Client Update: February 2023

Client Update

firm victories

LCW Partner Jennifer Rosner Wins Published POBRA Decision -- Unsubstantiated Rumors Do Not Start The One-Year Period For Completing An Internal Investigation.

LCW Partner Jennifer Rosner secured an appellate victory in a peace officer termination case. A captain in a sheriff’s department challenged his termination by claiming a violation of the Police Officers Bill of Rights Act’s (POBRA) one-year statute of limitations for conducting an investigation. Jennifer’s victory resulted in a published decision of the California Court of Appeal.

The captain had been a county employee for approximately 22 years. In around April of 2016, the chief learned of a rumored intimate relationship involving the captain and a female deputy. In May 20, 2016, the chief learned of another alleged relationship between the captain and a second female deputy. A personnel investigation then revealed the captain had maintained multiple sexual relationships with female employees in violation of department policy and general orders.

On June 3, 2016, the captain received written notice that he was the subject of an administrative internal affairs investigation into allegations that he had inappropriate relationships with other department employees/ subordinates. A detailed report, dated April 10, 2017, sustained allegations of the captain’s improper conduct. That same day, the captain received a notice of intent to terminate, and he was terminated on April 25, 2017. The captain lost his subsequent administrative appeal, and filed a petition for writ in the superior court to overturn his termination. The superior court denied the petition and agreed with the hearing officer’s finding that

there was sufficient evidence to substantiate the captain’s misconduct. The court found no POBRA violations.

The captain appealed the superior court’s ruling. On appeal, the captain alleged only that the Department violated his POBRA rights by failing to complete its internal investigation within one year of the discovery of his improper conduct. The POBRA contains a statute of limitations at Government Code section 3304, which states that “no punitive action, nor denial of promotion on grounds other than merit, shall be undertaken for any act, omission, or other allegation of misconduct if the investigation of the allegation is not completed within one year of the public agency’s discovery by a person authorized to initiate an investigation of the allegation of an act, omission, or other misconduct.”

The captain alleged that the chief should have known of his improper conduct earlier because his sexual relationships with subordinates were the subject of the department’s “rumor mill”. The captain claimed “there were at least a half-dozen supervisors and senior officers who were aware of allegations of misconduct involving [the captain] prior to April 10, 2016, all of whom could have, like [the chief], initiated a complaint inquiry.”

The Court of Appeal rejected this argument and held that the POBRA statute of limitations does not begin based on mere rumors, but only after a department determines that actionable misconduct occurred. Here, the captain failed to: identify a single individual who was “authorized to initiate” an investigation; or demonstrate that the public agency had determined that discipline should be taken prior to May 2016.

The Court of Appeal declined to “promote a policy of launching into the intimidate relationships of public safety officers on the basis of mere rumors.” The Court noted that an internal affairs investigation can have a devastating impact on the career of a public safety officer, and “should only be initiated when the officer

authorized to initiate an investigation knows or has reason to know that the conduct involves actionable misconduct” and not “on the basis of unsubstantiated rumors.”

Shouse v. County of Riverside, 84 Cal.App.5th 1080 (2022, rev. denied 2/1/23).

LCW Partner Danny Yoo And Associate Aleena Hashmi Won The Early Dismissal Of A Disability Discrimination Lawsuit.

An LCW team led by Partner Danny Yoo and Associate Aleena Hashmi won the dismissal of a lawsuit against a special district client. When a lawsuit is filed, the entity being sued has options. One option is for the entity to answer the complaint to tell its side of the story and to assert affirmative defenses, which would shield the entity from liability even if some of the facts of the complaint are true. Another option is to file a demurrer, which asserts that even if all the allegations in the lawsuit are true, there is still no cause of action. The latter option is very challenging. Even if a court grants the entity’s demurrer, the court usually gives the person suing an opportunity to try again to file a successful lawsuit.

LCW attorneys Danny and Aleena took the more challenging option and won. First, they met and conferred with the former employee who had been separated from his employment at a special district because of the district’s inability to accommodate his disability. After many communications, the former employee’s legal counsel agreed to drop some discrimination claims and a claim for wrongful termination in violation of public policy.

Second, Danny and Aleena filed a demurrer as to the remaining claims for disability discrimination and failure to prevent discrimination. They argued that the employee pursued an administrative appeal of his separation, but then failed to challenge the special district’s administrative hearing decision upholding the separation. Because the finding in the special district’s administrative decision was that the employee could not perform the essential functions of his job with or without accommodation, the employee’s failure to timely challenge that administrative decision meant that the employee was prevented from litigating these same claims in court.

The court granted the demurrer and dismissed the lawsuit because there was no judicial avenue for the employee to challenge his separation. Our special district client benefitted from this strategy because the litigation ended before the time-consuming discovery or trial could begin.

LCW Partner Jennifer Rosner And Associate La Rita Turner Convinced An Arbitrator To Sustain A Termination Of Peace Officer Who Could Not Carry A Firearm.

