An insurer does not have to provide coverage when the insured’s business operation and use of the premises was not in accordance with that listed on the insurance application. In Nationwide Mutual Fire Insurance Co. v. Almco Ltd., a federal judge for the District of Columbia ruled that where an insured’s application requested insurance for a “deli,” the insurer did not have to provide coverage under the policy when a shooting occurred at the insured’s entertainment venue resulting in personal injury claims.

Defendant Almco Ltd. had plans to open a delicatessen. It obtained insurance from Travelers Casualty Insurance Co. of America from 2011 to 2012. That policy stated Almco operated a fast-food restaurant. However, during that time period Almco not only provided food, but offered billiards, entertainment, and alcohol upon the premises. In 2012, Almco obtained a new policy from Nationwide. That application provided that Alcmo operated a deli, and did not serve alcohol, have entertainment, nor billiards.

Approximately six months after Almco obtained the new insurance, a shooting occurred upon the premises during a private event at which alcohol was being served to guests. Several guests suffered injuries and Almco tendered the claims to Nationwide. In 2013, Nationwide sued Almco, seeking declaratory judgment that it owed no duty to provide coverage under the policy due to false statements.

Under District of Columbia statute, an insured may be barred from coverage where a false statement is made with the intent to deceive, or a false statement materially affects the acceptance of risk or hazard assumed by an insurer. Almco moved for Summary Judgment arguing it did not intend to deceive Nationwide. However, neither party disputed that false representations were made at the time the application was submitted.

On Nationwide’s Motion for Summary Judgment, the District Judge found material representations existed in the application, stating, “[a] disco is not a deli and the risks posed by the combination of billiards, booze and entertainment are materially different from the hazards that could arise out of a corned beef on rye.” Because there was no genuine dispute as to whether the false statement affected Nationwide’s acceptance of risk or hazards assumed, the Judge entered judgment for Nationwide. “The test of materiality is whether the representation would reasonably influence the insurer’s decision as to whether it should insure the applicant.” (Westhoven v. New England Mut. Life. Ins. Co. (1978) 384 A.2d 36, 38.) “[W]here evidence warrants, materiality may be found as a matter of law.” (Jannenga v. Nationwide Life Ins. Co. (1961) 288 F.2d 169, 172.) The court found that Nationwide set forth sufficient evidence to demonstrate it would not have provided the policy to Almco had it been aware of the true nature of the business operations.

Under California law, generally speaking, misstatements or concealment of any material facts in an application for insurance, even if unintentional, entitle the insurer to rescind the insurance policy. (LA Sound USA, Inc. v. St. Paul Fire & Marine Ins. Co. (2007) 156 Cal.App.4th 1259, 1267.) Pursuant to Insurance Code § 332, “each party to a contract of insurance shall communicate to the other, in good faith, all facts within his knowledge which are or which he believes to be material to the contract and as to which he makes no warranty, and which the other has not the means of ascertaining.” Misstatement or concealment of “material” facts is ground for rescission even if unintentional. The insurer need not prove that the applicant-insured actually intended to deceive the insurer. However, under California law there are also exceptions to this general rule, including that an insurer cannot rescind a policy based upon facts that it knew, which it would have known through the exercise of ordinary care, or those of which the other waives communication.

Insurers should take care in issuing policies to ensure applications are fact checked and cross referenced with any other facts known to the insurer that may demonstrate the application is incomplete or fails to disclose material facts. While an insurer may have the right to rescind a policy where an insured fails to disclose material facts, in the event the insurer knew or should have known of the facts, it may not be capable of rescinding and may be liable under the terms of the policy.

This blog was originally posted to Jampol Zimet LLP on June 14. Click here to read the original entry. 

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The California Court of Appeal for the Fourth District recently held in Underwriters of Interest Subscribing Policy Number A15274001 v. ProBuilders Specialty Insurance Company that the statute of limitation on the insurer’s equitable subrogation claim was tolled until final payment by the insurer seeking contribution was paid.

The case involved a construction defect case against a construction company, Pacific Trades. Appellant Underwriters undertook Pacific Trades’ defense in the action under the terms of its general liability insurance policy. Appellee ProBuilders, also an insurer of Pacific Trades, denied defense on the basis that under the terms of its policy, it had no duty to defend when another insurer provided defense.

