Client Update: January 2024 by lcwlegal

January 2024

Client Update

Table Of Contents 03

Firm Victories

Did You Know?

Meyers-MiliasBrown Act

Benefits Corner

Labor Relations

Consortium Call Of The Month

Retaliation

On The Blog

Workers' Compensation

Contributors: Cynthia O’Neill Partner | San Francisco Ashley Sykora Associate | Los Angeles

Nathan Price Associate | Los Angeles Stephanie J. Lowe Senior Counsel | San Diego

Connect With Us! Copyright © 2024 Requests for permission to reproduce all or part of this publication should be addressed to Cynthia Weldon, Director of Marketing and Training at 310.981.2000. Cover Photo: Attributed to pexels.com

Client Update is published monthly for the benefit of the clients of Liebert Cassidy Whitmore. The information in Client Update should not be acted on without professional advice. To contact us, please call 310.981.2000, 415.512.3000, 559.256.7800, 916.584.7000 or 619.481.5900 or e-mail info@lcwlegal.com.

• Los Angeles • San Francisco • Fresno • San Diego • Sacramento •

LCW Partner Morin Jacob, And Associates Will Ambramovitz, Jessica Tam, And Brian Hawkinson Win Dismissal Of AG Commissioner’s Lawsuit.

County had no knowledge that any non-supervisory employees harassed the AC.

A County Board of Supervisors (BOS) appointed an Agricultural Commissioner (AC). A little more than one year later, the BOS terminated the AC due to poor performance and mismanagement of his department.

LCW Partner Brian Walter And Senior Counsel Alison Kalinski Win MSJ In First Amendment-FBOR Case Arising Out Fire Chief’s Termination.

The AC sued the County, every member of the BOS, and five of his former subordinates. The AG’s lawsuit alleged: termination in violation of California laws in the Food & Agriculture and Business & Professions Code; discrimination on the basis of national origin and religion; subordinate harassment because of his race and religion; retaliation for complaining to senior staff about his subordinates; and failure to prevent his harassment. The LCW team strategically disposed of this lawsuit piece by piece. First, LCW filed a series of demurrers and motions for judgment on the pleadings, with the following results: dismissal of his California law claims for failure to state a cause of action; and judgment in favor of all members of the BOS and all five subordinates because the AG failed to adequately exhaust his administrative remedies. Second, LCW filed a successful motion for summary judgment, in which the County argued: the BOS had legitimate, non-discriminatory and non-retaliatory reasons for terminating the AC; the County had no knowledge of the AG’s national origin, religion or protected activity at the time of his termination; the harassment claims failed because both the AC failed to adequately exhaust his administrative remedies, and the

January 2024

firm victories The Court granted summary judgment and dismissed the lawsuit, which allowed the County to avoid a costly trial in late January 2024.

In June 2020, a podcaster contacted a city to ask that its top officials discuss the city’s responses to COVID-19 and the civil unrest related to George Floyd’s death. The city manager gave permission for the others to appear if they chose. Both the police and fire chiefs agreed, and the podcast recording took place during the fire chief ’s paid worktime. The podcasters asked how the fire department was preparing for protests and civil unrest. The fire chief gave a lengthy response that discussed civil unrest he dealt with in his past employment following an officer-involved shooting that he believed was “100 percent legitimate.” He said that the media poorly portrayed the shooting and caused demonstrations. He said he used to feel “you’re one good shooting away from civil unrest” whereas now, “you’re one violent interaction [away]” from civil unrest. The fire chief later attended a meeting for a regional dispatch center. In discussing his displeasure for a vendor that had been used, the fire chief stated “I’m comfortable continuing to move forward, but not taking our foot off their throat either…I think your foot needs to be clearly on their throat, and they need to feel it and

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they need to feel that constant pressure every single day that we mean business.” Local police chiefs present at the meeting were disturbed by those comments and reported them to the city. The city manager determined he could no longer trust the fire chief and terminated the fire chief for his statements, finding they lacked compassion, sensitivity and judgment. The fire chief ’s notice of termination stated that his at-will employment was being terminated for “an incompatibility of management styles” and explained the supporting reasons were his above-referenced statements. The fire chief appealed his termination under the Firefighters Procedural Bill of Rights (FBOR). The hearing officer recommended the chief ’s termination be upheld and the city council affirmed. The former chief sued, alleging among other things, retaliation in violation of Labor Code Section 1102.5, retaliation for exercising his right to free speech in violation of the First Amendment, and violation of the FBOR. The chief also sought to overturn his termination. The U.S. District Court dismissed the Labor Code Section 1102.5 claim because the fire chief failed to timely file a governmental claim. The District Court also granted the city’s motion to dismiss his First Amendment claim as to the comments at the regional dispatch meeting, finding that he spoke in his capacity as a public employee. After discovery, the city filed a motion for summary judgment, arguing that the chief ’s speech on the podcast was not protected because he was speaking as a public employee, and that there was no violation of the FBOR because the chief was provided a fair termination appeal hearing. The U.S. District Court agreed, granted the city’s motion, and entered judgment for the city. On the First Amendment claim, the Court found that the chief ’s speech on the podcast, like his speech at the regional dispatch meeting, was not protected because he spoke as a public employee, and not as a private citizen. The test courts use to determine when a government employee has stated a prima facie case for First Amendment retaliation is whether the employee spoke: (1) on a matter of public concern; and (2) as a private citizen. If both of those are true, then the court considers whether the protected speech was a substantial or motivating factor in the adverse employment action. There was no dispute in this case that the chief ’s speech was of public concern. The Court found that the evidence showed that the chief spoke pursuant to his official job