Partner Jennifer Rosner and Associate La Rita Turner successfully convinced an arbitrator to sustain the termination of a peace officer. Throughout April and May of 2019, a city police officer had repeated law enforcement contacts arising out of domestic violence involving the mother of the officer’s child. The officer failed to report one of those incidents to the Department as required. The mother of the officer’s child came to the station to file a complaint that alleged the officer harassed her by continuously calling and texting her hateful and abusive messages.

The officer admitted to texting and calling, but claimed his communications were about seeing their daughter. The officer’s supervisor stated excessively texting or calling could be committing a crime under Penal Code 653m, and recommended the officer cease such conduct. He also reminded the officer that peace officers are held to a higher standard, which the officer claimed not to have known. Shortly thereafter, the officer texted his supervisor an explicit photograph of him and the mother of his child having sex.

On June 17, 2019, the woman sought and received a Temporary Restraining Order (TRO) for Domestic Violence against the officer. She sought and received a second TRO on November 19, 2019, after the first had expired. As part of the TRO, the Court ordered the officer to surrender his firearm. Due to the continuous harassment, the Court granted a Permanent Restraining Order against the officer on January 17, 2020. A condition of the permanent restraining order was that the officer could not own or possess a firearm for two years.

The City terminated the officer for: his failure to report one law enforcement contact; the inappropriate sexting exchange with his supervisor; and his inability to meet a primary requirement of his job: owning a firearm.

The arbitrator sustained the termination, noting that in addition to the restriction on the firearm causing obvious just cause for dismissal, “[i]t is very unlikely that any law enforcement agency would hire or retain a person with [the officer’s] history of domestic disturbance and domestic violence. It is obvious that police officers are mandated to enforce the law; and officers cannot violate the same laws that they are required to enforce. That is absolutely unacceptable.”

To view these articles and the most recent attorney-authored articles, please visit: www.lcwlegal.com/news • Quoted in Law360, LCW Partner Shelline Bennett speaks on the unionization efforts of Amazon warehouse workers. With regard to strategy, Shelline states, "The national and the bigger unions have so much in [their] playbook that is beneficial to organizing." Amazon employees departing from that playbook "are walking away, potentially, from all of that history and experience and ability to organize in a much more aggressive manner."

public employee discipline

California Court Of Appeal Gives District Broad Discretion To Discipline A Fire Captain.

Jesse Griego was a captain in the Barstow Fire Protection District for the City of Barstow. He also coached children’s sports teams, including the girls’ softball team at Barstow High School. In 2007, Barstow issued a memorandum to its captains directing personnel not to attend sporting events while on duty. In March 2017, a fire chief verbally reprimanded Griego for coaching while on duty. Griego expressed no regret and was later seen attending a sporting event while on duty. The fire chief thereafter issued Griego a written reprimand.

Also in early 2017, a safety officer at Barstow High School reported she suspected an inappropriate relationship between Griego and a 15-year-old student, H.S. The officer saw Griego bring H.S. lunch during school hours and H.S. drive Griego’s car. She heard students saying that H.S. was wearing Griego’s shirt, the two had adopted a cat together, and they had visited a theme park together.

The Barstow Police Department opened a criminal investigation into Griego’s actions. The City placed Griego on paid administrative leave, and Barstow High School told him

to end contact with the girls’ softball team. Nonetheless, Griego continued to attend practices and games and to communicate with coaches and players, including H.S.

Barstow launched an investigation into these allegations. The City’s investigator sustained 19 allegations against Griego. These allegations included, among others, that Griego: 1) sought an “intimate dating relationship” with minor H.S.; 2) defied specific directions not to coach while on duty despite multiple warnings; 3) carried a concealed handgun outside his home without a permit; and 4) filed a false court document under penalty of perjury. The handgun allegation referred to November 2017, when Griego carried a concealed gun to investigate suspicious people outside his home. A police officer arrived and asked Griego if he had a gun; Griego said yes and showed it to him. The officer asked if Griego had a concealed carry permit; Griego did not. Penal Code section 25400 prohibits carrying a concealed gun in public without a permit.

As for the perjury, in 2017 Griego’s exwife applied for a domestic violence restraining order against him. A temporary restraining order issued in July 2017 included a direction to store any firearms with the police department or a licensed gun dealer. Yet in August 2017, Griego signed and filed a response that declared, “I do not own or have any guns or

firearms.” Griego later admitted he had owned guns for about two years. Regarding the false court filing, he said, “I probably didn’t even read that and pay attention to that.”

The Fire Chief thereafter issued a notice of intent to terminate. After a Skelly meeting, the Fire Chief issued a notice of termination based on 18 sustained allegations. Griego appealed his termination through advisory arbitration. The arbitrator concluded there was sufficient evidence to sustain six of the 18 allegations against Griego. The arbitrator found insufficient evidence supported the alleged inappropriate relationship, however, as H.S. and her family testified nothing untoward had happened. The arbitrator advised reducing the penalty to a 30-day suspension.

