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
Partner James Oldendorph And Associate Attorney Nick Grether Win Dismissal Of Firefighter’s Disability And Age Discrimination Complaint.
In 2011, a city firefighter who worked in a paramedic assignment was diagnosed with a “physical disability, mental disability, or protected condition.” In 2016, the fire chief removed him from his paramedic assignment. In 2020 and again in 2021, the firefighter asked for, but was not reinstated to, that assignment.
In January 2022, the firefighter sued the city. He claimed the following violations of the California Fair Employment and Housing Act (FEHA): disability and age discrimination; failure to accommodate his disability; and failure to engage in the interactive process. The firefighter claimed the city regarded him and/or treated him as having or having had a “physical disability…’” since 2011. He further alleged that age and disability discrimination occurred when he was removed from his paramedic assignment in 2016, and that the discrimination continued in 2020 and 2021 when he unsuccessfully sought reinstatement to that assignment. The firefighter, however, did not allege: specific evidence of age discrimination; or that he asked for a reasonable accommodation.
The city filed multiple demurrers and motions to strike. The city’s demurrers were sustained, but with leave to amend. The firefighter then filed a third amended complaint (TAC) in July 2023. This time the superior court sustained the city’s demurrer without leave to amend. The court dismissed the entire case because the firefighter: did not meet the then-existing one-year FEHA statute of limitations to file his administrative complaint; failed to state causes of action for age or disability discrimination; and violated the sham pleading doctrine by amending his complaint to delete prior admissions without explanation.
LCW Partner Jesse Maddox And Associate James Bonnie Win
Terminating Sanctions For County In FEHA Case.
A former county employee sued the county for discrimination and retaliation in violation of the California Fair Housing and Employment Act.
Over the subsequent two years, the former employee and their counsel willfully failed to comply with the Superior Court’s orders and discovery laws and protocols. Initially, Partner Jesse Maddox and Associate Attorney James Bonnie obtained significant monetary sanctions against the employee and their counsel for the employee’s refusal to answer a request for admission. They also obtained a Court order requiring the employee and their counsel to supplement their written discovery responses.
The employee’s and their counsel’s willful violation of the Court’s orders and the law continued even following the initial sanctions order, including abusing the AttorneyClient privilege objection and refusing to identify documents and communication that the employee lost or were not in the employee’s custody and control. After a particularly egregious discovery dispute, the county moved for terminating sanctions.
At the hearing on the motion, Associate Attorney James Bonnie persuaded the Court that the prior monetary sanctions had been ineffectual and that additional monetary sanctions would therefore be futile.
The Court agreed, finding that the county had been harmed in lost time and taxpayer money in the lengthy and unresolved litigation. The Court also found that the county’s defense was prejudiced because two years after the litigation commenced, the county still had not received discovery to which it was entitled. Based on the entire record of discovery abuses, the Court ordered a terminating sanction of dismissal with prejudice.
LCW Partners Jennifer Rosner, Joung Yim, And Associate Marek Pienkos Prevail
On Firefighter’s
Claims As To Extracurricular Activities.
A firefighter participated in several unpaid and voluntary activities with a city fire department, including the department’s Urban Search and Rescue (USAR) program, training cadre, and grant committee. The firefighter suspected that one of the department’s battalion chiefs and the fire chief were involved in a “scheme” to obtain emergency federal funds, and the firefighter reported this suspicion. The department hired an outside investigator who concluded that the firefighter’s claims were unfounded.
After the firefighter reported the alleged scheme, the firefighter was reassigned from the training cadre (along with 11 other volunteers) and the USAR program was restructured resulting in a change of his USAR title but no changes to his pay, duties, schedules or work location. The firefighter also stopped doing work for the grant committee, but his participation in any grant committee was disputed. The firefighter ultimately elected to stop participating in the USAR program.
The firefighter sued the department and the city for whistleblower retaliation and age discrimination in violation of the Labor Code and Fair Employment and Housing Act (FEHA). The department moved for summary judgment on the ground that these events regarding the firefighter’s extracurricular activities did not amount to an “adverse employment action” as a matter of law. The trial court agreed and granted the motion. The firefighter appealed.
The California Court of Appeal upheld the trial court’s grant of summary judgment in favor of the department and city. The Court of Appeal made a clear distinction between actions which negatively affected an employee’s official position and duties, and actions concerning “adjacent activities” which did not. The Court of Appeal agreed with LCW that the firefighter failed to show how the change in the firefighter’s extracurricular activities affected his official position and duties.
Associate Attorney Sue Ann Renfro Secures Demotion Of County Therapist.
The county provides occupational and physical therapy, among other things, to children with a variety of medical conditions. The therapy is subject to many regulations, including the need for therapists to provide periodic medical evaluations, and prepare detailed reports to support billings.
In June 2020, the therapist received a “Meets Expected Standards” overall rating on her performance evaluation, but the evaluation noted that the therapist: was below average in the number of treatments per week; and was behind in completing client re-evaluations.
In July 2021, the therapist again received an overall “meets expected standards”, but received “improvement needed” in several categories, including the same problems noted in the 2020 evaluation as well as filing inaccurate evaluations and reports. The county issued the therapist a performance improvement plan (PIP). The therapist complained that the PIP was retaliation for her request for accommodation and concerns about the county’s COVID protocols.
