Client Update: June 2024

Client Update

Cynthia O’Neill

Partner | San Francisco

Ronni Cuccia

Associate | Los Angeles

Brian Hawkinson

Associate | San Francisco

Nathaniel J. Price

Associate | Los Angeles

Stephanie J. Lowe

Senior Counsel | San Diego

firm victories

LCW Partner Alex Volberding And Associate Jackie Lee Prevail On Termination Appeal.

A long-term county employee’s job duties gave him access to safety-sensitive information and a county vehicle to travel to various work locations. By chance, the county discovered the employee’s potential multiyear violations of the county’s policies concerning vehicle use and timesheet fraud. After careful consideration of: the findings of an administrative investigation; a Skelly meeting; the employee’s prior work performance; and the employee’s access to sensitive information, the county terminated the employee.

At the termination appeal hearing, the county provided direct witness testimony and documentary evidence of the employee’s misuse of the county vehicle and timesheet fraud. The county also brought evidence that the employee was untruthful during the administrative investigation. The arbitrator found that the county established by a preponderance of evidence that the employee’s violations of the county’s policies and untruthfulness were sufficient grounds for his termination.

LCW Partner J. Scott Tiedemann And Associate Alex Wong Convince Court Of Appeal To Uphold Police Officer’s Termination.

A city terminated a police officer based on allegations that he purchased and facilitated the sale of a controlled substance, and did not tell the truth during the administrative investigation into his misconduct. The officer denied the allegations and appealed the dismissal to the city manager.

The city manager followed the memorandum of understanding (MOU) between the city and the exclusive representative, and appointed a hearing officer to: oversee an administrative appeal hearing; and issue a recommend decision. The hearing officer ruled that the city did not prove the charges and recommended the officer’s reinstatement. The city manager declined this recommendation, and issued her own decision to sustain the charges and the termination.

The former officer asked the superior court to review the city manager’s decision. He claimed that the MOU required the city manager to defer to the hearing officer’s determinations regarding the facts and witness credibility. The trial court ruled that the city manager acted within her power under the terms of the MOU. The former officer appealed.

The California Court of Appeal upheld the city manager’s decision. LCW convinced the Court of Appeal that the city manager was well within her authority as the ultimate decision maker, and that there was no due process violation. The Court of Appeal agreed, finding that the MOU gives: the hearing officer the authority to create the record; and the city manager the discretion how to interpret the appeal hearing record and reach a final decision.

LCW Partner Geoff Sheldon, Senior Counsel Dave Urban, And Associate Kelsey Ridenhour Win Dismissal Of Union Dues Deduction Case.

The U.S. Supreme Court determined in its 2018 opinion in Janus v. AFSCME that the payment of union dues is a form of political speech, which triggers the First Amendment of the U.S. Constitution.

Based on Janus, a court reporter sued her union, the State of California, the superior court, and a county for violating her First and Fourteenth Amendment rights to free speech and due process. The court reporter claimed that the superior court and the county continued to collect union dues from her paycheck after she had terminated her union membership and had rescinded her dues-deduction authorization. She also alleged that the union forged her signature on the authorization form and misrepresented to the superior court and the county that the deductions should continue.

LCW represented the county, which processed payroll for the superior court employees. LCW defended the county in both the District Court and in the Ninth Circuit Court of Appeals. At each level, the courts agreed with LCW’s arguments and dismissed the court reporter’s claims.

As to the Fourteenth Amendment procedural due process claim, the county had no reason to doubt the union’s representations that the court reporter had authorized the dues deductions. The courts also agreed that the county had no duty to verify the validity of the authorizations.

As to the First Amendment free speech claims, the courts agreed that the county was not the proximate cause of the unauthorized dues deduction. The county could not have foreseen the court reporter’s First Amendment injury because the county had: 1) no duty to ensure that the dues authorization forms were genuine; and 2) no notice that the court reporter had contested the dues deductions from her paycheck.

Upcoming Webinar! 2025 Public Agency Legislative Roundup

October 24, 2024 10:00 a.m. - 12:00 p.m.

laborrelations

PERB Says Prevailing Party Is Not Entitled To Attorney’s Fees Absent Special Circumstances.

SEIU, Local 521 and Santa Clara County were parties to a memorandum of agreement (MOA) regarding physician assistants (PAs). PAs were required to maintain certain professional certification standards.