Per City policy, the City Manager received this advisory opinion and exercised his discretion to amend, modify, or revoke the arbitrator’s recommendation. The City Manager disagreed with the arbitrator and concluded the evidence demonstrated Griego indeed had pursued a relationship with H.S. The City Manager also upheld the other charges that the arbitrator had previously upheld and then terminated Griego.

Griego filed a petition for writ of administrative mandate in the superior court. The superior court found there was sufficient evidence

to sustain only three allegations: coaching on duty, carrying a concealed handgun without a permit, and filing a false court document. The superior court held termination was not appropriate based on these three allegations and remanded the matter for reconsideration of Griego’s discipline. The City appealed the trial court’s decisions that: 1) that the City abused its discretion by firing Griego based on the three sustained allegations; and 2) that the case was remanded to the City to redetermine Griego’s discipline.

On appeal, the Court of Appeal reviewed the matter to see if the City, abused its discretion. An agency abuses discretion if it does not proceed as required by law, its decision is not supported by the findings, or its findings are not supported by the evidence. The Court of Appeal held that termination was “well within the City’s broad discretion.”

The Court of Appeal found that the City Manager had connected her decision to three serious, sustained allegations, namely: refusing to follow an express directive, issued multiple times, not to coach softball while on duty; carrying a concealed handgun without a permit; and lying under penalty of perjury about possessing firearms. The Court of Appeal distinguished Griego’s case from another precedent in that Griego was “an experienced but defiantly insubordinate supervisor [who set] an intolerable example by repeatedly flouting direct commands from his superior.” The Court concluded that the sustained allegations of Griego’s misconduct demonstrated a lack of credibility, reliability, and trustworthiness, and were therefore a reasonable basis for the City’s decision to sustain termination.

Griego v. City of Barstow, 303 Cal.Rptr.3d 379 (2023).

Note:

This case highlights that supervisory employees must set a good example for their subordinates, and that insubordination is serious misconduct. In assessing whether a disciplinary penalty is within an agency’s discretion, the courts will consider harm to public service, circumstances surrounding the misconduct, and likelihood of its recurrence. The court found that the agency considered all these factors and imposed an appropriate penalty.

Join us at LCW’s 2023 In-Person Public Sector Employment Law Conference!

We're thrilled to announce that registration is now open for the 24th Annual LCW Conference taking place March 16 - 17, 2023. After a couple of years of Zoom meetings and virtual hangouts, we're looking forward to seeing you in-person for the 2023 LCW Conference in San Diego!

The LCW Conference is California's premier public sector employment and labor relations educational event. Our speakers are California labor relations and employment law attorneys who have dedicated their careers to representing and supporting California's cities, counties, special districts, public safety agencies and public educational institutions.

When: March 16 - 17, 2023

Where: Hilton San Diego

1 Park Boulevard San Diego, CA 92101

2023 LCW Conference attendees will gain access to:

• Top-notch Employment and Labor Relations Presentations. As always, the LCW Conference will offer the best and most timely information on California employment and labor relations topics available presented by our expert speakers.

• MCLE, HRCI and POST Credit. Do you need MCLE, HRCI, or POST credit? Don't worry, we've got you covered!

• Fun Activities. It wouldn't be the LCW Conference without some fun activities mixed in! We're creating exciting ways for attendees to decompress and have some fun. Stay tuned!

REGISTER HERE.

We are also excited to announce two Pre-Conference Sessions!*

* Please note that you must register for a pre-conference session separately from the LCW Conference.

Costing Labor Contracts March 15, 2023

The keys to successful negotiations include planning and costing. Just like planning a vacation, the amount of time and effort you put into planning and costing can determine the success of the trip. Costing contract proposals is similar to costing excursions on a vacation – they all sound like a good idea but can we afford them? Join us at this workshop to learn the importance of costing and the methods you can use to make costing easy. Participants will not only be provided with the tools to cost proposals, but will engage in interactive exercises where they set up an MOU Master Spreadsheet and proposals to cost. Bring your laptop and your Excel skills.

This workshop is our LCW Conference Pre-Conference session and is also part of our Labor Relations Certificate program.

We’ve added Bonus Content, since it is also our pre-conference session: CompensationSurveys&CollectiveBargaining!

As a bonus to this year’s pre-conference workshop, additional information on the development, impact, and usefulness of compensation surveys in collective bargaining will be highlighted and shared with attendees!

Register on our website here.

Human Resources Bootcamp March 15, 2023

Whether you are new to public sector labor and employment relations, or an experienced practitioner, this pre-conference session ensures that you are up to date on the most significant legal updates and fundamental issues facing public sector Human Resource professionals, including:

Legal Tune up Leaves Disability Discipline Performance Management and Discipline

We hope you will join us for this informative, interactive day designed to help you learn and hone your knowledge and skills so that you can operate at peak efficiency in tackling the HR challenges ahead.

Register on our website here.

Former Employee Could Not Rely On Her Own Declaration To Prove Discriminatory Pretext.