The therapist then filed a complaint, claiming she was not accommodated and she was discriminated against for seeking to work remotely. The county’s investigation found that no discrimination had occurred. The investigation showed that the county had eight interactive process meetings with the therapist and provided several accommodations.
The county’s review of billing records indicated the therapist had billed a high amount to Medi-Cal, without preparing supporting reports. The county investigated and found that the therapist had: billed for work 11 times without documentation; and her untimely evaluations endangered her patients’ health. The county noticed the therapist for demotion so that she could have more training and supervision.
The therapist responded to the notice of charges that: she had an excellent record; it was difficult to access all the files she needed to do her work; and the lack of client evaluations was likely due to patients missing appointments. The county issued a final notice to demote the therapist because she should have been aware of billing requirements and she had endangered patients. The therapist appealed. She claimed: she did not have
sufficient notice of performance failures; her demotion was retaliation for her complaints and requests for accommodation; and that she was “coachable” and recognized her need to improve.
The hearing officer upheld all charges and the penalty of demotion. The hearing officer noted that: the county had proved the charges; the therapist had notice of her performance failures; there was no causal connection between the disciplinary action and the therapist’s requests for accommodation and complaints; and that the therapist did not present a sincere or credible demeanor at the hearing.
The hearing officer’s decision became final after the therapist withdrew her appeal to the Employee Appeals Board.
LCW Partner Michael Youril And Associate Anthony Co Defeat Union’s Leave Pay Out Lawsuit.
Two former city police officers were paid accrued leaves at their final base salary rate upon separation. Their union filed for a writ of mandate alleging that the city had a legal obligation to pay out the former officers’ vacation and sick leave at their base rate plus incentive pays.
The city demurred to the causes of action and the court sustained with leave to amend. The union filed a second petition arguing that the cash outs should have included incentive pay at separation under the Memorandum of Understanding, the city’s personnel rules, or alternatively due to past practice. The city demurred to the second petition as well. After extensive oral argument at the demurrer hearing on the second petition, the Court sustained the city’s demurrer without leave to further amend, effectively ending the matter. The Court’s order tracked LCW’s arguments.
new to the Firm!
Patrick Marsh, an Associate in our Fresno office, provides expert labor and employment counsel and representation in a wide range of matters.
Peter A. Cress, an Associate in our Sacramento office, provides expert advice and counsel on labor and employment law matters, as well as conducting workplace investigations.
Charles R. Hellstrom, an Associate in our Sacramento office, provides expert advice and counsel on labor and employment law matters.
discrimination
FEHA Does Not Apply To Fertility Preservation Procedures.
Erika Paleny worked for Fireplace Products U.S., Inc. Paleny informed her manager of her plans to undergo oocyte (egg) retrieval procedures for donation and future personal use. Paleny claimed that her manager disapproved of the procedures and scolded her for needing time off. After Paleny asked for additional time off for her procedures, her manager allegedly became angry and terminated Paleny’s employment that same day.
Paleny then brought 10 causes of action against her employer and manager, including harassment, discrimination, retaliation, and failure to accommodate claims under the Fair Employment and Housing Act (FEHA) based on sex (i.e., due to pregnancy). Her manager and employer argued that oocyte retrieval was not considered a characteristic protected by the FEHA because she was never pregnant or attempting to get pregnant, nor was she disabled or requesting accommodations during her employment. In response, Paleny argued that freezing her eggs for potential future use qualified as a pregnancy “related medical condition” under the FEHA.
The trial court granted the employer’s and manager’s motion for summary judgment, finding that FEHA’s protections did not extend to medical procedures to donate eggs to others or freeze them for a possible future pregnancy. The trial court found that Paleny could not establish that she had a pregnancy-related medical condition, nor could she establish that she was disabled, or had engaged in FEHA-protected activity.
On appeal, Paleny argued that the trial court interpreted the FEHA too narrowly because procedures for future pregnancies were protected. The California Court of Appeal found that Paleny was not pregnant nor disabled by pregnancy during her employment, and thus could not claim entitlement to FEHA’s pregnancy disability law. The Court also found that Paleny did not have a medical condition related to pregnancy. The egg retrieval procedure did not constitute a medical condition related to pregnancy under the FEHA because Paleny was undergoing an elective
medical procedure without an underlying medical condition related to pregnancy. Therefore, Paleny did not have a protected characteristic under the FEHA.
Paleny v. Fireplace Products U.S., Inc., 103 Cal.App.5th 199 (2024).
Section 1981 Prohibits
Employment Discrimination Based On U.S. Citizenship.
Long before Title VII was adopted, federal law codified at 42 U.S.C. section 1981 prohibited discrimination on the basis of race. In this case, the U.S. Court of Appeals for the Ninth Circuit held that discrimination against U.S. citizens on the basis of their citizenship is also prohibited under 42 U.S.C. section 1981.
Purushothaman Rajaram, a U.S. citizen and information technology professional, alleged that Meta Platforms, Inc. refused to hire him because it preferred to hire noncitizens holding H-1B visas for lower wages. Rajaram brought a class action asserting a single claim: that Meta violated section 1981 by discriminating against U.S. citizens in hiring.
