Mastagni Law Celebrates the Firm's 2012 Super Lawyers

Mastagni Law celebrates the firm's 2012 Northern California Super Lawyers David P. Mastagni and John R. Holstedt and 2012 Northern California Rising Stars David E. Mastagni, Phillip R.A. Mastagni and John P. Tribuiano.

Actions Speak Louder Than Words

Businesses use many names, words, and titles in an attempt to define relationships with workers.  The California courts, however, are not bound by mere titles or words, and instead look to a company’s conduct to determine the real nature of its relationship with workers.

The Second Appellate District of the California Court of Appeal recently held that a franchisor could be held accountable for workplace harassment at one of its franchises when the franchisor exercises control over personnel decisions.  In Patterson v. Domino’s Pizza, LLC, an employee of a Domino’s restaurant alleged sexual harassment and assault at her job against both the local Domino’s franchisee and its parent company, the Domino’s franchisor.

The Court of Appeal rejected the franchisor’s attempt to dismiss the case against it on the grounds that plaintiff’s only employer was the local restaurant.  The Court held that despite the restaurant’s contract with Domino’s establishing it as franchisee and an independent contractor, there was evidence that the Dominos’ maintained substantial control over the franchisee’s local operation, management-employee relations and employee discipline.  

Further, the alleged harasser in Patterson v. Domino’s Pizza, LLC was the plaintiff’s supervisor, and in California an employer is held strictly liable for workplace harassment by its supervisors.             

You should contact an attorney experienced in matters involving employment law as soon as possible, if you believe you are the subject of workplace discrimination.

Age Discrimination Claims in the Age of Layoffs

Stale economies inevitably result in layoffs. As revenues dip, employers make tough decisions to balance budgets. Impacted employers often choose to layoff high-salary workers to cut costs. Firing high wage earners generally hurts older employees, and the courts are often called upon to determine whether eliminating high-salary workers, who happen to be over 40 years of age, is age discrimination.

A recent decision in the Ninth Circuit Court of Appeals is an example of the courts’ general reluctance to second guess an employer’s cost-saving choices, even when said choices harm older employees. Schechner v. KPIX-TV was about two forty-plus year old bay area television news reporters whose positions were eliminated by a local news station. During the case an expert statistician showed that the layoffs disparately affected older workers. In response, the employer claimed that the statistics did not explain differences in types of jobs, such as the difference between an anchor versus a general assignment reporter.

The Ninth Circuit held that the plaintiffs could use statistics as some evidence of discrimination. The statistics alone, however, were not enough to overcome their employer’s excuse that they were targeted for termination because they worked as general assignment reporters, and the argument that there was no discrimination because the very same individuals who had recently extended the plaintiffs’ contracts were the ones that made the decision to let the plaintiffs go.

You should contact an attorney experienced in matters involving employment law as soon as possible, if you believe you are the subject of discrimination.

California Supreme Court Decides Meal Period Rules

In Brinker Restaurant Corp. v. Super. Ct. (April 12, 2012) 2012 WL 1216356, the California Supreme Court found it is the employer's obligation to relieve its employee of all duty, with the employee thereafter at liberty to use the meal period for whatever purpose the employee desires. The employer need not, howeer, ensure that no work is done.

The lawsuit was filed by five non-exempt restaurant employees of Chili’s who claimed the restaurant illegally denied them meal and rest breaks. The employees challenged the restaurant’s practice of having employees take early lunches shortly after starting work and then working employees another five to ten additional hours without receiving another meal period. The employees also claimed they should have received a rest break before the first meal period.

The Court found an employer’s obligation to "provide" a meal period is satisfied if the employee (1) is relieved of all duty for an uninterrupted thirty minute period, and (2) is free to leave the work premises. The employer's obligation is to "relieve the employee of all duty," with the employee thereafter at liberty to use the meal period for whatever purpose he or she desires. The employer need not "ensure" that no work is done during a meal period. If an employer relieves the employee of all duty, the employer is not liable for a meal period premium if the employee chooses to work (unless the employee is pressured by the employer to work). However, if the employer knew or reasonably should have known that the employee was working during the meal period, the employer will be liable for payment of the employee's regular (or overtime) wage for such time worked. The Court further found Rest breaks and meal periods do not need to be taken in a certain order.

THE MOST SIGNIFICANT TORT DAMAGES DECISION IN YEARS: Howell v. Hamilton Meats & Provisions, Inc.

The California Supreme Court in Howell v. Hamilton Meats & Provisions, Inc. held that an injured party is not entitled to recover the reasonable value of medical services provided as damages in a lawsuit when the injured party was responsible enough to maintain private health insurance coverage. The Court opined that such an injured party’s medical damages are limited to the significantly lower sum paid by the healthcare insurer pursuant to its contract with the medical providers. The Court explained that the reduction in compensation for medical services based on a negotiated rate differential is not a benefit provided to the plaintiff in compensation for his or her injuries.