Joan Opara, a 62-year old woman of Nigerian national origin, worked as a Revenue Officer at the Internal Revenue Service (IRS). Opara was investigated for several alleged Unauthorized Access of Taxpayer Data (UNAX) offenses. Pending the investigation, she was reassigned to administrative work which included, among other tasks, washing the office’s government vehicle and cleaning cubicles.

After the investigation, Opara received an opportunity to respond to the charges at a meeting before Paul Alvarado, who was the hearing official. Seven years prior, Opara had successfully brought an EEO complaint against Alvarado’s mentee Rosanna Savala because Savala allegedly quoted Alvarado with phrases such as “if anyone is too old to do this job, she should quit” and “the job was better with young people.” Opara alleged that her superiors exaggerated the nature and severity of her several UNAX offenses. The IRS terminated Opara’s employment.

After unsuccessfully pursuing an EEO complaint, Opara sued the Treasury Secretary in the U.S. District Court alleging that her termination was based on her age and national origin in violation of the Age Discrimination in Employment Act (ADEA), and Title VII, respectively. The district court granted summary judgment to the Treasury Secretary on the grounds that Opara: 1) failed to establish a prima facie case of age discrimination; and 2) failed to show that the IRS’s proffered reasons for her termination were a pretext for age or national origin discrimination.

On appeal, the Ninth Circuit applied the McDonnell Douglas burden-shifting framework, which first requires the employee to establish a prima facie case of discrimination. Upon doing so, the burden then shifts to the employer to produce a legitimate, non-discriminatory reason for the adverse action. If the employer can do so, the burden shifts back to the employee to show that the employer’s proffered reason is a pre-text for discrimination.

An employee may offer direct or circumstantial evidence to establish her prima facie case. Here, Opara offered circumstantial evidence: her uncorroborated testimony about the decision maker’s allegedly biased statements; the alleged exaggeration of the severity of Opara’s UNAX offenses; and the alleged “draconian” punishment of cleaning cubicles and cars.

The Ninth Circuit held that very little evidence of discriminatory animus is necessary to establish a prima facie case of age discrimination on a motion for summary judgment. Opara’s three pieces of evidence were enough to establish a prima facie case. However, once the employer provides sufficient evidence for its actions and the burden of proof shifts back to the employee, the employee’s own, uncorroborated allegations alone are not enough to raise a genuine issue as to pretext.

The Ninth Circuit held that the IRS had met its burden of proving legitimate, non-discriminatory reasons for its decisions. First, once a Revenue Officer is under investigation for a UNAX offense, the Officer cannot access the computer system necessary to perform her usual duties. Second, the assignment to cleaning duties, including cleaning the office and a vehicle, were undisputedly the type of duties that were performed by secretarial staff. Third, the supervisor’s manual stated that termination was the appropriate penalty for a first time UNAX violation.

The Ninth Circuit held that Opara failed to meet her burden to show that the IRS’s reasons for her termination were a pretext for age discrimination. At the pretext stage, Opara could not rely on her testimony about the age-biased statements the decision maker allegedly made to prove that the IRS’s proffered reasons for Opara’s termination were pre-textual. The Ninth Circuit stated that at the pretext stage on a motion for summary judgment, the court has “refused to find a ‘genuine issue’ where the only evidence presented is ‘uncorroborated and self-serving’ testimony.”

Similarly, the Ninth Circuit assumed that even if Opara could establish a prima facie case of national origin discrimination, she would not succeed in using her own testimony to create a genuine issue as to whether the proffered reasons for her termination were “false” or whether her

termination was due in whole or in part to her national origin.

Because Opara had no evidence other than her uncorroborated statements to support her claim of pretext, the Ninth Circuit affirmed the summary judgment against her.

Opara v. Yellen, 57 F.4th 709 (9th Cir. 2023).

Note:

This case highlights how powerful a motion for summary judgement can be in a discrimination case. An employer can avoid a costly trial if the person suing has not produced any corroboration of her allegations of discriminatory animus.

The LCW Labor Relations Certification Program is designed for labor relations and human resources professionals who work in public sector agencies. It is designed for both those new to the field as well as experienced practitioners seeking to hone their skills. Participants may take one or all of the classes, in any order. Take all of the classes to earn your certificate and receive 6 hours of HRCI credit per course!

Benefits of Certification to the Participant:

• Increase knowledge in all areas of Labor Relations

• Increase your value to your agency

• Increase respect and recognition in the field

• Increase opportunity for upward mobility

• Increase marketability and ability to compete in the job market

• Increase professional credibility

Benefits of Certification to the Agency:

• Increase the level of competency of the individual

• Encourage and improve job performance

• Acknowledge an individual who has developed a high level of professionalism

• Use as an aid for retention and recruitment

Join our upcoming HRCI CertifiedLabor Relations Certification Program Workshops:

1. February 16 & 23, 2023 - The Rules of Engagement: Issues, Impacts & Impasse

2. April 20 & 27, 2023 - Nuts & Bolts of Negotiations

3. May 18 & 25, 2023 - The Public Employment Relations Board (PERB) Academy

INTERESTED?