The underlying case was concluded when the parties reached a settlement, in which ProBuilders agreed to pay $270,000 of $1 million. Following the conclusion of the case, Underwriters sought equitable contribution from ProBuilders for defense costs, which was denied. ProBuilders argued in its motion for summary judgment that it was excused from contributing to defense costs on the basis that the action was time-barred by the statute of limitations. Underwriters argued its action was timely because it was filed less than two years after it made its final payment towards attorney fees. The trial court agreed with ProBuilders that the clause in its policy relieving it of defense duty when another insurer was providing defense applied and entered summary judgment in favor of ProBuilders. Underwriters thereafter appealed.

Insurers are entitled to equitable contribution from a co-insurer where they share liability with a co-obligor and have paid more than their share of losses or defended the action. The Court of Appeal held that the trial court erred in enforcing ProBuilder’s escape clause. Ordinarily, an insurer is free to limit the risks assumed within the terms of its policies, and the court will not rewrite the policy terms. On this premise, ProBuilders claimed the escape clause conditioned its duty to defend on it being the only insurer available. However, such escape clauses are strongly disfavored by the court. “Other insurance clauses that attempt to shift the burden away from one primary insurer wholly or largely to other insurers have been the objects of judicial distrust. ‘[P]ublic policy disfavors “escape” clauses, whereby coverage purports to evaporate in the presence of other insurance.’ (CSE Ins. Group v. Northbrook Property & Casualty Co. (1994) 23 Cal.App.4th 1839, 1845, 29 Cal.Rptr.2d 120….; [citation].) Partly for this reason, the modern trend is to require equitable contributions on a pro rata basis from all primary insurers regardless of the type of ‘other insurance’ clause in their policies.”

Courts have repeatedly visited arguments by insurers that “other insurance” clauses relieve them of liability in defending and indemnifying the insured and other insurers. The court in Edmondson Property Management v. Kwock (2007) 156 Cal.App.4th 197, 203–204, stated that when “the ‘other insurance’ clause in [the] policy is written into an otherwise primary policy, the courts have considered this type of ‘other insurance’ clause as an ‘escape’ clause, a clause which attempts to have coverage, paid for with the insured’s premiums, evaporate in the presence of other insurance. [Citations.] Escape clauses are discouraged and generally not given effect in actions where the insurance company who paid the liability is seeking equitable contribution from the carrier who is seeking to avoid the risk it was paid to cover.”

The Court of Appeal adhered to this trend of requiring equitable contributions on a pro rata basis. It determined the trial court erred in concluding ProBuilders’ escape clause should be enforced and that it should not be liable for its share of costs.

Considering the statute of limitations argument, the Court noted that a two-year statute of limitations period applied. Underwriters’ action was filed more than two years after ProBuilders’ initial refusal to contribute defense costs, and more than two years after the court in the underlying lawsuit confirmed the settlement. However, Underwriters’ action was filed less than two years after the insurers contributed their payments to fund that settlement, and less than two years after the settlement agreements were signed in the underlying suit, and less than two years after Underwriters’ final payment to the defense counsel hired to represent Pacific Trades.

No California case authority was directly on point on this issue. The Court, following analogous rulings, held that, although an action for equitable contribution can accrue when the noncontributing insurer first refuses to participate in the defense of a common insured, the statute of limitations should be equitably tolled until the plaintiff insurer makes the last payment in the underlying suit for which the plaintiff insurer is seeking contribution. The trial court’s decision was therefore reversed.

Insurers should take several things away from this case. It serves as a reminder to insurers to review their policies to ensure that any escape clause does not exist. Not only are such clauses unenforceable, but they are the frequent subject of litigation. Furthermore, insurers should be aware that the two-year statute of limitations will be tolled in cases of equitable contribution until the last payment is made by the insurer seeking contribution.

This entry was posted to the Jampol Zimet blog on March 22. Click here to view the original post. 


