Briefing Room: December 2022

Briefing Room

415.512.3000, 559.256.7800, 916.584.7000 or 619.481.5900 or e-mail info@lcwlegal.com.

firm victorY

Three employees who were non-sworn recruits before September 8, 2012, and who became sworn officers in December of 2012, brought an action before CalPERS to receive the previous 3% at 50 retirement formula, instead of at 55 under the new formula.

LCW Partner Jennifer Rosner and Associate Anni Safarloo defeated three police officer recruits’ claims that they should have received a more lucrative retirement formula.

On July 1, 1941, the City contracted with CalPERS to provide benefits, including retirement benefits, for its eligible employees. In an amendment effective December 19, 2009 (2009 Amendment), the City agreed to classify its police officers as local safety members.

Under the 2009 Amendment, “normal retirement age” was set as 55 for local miscellaneous members and age 50 for local safety members. The retirement formula for all local safety members was 3% at age 50, regardless of their date of employment with the City or when they were sworn.

On August 7, 2012, CalPERS and the City amended its CalPERS Contract (2012 Amendment) to divide local safety members into two groups, effective September 8, 2012. For those entering membership in the safety classification for the first time on or before September 8, “normal retirement age” was still 50. For those entering membership in the safety classification after the effective date, the normal retirement age would be 55. The retirement formulas also changed. Those entering the safety classification before September 8, would receive 3% at age 50. Those entering after the effective date, would receive 3% at age 55. The 2012 Amendment followed the MOU between the City and the POA Union, which contained similar provisions.

CalPERS found that there was no reference in the MOU to retirement benefits owed to pre-service personnel. Although the recruits were hired with the expectation they would become sworn police officers, that did not make them eligible for sworn police officer benefits at the time they were hired as unsworn recruits. Because the MOU only pertained to “current sworn police personnel”, the recruits were not entitled to sworn police benefits.

Police Officer Recruits Hired Before Effective Date Of Lower Retirement Formula, But Sworn In After, Were Not Entitled To Higher Formula.

disability

Teacher Can Proceed With Disability Discrimination Claim After District Called Her “A Liability”

When It Revoked Her Conditional Job Offer.

In 2003, La Vonya Price had a serious stroke that left her paralyzed. After years of physical therapy and hard work, Price slightly recovered and relearned how to speak, walk, and use her body. Price still had some permanent paralysis, limited mobility, and issues lifting and grasping objects.

In 2018, Price was working as a substitute Instructional Assistant for the Victory Valley Union High School District when a full-time position opened up. Price applied and received a conditional offer of employment, contingent on her passing a physical examination, a requirement that the District required of all full time hires. Price had not been required to pass a physical to work as a substitute in the same position.

Price failed this physical examination, which a third-party medical professional administered. The District rescinded her job offer, stating that she was a “liability.”

The District also stated in a letter to Price that her failure on the physical examination disqualified her from her current position as an Instructional Assistant and any future positions with the District.

Price sued the District for several claims, including disability

discrimination in violation of the Fair Employment and Housing Act (FEHA). The trial court granted the District’s motion for summary judgment and entered judgment for the District. Price timely appealed.

The FEHA prohibits an employer from refusing to hire an applicant based on the applicant’s actual or perceived physical disability. To assess Price’s FEHA discrimination claim, the California Court of Appeal used the McDonnell Douglas burdenshifting framework. Under the McDonnell Douglas test, Price had the initial burden of establishing a prima facie case of disability discrimination by showing that she: 1) had a disability or was regarded as having a disability; 2) could perform the essential duties of a job with or without reasonable accommodations; and 3) was subjected to an adverse employment action because of the disability or perceived disability.

As to the first essential element of Price's claim for disability discrimination, the Court agreed that a jury could reasonably conclude that the District regarded Price as disabled. Price failed the “physical” test during her physical examination, and the doctor concluded that Price was not “medically suitable for the position.” Based on the doctor’s report, the District rescinded Price’s job offer. From this evidence, a jury could conclude that the District regarded Price as having, or potentially having, a physical disability that limited her workrelated abilities.