Section 1981(a) states that “[a]ll persons within the jurisdiction of the United States shall have the same right in every State … to make and enforce contracts, … and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens….”
The Ninth Circuit held that section 1981 prohibits employers from discriminating against U.S. citizens because an employer that does so gives one class of people—noncitizens, or perhaps some subset of noncitizens—a greater right to make contracts than “white citizens.” If some noncitizens have a greater right to make contracts than “white citizens,” then section 1981(a) is violated.
Rajaram v. Meta Platforms, Inc., 105 F.4th 1179 (9th Cir. 2024).
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retaliation
56-Day Gap Between EEO Complaint And Termination Did Not Establish Retaliation.
Meyer Kama sued the administrator of his former employer, the Transportation Security Administration (TSA), alleging Title VII retaliation. The TSA terminated Kama’s employment based on his failure to cooperate in an investigation into whether he received illegal compensation for assisting other employees during internal agency investigations.
Kama did not dispute that the TSA's reason for terminating him was a legitimate and non-retaliatory reason, but instead claimed that this reason was merely a pretext to cover up unlawful retaliation. To establish this claim, Kama relied primarily on the temporal proximity between the date of his last formal EEO complaint and the date of his termination. Kama contended that the
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56-day interval established illegal pretext by proximity alone. He also cited other circumstantial evidence to support his pretext claim. The district court disagreed and granted TSA’s motion for summary adjudication.
The Ninth Circuit Court of Appeals held that the temporal proximity between Kama’s last formal EEO complaint and the date of his termination was not sufficient, by itself, to support his claim. The 56-day period was considerably longer than the time periods in nearly all of the cases that Kama relied upon. Also undermining Kama’s temporal proximity argument was the fact that there was a strong temporal link between his noncooperation and his termination. The panel also rejected Kama’s list of circumstantial evidence. The Ninth Circuit affirmed the district court’s grant of the motion for summary adjudication.
Meyer Kama v. Mayorkas, 2024 U.S. App. LEXIS 17666 (9th Cir.).
family leave
Employer Defeated FMLA Certification With Non-Medical Evidence Of Fraud.
Thomas Perez, a haul truck driver for Barrick Goldstrike Mines, Inc., claimed that he was injured when his truck collided with the wall of a mine. Perez did not report the collision until the end of his shift, hours later, even though the Barrick policy requires immediate reporting. Neither an on-site emergency medical technician who examined Perez, nor a doctor who treated him later, found any outward signs of injury or abnormalities. Perez claimed severe pain from certain movements, so his doctor certified Perez to remain off-work for 11 days. Perez used Family and Medical Act Leave (FMLA) and returned to work 18 days after the alleged accident, with no restrictions. Barrick never requested a recertification or obtained a second medical opinion.
Instead, Barrick investigated Perez’s alleged accident. Barrick found no physical evidence that Perez’s truck had collided with a mine. Barrick hired a private investigator to follow Perez and to confirm whether he was fraudulently taking FMLA leave. Over the course of three days, the investigator captured video of Perez doing various activities without visible signs of difficulty or discomfort, including driving through town, gambling at a casino, performing repair work at his rental property, repeatedly lifting and holding both arms over his head, and carrying and using a power drill and other tools and equipment. Barrick then confronted Perez and fired him after concluding that he had faked his injury and violated company policy.
Perez sued his former employer for interfering with his FMLA rights when it terminated his employment. The jury in the district court found that Perez failed to show by a preponderance of the evidence either that he had a serious health condition preventing him from doing his job, or that Barrick terminated him because he sought protected leave.
On appeal to the U.S. Court of Appeals for the Ninth Circuit, Perez contended that the U.S. District court erred in its instructions to the jury. Perez argued that the district court should have instructed the jury that Barrick could only challenge his doctor’s certification with subsequent opinions from additional medical experts.
The Ninth Circuit disagreed with Perez and held that the FMLA does not require an employer to present contrary medical evidence before contesting a doctor’s certification of a serious health condition. The jury properly considered the non-medical investigation evidence that Barrick offered at trial in support of its argument that Perez did not have a serious health condition within the meaning of the FMLA.
Perez v. Barrick Goldstrike Mines, Inc., 2024 U.S. App. LEXIS 15778 (9th Cir.).
laborrelations
Court Invalidates Voter Approved Ballot Measure Because City Did Not First Consult In Good Faith With Public Safety Unions.
In 2010, the Palo Alto City Council considered altering a provision in its charter. That provision required that certain labor disputes with its public safety unions be resolved through binding interest arbitration. The City believed that the Meyers-Milias-Brown Act (MMBA), at Government Code section 3507, did not require prior good faith consultation with its public safety unions.
The City Council adopted resolution 9189, which proposed that City voters amend the City Charter at article V to repeal binding interest arbitration and replace it with other dispute resolution procedures. The City held a special election in November 2011, and the voters passed Measure D, to repeal binding interest arbitration.