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Employers frequently utilize tests and other assessments to determine which job applicants are best suited for a position. However, employers must ensure such assessments are race and gender neutral and do not unknowingly screen out protected classes or else risk liability. A test can be biased, even if it appears neutral on its face, by the statistical effect it has on the applicants considered for the job and ultimately hired.

The problem recently came to light by the Equal Employment Opportunity Commission (EEOC) which began taking steps to eliminate systemic bias from occurring in the recruitment, screening, and hiring of employees. According to the EEOC, despite progress, employment discrimination is widespread in the United States and can arise knowingly, and unknowingly, in screening assessments of potential employees.

One of the most recent cases involves the superstore chain Target, which last month settled a complaint filed against it by the EEOC alleging gender and race bias in hiring for $2.8 million. The settlement amount is considered high for a suit of its kind and will be divided among approximately 3,000 employees in accordance with the damages incurred by each.

According to the EEOC, for the past decade, Target had been utilizing hiring assessments for upper-level positions that were not sufficiently related to the job for which the test applied, in violation of Title VII of the Civil Rights Act of 1964. The EEOC agreed that, on their face, the tests were neutral. However, it contended that in practice the tests prevented certain races and genders from receiving jobs, and, in particular, that it screened out blacks, Asians, and women. In addition to the assessments, Target required a pre-employment psychological exam in violation of the Americans with Disabilities Act (ADA). Under the ADA, employers are not permitted to submit applicants to medical exams prior to receiving job offers.

In response to the charges, Target has agreed to monitor the hiring of its employees in a more careful manner as well as utilize expert consultants to train its employees on the proper administration of assessments and maintain better records.

Despite the large settlement, Target is not admitting any wrongdoing. “The EEOC has concluded that only a small fraction of the assessments administered during the relevant time period could have been problematic,” Target spokeswoman Molly Synder stated. “We continue to firmly believe that no improper behavior occurred regarding these assessments.”

This case should raise a red flag to employers who utilize tests and other assessments to screen job applicants. It is important that such tests do not disproportionately affect protected classes. Whether a test does have a biased effect on applicants can only be determined by employment statistics. However, careful review of screening tests prior to their use should be conducted to eliminate any potential for bias. Furthermore, Target’s improper utilization of pre-job offer psychological exams demonstrates a clear lack of legal leadership in the hiring process. Experienced legal counsel, were it utilized, could have prevented such an ADA claim by ensuring Target’s practices conformed to federal and state laws.


This blog was posted to Jampol Zimet LLP blog on September 29. Click here to read the original entry. 

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The Insurance Broker and Dual Agency

Posted on January 12, 2015 08:58 by Marc Zimet

 Insurance brokers and agents know that their respective roles entail unique responsibilities and duties to their clients. Correctly defining an individual as a broker or agent is essential to determining the proper scope of representation and duties owed to the client. This can be difficult where lines are blurred and legally, the determination will depend upon the facts, not how the parties label themselves. Furthermore, it is possible under certain circumstances for an individual to act as both agent and broker. In these cases care must be taken to ensure the broker is meeting its standard of care and ethical considerations are adhered to.

Generally speaking, agency relationships, such as those found in the agent and broker context, arise via contract. While an agency relationship may be oral, in the case of an insurance broker and agent, it should always be in writing to ensure a clear understanding between the parties is documented, as well as to comply with Business and Professions Code.

Typically, brokers are agents of the insurer when it comes to issuing policies, certificates of insurance, collecting premiums, etc. The role of the broker as an agent is generally provided for in the contract between the insurer and broker, as well as the specific circumstances under which the broker has the authority to act as agent.

However, problems may arise where the role of the intermediary is not so clear. For example, where the broker is an agent of the insured, if the insured directs the broker to obtain insurance from a specific insurance company, the broker is also considered to be an agent of the insurer. In situations such as these, the broker may become an agent of the insured for purposes of obtaining coverage, as well as an agent of the insurer for other purposes. Generally speaking, agents are fiduciaries of their principals, owing to their principal the duty of undivided loyalty. One would therefore assume that the dual agency would put the broker in a precarious situation, which is generally not permissible in the realm of agency law. However, in the insurance arena, this dual agency is not always a conflict for the broker.

