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Santa Monica’s Headspace Health laid off scores of therapists. Their patients don’t know where they went

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Santa Monica’s Headspace Health laid off scores of therapists. Their patients don’t know where they went

When Headspace Health laid off a large number of its therapists June 29, patients were told their providers had left the platform.

What they didn’t know was their therapists had lost their jobs. And they suddenly had no way to contact them.

Several therapists who were let go from Headspace, the Santa Monica-based meditation app and remote mental healthcare company, have raised alarm over their treatment and that of their patients after the companywide layoff of 181 employees, which amounts to 15% of the workforce.

After the layoff was announced in the morning without warning, these therapists said they immediately lost access to their patient care systems. Appointments, they said, were canceled without explanation, potentially causing irreparable harm to their patients and forcing them to violate the ethical guidelines of their profession.

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One former therapist, who specializes in working with the LGBTQ community, said one of his clients had just come out for the first time in a session the day before he lost his job. The therapist requested anonymity because he was still awaiting severance from Headspace and feared retribution.

“I’m the first person they’ve ever talked to about it,” he said. “They’re never going back to therapy. They just had the first person she talked to about it abandon them.”

He didn’t know he had been laid off until 10 minutes after his first appointment was supposed to start and he had been unable to log into the system.

“If any of the clinicians had done this to our clients we would be losing our licenses tomorrow,” he said. “I assume [Headspace] didn’t allow us to talk to the clients because they didn’t want us to poach the clients. In doing so, they just really screwed over their entire client base.”

Monica Blauner, an officer and past president of the California Society for Clinical Social Work, said if the layoffs did indeed immediately cut off access to therapists with no explanation, it would constitute a “huge breach of trust” with patients, many of whom may have a general history of trauma and loss.

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“A lot of what happens in psychotherapy — the most important curative factor in psychotherapy is the relationship with the client,” said Blauner, who’s been a therapist for more than 40 years.

Ending therapy is the end of an important relationship, and it’s crucial to give ample notice so that the therapist can help their patient process their feelings about the change and discuss how to move forward, Blauner said.

“One of the things that can be so therapeutic for people, especially if you’ve had a lot of traumatic loss, is having a different and a better goodbye,” she said.

In a statement, Headspace said it “promptly notified” members whose providers were impacted and provided details on how to switch to a new therapist, prioritizing patients with greater need.

“As a licensed medical provider, protecting the privacy and safety of our members and employees is paramount,” Headspace said. “We keep this commitment at the forefront for both our patients and our former colleagues, including safeguarding confidential patient data and personal details regarding the nature of the impacted employees’ departures.”

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The company said it used a “team-based model” that includes psychiatry and behavioral health coaching to ensure a continuity of care beyond individual therapists.

Jay Hodes, president of healthcare regulation compliance company Colington Consulting, said Headspace acted in line with federal legislation surrounding patient electronic medical records when conducting the layoff.

Companies are required to terminate a worker’s access to protected health information once employment ends, Hodes said. However, it’s up to companies to decide when or how they notify workers of a layoff or termination.

Beyond privacy, however, the abrupt termination could raise malpractice issues, said Rolf Lowe, a lawyer with Michigan-based healthcare law firm Wachler & Associates.

“If somebody has a crisis, and harms themselves or another, and they’re no longer seeing that specific therapist there could be some issues there, if someone were to file a complaint with an individual therapist with the board,” Lowe said. Since each state requires its own license to practice, this would apply to therapists individually across the country.

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Lowe said the employer should ideally be able to give patients a way to contact their therapists, with both parties’ permission.

“But the relationship is between the therapist and the patient, not the company and the patient,” Lowe said.

Another therapist laid off from Headspace said she had an active caseload of 67 patients, with her longest continuing client having seen her for two years.

She had eight appointments scheduled Thursday — the day of the layoffs — with seven on Friday and seven more on Saturday.

At a previous online therapy company that she worked for, Talkspace, she gave the company a month’s notice before leaving the platform. During that month, she was able to have discussions with her patients and talk about moving forward.

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“I’ve had former clients who have had other therapists tell me that that’s happened to them before, they feel abandoned,” she said. “It takes a long time for them to go back and try therapy again.

The ethics code of the American Psychological Assn. outlines the ideal process for transferring patients.

“Ideally, there would be pre-termination discussions and appropriate handoffs to the new therapist,” said Lindsay Childress-Beatty, the association’s chief ethics officer.

The code says that “paramount consideration” should be given to the welfare of the patient, and there should be “orderly and appropriate resolution of responsibility for care,” Childress-Beatty said.

Any termination of care should be “planned for, discussed openly in treatment, and be an essential aspect of the treatment process that assists the client toward effective independent functioning,” wrote Jeffrey Barnett and Caroline Coffman for the Society for the Advancement of Psychotherapy.