Second, a triable issue of fact also existed as to whether Price could perform the essential functions

of the position with or without reasonable accommodation. The District argued Price could not perform the essential functions of a special education Instructional Assistant because Price could not run after students. As a substitute Instructional Assistant, however, Price successfully performed, even though she frequently had to run after students. Moreover, the District taught special needs students in five different settings. While the students in the emotionally disturbed setting might be runners, students in other settings would not be runners. Price possibly could have been placed in three special needs settings where students do not require any physical assistance or physical supervision.

Third, the parties agreed that the revocation of Price’s job offer was an adverse employment action. The Court found that there was a triable issue of fact as to whether Price’s disability was a substantial motivating reason for the District’s decision to rescind the offer. The District determined that Price was “NOT medically suitable for the position” because of the strength and balance deficits in her right leg. According to Price, when she asked for more of an explanation about that decision, the District told her several times, “you are a liability.” Taken together, a reasonable jury could find that the District rescinded Price’s job offer because of an actual or perceived disability or potential disability.

The Court of Appeal assumed, without deciding, that the District’s legitimate reason for rescinding Price’s conditional job offer was because of the doctor’s report that found she was not medically qualified.

Employee’s Evidence That She Was Paid Less Than A Single Male Colleague Wins EPA Wage Claim, But Not FEHA Sex Discrimination Claim.

Joyce Allen began working at Staples in 2006 as a sales representative. In March 2015, she took a position as an outside facilities area sales manager (ASM). While holding this position she reported to a field sales director (FSD). In the summer of 2017, Allen was promoted to FSD. In February 2019, several FSD’s, Allen included, were laid off because of a corporate reorganization.

In March 2019, Allen sued Staples for violating California’s Equal Pay Act (EPA), gender discrimination, sexual harassment, and other claims under the Fair Employment and Housing Act (FEHA). Allen’s claims were dismissed via summary judgment. Allen then appealed to the California Court of Appeal.

The Court of Appeal first considered the EPA claim. At the relevant times during Allen’s employment, Labor Code Section 1197.5 stated that “No employer shall pay any individual in the employer’s employ at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex.” (Note that Labor Code Section 1197.5 was amended, effective January 2019 to make it more employee-friendly.)

To show a prima facie case of sex-based wage discrimination under the EPA, an employee must establish that the employer pays different wages to employees of the opposite sex who are doing substantially similar work under similar conditions. Then, the burden shifts to the employer to prove the wage disparity is based on a bona fide factor other than sex.

Here, the Court of Appeal found that Allen showed that she was paid $22,000 less in base salary than a male ASM and $48,000 less in base salary than a male FSD. This, the Court of Appeal held, was enough to establish a prima facie case.

Staples reported that the salary differences were based on time with the company and overall experience. However, Staples only showed this in a general sense and did not show the specific factors that caused the pay differences between Allen and the specific male ASM’s and FSD’s who were paid more. As a result, Staples had not fully carried its burden and the Court of Appeal reversed the summary judgment.

Allen then argued that her success in showing a prima facie case of unequal pay, also proved a prima facie case of sex discrimination under the FEHA. The Court of Appeal analyzed Allen’s argument under the McDonnell Douglas burden shifting framework: “a plaintiff may establish a prima facie case for unlawful discrimination by providing evidence that ‘(1) he [or she] was a member of a protected class, (2) he [or she] was qualified for the position he [or she] sought or was performing competently in the position he [or she] held, (3) he [or she] suffered an adverse employment action, such as termination, demotion, or denial of an available job, and (4) some other circumstance suggests discriminatory motive.”

Once that prima facie case is established, the burden shifts to the employer to show that its action was motivated by legitimate, nondiscriminatory reasons. A reason is legitimate if it is facially unrelated to prohibited bias, and which if true, would thus preclude a finding of discrimination. If the employer meets this burden, the employee then must show that the employer’s reasons are pretexts for discrimination, or produce other evidence of intentional discrimination.