In 2019, the County disciplined a PA for allegedly failing to maintain the professional certification that the County bylaws required. The PA filed a grievance and won. The County then substantially revised the certification bylaws.

SEIU filed a PERB unfair practice charge. SEIU claimed that the County unlawfully refused to bargain before its Board of Supervisors (BOS) approved the County’s bylaw revisions. Those revisions included new certification standards for SEIU-represented employees. PERB held that that the County violated its bargaining duties both with respect to the BOS’ decision and its effects, because the certification bylaws were within the scope of representation.

But PERB rejected SEIU’s request to include attorney's fees as a standard, make-whole remedy. PERB explained that, except in cases in which there is a statutory right to attorney's fees, a successful party cannot require the other party to pay its fees. A party in a PERB case seeking fees must normally show that its opponent pursued a claim, defense, or motion, or used a tactic without arguable merit and in bad faith.

PERB rejected the idea that, as a matter of course, a successful charging party should receive reimbursement of litigation expenses. PERB rejected SEIU’s request for attorney's fees in this case as the County did not assert a frivolous, or bad faith defense.

County of Santa Clara, PERB Dec. No. 2900-M (April 23, 2024), judicial appeal pending.

Key Takeaway:

The County vigorously argued several points of law and defenses in this case. PERB responded to each with the result that this case is a primer on many aspects of the duty to bargain. Note that a judicial appeal is pending.

Happy Summer! Please note that we will not have a July newsletter and will resume in August.

retaliation

FEHA Mixed-Motive Standard Does Not Apply To Whistleblower Retaliation Cases.

Donald Ververka worked for the California Department of Veterans Affairs (CalVet) as the administrator of the veterans’ home in Yountville, CA. Ververka sued his employer for allegedly terminating him in retaliation for his reporting of health and safety issues about the home to an independent state agency and to his supervisor. Days after Ververka reported his safety concerns, his supervisor recommended Ververka’s removal due to poor management of the home.

At trial, the jury found that Ververka’s disclosures were protected and “contributing factors” to CalVet’s decision to terminate him for purposes of his Labor Code section 1102.5 whistle blower claim. But the jury still found in favor of CalVet because CalVet had proven by clear and convincing evidence that it would have made the same decision for “legitimate, independent reasons” as specified in Labor Code section 1102.6.

LCW In The News

At the California Court of Appeal, Ververka argued that because the jury found his protected activities were a contributing factor in his termination, he was entitled to declaratory relief, injunctive relief, reasonable attorney’s fees, and costs based on the California Supreme Court’s opinion in Harris v. City of Santa Monica. That opinion held in part that employees are entitled to that relief in “mixed-motive” Fair Employment and Housing Act (FEHA) employment discrimination cases if: the employee proves a discriminatory motive was a substantial motivating factor in an employer’s decision; and the employer proves it would have made the same decision for non-discriminatory reasons.

The court disagreed. The court concluded that the analysis in Harris was specific to the language in the FEHA and did not extend to Labor Code section 1102.5 whistleblower claims, which must be evaluated under the procedures described in Labor Code section 1102.6.

Ververka v. Department of Veterans Affairs, 2024 Cal.App. LEXIS 334.

To view these articles and the most recent attorney-authored articles, please visit: www.lcwlegal.com/news.

• Featured in both The Recorder and Bloomberg Law, LCW Partner Alexander Volberding and Senior Counsel Brett Overby discuss California's new workplace violence prevention law, highlighting its role in setting a national standard for worker safety. Mandating comprehensive prevention plans, employee training, incident logging, and compliance records by July 1, 2024, the law urges swift action from employers. Inspired by a tragic mass shooting, it will be enforced by the Division of Occupational Safety and Health (DOSH) without a grace period. Volberding and Overby emphasize the need for customized plans, hazard assessments, and thorough training, advising employers to use templates, consult professionals, and leverage available resources to ensure effective compliance.

City’s Authorization To Issue Bonds To Address Unfunded Pension Liability Was Lawful.

