Business
One of California’s first labor fights over AI is playing out at Kaiser
Workers of one of the most powerful unions in California are forming an early front in the battle against artificial intelligence, warning it could take jobs and harm people’s health.
As part of their negotiations with their employer, Kaiser Permanente workers have been pushing back against the giant healthcare provider’s use of AI. They are building demands around the issue and others, using picket lines and hunger strikes to help persuade Kaiser to use the powerful technology responsibly.
Kaiser says AI could save employees from tedious, time-consuming tasks such as taking notes and paperwork. Workers say that could be the first step down a slippery slope that leads to layoffs and damage to patient health.
“They’re sort of painting a map that would reduce their need for human workers and human clinicians,” said Ilana Marcucci-Morris, a licensed clinical social worker and part of the bargaining team for the National Union of Healthcare Workers, which is fighting for more protections against AI
The 42-year-old Oakland-based therapist says she knows technology can be useful but warns that the consequences for patients have been “grave” when AI makes mistakes.
Kaiser says AI can help physicians and employees focus on serving members and patients.
“AI does not replace human assessment and care,” Kaiser spokesperson Candice Lee said in an email. “Artificial intelligence holds significant potential to benefit healthcare by supporting better diagnostics, enhancing patient-clinician relationships, optimizing clinicians’ time, and ensuring fairness in care experiences and health outcomes by addressing individual needs.”
AI fears are shaking up industries across the country.
Medical administrative assistants are among the most exposed to AI, according to a recent study by Brookings and the Centre for the Governance of AI. The assistants do the type of work that AI is getting better at. Meanwhile, they are less likely to have the skills or support needed to transition to new jobs, the study said.
There are millions of other jobs that are among the most vulnerable to AI, such as office clerks, insurance sales agents and translators, according to the research released last month.
In California, labor unions this week urged Gov. Gavin Newsom and lawmakers to pass more legislation to protect workers from AI. The California Federation of Labor Unions has sponsored a package of bills to address AI’s risks, including job loss and surveillance.
The technology “threatens to eviscerate workers’ rights and cause widespread job loss,” the group said in a joint letter with AFL-CIO leaders in different states.
Kaiser Permanente is California’s largest private employer, with close to 19,000 physicians and more than 180,000 employees . It has a major presence in Washington, Colorado, Georgia, Hawaii and other states.
The National Union of Healthcare Workers, which represents Kaiser employees, has been among the earliest to recognize and respond to the encroachment of AI into the workplace. As it has negotiated for better pay and working conditions, the use of AI has also become an important new point of discussion between workers and management.
Kaiser already uses AI software to transcribe conversations and take notes between healthcare workers and patients, but therapists have privacy concerns about recording highly sensitive remarks. The company also uses AI to predict when hospitalized patients might become more ill. It offers mental health apps for enrollees, including at least one with an AI chatbot.
Last year, Kaiser mental health workers held a hunger strike in Los Angeles to demand the healthcare provider improve its mental health services and patient care.
The union ratified a new contract covering 2,400 mental health and addiction medicine employees in Southern California last year, but negotiations continue for Marcucci-Morris and other Northern California mental health workers. They want Kaiser to pledge that AI will be used only to assist, but not replace, workers.
Kaiser said it’s still bargaining with the union.
“We don’t know what the future holds, but our proposal would commit us to bargain if there are changes to working conditions due to any new AI technologies,” Lee said.
Healthcare providers have also faced lawsuits over the use of AI tools to record conversations between doctors and patients. A November lawsuit, filed in San Diego County Superior Court, alleged Sharp HealthCare used an AI note-taking software called Abridge to illegally record doctor-patient conversations without consent.
Sharp HealthCare said it protects patients’ privacy and does not use AI tools during therapy sessions.
Some Kaiser doctors and clinicians, including therapists, use Abridge to take notes during patient visits. Kaiser Permanente Ventures, its venture capital arm, has invested in Abridge.