Here, the Court of Appeal held that, even though Allen made a prima facie case of unequal pay discrimination, she could not satisfy the burden of establishing a connection between the pay disparity and her gender. None of the evidence Allen provided regarding allegedly discriminatory workplace conduct was linked to salary decisions. Instead, Staples’ evidence showed that female ASM’s were paid more on average than male ASM’s, and some male AMS’s and FSD’s were paid

lower salaries than Allen. The Court of Appeal found the trial court properly granted summary judgment on the FEHA discrimination claim.

Allen v. Staples, Inc., 84 Cal. App. 5th 188, 299 Cal. Rptr. 3d 779 (2022).

Note: This case highlights the different evidence needed to prove an EPA wage claim and a FEHA sex discrimination claim. On the EPA claim, the employer lost because it did not provide evidence of a bona fide factor other than sex to explain why a specific male employee received a higher wage than the female employee who sued. On the FEHA sex discrimination claim, the employer won because the female employee could not link her lower pay to any act of alleged sex discrimination. Employers can prevent EPA claims by using pay practices and procedures that are based on bona fide factors other than sex and by documenting the legitimate bases for pay decisions.

An Employee’s Communications To A Supervisor Regarding Possible Unlawful Activity Triggered The California Whistleblower Protection Act.

SpecPro Professional Services, LLC, is an environmental services firm that assists government agencies with the preparation of environmental assessments. The U.S. Army Reserve Command hired SpecPro to assist in preparing an environmental assessment for a new helicopter training area.

Aaron Killgore, an employee at SpecPro, was assigned this project. Killgore had a small team of colleagues and reported to his supervisor William Emerson. Killgore also reported to Chief Laura Caballero, the Army Reserve’s project leader.

Killgore and his team discovered that there were discrepancies between the facts they had found on the ground and what the Army Reserve wanted SpecPro to report in their environmental assessment. When Caballero directed Killgore to omit certain information from the report, Killgore pushed back and told Caballero that failing to report certain facts would violate a federal law called NEPA and other federal regulations.

Following this pushback, Caballero called Emerson to raise concerns about Killgore. Emerson then told Killgore to complete the report on time and to exclude the information that Caballero wanted excluded. Killgore again explained that this might be illegal but Emerson told Killgore that their chief goal was to keep Caballero happy to win any future Army Reserve contracts.

Killgore and his team eventually drafted the environmental assessment and included the information that Caballero wanted excluded. Caballero then instructed the team to take out the information and complained to Emerson and the general manager of SpecPro during a meeting. After this meeting, Emerson fired Killgore.

Killgore then filed a lawsuit against SpecPro, asserting that his termination violated the California Whistleblower Protection Act (CWPA). Labor Code section 1102.5 provides whistleblower protections to employees who disclose wrongdoing to authorities. Specifically, section 1102.5 prohibits an employer from retaliating against an employee for sharing information the employee “has reasonable cause to believe . . . discloses a violation of state or federal statute” or of “a local, state, or federal rule or regulation” with a government agency, with a person with authority over the employee, or with another employee who has authority to investigate or correct the violation. [emphasis added].

The District Court dismissed Killgore’s lawsuit because it ruled that Killgore’s communications to Emerson and Caballero were not protected by the CWPA. The District Court decided that because Emerson, a private citizen in the employ of a private business, did not have the power to correct the Army Reserve’s noncompliance, Killgore’s communications to Emerson were not protected. In doing so, the District Court interpreted section 1102.5(b) to mean that a protected disclosure must be made to “a person with authority over the employee” who also has the authority to “investigate, discover, or correct” the violation.

Emerson then appealed to the Ninth Circuit Court of Appeals. The Ninth Circuit took up the question of whether Killgore’s communications were protected.