The City Council of the City of San Jose authorized the sale of bonds to address an unfunded liability in the City’s pension plans. The Howard Jarvis Taxpayers Association and others (collectively, HJTA) claimed the City had no authority to issue bonds because the City had not obtained approval of two-thirds of the voters as required by the California Constitution’s debt limitation clause. The constitutional debt limitation prohibits cities from incurring any indebtedness or liability exceeding the income and revenue provided for a given year without the assent of two-thirds of the voters.

The trial court upheld the City's actions, ruling that the bond issuance fell under the “obligation imposed by law” exception to the debt limitation clause. The HJTA appealed.

The California Court of Appeal affirmed the judgment on different grounds. First, the Court determined that the City did not violate the debt limitation clause. The City did not seek to increase pension benefits but instead to issue bonds to provide an income stream for a pension liability it had already incurred. Thus, the City's actions to sell bonds did not trigger the constitutional debt limitation.

Second, the City has the authority to issue the bonds. Government Code section 53583 permits a city to issue bonds for the purpose of refunding any revenue bonds. Bonds are defined in Government Code section 53570 as “warrants, notes, or other evidence of indebtedness.” The Court concluded that “evidence of indebtedness,” includes unfunded liability. Thus, the Court found the City had authority to issue the bonds as well.

City of San Jose v. Howard Jarvis Taxpayers Association, et al, 101 Cal.App.5th 777 (2024).

Key Takeaway:

This case provides a helpful summary of a public entity’s pension-related obligations.

For more information on some of our upcoming events and trainings, click on the icons:

Workplace Violence Prevention Plan July 1 Deadline Approaching!

With the enactment of Senate Bill 553, the legislature amended Labor Code section 6401.7 and added Labor Code section 6401.9, requiring employers to adopt and implement a Workplace Violence Prevention Plan (WVPP) and corresponding training for their employees by July 1, 2024. As the effective date for these statutory requirements rapidly approaches, LCW has developed a number of resources to help employers develop a WVPP for their worksites and training for their employees in order to comply with these new obligations. (See here for additional information about LCW offerings and here for a special bulletin on the same topic).

Option 1:

Comprehensive package including LCW’s model WVPP and template training materials along with instructions with valuable insight and explanation as to how to customize the WVPP for your unique workplace specific issues as well as how to implement and maintain an effective WVPP moving forward. This training will also provide detailed guidance regarding the customization of LCW’s training materials to effectively train your employees on issues specific to your workplace(s).

Option 1 Purchase Includes:

• Model Workplace Violence Prevention Plan (with notes on how to customize for your organization)*.

• Checklist of plan/training requirements.

• Slides you can customize and use to train your workforce.

• Three-month access to the two hour webinar recording which provides instructions on how to customize both the Plan and the training (recording length: two hours).

Option 2:

Model Workplace Violence Prevention Plan annotated on how to update for your agency.

Option 2 Purchase Includes:

• Model Workplace Violence Prevention Plan (with notes on how to customize for your organization)*.

The Department of Industrial Relations (DIR) has recently updated their guidance on these requirements. LCW’s WVPP complies with these guidelines.

litigation

Court Dismissed Lawsuit Due To Teacher’s Failures To: Present A Claim And Timely Sue.

In September 2021, John Sandy Campbell, a Resource Specialist Teacher, sued her former employer, the Los Angeles Unified School District, alleging racial discrimination in violation of the Fair Employment and Housing Act (FEHA) and retaliation for whistleblowing in violation of Labor Code sections 1102.5 and 1106.

The District argued that Campbell had no case because: 1) she had not complied with the Government Code’s claim presentation requirement; and 2) the statute of limitations barred her FEHA cause of action. The trial court sided with the District and dismissed the case without leave to amend.

The California Court of Appeal agreed with the trial court. A person suing a public entity for damages must timely present a written claim to the entity before filing suit. Campbell argued that she substantially complied with the claim presentation requirement. The Court said that the fact that Campbell noted that she previously submitted various racial discrimination and whistleblower complaints was not substantial compliance. Campbell's complaint also failed to plead compliance with the claim presentation requirement.

Campbell's FEHA claim was time-barred. She received a Right to Sue notice dated October 9, 2018, that advised that she had one year to file a civil action. But Campbell did not sue until September 2021, making her suit very untimely. The Court dismissed the case and awarded the District costs.

Campbell v. Los Angeles Unified School District, 2024 Cal.App. LEXIS 326.

Did You Know?