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Several therapists said that former patients have reached out to them through LinkedIn, Psychology Today, and searched for therapists’ private practices to ask where they went and if they are OK. Some patients were under the impression that the therapist themselves had canceled their appointments at the last minute.

“That’s defaming us,” one former therapist said. “It very much affects our reputation as providers.”

A therapist still employed by Headspace said she was instructed by her supervisor to stick with the messaging that “their previous provider is no longer with the organization” and that they could not share details “for confidentiality reasons.”

She’s already seen her workload increase, with eight new intake patients this week — more than double the usual. One of her colleagues got nine new patients transferred from other providers, she said.

“I’ll be honest, I was already looking for other jobs,” she said. “Definitely not feeling comfortable to stay now.”

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Albania Gives Jared Kushner Hotel Project a Nod as Trump Returns

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Albania Gives Jared Kushner Hotel Project a Nod as Trump Returns

The government of Albania has given preliminary approval to a plan proposed by Jared Kushner, Donald J. Trump’s son-in-law, to build a $1.4 billion luxury hotel complex on a small abandoned military base off the coast of Albania.

The project is one of several involving Mr. Trump and his extended family that directly involve foreign government entities that will be moving ahead even while Mr. Trump will be in charge of foreign policy related to these same nations.

The approval by Albania’s Strategic Investment Committee — which is led by Prime Minister Edi Rama — gives Mr. Kushner and his business partners the right to move ahead with accelerated negotiations to build the luxury resort on a 111-acre section of the 2.2-square-mile island of Sazan that will be connected by ferry to the mainland.

Mr. Kushner and the Albanian government did not respond Wednesday to requests for comment. But when previously asked about this project, both have said that the evaluation is not being influenced by Mr. Kushner’s ties to Mr. Trump or any effort to try to seek favors from the U.S. government.

“The fact that such a renowned American entrepreneur shows his interest on investing in Albania makes us very proud and happy,” a spokesman for Mr. Rama said last year in a statement to The New York Times when asked about the projects.

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Mr. Kushner’s Affinity Partners, a private equity company backed with about $4.6 billion in money mostly from Saudi Arabia and other Middle East sovereign wealth funds, is pursuing the Albania project along with Asher Abehsera, a real-estate executive that Mr. Kushner has previously teamed up with to build projects in Brooklyn, N.Y.

The Albanian government, according to an official document recently posted online, will now work with their American partners to clear the proposed hotel site of any potential buried munitions and to examine any other environmental or legal concerns that need to be resolved before the project can move ahead.

The document, dated Dec. 30, notes that the government “has the right to revoke the decision,” depending on the final project negotiations.

Mr. Kushner’s firm has said the plan is to build a five-star “eco-resort community” on the island by turning a “former military base into a vibrant international destination for hospitality and wellness.”

Ivanka Trump, Mr. Trump’s daughter, has said she is helping with the project as well. “We will execute on it,” she said about the project, during a podcast last year.

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This project is just one of two major real-estate deals that Mr. Kushner is pursuing along with Mr. Abehsera that involve foreign governments.

Separately, the partnership received preliminary approval last year to build a luxury hotel complex in Belgrade, Serbia, in the former ministry of defense building, which has sat empty for decades after it was bombed by NATO in 1999 during a war there.

Serbia and Albania have foreign policy matters pending with the United States, as both countries seek continued U.S. support for their long-stalled efforts to join the European Union, and officials in Washington are trying to convince Serbia to tighten ties with the United States, instead of Russia.

Virginia Canter, who served as White House ethics lawyer during the Obama and Clinton administrations and also an ethics adviser to the International Monetary Fund, said even if there was no attempt to gain influence with Mr. Trump, any government deal involving his family creates that impression.

“It all looks like favoritism, like they are providing access to Kushner because they want to be on the good side of Trump,” Ms. Canter said, now with State Democracy Defenders Fund, a group that tracks federal government corruption and ethics issues.

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Craft supplies retailer Joann declares bankruptcy for the second time in a year

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Craft supplies retailer Joann declares bankruptcy for the second time in a year

The craft supplies and fabric retailer Joann filed for bankruptcy for the second time in less than a year, as the chain wrestles with declining sales and inventory shortages, the company said Wednesday.

The retailer emerged from a previous Chapter 11 bankruptcy process last April after eliminating $505 million in debt. Now, with $615 million in liabilities, the company will begin a court-supervised sale of its assets to repay creditors. The company owes an additional $133 million to its suppliers.

“We hope that this process enables us to find a path that would allow Joann to continue operating,” said interim Chief Executive Michael Prendergast in a statement. “The last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step.”

Joann’s more than 800 stores and websites will remain open throughout the bankruptcy process, the company said, and employees will continue to receive pay and benefits. The Hudson, Ohio-based company was founded in 1943 and has stores in 49 states, including several in Southern California.