Visit our website: www.lcwlegal.com/lrcp

The use of this official seal confirms that this Activity has met HR Certification Institute’s® (HRCI®) criteria for recertification credit pre-approval.

The Deliberative Process

Privilege Broadly Protects Records That Reveal An Agency’s Collective Bargaining Evaluations, Research, Theories, Or Strategy.

In January and March 2020, an organization called the Freedom Foundation submitted two requests under the California Public Records Act (CPRA). The CPRA generally requires a public agency to disclose public records upon request, unless an exemption or privilege applies.

The Freedom Foundation requested a variety of information on the bargaining unit membership of state employees. For each employee currently employed in certain bargaining units, it requested: full name, month and year of birth, job classification title, job classification code, employee identification number, hire date, current pay rate/salary, work email address, worksite/duty station address, and bargaining unit number.

The California Department of Human Resources (CalHR) had the information requested via a report it purchased on a yearly basis from the database of another department of the state government. CalHR then used this report to inform its decisions about formulating bargaining proposals, evaluate proposals from unions, and inform and direct its negotiators concerning labor relations.

Because CalHR uses the information the Freedom Foundation requested in a strategic manner and to inform its decisions, CalHR contended it did not have to provide the information due to the deliberative process privilege. The Freedom Foundation argued that the privilege did not apply because no decision or strategy was contained in the records requested; the records contained only the information used in making a decision or strategy.

However, the trial court stated that the relevant definition of the deliberative process privilege is not only records that reveal a state agency’s deliberative process, but also records that reveal a state agency’s impressions, evaluations, opinions, recommendations, meeting minutes, research, work products, theories, or strategy. The trial

court found that the requested information revealed CalHR’s research and evaluation of information, and therefore, the information was protected by the deliberative process privilege.

The Freedom Foundation appealed to the California Court of Appeal, which promptly affirmed the lower court’s decision.

A related issue in this case dealt with whether CalHR was required to search the database of the other government department to come up with the information requested. As referenced above, that other government department owned, controlled, and operated this database. CalHR did not possess the database or have the power or authority to manage, direct, or oversee the information within it. All CalHR did was view the parts of the database contained in the report it obtained. Because CalHR did not have control over or possess the relevant files, the trial court and Court of Appeal held that CalHR was not required to search the other agency’s database and provide further information.

Freedom Foundation v. Superior Court of Sacramento County, 302 Cal.Rptr.3d 655 (2022).

Note:

This case illustrates the breadth and depth of the deliberative process privilege, and how agencies can use it to protect internal collective bargaining deliberations and strategies. Although this case concerned the deliberative process for state agencies at the newly recodified Public Records Act at Government Code section 7928.405, an identical deliberative process statute for local government agencies is codified at Government Code Section 7928.410.

Medical Center Waived Its Right To Arbitrate By Delaying And Actively Trying The Issues In Non-Arbitration Forum.

Desert Regional Medical Center (DRMC) employed three nurses (RNs) under a collective bargaining agreement (CBA). The CBA governed nurses’ rest breaks, meal periods, and payment of missed break premiums. The CBA also required grievance and arbitration procedures for disputes involving interpretation or application of the CBA. The CBA stated that individual nurses and DRMC may voluntarily agree to arbitrate “any dispute not otherwise arbitrable under the [CBA].” RNs also signed a DRMC employment document (Agreement) in which they agreed submit non-CBA covered claims or disputes to final and binding arbitration before the American Arbitration Association (AAA).

In March 2015, the nurses’ Union filed a meal and rest break grievance against DRMC. Thereafter, the RNs filed individual claims with the California Labor Commissioner (LC), alleging unpaid rest and meal period wages, and requesting waiting time penalties. In February 2019, DRMC participated in the LC proceedings by filing a brief. The LC awarded each of the RNs thousands of dollars in unpaid wages in July 2019.

In August 2019, DRMC appealed the LC award to the trial court, alleging that the LC lacked jurisdiction because the CBA controlled. By October 2019, the Union and DRMC had begun the arbitration process on the Union’s meal and rest break grievance. In July 2020, DRMC filed a petition with the trial court to compel arbitration of the RNs’ wage claims. In August 2020, DRMC filed an amendment to its petition to compel arbitration, adding allegations that it did not waive its right to arbitrate and that furthermore, the RNs were prevented from arguing DRMC waived its right to arbitrate because the Union had already agreed to arbitrate the same issues. The trial court denied DRMC’s requests to arbitrate and amend the petition, and DRMC appealed.