Whether you are looking to impress your colleagues or just want to learn more about the law, LCW has your back! Use and share these fun legal facts about various topics in labor and employment law.

• If a local agency discloses a public record that is exempt from the disclosure under the California Public Records Act, that disclosure waives the exemption.

• An employer cannot discriminate or retaliate against an employee because the employee is exercising rights under California law to take time off from work and to request reasonable safety accommodations provided that the employee: 1) works for an employer with 25 employees or more (for some types of unpaid leaves); and 2) gives notice of their status as a victim of a crime or abuse. (Labor Code sections 230 and 230.1).

• Under California’s paid Sick Leave Laws, if an employer elects to use an accrual method for paid sick leave, paid sick leave must begin to accrue on the first day of employment. To be eligible to use that accrued paid sick leave, an employee must have worked for the employer for at least 90 days.

benefits

Final Rule Broadens ACA’s Nondiscrimination Protections.

The U.S. Department of Health and Human Services (HHS) has issued a final rule for Section 1557 of the Affordable Care Act (ACA) that broadens protections against discrimination on the basis of race, color, national origin, sex, age, and disability with health programs and activities receiving federal financial assistance.

The final rule does not apply to employment practices, which means that public agencies cannot face employment discrimination claims brought under Section 1557 (although other federal and state laws prohibiting employment discrimination continue to apply to public agency employment). Although Section 1557 is not an employment discrimination law, public agency employers should still be aware of Section 1557 since it relates to services provided by health insurance issuers that the public agencies may contract with. Here are the key provisions of the Section 1557 final rule public agencies should be aware of:

1. Section 1557 makes it unlawful for health care providers and health insurance issuers that receive federal financial assistance to refuse to treat or otherwise discriminate against an individual on the basis of race, color, national origin, sex, age, or disability.

2. Section 1557 applies to doctors, hospitals, health clinics, health insurance issuers, state Medicaid agencies, community health centers, physicians’ practices, home health care agencies, and Covered California when these providers receive federal financial assistance.

3. Section 1557 requires health insurance coverage and other health-related coverage to provide the most integrated setting appropriate to meet the needs of qualified individuals with disabilities.

4. The prohibition of sex discrimination includes, but is not limited to, prohibiting discrimination on the basis of sexual orientation, gender identity, sex characteristics (including intersex traits), pregnancy or related conditions, and sex stereotypes.

5. The Office for Civil Rights investigates discrimination complaints under Section 1557.

Final Rule and Interpretation: Nondiscrimination in Health Programs and Activities, 42 CFR Parts 438, 440, 457, and 460; 45 CFR Parts 80, 84, 92, 147, 155, and 156, 89 Fed. Reg. __ (May 6, 2024); Fact Sheet: Strengthening Nondiscrimination Protections and Advancing Civil Rights in Health Care through Section 1557 of the Affordable Care Act (Apr. 26, 2024); Section 1557 Final Rule: Frequently Asked Questions (Apr. 26, 2024).

Employer That Promised Lifelong Retiree Health Insurance Could Not Change The Benefit To An HRA.

Alcoa USA Corporation had a history of collective bargaining agreements promising that Alcoa would provide employees with healthcare benefits when they retired. Over time, Alcoa faced increasing healthcare costs and sought ways to limit or cap the retiree healthcare expenses.

In 2021, Alcoa unilaterally replaced the fixed group health insurance plan it provided to retirees with a health reimbursement arrangement (HRA). A group of former Alcoa employees (retirees) filed a lawsuit claiming Alcoa had promised them lifetime healthcare benefits that could not be unilaterally diminished. They argued the new HRA reduced their retiree healthcare benefits in violation of that promise.

The Southern District Court of Indiana first analyzed whether the retirees had a vested right to lifelong healthcare benefits. It determined that the doctrine of judicial estoppel prohibited Alcoa from arguing that retirees did not have lifelong healthcare benefits. Alcoa

corner

was in a rare situation where it had faced a prior lawsuit from a different group of retirees over their retiree healthcare benefits. As part of that prior lawsuit, Alcoa had represented and made statements that retiree health benefits were guaranteed for life. The District Court found that Alcoa could not now go back and argue that retirees did not have a vested right to lifelong healthcare benefits.