In California, it has been held that the broker’s duties to the insured do not rise to the level of a fiduciary. A broker need only act with reasonable care. (Workmen’s Auto Insurance Company v. Guy Carpenter & Company, Inc.(2011) 194 Cal.App.4th 1468.) Therefore, in California at least, the broker acting as dual agent will not run afoul of principal-agency law. While the courts have declined to impose the fiduciary duty on brokers, the fact of the matter is that under normal circumstances a dual agency in the context of insurance will rarely see a conflict of interest such as that that the prohibition is intended to prevent. This is because the broker’s responsibilities to the insurer and insured are independent of each other. For example, the broker can easily procure insurance for the insured and collect the premium for the insurer without conflict. Once the broker has obtained coverage as requested by the insurer, the agency relationship between the broker and insured terminates, thereby permitting the broker to continue to collect premiums and issue certificates on behalf of the insurer without any potential for conflict.

While brokers may act in a dual agency capacity, care must still be taken to act with reasonable care and prudence, and a broker may still be liable to insureds for failing to meet this standard. 

This blog was originally posted on January 6. Click here to read the original entry. 


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Frequently, nursing homes and long term care facilities find themselves the subject of claims for injuries or harm to patients stemming from insufficient staffing. Proving that the facility had enough employees on hand to properly care for its patients is essential to defending such claims.

Under California law, facilities must provide, at a minimum, 3.2 nursing hours per patient per day. (Health & Safety Code §1276.5.) However, according to the California Code of Regulations, facilities are required to have sufficient staff on hand and provide those nursing hours needed meet the individualized needs of its patients. (22 Cal.Code.Regs. §72501(e).)

An issue arises when a facility relies upon the Health and Safety Code requiring only 3.2 nursing hours per day per patient, and mistakenly believes that so long as this number is achieved, they have fulfilled their duties. However, in some cases 3.2 hours per patient may not be sufficient to care for the patient, resulting in a failure of the facility to meet the requirement of the California Code of Regulations to meet the individualized needs of its patients.

Facilities must be careful to ensure it is meeting the individual needs of its patients, rather than relying upon §1276.5 and its 3.2 hour requirement. A facility that relies only upon the 3.2 hour requirement and fails to provide care as needed may in fact demonstrate that it has disregarded the individual needs of its patients. Plaintiffs alleging wrongdoing by a nursing facility who are trying to prove the facility has failed to provide care as needed, and that as a result of insufficient staffing harm has occurred, may look to budget and cost records. A facility’s budget records can be utilized against a nursing facility to demonstrate that it budgeted only for staffing to provide 3.2 hours of nursing per day per patient. This evidence can show that the facility failed to meet the individualized needs of its patients by providing only the minimum standard of care.

Nursing facilities can help eliminate the risk of lawsuits and liability for insufficient care by ensuring the individualized needs of its patients are met. This means a careful review of the facilities’ patients and their needs is required on a consistent and frequent basis to assess the overall needs of the facility in terms of staffing.

If you are a nursing facility and have questions about the standard of care required for your patients, or have liability concerns, please contact Marc Zimet at Jampol Zimet, LLP at (213) 689-8500 or at, for a consultation to ensure your interests are protected before it is too late.

*This blog was originally posted to Jampol Zimet on December 23. Click here to read the original entry. 

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The U.S. Supreme Court has granted review of Integrity Staffing Solutions v. Busk to determine whether time spent by employees in a security check line constitutes work and is therefore compensable. The case was brought by employees of Integrity Staffing Solutions, a temporary employee provider, who provided employees to Amazon.

In Integrity, temporary workers were assigned to work for Amazon at two of its Nevada warehouses. According to the class action plaintiffs, they regularly spent approximately 20-25 minutes at the end of each day in security checks when leaving work, waiting to be searched, empty their pockets, and pass through metal detectors. They claimed they were not compensated for this time and were due overtime pay. The workers argue that Amazon required them to clear security checks each day, as necessary to reduce employee theft from the warehouses. The plaintiffs went on to note that the Title 29 of the Code of Federal Regulations Part 785 provides, “[t]he workweek ordinarily includes all time during which an employee is necessarily required to be on the employer’s premises, on duty, or at a prescribed workplace.” A workday is further defined as, “[t]he period between the time on any particular day when such employee commences his/her principal activity and the time on that day at which he/she ceases such principal activity or activities. The workday may therefore be longer than the employees scheduled shift hours, tour of duty, or production line time.”