The firefighters’ union sued. In prior decisions, the Court of Appeal and the Public Employee Relations Board (PERB) both concluded that the City violated Section 3507 by enacting resolution 9189 and submitting Measure D to the voters without having first consulted in good faith with the firefighters’ union. The Court of Appeal remanded the case to PERB to determine the remedy.
PERB rejected the City’s objections that the City’s constitutional home-rule privileges insulated the voterapproved Measure D from PERB’s remedial reach. PERB ruled that the City’s action to refer Measure D to the voters was void, and directed the City to consult in good faith with the firefighter’s union upon request. Both the
firefighters’ union and the City, however, disagreed about whether the City complied with PERB’s orders. The City did not reinstate the charter provision as it existed prior to the passage of Measure D.
The firefighters’ union then requested the California Attorney General (AG) to bring a quo warranto action to decide the remedy to the MMBA violation. The AG may authorize the use of the quo warranto procedure, under Code of Civil Procedure section 803, to sue on behalf of the people to determine whether any corporation – including a municipal corporation – has unlawfully held or exercised any franchise within the state. The AG authorized leave to sue, noting that the public has an interest in ensuring that City Charter amendments are validly enacted.
The firefighters’ union filed the quo warranto complaint. The union argued that the trial court should invalidate Measure D because the City failed to consult in good faith before placing it on the ballot. The City argued that the voter’s election was not an unlawful exercise of a franchise, and that the City’s MMBA violation should not invalidate the will of the electorate.
The trial court did not invalidate Measure D. Instead, it retained jurisdiction for the limited purpose of issuing a final judgment invalidating Measure D if: the City and the firefighters’ union agreed to use alternative procedures to binding interest arbitration; or the City passed a resolution to pursue a charter amendment alternative to Measure D; or PERB determined that the City failed to consult in good faith with the affected public safety unions. The firefighters’ union appealed.
The California Court of Appeal concluded that once the trial court determined that the City’s submission
of Measure D to the voters violated the MMBA, the trial court abused its discretion by failing to invalidate Measure D. The Court of Appeal remanded the case to trial court to: 1) order the City to restore the preamendment portion of article V to the City’s Charter; 2) invalidate Measure D; and 3) provide any other appropriate relief.
People ex rel. International Association of Firefighters, Local 1319, AFL-CIO v. City of Palo Alto, 102 Cal.App. 5th 602 (2024).
Arbitrator Finds SEIU Liable To HCA Healthcare For $6.26M In 2020 Strike Dispute.
In June 2020, Registered Nurses represented by Service Employees International Union Local 121RN (SEIU) at Riverside Community Hospital (RCH) held a 10-day
strike. HCA Healthcare (HCA), which runs RCH, was forced to find and hire replacement nurses.
At the time, SEIU justified the mid-pandemic strike as an effort to force the Hospital to increase staffing and improve safety as COVID-19 infections surged. The SEIU and nurses also voiced complaints about shortages of personal protective equipment, which were not subjects addressed within the collective bargaining agreement between SEIU and HCA.
HCA disputed the legality of the strike, and the dispute went to arbitration. In May 2023, the arbitrator concluded that SEIU violated the parties' collective bargaining agreement in connection with the strike. One year later, in May 2024, the arbitrator ruled that SEIU must pay HCA $6.26 million in damages linked to a 10day strike.
retirement
County Properly Excluded Section 125 Benefit From Retirement Pension Calculation.
James Morell, is a retired research attorney for the California Superior Court in Orange County. He was entitled to a pension under the County Employees Retirement Law of 1937 (CERL). To determine the amount of his pension, the Orange County Employees’ Retirement System (OCERS) needed to first calculate Morell’s “compensation.”
The issue in this case was whether the Optional Benefit Program (OBP), valued at $3,500, that the County provided to each research attorney, was part of compensation for retirement pension calculation purposes. Each research attorney could allocate the OBP in a variety of ways, such as taxable cash (paid in the first paycheck of the year), or a healthcare reimbursement account for certain medical expenses.
Morell allocated a portion of the $3,500 OBP benefit to a healthcare reimbursement account and the remainder to cash. When the OCERS calculated Morell’s “compensation” in 2014, it omitted the $3,500 OBP payments. Morell sued the OCERS for excluding the value of the OBP benefit from his pension benefits. The trial court granted Morell’s petition. OCERS appealed.
The California Court of Appeal reviewed the County resolution that excluded from compensation those payments that: 1) were provided to employees who elected to participate in a flexible benefits program; and 2) exceeded the employee’s salary.
The Court of Appeal found that both factors applied to the OBP benefit. First, there was no doubt that Morell elected to participate in the OBP because he directed the OBP be applied to a healthcare reimbursement
account and cash. Second, the County’s section 125 program stated that after an eligible employee elected to participate in the OBP, “his or her Compensation will be reduced in an amount equal to the … contributions elected.” As a result, the OBP benefit exceeded Morell’s reduced salary, and OCERS was correct to exclude the value of the OBP benefit. The Court of Appeal reversed the trial court and denied Morell’s petition.
Morell v. Board of Retirement etc., 103 Cal.App.5th 632 (2024).
Retirement Board Is Authorized To Create Classifications And Set Salaries For Its Employees.