The District Court then reviewed whether the new HRA was “reasonably commensurate” with the retirees’ prior health insurance plan. Alcoa argued that it did not violate the collective bargaining agreements because the new HRA was reasonably commensurate with the prior health insurance plan. However, the District Court found that no reasonable jury could find that to be accurate. The District Court addressed three reasons the new HRA was a significantly reduced benefit compared to lifelong healthcare benefits. First, the terms of the new HRA stated that Alcoa could terminate it at any time, which was a substantial decrease in benefit compared to the retirees’ lifelong healthcare benefits. Second, onethird of the retiree group was not eligible to participate in the HRA, despite Alcoa guaranteeing them lifelong healthcare benefits. Third, the HRA shifted the burden of rising healthcare costs from Alcoa onto the retirees. The District Court granted the retiree’s partial motion for summary judgment as to liability.

Note: This case presented an unusual situation where the employer was judicially estopped from arguing that its retiree healthcare benefits were not vested for the lifetime of the retiree. Generally, whether or not a collective bargaining agreement or a memorandum of understanding has created a vested right to lifelong retiree healthcare benefits is a specific analysis that will depend on the exact contractual language and the history of prior contract language.

Kaiser v. Alcoa USA Corp., 2024 WL 1283535 (S.D. Ind. 2024).

Benefits Compliance Question

Question: What types of payments are included in the 4850 leave benefit for public safety employees?

Answer: California Labor Code section 4850 provides a leave of absence without loss of salary to public safety employees who are disabled, whether temporarily or permanently, by injury or illness arising in the course of their duties. While the phrase “without loss of salary” is not defined by Section 4850, it has been construed by courts to include all types of pay and benefits that an employee would normally receive if they were not on leave. This includes wages, bonuses, premiums, and other special pays. There is an exception where 4850 pay does not include any pay that is predicated on satisfying additional conditions beyond mere continued employment, such as holiday premium pay for actually working the holiday. 4850 payments are also nontaxable. The non-taxable status derives from the same principles that provide that workers’ compensation payments are non-taxable.

LCW BENEFITS BEST PRACTICES TIMELINE

Each month, LCW presents a monthly benefits timeline of best practices. This timeline is intended to apply to agencies that are applicable large employers for Affordable Care Act purposes.

June

• Prepare for the end of the fiscal year, including budgeting for employee benefits.

• Consider whether the agency wants to revise its Section 125 cafeteria plan document. Prepare for any changes to ensure their timely adoption by December 31, before the next calendar year.

Train the Trainer Program

Become a Certified Harassment Prevention Trainer for your Organization!

LCW Train the Trainer sessions will provide you with the necessary training tools to conduct the mandatory AB 1825, SB 1343, AB 2053, and AB 1661 training at your organization.

California Law requires employers to provide harassment prevention training to all employees. Every two years, supervisors must participate in a 2-hour course, and non-supervisors must participate in a 1-hour course.

QUICK FACTS:

Trainers will become certified to train both supervisors and non-supervisors at/for their organization.

Attendees receive updated training materials for 2 years.

Pricing: $2,000 per person. ($1,800 for ERC members).

October 2, 2024 9:00 AM - 4:00 PM

To learn more about our program, please visit our website below or contact Anna Sanzone-Ortiz 310.981.2051 or asanzone-ortiz@lcwlegal.com.

www.lcwlegal.com/train-the-trainer

Consortium Call Of The Month

Members of Liebert Cassidy Whitmore’s employment relations consortiums may speak directly to an LCW attorney free of charge regarding questions that are not related to ongoing legal matters that LCW is handling for the agency, or that do not require in-depth research, document review, or written opinions. Consortium call questions run the gamut of topics, from leaves of absence to employment applications, disciplinary concerns to disability accommodations, labor relations issues and more. This feature describes an interesting consortium call and how the question was answered. We will protect the confidentiality of client communications with LCW attorneys by changing or omitting details.

Question: Answer:

An employee who was victim of domestic violence is seeking extended work from home accommodations. How do we proceed?