On appeal, the Ninth Circuit noted that the FLSA, as amended by the Portal-to-Portal Act of 1947, “generally precludes compensation for activities that are ‘preliminary’ or ‘postliminary’ to the ‘principal activity or activities’ that the employee ‘is employed to perform.’” However, it also noted that “preliminary and postliminary activities are still compensable” if they are “integral and indispensable” to an employee’s principal activities. For example, in Steiner v. Mitchell, (1956)350 U.S. 247, 332, changing clothes and showering were “integral and indispensable” to the production of batteries. It has been held that to be “integral and indispensable,” an activity must be (1) “necessary to the principal work performed” and (2) “done for the benefit of the employer.” (Alvarez v. IBP, Inc. (2003) 339 Fed.3d 894, 902–03.)

In finding the employees entitled to compensation, the Ninth Circuit held that the security clearances were necessary to the “employee’s primary work as warehouse employees and done for Integrity’s benefit.

The Supreme Court, in issuing a decision on this issue, will clear up much confusion, as the Ninth Circuit’s decision is in direct conflict with other circuit rulings. In Gorman v. Consolidated Edison Corp. (2007) 488 Fed.3d 586, the Second Circuit ruled that time spent in a security screening by employees was not compensable. Furthermore, the Eleventh Circuit issued a similar ruling in Bonilla v. Baker Concrete Construction (2007) 487 Fed.3d 1340.

The outcome of this case has the potential to reach thousands of workers who have worked for Amazon and have been subject to the security checks. Amazon employs approximately 38,000 temporary employees at its warehouses. It is estimated that if the Supreme Court affirms the Ninth Circuit ruling, damages will be in the millions.

Employers should be aware of the standards applied by the courts to determine whether their employees are entitled to compensation for activities required by the employer. Employers requiring their employees to spend time in security checks, change clothes, or otherwise take time to prepare for work should seek advice of counsel to determine whether such time is compensable. If you are an employer unsure about whether your employees must be compensed for time spent in security checks or preparing for work, please contact our attorneys at Jampol Zimet, LLP located at 800 Wilshire Boulevard, Los Angeles, CA 90017, or at (213) 689-8500, for a consultation to ensure your interests are protected before it is too late.

This blog was first posted to Jampol Zimet’s Insurance Defense Blog. Click here to read the original entry. 

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Preventing Elder Abuse in the Nursing Home

Posted on May 30, 2014 02:47 by Marc Zimet

Despite the fact that nursing homes and long-term care facilities strive to provide the best care to their patients and residents, such facilities are exposed to a great risk of liability by employees who commit elder abuse. Elder patients are vulnerable and can easily fall victim to various kinds of abuse from employees, including physical and emotional abuse, neglect, and fraud. However, there are steps that nursing homes can take to reduce its risk of abuse.

Staff Screening: The first thing nursing homes can do to minimize its risk of abuse is properly and thoroughly screen its employees. Prior to hiring any employees, criminal background checks must always be performed and references should be inquired. Staff should also be screened for their suitability for the position. Individuals who have had substance abuse or domestic violence issues are not suitable. Furthermore, individuals who demonstrate a tendency to be controlling, lack empathy, or are not genuinely interested in the welfare of their patients may not be appropriate.

Patient/Staff Ratio: Research has demonstrated that homes with a low staff-to-patient ratio have the most occurrences of abuse. A high staff-to-patient ratio permits staff members to develop relationships with their patients thereby reducing the risk of abuse. Nursing homes can combat this risk by ensuring it has sufficient staff on hand to care for all its residents to prevent overwhelming staff from caring for too many patients. Facilities should also monitor and regularly screen its employees for burn-out and stress to ensure any problems employees may be having with their duties are addressed. Facilities should also regularly take patient satisfaction surveys of its employees. To help in preventing employee stress, facilities can increase pay and benefits, increase aides and/or assistant support staff, and provide strong leadership.