The Ninth Circuit found that the District Court incorrectly interpreted the CWPA by limiting the avenues for employees to report wrongdoing. The Ninth Circuit held that the CWPA prohibits employers from retaliating against employees who disclose potential wrongdoing through any one of several avenues: government or law enforcement agencies; a person with authority over the employee; other employees with authority to investigate, discover, or correct the violation or noncompliance; or any public body conducting an investigation, hearing, or inquiry.

Killgore v. SpecPro Pro. Servs., LLC, 51 F.4th 973 (9th Cir. 2022).

Note:

This case is a helpful reminder of the statutory framework for whistleblower claims. If an employee comes to a supervisor, or to any individual who has any authority to investigate or correct a violation of the law, it should be treated as a protected CWPA communication and investigated. In general, employees who bring concerns of wrongdoing to their employers or supervisors should be taken seriously, and their concerns promptly investigated.

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.

• Soon, jaywalking will no longer be a crime in California. Effective January 1, 2023, jaywalking will be decriminalized and no longer subject to the up to $250 fine.

• The San Francisco Board of Supervisors is weighing whether to allow robots to use deadly force. Every municipality in the state is required to list and define the authorized uses of all military-grade equipment in their local law enforcement agencies. Pursuant to this law, the San Francisco Police Department drafted a proposed policy relating to said equipment, including use of their 12 remote-controlled robots. Their proposal states, “robots will only be used as a deadly force option when risk of loss of life to members of the public or officers are imminent and outweigh any other force option available to the SFPD.

• A 22-year-old Colorado woman will be serving the El Paso County community as a Sheriff’s Deputy. She received her El Paso County Sheriff’s Academy graduation pin from an Escondido California officer who rescued her from a turbulent home when she only six weeks old.

Wage&Hour

Employers Who Accurately Capture Employees’ Time Down To The Minute, Must Pay Employees For

Every Minute Worked.

Home Depot uses a Kronos electronic timekeeping system. Employees use the system punch in and out for work shifts. The system records the time down to the minute when an employee punches in or out. Home Depot then applies a quarter-hour rounding policy to the total shift time worked by an employee. For example, if an employee works 6 hours and 7 minutes, their time sheet would reflect that they worked a 6-hour shift. If an employee worked for 6 hours and 8 minutes, their time sheet would reflect that they worked a 6.25hour shift.

Delmer Camp lost a total of 470 minutes of time worked over four and a half years of employment with Home Depot. He filed a lawsuit against Home Depot for unpaid wages.

Relying on previous case law, Home Depot filed a motion for summary judgment contending that its rounding system was neutral on its

face, neutral as applied, and otherwise lawful under the controlling case law. The trial court granted Home Depot’s motion. Camp appealed.

The California Court of Appeal first reviewed the relevant wage orders and the Labor Code and found that both contemplate that employees must be paid for all work performed. The Court of Appeal also noted that both the wage orders and Labor Code are concerned with even small amounts of worktime, such as small losses to individual employees that will occur when an employer uses a rounding system. Finally, the Court of Appeal found that unlike the Fair Labor Standards Act (FLSA) regulations, there is no language, in the Labor Code or in the applicable wage order that authorizes time rounding if : 1) the rounding causes the underpayment of an individual employee for all time worked; and 2) the employer can capture and has captured the employee’s worktime in minute increments.

The Court of Appeal next noted that there is no language in California law that authorizes time rounding that causes the underpayment of an individual employee for all time worked, if there is no administrative difficulty in capturing all worktime. Rounding work time only came into

existence because pay systems could not track time more precisely. With technological advancements, it is now easy to capture working time exactly, as Home Depot did in this case. The Court of Appeal observed that rounding now seems to be an additional step instead of a shortcut to accurate payments.

Home Depot could not refute any of these contentions. The Court of Appeal overturned the grant of summary judgment, and held that if an employer can and does accurately capture all time an employee works, the employee must be paid for all hours worked and cannot lose time, even because of a neutral and neutrally applied rounding policy.

Camp v. Home Depot U.S.A., Inc., 84 Cal. App. 5th 638 (2022).