The Court of Appeal upheld the trial court’s decision to deny DRMC’s petition to compel arbitration. First, Court noted that the California Arbitration Act requires the trial court to compel arbitration unless an exception applies. Here, the exception provides that state statutory wage and hour claims are generally not subject to arbitration, whether the arbitration clause is contained in the CBA or an individual agreement. Here, the Agreement stated that RNs will submit claims to arbitration, except that “wage claims within the jurisdiction of a local or state labor commissioner…are not subject to [arbitration].” Therefore, RNs Agreement allowed them to “file such non-waivable statutory claims with the appropriate agency,” which they did when they filed with the LC.

Second, on the issue of waiver, the Court found that even if an agreement states that arbitrations must follow the procedural rules in the Federal Arbitration Act and American Arbitration Association, California law nevertheless requires the court to determine whether a waiver to arbitrate has occurred. Accordingly, the trial court had jurisdiction under state law to determine whether DRMC waived its right to arbitrate RNs claims.

Finally, the Court determined that DRMC did waive its right to arbitrate through numerous actions. For example, DRMC delayed filing its petition to compel arbitration for over four years, including at least three years from when RNs filed their individual claims with the LC and one year after the LC issued its decision. Instead, DRMC actively participated in the LC proceedings, including participating in the hearing and presenting evidence and arguments. Before filing a petition to compel arbitration, for example, DRMC filed motions to remove its case in order to appeal the LC decision to federal court, filed motions of related cases, requested reassignment and transfer of the case, filed objections to RNs written discovery, and requested discovery sanctions.

Desert Regional Medical Center v. Miller, 2022 WL 18142878.

Note:

As a general rule, if an employer wants to preserve its right to arbitrate, it must promptly petition for arbitration and not actively participate in proceedings outside the arbitration forum.

Corporation’s Section 998 Settlement Offer Was Valid And Shifted Fees and Costs To Consumer.

In 2013, Smalley bought a 2014 Subaru. While the car was still under warranty, non-repairable defects surfaced. Subaru subsequently denied Smalley’s request that Subaru repurchase the vehicle, and Smalley sued Subaru.

Subaru served Smalley a Code of Civil Procedure Section 998 settlement offer for $35,001.00 and Smalley’s choice of either $10,000 for costs and attorneys’ fees, or costs and attorneys’ fees to be determined by the Court. In exchange, Smalley would have to request dismissal of his lawsuit with prejudice and return the car to the dealer and clear the title to Subaru. Smalley objected to the offer in writing as “not reasonable.”

Section 998 incentivizes settlement of lawsuits by shifting post-offer litigation fees and costs to the party who declined a more lucrative offer than the court or jury later awards after trial. In making the decision to reject Subaru’s Section 998 offer, Smalley took the risk that he would not obtain a better result, be deprived of post-offer attorney fees, and be made to pay the other side’s fees or costs.

After a civil trial, a jury awarded Smalley $27,555.74. The Court, finding the section 998 offer valid, then awarded Smalley $1,351.17 in pre-offer costs and awarded Subaru $16,684.92 in post-offer costs to account for the greater amount Subaru had offered in its 998 offer. Smalley appealed from this post-judgment order, alleging that the offer was invalid.

The Court rejected Smalley’s argument that the 998 offer was invalid because it did not specify whether he would be the prevailing party for purposes of a motion for attorneys’ fees. The Court noted that Section 998 does not require that language.

The Court also rejected Smalley’s argument that the offer was invalid because it did not distinguish expenses from costs. Relying on prior case law the Court noted “Where a section 998 offer is silent on costs and fees, the prevailing party is entitled to costs and, if authorized by statute or contract, fees.” Therefore, Smalley still would have been entitled to recover expenses, and the failure to include the word “expenses” in the offer does not make it invalid.

The Court upheld the post-judgment order for costs.

Note:

Statutory settlement incentives like 998 offers are very complex, and rejecting these offers involves monetary risks. Never reject a 998 settlement offer without first receiving sound legal advice.

Smalley v. Subaru of America, 2022 WL 18276885.

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.

• The California Public Records Act has undergone a complete recodification that became effective on January 1, 2023. The Act is now codified at Government Code section 7920.000-7931.000. Agencies that use preprinted forms for the public to use to request public records should review their forms and update any citations to the Government Code.

• As of July 1, 2022, SB 270 authorizes public employee unions to file a special form of unfair practice charge for an employer’s failure to provide the names and home addresses of newly hired employees, as well as their job titles, departments, work locations, telephone numbers, and personal email addresses, within 30 days of hire or by the first pay period of the month following hire.

• AB 237, the Public Employee Health Protection Act, became law in October 2021, and requires public employers to maintain their employees’ health care during an authorized strike or work stoppage.

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

benefits Corner

The New Deadline To Furnish Form 1095-C To Employees Is March 2, 2023.

By: Stephanie J. Lowe

The IRS finalized regulations extending the deadline for employers to furnish Form 1095-C to employees. (See 87 Fed. Reg. 76569, December 15, 2022.) Beginning January 1, 2023, the deadline is permanently extended 30 days from January 31 to March 2 of the year following the calendar year to which the statement relates. For minimum essential coverage provided in 2022, the deadline to furnish statements to employees is March 2, 2023. Since the extension is automatic, the regulations removed the option for employers to submit a written request for an extension for good cause and the IRS’s discretion to prescribe any other automatic extension.