The Los Angeles County Employees Retirement Association (LACERA) sued the County of Los Angeles over which entity has the authority to set employment classifications and salaries for LACERA employees. LACERA argued that under the County Employees Retirement Law of 1937 (CERL) and the California Constitution, it had the authority. The County disagreed, asserting that it had that authority for all county employees, including those of LACERA. The lower court sided with the County.
The California Court of Appeal sided with LACERA. The appellate court found that the case law the trial court relied upon was inconsistent with Proposition 162, a voter initiative that gave governing boards of public employee retirement systems “plenary authority and fiduciary responsibility for investment of moneys and administration of the system.” The court concluded that this plenary authority included the power to create employment classifications and set salaries for employees of the retirement system.
Los Angeles County Employees Retirement Assn. v. County of Los Angeles, 102 Cal.App.5th 1167 (2024).
workplace safety
Cal/OSHA Passes New Indoor Heat Standard.
Effective July 23, 2024, the California Occupational Safety and Health Standards Board (Cal/OSHA) adopted a new standard for Heat Illness Prevention in Indoor Places of Employment (8 Cal.Code Regs section 3396).
The new standard defines all indoor work areas as spaces that are under a ceiling or overhead covering that restricts airflow and that are enclosed along the entire perimeter by walls, doors, windows, dividers, or other physical barriers that restrict airflow, either open or closed.
The standard is triggered as to all indoor work areas when: the temperature or heat index equals or exceeds 87 degrees Fahrenheit when employees are present; employees wear clothing that restricts heat removal and the temperature equals or exceeds 82 degrees Fahrenheit; and when employees work in a high-radiant-heat area and the temperature equals or exceeds 82 degrees Fahrenheit.
Note that the standard does not apply to:
• Employees who telework from a location of their choosing that is outside the employer’s control.
• “Incidental heat exposures” of less than 15 minutes in any 60-minute period when the temperature is about 82 degrees Fahrenheit and below 95 degrees Fahrenheit.
• Emergency operations directly involved in the protection of life or property.
The standard requires employers to take the following steps: for indoor workplaces where the temperature reaches 82 degrees Fahrenheit, employers must take steps to protect workers from heat illness. Some of the requirements include providing water, rest, cool-down areas, and training. Additional requirements apply when the temperature reaches 87 degrees, and include: cooling down the work area; implementing work-rest schedules; and providing personal heat-protective equipment. If employees wear clothing that restricts heat removal or work in high radiant heat areas, the additional requirements apply at 82 degrees. Finally, Cal/OSHA also requires that this rule is written in a plan, which can be incorporated into an employer’s injury and illness prevention program (IIPP).
Congratulations to LCW Partner Morin I. Jacob for being named one of the Top Women Lawyers of 2024 by TheDailyJournal
brown act
AG Opines When Brown Act Would Apply To
Mayor’s Off-Site State Of The City Address.
On September 13, 2022, the City of Ventura announced that the Ventura Chamber of Commerce was hosting a breakfast meeting where the Mayor would deliver a “State of the City” address. Members of the public could attend the event in person, but only if they purchased a ticket from the Chamber of Commerce.
Before the event, the Ventura County District Attorney, requested an opinion from California Attorney General (AG). The DA asked if the breakfast would be a “meeting” of the City Council under the Brown Act if a majority of the Council attended. The AG initially advised that less than a quorum of the Council should attend the breakfast. On September 22, 2020, the mayor delivered the address during the breakfast event before less than a quorum of the City Council.
In a subsequent written opinion, the AG advised that if a majority of the members of the City Council had attended the event, the event would have constituted a congregation of a majority of the councilmembers at the same time and location to hear—and potentially discuss—an item within their subject matter jurisdiction. These factors would have made the event a “meeting” within the meaning of Government Code section 54952.2(a), and the meeting would have had to complied with the open-meeting requirements of the Brown Act, unless a statutory exception applied.
The AG explained that the Brown Act requires that every meeting of a legislative body of a local agency be open and public, and that “all persons shall be permitted to attend…”
No ticket could be required to attend the meeting for a couple of reasons. First, a member of the public cannot be required, as a condition to attendance at the public meeting, to register his or her name, to provide other information, to complete a questionnaire, or otherwise to fulfill any condition precedent.
Second, the Brown Act prohibits a legislative body from conducting a meeting in a facility “where members of the public may not be present without making a payment or purchase.” (Gov. Code, section 54961(a).) These rules apply whenever there is a “meeting” of the legislative body of a local agency, broadly defined as a “congregation of a majority of the members of a legislative body at the same time and location . . . to hear, discuss, deliberate, or take action on any item that is within the subject matter jurisdiction of the legislative body.” (Gov. Code, section 54952.2(a).)
The AG found that no exception to the Brown Act’s open meeting requirements applied in this hypothetical case. First, the breakfast would not meet the Brown Act exception codified at Government Code section 54952.2(c)(2) for conferences or similar gatherings. A qualifying conference or similar gathering must involve a “discussion” of issues, whereas at the breakfast, the Mayor would give a single speech regarding the conditions in a single city. Second, the breakfast would not satisfy the Brown Act community meetings exception codified at Government Code section 54952.2(c) (3) for “an open and publicized meeting organized to address a topic of local community concern…”. The breakfast meeting would not have been sufficiently “open” because attendees had to purchase a ticket to gain access.