Note:

This case highlights how California’s more employee friendly wage laws interact with the federal FLSA. The FLSA establishes a base line standard, but individual states like California can create greater employee rights. Note also that while California’s minimum wage law applies to public agency employers, California’s daily overtime standards do not.

drug testing

Applicants Not Entitled To Compensation For Time And Travel Expense For Pre-employment Drug Test.

WinCo Foods LLC operates a U.S. supermarket chain. When WinCo hires new employees, a Hiring Manager calls successful applicants to extend a conditional offer of employment. The offer is contingent upon the successful completion of a “pre-employment background check and drug test.” WinCo pays the drug testing fee but does not pay for travel expenses or the time required to test.

In 2017, a successful applicant named Alfred Johnson sued WinCo on behalf of himself and other employees and successful applicants. He sought compensation for the time and expense associated with the drug testing. Johnson advanced two primary contentions.

First, Johnson claimed he was an employee during the drug test because California applies a control test to determine whether an employment relationship exists, and WinCo controlled the administration of the drug test.

Second, Johnson contended that under contract law, the drug test should be regarded as a “condition subsequent” to his hiring as an employee.

The Ninth Circuit Court of Appeals dismissed both of Johnson’s contentions.

The Ninth Circuit first elaborated on the California control test, which assesses whether an employer controls the manner and means of performing a job or accomplishing a desired service. Here, WinCo directed Johnson to undergo a drug test at a certain place and time. The Ninth Circuit noted that employers also direct applicants to: appear for interviews at a certain place and time; undergo writing or skills tests; or even interview in a panel or in another way. None of these are required of someone who is already

employed. Simply put, the level of control WinCo had over applicants during the application process was not enough to “magically convert applicants into employees.”

Under contract law, an employment contract can be formed before or after a certain condition is satisfied. Johnson argued that the drug test was a condition subsequent, meaning that the employment contract was already created and WinCo could terminate the contract in the event of a drug test failure. WinCo argued the opposite, contending that the drug test was a condition precedent, meaning that an employment contract is not created until the applicant successfully passes the drug test.

Here, WinCo unequivocally communicated to applicants that the job offer was conditional and that the preemployment drug test was a condition of WinCo’s contingent offer. WinCo’s communication to applicants proved that the drug test was a condition precedent, one that must be satisfied before an employment contract and relationship is formed.

Because both of Johnson’s theories failed, the Ninth Circuit held that Johnson and his class members were not employees when they underwent the required drug test and were not entitled to reimbursement for related expenses.

Johnson v. WinCo Foods, LLC, 37 F.4th 604 (9th Cir. 2022).

Note:

The goal of the job applicants who filed this case was to trigger California Labor Code Section 2802. That law requires employers to reimburse employees for work- related expenses. This case highlights that a properly worded conditional offer of employment prevents an applicant from becoming an employee until the stated conditions have been met. Note too that in California: 1) pre-employment drug testing in the public sector may only be used for “special needs” jobs, such as positions that supervise children or that are safety sensitive; and 2) as of January 1, 2024, employment-related drug-testing in California cannot look for non-psychoactive cannabis metabolites, unless a federal contract or federal funding requirement specifies otherwise.

The 411 On Consortiums:

LCW has 30+ consortiums across the State! Consortium members enjoy access to quality training throughout the year, discounts on other LCW products and events, and unlimited, complimentary telephone consultation with an LCW attorney on matters relating to employment and labor law questions (including questions involving COVID-19, supervisory skills, and negotiation matters!). We’ve outlined a recent consortium call and the provided answer below. Client confidentiality is paramount to us; we change and omit details in the ERC Call of the Month.

Consortium Call Of The Month

Is there a maximum number of hours a police dispatcher may work per day or per week?

There are no legal restrictions regarding the maximum number of hours a police dispatcher may work. However, Departments will want to be mindful of Fair Labor Standards Act (FLSA) overtime, as dispatchers are not eligible for the 207k partial overtime exception. Instead, the police dispatcher overtime threshold is 40 hours. Departments may want to consider whether longer hours would pose safety or efficiency concerns.