Policies and Training: All facilities should ensure clear policies against abuse are set forth in its employee handbook. Additionally, facilities should actively provide training to employees regarding abuse, its prevention, how to spot it,and how to report it. Employees reporting abuse should not be punished. Nursing homes should strive to create an abuse-free environment through creating a company culture that is anti-abuse. Employees should be trained in communication skills, anger management, and handling difficult patients. Employees lacking proper training and skills to handle difficult patients are more likely to become stressed and frustrated.

Address Complaints: Many homes who find themselves in litigation due to ongoing abuse of its patients could have prevented such abuse had it properly address complaints. Typically, there are warning signs of abuse that facility employees and/or supervisors fail to recognize and address. Complaints, even those of the smallest nature, should be taken seriously and thoroughly investigated. Supervisors should receive additional training regarding the intake of complaints, how to investigate such complaints, and how to manage a finding of abuse. Any complaint or grievance with an employee should be memorialized in writing and maintained in an employee's individual file to create a clear record that can be reviewed. The accumulation of small complaints may suggest a larger problem with an employee. 

At-Risk Patients: Research has shown that some patients are at greater risk for abuse than others. Those patients suffering from diseases that result in isolation, such as dementia, are at greatest risk. Patients who do not have family regularly visiting them, as well as those who have a higher degree of dependency on staff are also at greatest risk. Patients meeting these criteria should be monitored closely to ensure staff are properly caring for them. 

While a nursing home may not be able to completely eliminate all risk of the occurrence of abuse, it can take many steps that will aid in its prevention. From thorough screening, training, and monitoring of employees to creating strong company policies and addressing complaints, a nursing home can take a proactive approach to managing its staff and reducing its exposure. 

Blurb: Despite the fact that nursing homes and long-term care facilities strive to provide the best care to their patients and residents, such facilities are exposed to a great risk of liability by employees who commit elder abuse. Elder patients are vulnerable and can easily fall victim to various kinds of abuse from employees, including physical and emotional abuse, neglect, and fraud. However, there are steps that nursing homes can take to reduce its risk of abuse.

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The California Court of Appeals recently held that the penalties that may be awarded to a patient for violations under the Patient's Bill of Rights are statutorily limited to $500 per lawsuit. In Nevarrez v. San Marino Skilled Nursing and Wellness Centre, Nevarrez was admitted to the San Marino nursing home for rehabilitation. Though alert, he had difficulty standing and walking and during the month he was there, fell a total of nine times. His last fall resulted in a head injury and required brain surgery, and he later suffered a stroke from his injury. After his hospital stay, we was readmitted to the home and fell an additional two times.  

Nevarrez thereafter filed a complaint alleging elder abuse under Welfare and Institutions Code section 15600 et seq., negligence, violation of the Patient's Bill of Rights under Health and Safety Code section 1430, subdivision (b), willful misconduct, and violation of Penal Code section 368.

At trial, the judge permitted a citation issued by the Department of Public Health after Nevarrez's ninth fall to be admitted into evidence. The citation included information concerning the nursing home's plan for corrections and the investigator's specific findings. After it became clear the investigator would not testify at trial, San Marino attempted to keep the citation out of evidence on the basis that it would not be permitted to cross examine the investigator. It was nonetheless allowed into  evidence by the judge. 

After trial, the jury found the Patient's Bill of Rights had been violated due to the home's under staffing. It also found negligence on the home's part, with the home 40% comparatively negligent. On the elder abuse claim, it found the home had been negligent as well, but did find any malice. Nevarrez was awarded approximately $1.2 million for past medical expenses, $200,000 for future medical expenses, and $3 million for general damages. The court additionally awarded Nevarrez $500 per violation of the Patient's Bill of Rights as permitted under Section 1430(b) (of which there were 14) for a total of $7,000, and $950,000 in attorneys fees. The court denied San Marino's motion to reduce non-economic damages to the $250,000 cap per the Medical Compensation Reform Act (Civ. Code §3333.2) and to reduce economic damages to those amounts actually paid. San Marino timely appealed.