Applicable large employers are required to file information returns and furnish written statements with respect to the health insurance, if any, that the employer offers to full-time employees. The IRS uses the information returns to administer the employer shared responsibility provisions of the Affordable Care Act. The IRS has generally designated Form 1095-C to meet the requirement that applicable large employers furnish individual employees with a written statement identifying the offer of employer-sponsored minimum essential coverage.

While the due date to furnish Forms 1095-C has been permanently extended to March 2, applicable large employers are still required to file Forms 1094-C and 1095-C with the IRS on or before February 28th , if filing on paper, or March 31st, if filing electronically. Notably, employers filing 250 or more returns are required to file electronically. Employers that would like an automatic 30-day extension to file Forms 1094-C and 1095-C must submit Form 8809 on or before the due date of the returns.

Employers who fail furnish or file statements by the deadlines are subject to penalties unless the failure is due to reasonable cause and not to willful neglect.

Lawsuit to Watch: David G. Williams v. Amazon.com Services, LLC

Senior software development engineer David G. Williams filed a lawsuit against his employer Amazon to recoup expenses he incurred while working from home. Under California Labor Code Section 2802, employers are required to indemnify employees for all necessary expenditures or losses incurred in direct consequence of the employee discharging his or her duties. Due to California’s Stay-at-Home orders in March 2020, Williams was sent to work from home and claims he incurred expenses for his home internet, equipment, electricity, and home office infrastructure by working remotely.

Williams filed the lawsuit as a proposed class action on behalf of himself and all other California residents who are or were employed by Amazon. Williams alleges that the typical amount of expenses owed is $50 to $100 per class member. There are at least 4,200 members in the proposed class, who worked 110,000 months in the aggregate. The amount in controversy is estimated to be $5,500,000 on the low end.

Amazon filed a motion to dismiss the lawsuit and raised three arguments about why it was not responsible for its employees’ work-from-home expenses. First, Amazon claimed that the government, and not Amazon, imposed the lockdown which necessitated that employees work from home. Amazon claimed that Williams was trying to capitalize on the pandemic by using Labor Code Section 2802 to seek reimbursement for his remote work expenses. The court held that it did not matter if Amazon itself was not the but-for cause for the shift to remote work. The court determined that Amazon expected Williams to continue to work from home after

the Stay-at-Home orders were imposed, which was sufficient for Williams’ Labor Code Section 2802 claim to continue.

Second, Amazon argued that employees had incurred no additional or incremental expenses by working from home. The court disagreed with Amazon and found that the duties of an engineer plausibly require the use of physical space, internet, and electricity.

Third, Amazon claimed that Williams did not take advantage of Amazon’s expense reimbursement policies. Amazon argued that Williams did not ever submit a single reimbursement request and there were no facts showing Amazon knew or had reason to know about the expenses. Amazon’s position was that an employer needs information about the expense before it can reimburse the expense. The court found that as a major tech company, Amazon surely knew or at the very least, had reason to know, that its engineers who worked from home were incurring basic costs related to their duties.

The court denied Amazon’s motion to dismiss, which allows Williams’ proposed class action to move forward.

Williams v. Amazon.com Services, LLC, 2022 WL 1769124 (N.D. Cal., Jun. 1, 2022).

Note:

Public agencies should monitor developments in this proposed class action lawsuit to see how the court interprets an employer’s obligations under Labor Code Section 2802 as it relates to work-from-home expenses.

Reminder: Increase to Health FSA Contribution Limit

The 2023 annual limit for employee salary reductions for contributions to health FSAs is $3,050 (up from $2,750 from 2022). For Section 125 cafeteria plans that permit carryover of unused funds, the maximum health FSA carryover is $610. The annual limit for employee salary reductions for contributions to dependent care assistance programs (DCAPs) remains at $5,000. For more information, see IRS Revenue Procedure 2022-38.

Reminder: The 2023 Standard Mileage Rate

The 2023 standard mileage rate is 65.5 cents per mile driven for business use. This rate is used to calculate the reimbursable and deductible costs of operating

a vehicle for business purposes. The rate applies to electric, hybrid, gasoline, and diesel-powered vehicles. Employers also have the alternative option of calculating the actual costs of using a vehicle rather than using the IRS’s standard mileage rate.

The 2023 standard mileage rate is 3 cents higher than the rate at the end of 2022. In the middle of 2022, the IRS enacted a mid-year increase to the standard mileage rate by 4 cents to account for the increase in fuel prices. LCW will continue to monitor any future changes to the standard mileage rate for this year.

ACA Compliance Question: Look Back Measurement Method Safe Harbor

Does your agency use a Look Back Measurement Method Safe Harbor (LBSH) to calculate who is a fulltime employee for ACA purposes? More importantly, does your agency have a written policy establishing the LBSH? Agencies that are applicable large employers (50 or more full-time equivalent employees) and use the LBSH should have a written policy establishing the terms of the LBSH. Let us know if we can help.