Generally, California Labor Code section 230 requires employers to provide reasonable accommodations for workplace safety to employee-victims of domestic violence. Once the victimemployee requests the accommodation, the employer should initiate a timely, good faith interactive process with the employee to determine if effective workplace safety accommodations exist. According to the Labor Code, reasonable accommodations to provide for the employee’s safety at work include: a transfer, reassignment, modified schedule, changed work telephone, changed work station, installed locks, assistance in documenting domestic violence, sexual assault, stalking, or other crime that occurs in the workplace, an implemented safety procedure, or another adjustment to a job structure, workplace facility, or work requirement.

On The Blog

Compensatory Time Off: Navigate The Vacation Rush For Smooth Sailing

By: Anthony Co

The days are getting longer and the vacation requests are piling up. If your agency uses compensatory time off, or “CTO,” granting vacation requests can be tricky when everyone wants to take time off at the same time.

What is CTO?

The Federal Labor Standards Act (FLSA) requires employers to pay employees at least 1.5x the employee’s regular rate of pay for overtime hours worked. Alternatively, the FLSA allows public employers and employees to agree on a different method of compensation: CTO. Instead of paying 1.5x the regular rate of pay for overtime hours worked, public employers can instead provide employees with time off work at 1.5x their overtime hours worked.

Using CTO is quite different from using regular vacation leave. For vacation leave, employers may typically approve or deny an employee’s request subject only to conditions in the employer’s personnel rules or applicable memoranda of understanding.

For CTO, agencies must be familiar with two standards: (1) “reasonable period” and (2) “undue disruption.”

A “reasonable period” considers the “customary work practices within the agency based on the facts and circumstances in each case.” The FLSA regulations provide four non-exhaustive factors that could contribute to the analysis: (1) the normal schedule of work; (2) the anticipated peak workloads based on past experience; (3) emergency requirements for staff and services; and (4) availability of qualified substitute staff. For represented employees, the agency should strongly defer to the MOU’s provisions on CTO to determine what is reasonable, if applicable.

If the agency cannot provide a reasonable period of time in which the employee can use CTO, the agency must be able to justify its decision by showing undue disruption. “Undue disruption” is an unreasonable burden on the agency’s ability to provide services of acceptable quality and quantity.

Typically, showing undue disruption is a difficult task. Undue disruption is more than a mere inconvenience, and there is some authority that even having to hire replacements—by itself—does not establish undue disruption.

Save the Date

The Department of Labor (DOL) maintains its “longstanding position that employees are entitled to use compensatory time on the date requested absent undue disruption to the agency.”

In contrast, the Ninth Circuit held in 2004 in Mortensen v. County of Sacramento that the FLSA does not require employers to approve an employee’s specifically requested CTO date. Instead, once an employee requests CTO, the agency has a reasonable period of time to grant the request.

The Ninth Circuit declined to defer to the DOL’s interpretation because it concluded that the text of the FLSA “unambiguously states that once an employee requests the use of CTO, the employer has a reasonable period of time to allow the employee to use accrued time.” Thus, employers may provide a reasonable period of time in which the employee can use CTO, without showing that the employee’s specifically requested date would cause undue disruption.

The Ninth Circuit’s decision in Mortensen remains unchallenged in this jurisdiction, and the Supreme Court has not reviewed the issue. Accordingly, California agencies are likely able to follow Mortensen’s decision and provide employees with a reasonable period of time in which they can use CTO instead of approving the employee’s specifically requested date.

A reasonable period of time, as mentioned previously, may depend on several factors, such as the agency’s practice of approving time off requests. In Mortensen, for example, the County of Sacramento had the following “leave book” policy: If the CTO request falls on a date for which all the leave openings are full, the County denies the CTO request. The employee may select any other day with a leave opening, up to one year. If the employee has not used their CTO within a year, the County cashes out the CTO.

The Ninth Circuit held that this policy complies with the FLSA, even though the “reasonable period” may theoretically last for up to one year. The Court observed that the County used this same policy for all leaves and the employee’s bargaining unit assented to the policy under the MOU.

In sum, when an employee requests to use their accrued CTO, the agency must grant the request to use CTO within a reasonable period unless the request will unduly disrupt the agency’s operations. That is, the agency is not required to grant a request to use CTO on a specific date. However, the employee must be able to use the CTO within a reasonable period, which depends on several factors mentioned above. Otherwise, the agency must be able to show that allowing CTO use within a reasonable period would unduly disrupt the agency’s operations.

View the full blog here.

Liebert Cassidy Whitmore