ compensation fraud. It criminalizes making knowingly false or fraudulent statements or representations to obtain, deny, or influence workers’ compensation benefits, as defined under Labor Code section 3200 (which covers employee injuries arising out of employment).

Section 1871.7, in contrast, is a broader qui tam provision allowing private relators (like Jerilyn Henggeler below to sue on behalf of the state for general insurance fraud. It incorporates violations of Penal Code sections 549 (soliciting or referring business for fraudulent claims), 550 (presenting false claims or concealing facts to defraud insurers), and 551 (fraudulent auto insurance claims).

In October 2009, Omar Dauod was involved in a car accident while driving at high speed, colliding with another vehicle exiting a private community without fully stopping. The other driver’s insurer, Farmers Insurance, paid Omar $100,000 after arbitration determined fault. Omar and his wife Gina, represented by attorney James Ballidis of the Law Offices of Allen, Flatt, Ballidis & Leslie, then pursued an underinsured motorist claim against their own insurer, Geico, seeking $400,000 – the policy limit. After arbitration in 2013 awarded them that amount, the Dauods sued Geico in December 2014 for breach of contract, bad faith, and emotional distress, alleging Geico’s delays caused emotional harm, loss of two homes, and Omar’s business losses as a real estate developer. Ballidis testified at the trial supporting these claims, though he did not represent them in court. A jury awarded Omar $22.9 million.

Jerilyn Henggeler, a former neighbor and social acquaintance of the Dauods, learned of the verdict over a year later through news reports. Appalled, she believed the claims were fraudulent based on personal knowledge: she had observed Omar uninjured and active post-accident, knew he was a real estate salesman – not a developer – and learned from tenants that home losses stemmed from pocketing rent, not injuries. Henggeler’s research into public records, including Colorado business filings, bankruptcies, lawsuits, property titles, and licenses, contradicted Omar’s and Ballidis’s representations about Omar’s businesses, properties, and licenses. She also identified forged documents submitted to Geico, such as a letter purportedly from Omar’s brother-in-law and a nonexistent entity’s escrow agreement.

Henggeler filed a qui tam action under Insurance Code section 1871.7 on behalf of the State of California, alleging the Dauods, Ballidis, and the Law Firm defrauded Geico through false claims and testimony. The second amended complaint included four causes: three under section 1871.4 (workers’ compensation fraud statutes) for false statements, and one under section 1871.7 incorporating Penal Code violations for presenting fraudulent claims and concealing facts. The Dauods and Ballidis/Law Firm demurred, arguing the court lacked jurisdiction under the public disclosure bar (section 1871.7, subd. (h)(2)(A)), as Henggeler’s claims relied on public information from news, court files, and records.

The trial court sustained the demurrers without leave to amend, ruling it lacked jurisdiction due to the public disclosure bar. It found Henggeler’s claims were based on publicly disclosed information: she learned of the verdict from news media, incorporated trial testimony from Omar and Ballidis, and used public records like court files and Colorado documents.

The Court of Appeal reversed in the partially published case of People ex rel. Henggeler v. Dauod -G064064 (January 2026) and remanding with directions to sustain demurrers on the first three causes (workers’ compensation fraud statutes) but overrule on the fourth based upon Penal Code violation. This distinction was based upon balancing qui tam policy goals. By narrowly interpreting the bar to exclude reliance on neutral public information, the court preserved Henggeler’s suit as original, promoting IFPA’s anti-fraud aims. Dismissing workers’ compensation claims aligned with statutory limits, ensuring only valid insurance fraud allegations proceeded. This first-impression ruling clarified the bar’s scope, certifying partial publication to guide future cases.

The appellate court concluded that the trial court misinterpreted the public disclosure bar. It clarified the bar applies only to qui tam suits based on publicly disclosed “allegations” of fraud or specific fraudulent “transactions,” not mere “information” even if related to fraud.

Drawing from legislative history of the IFPA, CFCA, and federal False Claims Act, the court noted the bar’s purpose: to prevent parasitic suits copying public fraud allegations while encouraging original whistleblowers. Congress and California rejected broader bars prohibiting use of public “information” or “evidence,” opting for narrow limits on “allegations or transactions.”

Henggeler’s complaint used public records (e.g., business filings, bankruptcies) and trial testimony as evidence to prove fraud, not as pre-existing fraud allegations. Testimony from Omar and Ballidis supported their claims against Geico, not accusations of fraud. No prior public disclosure alleged Respondents’ fraud; Henggeler’s firsthand knowledge and research formed the basis.

The court upheld demurrers on the first three causes under section 1871.4, as they pertained to workers’ compensation fraud without relevant allegations. It rejected other defenses: no prefiling under Civil Code section 1714.10 was needed due to Ballidis’s independent duty not to defraud nonclients like Geico; collateral estoppel failed for lack of privity between the state/Henggeler and Geico.