BENEFITS BEST PRACTICES TIMELINE

Each month, LCW will present a monthly benefits timeline of best practices. This timeline is intended to apply to agencies that are applicable large employers for Affordable Care Act (ACA) purposes. LCW encourages public agencies to use the timeline as a guideline.

February

• Forms 1094-C and 1095-C due February 28, 2023 if filing on paper (or March 31, 2023 if filing electronically). Employers filing 250 or more returns must file electronically.

• Prepare to furnish Form 1095-C to each full-time employee by March 2, 2023 for the 2022 calendar year.

March

• Furnish Form 1095-C to each full-time employee by March 2, 2023 for the 2022 calendar year.

• Forms 1094-C and 1095-C due March 31, 2023 if filing electronically (due earlier on February 28, 2023 if filing on paper).

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.

My city is hoping to hire an employee under the age of 18 for an entry-level position. Is there a special process or any extra requirements for the hiring of a minor?

Question: Answer:

Public agencies are not required to obtain work permits when hiring minors (see page 4 of this Division of Labor Standards Enforcement (DLSE) pamphlet and Question 11 of this state Department of Education Guidance). However, the Fair Labor Standards Act requires the public entity to must obtain a Certificate of Age for the minor to establish that the minor is above the “oppressive child labor age” applicable to the occupation in which they are employed (see the Dept. of Ed. Guidance and 29 C.F.R. § 570.5). California's “Statement of Intent to Employ a Minor and Request for a Work Permit - Certificate of Age” (CDE form B1-1), which can be found on the California Department of Education Website, meets the standards of the Federal Regulations requiring such documentation.

On The Blog

How Does California’s New Pay Transparency Law Impact Your Organization?

By: Dana Burch

While those of you in the public sector are accustomed to seeing salary information in job postings, now private employers who post jobs in California are required to post salary ranges in their job advertisements. Effective January 1, 2023, California expanded its pay transparency laws. The new law has two major components: 1) pay scale disclosure; and 2) pay data record keeping and reporting. Read on to find out how these laws impact your organization.

Pay Scale Disclosure

Under the new law, all private employers with 15 or more employees who post jobs in California will need to include pay scale data in published job advertisements. Moreover, if an employer uses a third party to advertise a job, the employer must provide the third party with a pay scale to include in the job posting. The law describes the pay scale is “the salary or hourly wage range that the employer reasonably expects to pay for the position.” However, there is no further guidance in the statute about how broad the pay scale range can be.

While the salary disclosure requirements may be old hat for public entities, there are components of the new law that apply to both the private sector and the public sector. For example, upon request, all employers of any size are required to disclose the pay scale for a position to both job applicants and current employees.

Similarly, the portions of the law regarding salary determinations apply to both public and private sector employers. Under Labor Code section 432.3, employers cannot rely on an applicant’s salary history as a factor in determining whether to offer employment or in determining what salary to offer an applicant. In fact, employers are prohibited from seeking an applicant’s salary information. However, nothing in the law prohibits an applicant from voluntarily disclosing salary history information to a prospective employer. If an applicant voluntarily discloses salary history information without prompting, then the employer can consider such information in setting the salary for the applicant. So, what can you ask an applicant when it comes to pay? You can ask about the applicant’s salary expectation for the position for which they have applied.

Pay Data Reporting

California’s new pay transparency law also impacts employer data reporting for both public and private sector employers. The law also requires employers to maintain records of job title and wage history for each employee for the duration of employment plus three years. The Labor Commissioner can inspect those records to determine if there is a pattern of wage discrepancy. If employers violate these rules the Labor Commissioner may issue penalties up to $10,000. Moreover, if an employer fails to keep records in violation of Labor Code section 432.3, there is a rebuttable presumption of pay disparity in favor of the employee if the employee makes a legal challenge. This is especially important to note because the new law created a private right of action for violations of the pay transparency law, giving aggrieved parties the right to seek injunctive and “any other appropriate relief.”

What can you do to be ready for the new law?

• Make sure your job advertisements include salary information.

• Be sure your hiring personnel are aware of what they can and cannot ask applicants regarding their salary history. LCW offers training on hiring and a variety of other topics. Contact Anna M. SanzoneOrtiz (asanzone-ortiz@lcwlegal.com) for more information on LCW’s training programs!

• Maintain job title and wage history information for three years after employee separation.

• Consider a pay equity audit of current employee wages to ensure there are not any significant discrepancies or inequities.

• Consider developing a formalized pay equity policy.

Conclusion

The law is seen as a positive step towards achieving pay equity in California, and is a model for other states to follow. However, it remains to be seen how effective the law will be in achieving its goals, and how it will be enforced.

If you have any questions or need further guidance on how to comply with California’s wage transparency law, contact your trusted legal counsel.

View the full article on our blog here.

Liebert Cassidy Whitmore