The decision skewed the civil justice system in favor of liability insurers and defendants by leaving prevailing plaintiffs with a smaller recovery and insurance companies with lower liability damages. Defendants are no longer liable for the total cost of a plaintiff’s medical bill, but rather the substantially discounted negotiated rates that are paid for by medical insurance companies.
The Court’s decision penalizes the injured plaintiff whose foresight and prudence resulted in maintaining private health insurance by creating disparate values of medical treatment for plaintiffs with health insurance and those without health insurance.

Plaintiffs with medical insurance are entitled to only what is paid by their medical insurance carrier; however, plaintiffs with no insurance are entitled to recover the entire reasonable value for identical medical treatment. The uninsured plaintiff is entitled to such a recovery even when the hospital reduces the costs of non-insured plaintiffs’ bills. In Sanchez v. Strickland, the California Court of Appeals held that when a hospital willingly reduces the bill without the insurance carrier being involved it is a benefit that may be recovered by the plaintiff under the collateral source rule. As a result, Howell puts insured plaintiffs in a worse position than those plaintiffs who do not carry medical insurance.

Bob Tyson, who argued for the defendants before the California Supreme Court, argues that letting plaintiff’s recover the full bill is a “super windfall.” Generally a windfall is defined as receipt of financial gain that was not expected and not the result of something the recipient did. Finding a $100 bill on the street is a windfall. In contrast, a marketplace gain by freely negotiating parties is not a windfall. It’s anticipated, planned, and paid for with plaintiffs’ medical insurance premiums. This “windfall” rhetoric, which has a negative connotation, has been used effectively by defense attorneys throughout the nation to limit the scope of the collateral source rule.

On February 24, 2012, California Senate President Pro Tem Darrel Steinberg brought a glimpse of hope when he introduced Senate Bill 1528 (“SB 1528”). The Bill seeks to add Section 3284 to the California Civil Code, which would effectively overturn last year’s California Supreme Court decision in Howell. The Bill would eliminate the cap set by the Court in Howell and instead allow plaintiffs with medical insurance to recover the reasonable cost of the medical services provided to the plaintiff without regard to the amount that was actually paid for the services.

Look out for a major battle this year over SB 1528!

One Woman's Struggle for Reimbursement

One of the principal cornerstones of the workers’ compensation system, both in California and abroad, is the right to medical care. California Labor Code Section 4600 states that a broad range of medical care “that is reasonably required to cure or relieve the injured worker from the effects of his or her injury shall be provided by the employer.”

When someone is gravely injured, the level of this necessary care reaches quite far: extensive surgery, hospitalization, and sometimes even constant bed-side care. In a real sense, this is the system working at its best: the level of care matches the workers’ need, not some arbitrary external standard. However, this also means that the costs to defendants reach high levels, and defense attorneys seek creatively destructive arguments to weasel out of providing necessary care.

Recently California has seen a particularly nasty illustration of this sort of defense tactic, which, despite decisive rebukes from the Workers’ Comp Judge and the Workers’ Compensation Appeals Board, is now pending in the California Third Circuit Court of Appeals.

Felix Nino Mota was working as a lawn care worker for Allgreen Landscaping in Orange County when he suffered a brutally debilitating injury in 2001. Virtually his whole body was impacted: his head, neck, jaw, low back, right leg, right shoulder, left wrist, chest, liver, nose, eyes, gums, urinary tract and gastrointestinal system. He wound up settling his claim at 89% permanent disability with the right to ongoing and future medical care.

Mr. Mota required nearly constant care to get through daily life, and according to the uncontested language of Labor Code Section 4600, the defendant had to pay. Faced with this horrible incident, Mr. Mota’s wife Teodora left her home in Mexico to come to California and do what she could to help. She obtained legal permission to enter the country, though she did not maintain proper documentation through the long time in which she was caring for her severely disabled husband.

Defendant did not object to the care Ms. Mota was providing—at least not until she filed a lien to receive reimbursement for her work. As noted, this is nothing more or less than routine when medical providers give care without being paid. When Ms. Mota went forward and requested what was owed to her, Allgreen’s lawyers brain-stormed a series of spurious reasons in an attempt to keep their client’s wallet shut.

They claimed that Ms. Mota had not filed her lien in a timely manner. While the WCJ agreed at first, the Appeals Board shot this argument down, highlighting the continuous nature of the caregiving services. This was not one-time care that was then abandoned; it was (and remains) a process of care. Even the defendant’s lawyers conceded that this area of law is hardly clear.

Second, they claimed that because Mota is not a licensed vocational nurse they didn’t have to pay for the care she provided. (In fact, while not licensed, Ms. Mota had obtained significant training for the more complex tasks she performed.)

Here, again, though, they had to concede that in numerous instances courts have authorized non-experts, including close family members to provide such care. The defense acknowledged such cases, and even cited some of them, albeit to claim that they all involved exceptional circumstances not present in Mota’s case.