On review, the Court of Appeals affirmed the Patient's Bill of Rights violations. However, it found the jury had been improperly instructed that it could find negligence based upon violations of federal and California law, and the issuance of the citation by the DPH which evidenced such violations. On the elder abuse claim, the Court found again that the trial court had improperly provided the DPH citation to the jury before weighing its probative value against its prejudicial effect. The Court therefore reversed the negligence and elder abuse verdicts. 

The Court then reviewed the attorney fees and penalties awarded under Health and Safety Code section 1430, subdivision (b) which permits a patient to sue a nursing home that “violates any rights” set forth in the Patient's Bill of Rights. Though the court properly awarded the fees as permitted for violations of the Elder Abuse Act and Section 1430(b), it failed to apportion the award, as San Marino was the only defendant named in the cause of action under Section 1430(b). It therefore reversed the award of attorneys fees to be reviewed upon remand.

Of greatest significance of this case is the Court's review of the lower court's award under Section 1430(b) of $7,000 for the 14 violations of the Patient's Bill of Rights. After reviewing arguments set forth by all parties, the Court concluded that the statute only permits a single award of $500 per lawsuit and that the $7,000 award was excessive. The Court reviewed the statute, looking to the Legislature's intent when enacting the statute, statutory scheme, legislative history, and public policy considerations. The section provides: “The licensee shall be liable for up to five hundred dollars ($500) ... and may be enjoined from permitting the violation to continue.” While Nevarrez argued the language pointed towards an award per single violation, the Court did not agree. Looking to the plain meaning of the language, the court held that the penalty could only be awarded once per lawsuit. 

This holding is important specifically for skilled nursing homes. The Court's curtailing of penalties permitted for violations of the Patient's Bill of Rights may effectively reduce lawsuits related to violations as plaintiff's potential monetary recovery is now limited.

Blurb: The California Court of Appeals recently held that the penalties that may be awarded to a patient for violations under the Patient's Bill of Rights are statutorily limited to $500 per lawsuit. This significantly reduces the potential monetary recovery by plaintiffs for violations. 


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Drafting the Employee Handbook

Posted on March 24, 2014 07:14 by Marc Zimet

Are you an employer? Then you should have an employee handbook. If you don't have one, now is the time to procure one. If you do have one, then now is the time to review your handbook to ensure it is up to date with the ever changing employment laws. While the state of California does not require an employer to maintain an employee handbook, a well drafted handbook helps to avoid lawsuits, offers an affirmative defense to litigation, and ensures compliance with complex state and federal regulations. 

A good employee handbook sets forth the company's stance on important legal issues, such as harassment and discrimination, as well as informs the employee of the company's operating policies and procedures. A handbook can set forth the rules for employees, including management guidelines, and may also be used to educate employees about benefit plans. Regardless of the depth of a handbook, there are a few policies an employer should be sure to develop and include. 

- An explanation of “at-will” employment and disclaimer. To ensure an employee handbook is not interpreted by an employee as constituting an employment contract , the handbook must include an “at-will” disclaimer. This will explain to the employee that he or she can be terminated with or without cause at any time.

-An explanation of the different classifications of employment. This should include full-time, part-time, temporary, exempt, and non-exempt classifications. It should be clear which category an employee fits into, and the employer should ensure the employee is properly classified. 

- An explanation of hours, meals, and breaks. To aid in avoiding litigation, employers should ensure their policy regarding employee hours, meals, and breaks is clearly set forth and in compliance with legal requirements. This should also include the employer's policies regarding over-time and double-time pay rates. 

-A statement of equal employment opportunity. Employers should ensure they have a well drafted policy addressing their dedication to equal employment and intolerance of all forms of discrimination against classes protected by law. It should further set forth that the employer shall not discriminate at any time during the employment process, such as during hiring and termination. 

-Policy against harassment. All employers should clearly set forth their policy against harassment in the workplace. This should include all forms of harassment employees are protected against (not just sexual). A harassment policy should also provide employees who believe they have been harassed with guidelines for reporting such harassment and protocols for handling incidents reported by employees. 