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According to court documents, Joann began receiving unpredictable and inconsistent deliveries of yarn and sewing items from its suppliers, making it difficult to keep its shelves stocked. Joann’s suppliers also discontinued certain items the retailer relied on.

Along with the “unanticipated inventory challenges,” Joann and other retailers face pressure from inflation-wary consumers and interest rates that were for a time the highest in decades. The crafts supplier has also been hindered by competition from others in the space, including Michael’s, Etsy and Hobby Lobby, said Retail Wire Chief Executive Dominick Miserandino.

“It did not necessarily learn to evolve like its nearby competitors,” Miserandino said of Joann. “Not many people have heard of Joann in the way they’ve heard of Michael’s.”

Joann is not the first retailer to continue to struggle after going through bankruptcy. The party supply chain Party City announced last month it would be shutting down operations, after filing for and emerging from Chapter 11 bankruptcy in 2023.

Over the last two years, more than 60 companies have filed for bankruptcy for a second or third time, Bloomberg reported, based on information from BankruptcyData. That’s the most over a comparable period since 2020, when the COVID-19 pandemic kept shoppers home.

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Discount chain Big Lots filed for bankruptcy last September, and the Container Store, a retailer offering storage and organization products, declared bankruptcy last month. Companies that rely heavily on brick-and-mortar locations are scrambling to keep up with online retailers and big-box chains. Fast-casual restaurants such as Red Lobster and Rubio’s Coastal Grill have also struggled.

High prices have prompted consumers to pull back on discretionary spending, while rising operating and labor costs put additional pressure on businesses, experts said. The U.S. annual inflation rate for 2024 was 2.9%, down from 3.4% in 2023. But inflation has been on the rise since September and remains above the Federal Reserve’s goal of 2%.

If a sale process for Joann is approved, Gordon Brothers Retail Partners would serve as the stalking-horse bidder and set the floor for the auction.

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U.S. Sues Southwest Airlines Over Chronic Delays

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U.S. Sues Southwest Airlines Over Chronic Delays

The federal government sued Southwest Airlines on Wednesday, accusing the airline of harming passengers who flew on two routes that were plagued by consistent delays in 2022.

In a lawsuit, the Transportation Department said it was seeking more than $2.1 million in civil penalties over the flights between airports in Chicago and Oakland, Calif., as well as Baltimore and Cleveland, that were chronically delayed over five months that year.

“Airlines have a legal obligation to ensure that their flight schedules provide travelers with realistic departure and arrival times,” the transportation secretary, Pete Buttigieg, said in a statement. “Today’s action sends a message to all airlines that the department is prepared to go to court in order to enforce passenger protections.”

Carriers are barred from operating unrealistic flight schedules, which the Transportation Department considers an unfair, deceptive and anticompetitive practice. A “chronically delayed” flight is defined as one that operates at least 10 times a month and is late by at least 30 minutes more than half the time.

In a statement, Southwest said it was “disappointed” that the department chose to sue over the flights that took place more than two years ago. The airline said it had operated 20 million flights since the Transportation Department enacted its policy against chronically delayed flights more than a decade ago, with no other violations.

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“Any claim that these two flights represent an unrealistic schedule is simply not credible when compared with our performance over the past 15 years,” Southwest said.

Last year, Southwest canceled fewer than 1 percent of its flights, but more than 22 percent arrived at least 15 minutes later than scheduled, according to Cirium, an aviation data provider. Delta Air Lines, United Airlines, Alaska Airlines and American Airlines all had fewer such delays.

The lawsuit was filed in the United States District Court for the Northern District of California. In it, the government said that a Southwest flight from Chicago to Oakland arrived late 19 out of 25 trips in April 2022, with delays averaging more than an hour. The consistent delays continued through August of that year, averaging an hour or more. On another flight, between Baltimore and Cleveland, average delay times reached as high as 96 minutes per month during the same period. In a statement, the department said that Southwest, rather than poor weather or air traffic control, was responsible for more than 90 percent of the delays.

“Holding out these chronically delayed flights disregarded consumers’ need to have reliable information about the real arrival time of a flight and harmed thousands of passengers traveling on these Southwest flights by causing disruptions to travel plans or other plans,” the department said in the lawsuit.

The government said Southwest had violated federal rules 58 times in August 2022 after four months of consistent delays. Each violation faces a civil penalty of up to $37,377, or more than $2.1 million in total, according to the lawsuit.

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The Transportation Department on Wednesday also said that it had penalized Frontier Airlines for chronically delayed flights, fining the airline $650,000. Half that amount was paid to the Treasury and the rest is slated to be forgiven if the airline has no more chronically delayed flights over the next three years.

This month, the department ordered JetBlue Airways to pay a $2 million fine for failing to address similarly delayed flights over a span of more than a year ending in November 2023, with half the money going to passengers affected by the delays.

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