Third, and most off-track, they sought to avoid paying Mota because she is an undocumented immigrant.

One might be inclined to ask, what do her immigration papers have to do with her right to reimbursement for medical benefits in a workers’ compensation matter? A fair question, and one for which Allgreen has a rather implausible answer: according to Allgreen, Ms. Mota, by providing nursing care, became an employee of Allgreen’s, and according to the federal Immigration Reform and Control Act of 1986, it is illegal to hire undocumented immigrants. Hence, the argument goes, they do not have to pay medical benefits.

But of course reimbursement for medical benefits does not constitute employment by any stretch of the imagination. By Allgreen’s logic, every doctor that gives care in a workers’ comp case would become an employee of every injured worker’s employer. Doctors’ offices would be overrun with W-2 forms.

The truth is that this argument is just the latest in a series of attempts by the workers’ comp defense bar to drag immigration laws into the domain of workers’ compensation. Unfortunately, they have had some success in denying benefits such as temporary disability and vocational rehabilitation. Now emboldened, they are now trying to expand this campaign beyond employment to medical expenses.

The effort has no justification. Immigration and Customs Enforcement is a mammoth federal agency, which in 2011 commanded well over $5,000,000,000 of our tax dollars. Its operating mission does not in any way require the conscription of workers’ comp judges in California. And there is no reason for the rest of us to respect the repeated perverse attempts by the defense bar to exploit irrelevant areas of law in order to avoid paying their bills.

Anti-SLAPP: New California Appellate Decision Reinforces the Need to Exhaust Administrative Remedies

In Nesson v. Northern Inyo County Local Hospital District, (4th Dist., Div 2, March 6, 2012) Case No. SICVCV1049815, the California Court of Appeal affirmed the trial court’s grant of the hospital’s anti-SLAPP motion and held that (1) the trial court properly found that all causes of action arose from alleged actions and conduct by the hospital during medical peer review that qualify as official proceedings under the anti-SLAPP statute; (2) all causes of action were barred due to the plaintiff's failure to exhaust his administrative and judicial remedies before filing suit; and (3) even if the plaintiff had exhausted his remedies, he failed to meet his burden to establish a probability he would prevail on any of his claims.

Plaintiff John Nesson, a radiologist, sued defendant Northern Inyo County Local Hospital District (hospital) after the medical executive committee (MEC) summarily suspended his medical staff privileges and the Hospital terminated his contract to provide radiology services because the hospital deemed that it would be impossible for Nesson to comply with the requirements of his contract with the hospital without the medical staff privileges. Nesson filed a complaint against the hospital for breach of contract, breach of the covenant of good faith and fair dealing, violation of Health and Safety Code section 1278.5, violation of the Unruh Civil Rights Act, and violation of the Fair Employment and Housing Act. In response, the hospital filed a special motion to strike pursuant to the Code of Civil Procedure section 425.16 (hereinafter, “the anti-SLAPP statute”). The Legislature enacted the anti-SLAPP statute to provide a procedural remedy to dispose of lawsuits that are brought to chill the valid exercise of constitutional rights.

The anti-SLAPP statute establishes a two-step procedure. First, the defendant is required to show that the cause of action arises from protected activity, i.e., activity by the defendant in furtherance of his constitutional right of petition or free speech. Statements and activity made in connection with an “official proceeding authorized by law” fall within the scope of the first prong of anti-SLAPP. In this case, the court held that the adverse employment actions were protected because the termination of employment and privileges arose from the hospital’s peer review process, which is an official proceeding required by a comprehensive statutory scheme and subject to review by the courts in administrative mandamus proceedings.

Second, if the defendant meets the initial burden, then the burden shifts to plaintiff to demonstrate a reasonable probability of prevailing on the merits of his cause of action. The court emphasized that a plaintiff, who has failed to exhaust his administrative and judicial remedies, cannot prove a probability of prevailing on any claim, irrespective of how it is labeled. More specifically the court outlined specific steps that a physician, who is a victim of faulty medical peer review, must take to rectify the situation prior to filing a lawsuit. First, the physician must fully exhaust his internal hospital administrative remedies. Second, if the physician has fully exhausted his administrative remedies at the hospital but has failed to overturn the hospital’s peer review negative disciplinary action against him, the physician is required to petition for issuance of a writ of mandamus under Code of Civil Procedure section 1094.5. Only after the physician has obtained a writ of mandamus setting aside the hospital’s discipline of him, may the aggrieved physician file a civil lawsuit asserting state law claims against the hospital and its associated defendants. Here, the court held Nesson’s claims are barred because he failed to exhaust his administrative and judicial remedies. He did not request a timely hearing as required by the hospital bylaws; refused to cooperate with the evaluations requested by the peer review committee; refused to cooperate with the investigation undertaken by the medical staff; and did not file a petition for writ of mandamus to set aside the hospital’s adverse actions.