The healthcare provider said, “Investment decisions are distinctly separate from other decisions made by Kaiser Permanente.”
Close to half of Kaiser behavioral health professionals in Northern California said they are uncomfortable with the introduction of AI tools, including Abridge, in their clinical practice, according to their union.
The provider said that its workers review the AI-generated notes for accuracy and get patient consent, and that the recordings and transcripts are encrypted. Data are “stored and processed in approved, compliant environments for up to 14 days before becoming permanently deleted.”
Lawmakers and mental health professionals are exploring other ways to restrict the use of AI in mental healthcare.
The California Psychological Assn. is trying to push through legislation to protect patients from AI. It joined others to back a bill requiring clear, written consent before a client’s therapy session is recorded or transcribed.
The bill also prohibits individuals or companies, including those using AI, from offering therapy in California without a licensed professional.
State Sen. Steve Padilla (D-Chula Vista), who introduced the bill, said there need to be more rules around the use of AI.
“This technology is powerful. It’s ubiquitous. It’s evolving quickly,” he said. “That means you have a limited window to make sure we get in there and put the right guardrails in place.”
Dr. John Torous, director of digital psychiatry at Beth Israel Deaconess Medical Center, said that people are using AI chatbots for advice on how to approach difficult conversations, not necessarily to replace therapy, but that more research is still needed.
He’s working with the National Alliance on Mental Illness to develop benchmarks so people understand how different AI tools respond to mental health.
Healthcare workers say they are worried about what they are already seeing can happen when people struggling with mental health issues interact too much with AI chatbots.
AI chatbots such as OpenAI’s ChatGPT aren’t licensed or designed to be therapists and can’t replace professional mental healthcare. Still, some teenagers and adults have been turning to chatbots to share their personal struggles. People have long been using Google to deal with physical and mental health issues, but AI can seem more powerful because it delivers what looks like a diagnosis and a solution with confidence in a conversation.
Parents whose children died by suicide after talking to chatbots have sued California AI companies Character.AI and OpenAI, alleging the platforms provided content that harmed the mental health of young people and discussed suicide methods.
“They are not trained to respond as a human would respond,” said Dr. Dustin Weissman, president of the California Psychological Assn. “A lot of those nuances can fall through the cracks, and because of that, it could lead to catastrophic outcomes.”
To be sure, some users are finding value and even what feels like companionship in conversations with chatbots about their mental health and other issues.
Indeed, some say the AI bots have given them easier access to mental health tips and help them work through thoughts and feelings in a conversational style that might otherwise require an appointment with a therapist and hundreds of dollars.
Roughly 12% of adults are likely to use AI chatbots for mental healthcare in the next six months and 1% already do, according to a NAMI/Ipsos survey conducted in November.
But for mental health workers like Marcucci-Morris, AI by itself is not enough.
“AI is not the savior,” she said.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
Business
Orange County real estate investor pleads not guilty in $100 million bank fraud case
An Orange County real estate investor accused of criminally defrauding an Arizona bank of nearly $100 million pleaded not guilty Monday and remains in custody.
Mahender Makhijani, 44, of Corona del Mar — who also was ordered by an arbitrator to pay $1.34 billion in a separate civil fraud case — was arraigned in Santa Ana federal court on two charges.
He is accused of bank fraud and making a false statement to a bank in a June 8 case involving a $100 million real estate loan made by Phoenix-based Western Alliance Bank. He was taken into custody on June 10.
Makhijani is accused of providing bogus collateral for the October 2024 loan now in default. In a civil lawsuit, Western Alliance said the outstanding balance as nearly $99 million.
Prosecutors say he falsified title insurance policies that showed the bank would have a first lien on the underlying collateral if the loan went bad, when in fact it did not.
A trial was set for August 11 before U.S. District Judge David O. Carter in Santa Ana.
Michael Schachter, his criminal defense attorney, did not respond to messages seeking comment.