California Attorney General Opinion No. 23-102.
public records
UCLA Required To Disclose Investigation Report Into Former Professors’ Misconduct.
In January 2018, the University of California Los Angeles received a whistleblower complaint alleging that three UCLA professors had participated in serious misconduct. UCLA retained an outside law firm to investigate.
In May 2020, a 60-page investigation report stated that: the professors violated UCLA policy prohibiting improper governmental activities; two of the professors violated UCLA policy and California conflict of interest laws; one of the professors retaliated against another faculty member via ‘improper governmental activity’ in violation of the UCLA Code of Conduct, and that another professor was “involved in harassing activities.”
UCLA issued notices of intent to dismiss two of the professors effective July 2020. All three professors settled their pending disciplinary proceedings with no findings of misconduct, no adjudication regarding the report, and no admissions of liability or unlawful conduct. The professors resigned their employment in connection with their settlements.
In March 2021, a former UCLA employee, requested the report under the California Public Records Act (CPRA). The Regents of the University of California notified the former professors, who objected to the release of the report. Each of them sought a writ of mandate to withhold disclosure of the report, known as a “Marken” claim, and the cases were consolidated.
The trial court denied the petitions for writ of mandate and a preliminary injunction, allowing the Regents to release the report (with certain redactions). The trial court found while the disclosure of the report would likely compromise substantial privacy interests, the report found that the professors committed serious misconduct and provided supporting evidence to substantiate the findings. Thus, the professors did not meet their
burden of establishing that the potential harm to their privacy interests outweighed the public interest in disclosure.
The trial court postponed the time for release of the documents to allow the former professors to seek appellate review. Two professors appealed.
Before the appeal could be heard, the Los Angeles Times (which was not a party in the original proceeding) made its own CPRA request. The Times requested the report, the subsequent settlement agreements between each of the three professors and UCLA, and the notices of intent to dismiss the professors. The trial court determined that the additional documents the Times requested related to well founded and substantial claims of public employee misconduct and were not exempt from disclosure under the CPRA.
The California Court of Appeal preliminarily ordered the Regents not to disclose the report or any portion of it to anyone pending resolution of the appeals. After two of the professors sought a preliminary injunction to block the notices of intent and settlement agreement (which referenced the report heavily), the Court of Appeal preliminarily blocked release of those documents also.
The appellate court affirmed the trial courts’ orders allowing the Regents to disclose the report, the notices of intent, and the settlement agreements. The court reasoned that the professors had failed to demonstrate that they were likely to prevail in blocking the release of the reports. According to the Court, the “strong public policy supporting transparency in government” inherent in the CPRA outweighed the professors’ privacy concerns, so the documents at issue would need to be made subject to disclosure. The Court of Appeal affirmed the denial of the injunction blocking release of the documents.
Doe v. Regents of the University of California, Los Angeles Times Communications LLC, 102 Cal.App.5th 766 (2024).
benefits
The IRS Issues FAQs About Educational Assistance Plans.
In June 2024, the IRS issued answers to frequently asked questions about educational assistance plans (EAP) under Section 127 of the Internal Revenue Code. Employers that provide educational assistance benefits to help employees pay for tuition, fees, books, supplies, and equipment may exclude the payments, up to $5,250 per year, from employees’ gross income if the benefit complies with Section 127. The IRS’s FAQs describe and clarify the benefit. Here are the highlights from the IRS’s FAQs:
The EAP must be a separate written plan. An employer cannot pay for an employee’s educational expenses under the premise that it has established an EAP unless there is a written plan describing and setting the terms of the EAP. To accompany the FAQs, the IRS created a sample plan for employers, which employers may customize.
Eligible Educational Expenses. EAPs are used to pay for educational expenses such as tuition, fees and similar expenses, books, supplies, and equipment. The benefit does not include payments for meals, lodging, transportation, tools or supplies that the employee can keep after completing the educational course, and does not include any courses involving sports, games, or hobbies unless they are related to the employer’s business or are required as part of a degree program. Out of the eligible expenses, employers may choose which eligible EAP benefits to offer as part of its plan and specify the benefits in the written EAP plan.
The EAP May Pay For Employee Loans Through 2025. Eligible expenses also include principal or interest payments on qualified educational loans if the loans have been incurred by the employee for their own education. The benefit cannot be used to pay for loans for an employee’s spouse or dependent’s education. Paying for educational loans is a limited EAP benefit that only lasts through December 31, 2025 unless there is future legislation extending it.
The Educational Courses Do Not Need to Be WorkRelated. A Section 127 EAP benefit does not have to be limited to work-related courses. It can apply towards courses that are unrelated to the job. The benefit applies to either undergraduate or graduate-level courses.
Annual Limit. Under Section 127, an employer may exclude up to $5,250 of EAP payments per calendar year. Any educational assistance payment above $5,250 in a calendar year is taxable. For any payments made as a reimbursement, the employer must reimburse the expenses in the same calendar year that the employee paid for the expense. Unused portions of the $5,250 cannot be carried over to the following calendar year.