- Employee conduct and performance. The handbook should set forth what conduct is impermissible in the workplace, especially that conduct which may result in termination. It should also set forth expectations regarding an employee's performance and whether there will be periodic reviews of performance levels. 

-Explanation of the company's electronic privacy policies. The employee handbook is the best place for employers to set forth their policy on electronic privacy of employees. This includes an employee's privacy of their computers, emails, telephone conversations, and voicemails.  

- Family and Medical Leave Act (FMLA) policy. If you are an employer with more than fifty employees, you are required by law to provide your employees with your FMLA policy in writing. The handbook is an excellent place to do this.

- Acknowledgment. Employers should always ensure they receive a written acknowledgment from the employee stating his or her receipt of the handbook and that he or she understands the terms and agrees to abide by company policies. It cannot be emphasized how important this step is. 

Due to the complexity of employment laws, employers should hire experienced legal counsel to draft and/or review their employee handbook. A well drafted handbook will be written in simple, laymen language to ensure all employees understand its provisions and there is no confusion about the meaning of its terms.

Last of all, employers must ensure its employees actually follow the employee handbook. It is important that not just low-level employees comply, but managers as well. This is especially true in cases of claims of discrimination or harassment where a manager's handling of a claim can either mitigate a company's damages, or increase them. 

While the above list is not exclusive, it provides a solid foundation for employers to base their employee handbooks. An employer who clearly sets forth its policies on these issues protects itself against litigation, and will find that in the event litigation is ever commenced, the handbook provide defense as well as evidence of company policies and culture. 

Blurb: If you are an employer in California, an employee handbook is a must. While the state of California does not require an employer to maintain an employee handbook, a well drafted handbook helps to avoid lawsuits, offers an affirmative defense to litigation, and ensures compliance with complex state and federal regulations. Included are some of most important policies an employer should be sure to develop and include in their handbook.

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Categories: Employment/Labor Law

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How to Avoid Retaliation Claims When Firing

Posted on January 22, 2014 02:34 by Marc Zimet

Retaliation claims were the most frequent claims filed with the Equal Employment Opportunity Commission (EEOC) for 2012. There has been a sharp rise in retaliation claims since the 2006 Supreme Court opinion in Burlington Northern & Santa Fe Railway Company v. White, which lowered the standard for what is considered retaliatory conduct. Employers accused of wrongdoing by an employee risk such a claim when the employee is later fired for a legitimate reason. However, employers should not fear retaliation claims so that employees are kept on to the detriment of their business. While fear of a retaliation claim is a legitimate concern, there are steps an employer can take to help reduce the likelihood of such a claim, and protect themselves if a claim is made. 

1) Maintain an effective no-retaliation policy. All employers should maintain an effective no-retaliation policy to solidify its stance against retaliation. This should be affirmed in the company’s policies against harassment and discrimination, but can also be provided for in its own provision.

2) Train Employees. Employers must train supervisors and managers on how to properly respond to employee complaints, and specifically those complaints that involve them as managers. Those managers to whom a complaint is made against, or who personally supervise the complaining employee, should not be in charge of investigating the complaint. A neutral, third party should always be used to ensure an objective viewpoint.

3) Investigate Claims. All complaints should be thoroughly investigated and documented.

4) Document Performance Issues. Good documentation of performance issues leading to termination can defend an employer against a retaliation claim. Ensure employees with similar performance problems are treated equally.

5) Before termination, review discipline and the decision to terminate. Ensure the employee’s poor performance is well documented. If an employee has made a recent complaint regarding harassment or discrimination, has complained of workplace misconduct, or has engaged in any protected activities such as union picketing, it may not be a good time to terminate if there may appear to be a connection between the activity and the termination.

No employer wants to face a retaliation complaint. Proactive employers following the above steps can reduce their exposure and likelihood of suits. In the case that a complaint is filed, employers aren’t stuck with a poorly performing employee. However, understanding the proper steps to documenting the performance issues and ensuring the cause for termination is clear from the record and timing is essential before taking termination action.

This blog was originally posted on Jampol Zimet’s blog on January 14. Click here to read the original entry.  

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Categories: Employment/Labor Law

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