On The Blog

Office Parties: Holiday Cheer or HR Fear?

By: Dana Burch

‘Tis the season to deck the halls and celebrate all things holiday! Office holiday parties can be great fun, but they are fraught with pitfalls. Planning an office holiday party is a daunting task! However, with a little advance planning you can ensure a safe and happy holiday season for all of your employees!

1. Make Sure Everyone is on the Nice List

It is important to make sure that all of your employees feel welcomed at your company holiday party. It is important to select a theme and décor that are inclusive to all of your employees. Opt for snowflakes over Santa Claus. Rather than focus on a particular holiday, a year end party may be a good time to celebrate your employees and their accomplishments. Perhaps a video montage of the past year’s activities or an award ceremony recognizing your best and brightest? Also, when planning a holiday party, make sure that the date you select does not interfere with any religious holidays that your employees may celebrate. Celebrating in January can avoid some of these scheduling conflicts and also be very cost-effective!

Selecting an accessible venue is also key to a safe and inclusive event. Consider your employees’ unique needs when selecting the party location to make sure everyone can attend. Is the venue wheelchair accessible? Will the lighting aggravate an employee’s medical condition? If you plan team building events or party games, be sure that the activities are accessible to all. For example, a limbo contest may not be the best option if you have any employees who are in a wheelchair.

Finally, make sure that you express that attending the party is voluntary. Employees may have a myriad of reasons for not attending, so make sure everyone knows that attending the holiday party is not required and there will no negative repercussion if employees opt to sit this one out.

2. Avoid Eggnog Overload

Everyone has an embarrassing story to tell about a co-worker who had a few too many glasses of egg nog at the company holiday party. As an employer, you can take steps to ensure that all employees have fun and avoid doing the Monday morning walk of shame past the cubicles.

You can serve alcohol even if you have a drug-free and alcohol-free workplace policy, but you should consider options for ensuring the safety of all employees. First and foremost, you want to make sure that everyone gets home safely. You may want to offer shuttles or ride services to all employees at the party. Alternatively, you may be able to take some steps to limit alcoholic beverages by using drink tickets or limiting the number of hours of open bar. It is also a good idea to serve food and water with the alcoholic beverages. One option is to have a post-meal “midnight snack” served late in the party such as sliders or sandwiches. Second, ensure that the bartenders will cut people off after a certain number of drinks. If you hire bartenders for the event, be sure to speak with them in advance and empower them to stop serving anyone who has had a few too many drinks. Third, consider planning some activities such as team-building to shift the focus away from drinking. Perhaps a trivia game or matching baby pictures to employees. Fourth, consider holding the party at your worksite during work hours – which tends to discourage drinking. Alternatively, start the party immediately following the work day to eliminate any pre-party imbibing.

3. Forego the Mistletoe

While you do want your employees to let loose at the party, you also want to make sure that everyone feels respected and safe. In advance of the party, you should remind employees of your policies on sexual harassment and dress code. You can also invite employees’ significant others to the party which may encourage employees to be on their best behavior. Further, any games or team activities that you plan should not involve bodily contact or disrobing. Avoid twister or strip poker!

4. Gifting Guidelines

Everyone loves presents! However, if you plan to do a holiday gift exchange, remind employees that the gifts should be work appropriate. One option is to consider a gift card exchange or a silly sock exchange to limit the chances of a NSFW gift making an appearance at your holiday party.

5. Create a Grinch Squad

Despite all of your planning, there is still a chance that something could go wrong at the party. It might make sense to have a designated team who agrees to remain sober and step in if the event gets out of hand. This does not need to be comprised exclusively employees from the Human Resources department; the team should be made up of a variety of different employees from different departments.

6. Have fun!

Last but not least, be sure to have fun! You and your team work hard all year and deserve to celebrate!

Happy Holidays and Happy New Year from your friends at LCW!

Visit our blog for this post amd more.

Briefing Room