A Section 127 EAP is one way to provide employees with a tax-free benefit to help them pay for educational expenses. Another way to provide a similar benefit is to pay for or reimburse employees for educational expenses as a working condition fringe benefit. A working condition fringe benefit has no annual limit on the amount but the educational expenses must be job-related and meet the IRS’s business expenses requirements.
The IRS’s FAQs about Section 127 educational assistance plans is available at: https://www.irs.gov/newsroom/ frequently-asked-questions-about-educational-assistanceprograms. For more information and guidance about your agency’s educational assistance or reimbursement plan, please contact LCW.
Employees Challenge Employer’s Wellness Program Incentive.
Quad/Graphics, Inc. (Quad) offers its employees a choice to participate in an optional “wellness program,” where employees undergo a biometric screening that tests their blood sugar, blood pressure, cholesterol, triglycerides/ high-density lipoprotein, and body mass index. If employees undergo the screening and their test results meet certain standards, they receive a discount on their medical insurance premiums.
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A group of employees (plaintiffs) who chose not to participate in the biometric screening sued Quad alleging violations of the Americans with Disabilities Act (ADA). Initially, Quad provided a grace period to give employees sufficient time to elect to participate in the biometric screening. During the grace period, all employees, including the plaintiffs, received the discount to their medical insurance premiums. After the grace period ended, only employees who completed the biometric screening and met the test standards continued to receive the discount. Since the plaintiffs had not participated in the biometric screening, their premiums went back to their original, baseline rates, which were approximately $34 higher than the discounted rates.
The plaintiffs claimed that Quad’s wellness program violated the ADA’s prohibition of employer-based medical examinations and inquiries. Under the ADA, covered employers are not allowed to require a medical examination or make inquiries that assess whether an employee is an individual with a disability unless the examination or inquiry is job-related and consistent with business necessity. The ADA provides an exception for “voluntary” medical examinations, including ones that are part of an employee health program. The parties did not dispute that the biometric screening was a medical examination.
Quad filed a motion to dismiss the lawsuit. The District Court assessed whether the biometric screening was voluntary. Plaintiffs argued that the monthly charges to their insurance premiums were imposed because they failed to complete the biometric screening, which was a significant penalty. They argued the participation in the biometric screening was coercive and therefore, not voluntary. Quad claimed that employees who elected not to participate in the biometric screening were paying the original costs of the premiums. Quad argued that it was not a penalty, rather the employees who underwent the biometric screening were merely receiving a premium discount.
The District Court stated that the ADA did not include a definition of what “voluntary” means. The District
Court determined that whether a medical examination is voluntary is a question of fact. It found that plaintiffs sufficiently alleged evidence to show that Quad’s wellness program and biometric screening was not voluntary based on the motion to dismiss standard and denied Quad’s motion to dismiss, thereby allowing the lawsuit to move forward.
Diment v. Quad/Graphics, Inc., 2024 U.S. Dist. LEXIS 103895, *1.
Benefits Compliance Question
Question: Is life insurance excludable from an employee’s gross income (non-taxable)?
Answer: Under Internal Revenue Code section 79, the cost of the first $50,000 of life insurance coverage is excludable from an employee’s gross income. (26 U.S.C. section 79(a)(1).) This applies only to group-term life insurance policies for the life of the employee (not the life of an employee’s spouse or dependent) carried directly or indirectly by the employer through a nondiscriminatory plan. For any cost of life insurance coverage that is above $50,000, the cost is taxable and included in the employee’s gross income. This includes employer contributions to life insurance policies above $50,000.
LCW BENEFITS BEST PRACTICES TIMELINE
Each month, LCW presents a monthly benefits timeline of best practices.
August
• Prepare for open enrollment if the agency’s open enrollment occurs in the fall. Review and revise open enrollment forms, including salary reduction agreements for Section 125 cafeteria plans and optout (waiver of coverage) forms.
• Review MOUs and policies for updated information regarding employer contributions amounts for open enrollment.
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.
• An employer must make accommodations to the known religious creed of an applicant during the hiring process, unless it would impose an undue hardship. The obligation to accommodate religious practices extends to scheduled times for interviews, examinations, and other functions related to employment opportunities.
• Public employers have a right to regulate their employees while they are working for the agency. However, the U.S. and California Constitutions protect the privacy of employees in their off-duty conduct, via laws such as the right of privacy under the California Constitution, and the First and Fourth Amendments to the U.S. Constitution.
• The California Government Code prohibits most public officials and all candidates for public office from accepting any “honoraria.” Honoraria are payments made to an official, from other than the official’s public employer, for making speeches, publishing articles, or attending public or private conferences, conventions, meetings, social events, meals, or like gatherings.
Congralutions to our 2024 Southern California Super Lawyers’ Rising Stars!
Megan Atkinson Anni Safarloo
Alysha Stein-Manes
Consortium Call Of The Month
Question: Answer:
What records are required to document the mandatory Workplace Violence Prevention Plan training?
The Labor Code requires that training records include the following information: Training dates; Contents or a summary of the training sessions; Names and qualifications of persons conducting the training; and Names and job titles of all persons attending the training sessions.