In the civil case, an arbitrator in May ordered Makhijani to pay Laguna Beach real estate mogul Mohammad Honarkar $1.34 billion after ruling he had fraudulently induced him into a 2021 joint venture — and then wrested control and lost to creditors more than two dozen properties Honarkar had owned.
Makhijani has not been criminally charged in that case, but prosecutors alleged in an affidavit in support of the bank fraud charges that he used “force and threats” in his dealings with Honarkar and others — including taking over the landmark Hotel Laguna in 2023 that Honarkar was renovating.
Prosecutors sought to hold Makhijani without bail after his arrest.
The affidavit noted he is a legal Indian immigrant with a home and bank accounts in that country, has access to private jets and threatened to “run away” if caught in a difficult situation.
The request was denied and he was granted $500,000 bail.
However, Makhijani remains in custody after a hearing sought by prosecutors last month before Magistrate Judge Autumn Spaeth.
The judge declined to accept a $450,000 cashier’s check submitted by a Makhijani associate for the bail, finding insufficient proof the source of the funds was legitimate, according to court records.
Makhijani is not prominent outside Orange County real estate circles, but he established a thriving distressed-assets business over the last decade that attracted prominent Southern California real estate investors.
Prosecutors said it paid for a lifestyle that included two multimillion-dollar homes in Corona del Mar, a luxury apartment in Newport Beach and various luxury vehicles.
As of last month, prosecutors had not fully traced his assets, which they believe are not held in his name and some of which may be in India.
The businessman employed an array of shell companies and strawmen to sign documents on his behalf, and to stand in for him as operators of his companies, according to the affidavit.
Makhijani told an associate he took extra precautions because wanted to insulate himself from litigation and that “they were sharks in the distressed world who took advantage of people,” the affidavit stated.
Business
Many indie festival films struggle to get distribution. Alamo Drafthouse is trying to change that
Dine-in movie theater chain Alamo Drafthouse Cinema is launching a new initiative to show unreleased independent films that had successful festival runs, a move that comes as specialty films have struggled to gain distribution.
The Alamo Exclusives program, announced Wednesday, will give limited theatrical runs to films that showed at festivals including Sundance, the Toronto International Film Festival, Tribeca Festival and South by Southwest festival, as well as Alamo’s own Fantastic Fest.
The idea is to help showcase films that received critical acclaim, but did not secure distribution or acquisition deals. The chain will not acquire these films, but instead will enter into agreements with filmmakers to exhibit their films on Alamo Drafthouse screens. By showing these films to audiences on the big screen, these films could get the momentum they need for further opportunities.
The program’s first film will be the documentary “Butthole Surfers: The Hole Truth and Nothing Butt,” which debuted last year at South by Southwest and chronicles the history of the punk rock band.
The film will be shown in Alamo Drafthouse theaters for a limited time later this summer.
The Austin-based chain, which is owned by Sony Pictures, has a long history of curating indie films for its audiences, giving Alamo Drafthouse confidence that its viewers want to see these kinds of movies, company chief executive Michael Kustermann said in a statement.
“Time and again, they’ve shown they’ll come out to support bold, original films when given the opportunity,” he said. The new Alamo Exclusives “gives us another way to champion filmmaker-driven films that deserve to be discovered and connect them with the wider Alamo Drafthouse audience.”
The initiative comes at a difficult time for indie films. Since the pandemic upended the movie business, traditional studios and distributors have had less appetite for risk, including betting on smaller indie films out of festivals.
And as the 2023 dual writers’ and actors’ strikes thinned out theatrical lineups, that aversion to uncertainty became a push for reliable and profitable hits.
“Too many incredible films premiere at festivals and then never receive the theatrical life they deserve,” Lisa Dreyer, director of Fantastic Fest and film innovation at Alamo, said in a statement. “We are actively searching for films across all genres, from horror to comedy, to everything in-between, to champion in this new, exciting way.”
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