On The Blog
To Pay Or Not To Pay? The Ninth Circuit Addresses Whether Work Time Is Compensable Or De Minimis
By: Alison Kalinski
In Cadena v. Customer Connexx LLC, decided on July 10, 2024, the United States Court of Appeals for the Ninth Circuit (which includes California) recently affirmed the applicability of the “de minimis” doctrine, which provides that under the Fair Labor Standards Act (FLSA) employers are not required to pay wages for work performed before or after scheduled work hours when the amount of time is “de mininis.” The court however, held that a triable issue of fact existed whether the employees’ alleged pre/post shift work actually was de minimis, and reversed the district court’s granting of summary judgment to the employer.
Background
Defendant Customer Connexx LLC operates a customer service call center in Las Vegas for an appliance recycling business. Plaintiffs are customer service representatives of Connexx who spoke to customers on the phone, or supervised call center agents. Connexx required these employees to clock in/out for each shift with a computer timekeeping software program. To do so, employees had to turn on/awaken the computer, log in, and then open the timekeeping software to clock in. Employees did not have their own workstation. Employees testified some computers were “old and slow” and that sometimes they had to try several work stations before they found a working computer.
Under Connexx’s policies, employees had to be clocked in and ready to accept calls before their shift started, so employees had to arrive and login before their shift began. Connexx policy prohibited employees from clocking in 7 or more minutes before their shift began.
Plaintiffs Cariene Cadena and Andrew Gonzales, two Connexx call center workers, filed a collective action complaint (which allows similarly situated employees to opt into the action), seeking unpaid overtime under the FLSA for the time they spent booting up and down their computers before and after clocking into the timekeeping software each shift. The district court initially granted summary judgment to Connexx, and on appeal the Ninth Circuit reversed and remanded to the District Court to determine whether this time was compensable or de minimis under the FLSA. On remand the District Court again granted summary judgment to Connexx concluding the time was de minimis. Plaintiffs appealed.
Is the de minimis rule still valid?
First, the Court evaluated whether the de minimis doctrine is still good law in light of the United States Supreme Court’s 2014 decision in Sandifer v. U.S. Steel Corp., 571 U.S. 220 (2014). Sandifer held the de minimis doctrine
was inapplicable to 29 U.S.C. section 203(o) which allows parties to a collective bargaining agreement to exclude as compensable time spent changing clothes at the start or end of the workday (“donning and doffing”). The Ninth Circuit rejected Plaintiffs’ argument that Sandifer foreclosed the applicability of the de minimis rule. The Court reviewed its prior decisions applying the de minimis rule, noting they did not concern donning/doffing or exclusions from collective bargaining agreements, but rather addressed when pre/post shift work activities were compensable or de minimis. Thus, the Ninth Circuit concluded that Sandifer did not overrule the de minimis rule.
Was Plaintiffs’ time waiting for computers to boot up non-compensable de minimis time?
The Ninth Circuit considers three factors in determining whether work time is de minimis:
1. “The regularity of the additional work,”
2. “The aggregate amount of compensable time,” and
3. “The practical administrative difficulty of recording the additional time.”
This is the employer’s burden. The Court addressed each of the factors in turn.
First, as to the regularity of the work, employees performed uncompensated work before every shift since they need to boot up a computer to clock in, and likely had to wait for their computers to shut down at the end of this shift, and Connexx was aware of this. While the amounts of time employees had to wait for their computers to boot up varied, that did not impact the regularity of this time. This regularity favored compensability.
Second, the Ninth Circuit found a disputed factual issue as to the aggregate amount of time spent on booting up/ down. Employees testified as to estimated ranges varying from a “few seconds up to thirty minutes per shift” booting up and shutting down their computers. The Ninth Circuit found that spending eleven to thirty minutes “cannot be characterized as de minimis” and this uncompensated time “could be substantial over time.”
Finally, the Ninth Circuit rejected Connexx’s arguments that it was administratively difficult and impracticable to record this time. The Court suggested a number of alternatives, such as having employees swipe in/out when they arrive and leave, or using a non-computer based time tracker, such as a separate time clock on the wall, or a punch clock at their workstations.
Based on these three factors, the Ninth Circuit concluded the plaintiffs raised triable issues whether their boot up/ down time was de minimis, and this precluded summary judgment. The Ninth Circuit remanded to the District Court for further proceedings.
Application to California Employers
While the Ninth Circuit’s decision in Cadena v. Connexx is helpful to employers in affirming the application of the de minimis rule, the Court’s decision emphasizes the burden on employers to prove the work time really is de minimis and should not be compensated. The Court’s decision further highlights that regular uncompensated time, even in small or varying amounts, could aggregate to significant amounts that warrant compensation and are not de minimis. Finally, employers should anticipate that, in their making de minimis arguments that time is too administratively and practically challenging to calculate, courts could well view the arguments with skepticism and close examination. When California employers are aware employees are engaging in pre/post shift work activities that are not being compensated, they should take appropriate action to make sure there is compliance with the FLSA. This includes among other things evaluating if this work time is regular and if there are easy ways to capture and compensate employees for this time.
View the full blog post here.
Liebert Cassidy Whitmore