responsibilities as a public employee. The city coordinated the chief ’s appearance, the subject matter of the podcast was how the city was responding to the unrest, the chief appeared during his worktime, and he was introduced as the fire chief. The Court found that the First Amendment claims failed because the chief was speaking as part of his job and not as a private citizen. As to the FBOR claims, the Court found that the hearing before a hearing officer that the parties agreed to use was fair and satisfied the chief ’s due process rights. The chief pointed to six alleged incidents in the transcript when the hearing officer denied the admission of evidence or rejected the chief ’s legal counsel’s questions. The Court concluded that the hearing officer fairly denied the evidence and questions, as leading, irrelevant, beyond the scope of the hearing or the individual’s personal knowledge, or duplicative. Thus, there were no FBOR violations. Finally, the Court found the city was justified in terminating the fire chief for an incompatibility of management styles.

LCW Partners Brian Walter And Paul Knothe And Associate Nick Grether Convince Ninth Circuit That Opt-Out Fee Is Excluded From FLSA Regular Rate. Ventura County firefighters and law enforcement officers sued the County for failing to include a portion of their flex benefits in the Fair Labor Standards Act (FLSA) “regular rate” of pay. The regular rate of pay is used to calculate FLSA overtime compensation. Every pay period, employees received a “Flex Credit” under the County’s Flexible Benefit Program which they could use to purchase health benefits on a pre-tax basis. The amount of their Flex Credit was set through annual negotiation. If an employee’s health premium was less than their flex benefit amount, the employee could take the remainder of the benefit in cash. That cash was included in the employee’s regular rate of pay. Employees who chose to participate in the Flexible Benefits Plan, but had insurance through a non-County or non-union source, such as a spouse’s health plan, would receive the same Flex Credit, but had to pay an opt-out fee, which varied from year-to-year. This optout fee was largely put back into the health plans to lower the cost of health insurance for the employees who did participate based in the County or union health plans. The remainder was then credited to the employees as cash

• Los Angeles • San Francisco • Fresno • San Diego • Sacramento •

The employees alleged that excluding the opt-out fee from the “regular rate” resulted in them being underpaid for FLSA overtime. The U.S. District Court granted the County’s summary judgment motion, and the employees appealed. The Ninth Circuit affirmed the District Court in favor of the County in a published decision. The Ninth Circuit stated that while it had previously held that FLSA exemptions should be interpreted narrowly, the U.S. Supreme Court in Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134 (2018), later clarified that “FLSA exemptions are construed under ‘a fair (rather than a “narrow”) interpretation.’” First, the employees claimed that the 2016 Ninth Circuit opinion in Flores v. City of San Gabriel, required that cash cafeteria benefits, like the opt-out fee, be included in the regular rate. The Ninth Circuit held that Flores was not applicable because the opt-out fee was not provided to the employees in cash at all. Instead, the opt-out fee was used to fund the County and unionprovided health plans. Second, the employees claimed that the opt-out fee could not be excluded from the regular rate under 29 U.S.C. Section 207(e)(4), which excludes “contributions irrevocably made by an employer to a trustee or third person pursuant to a bona fide plan for providing … health insurance ….for employees.” The employees did agree that the opt-out fee was irrevocably provided to third parties. They argued the exception still did not apply because: 1) the opt-out fee was not contributed for their own benefit, but rather was applied towards health insurance for other employees; and 2) the Flexible Benefits Program was not “bona fide.”

January 2024

earnings. The Flex Credit appeared on an employee’s paystub under “Earnings” and the opt-out fee was listed as a “before tax deduction.” When calculating overtime, the County included the residual cash earnings as part of employees’ regular rate of pay, but excluded the value of the opt-out fee.

The Court also rejected the employees’ argument that the Flexible Benefits Program was not “bona fide.” While the FLSA does not define “bona fide,” the Department of Labor (DOL) regulations indicate that the 207(e)(4) exception applies if the primary purpose of the plan is for the payment of benefits to employees, and that a plan is still bona fide even if, as an incidental part, the plan pays an employee in “cash of all or a part of the amount standing to his credit…” The DOL’s rule for determining whether a cash payment was incidental was based on a 20% cash ceiling of the plan’s employee contributions on a plan-wide basis. The Ninth Circuit declined to adopt this 20% ceiling for a couple of reasons. First, the Court noted that the DOL’s 20% ceiling, which was first explored in a 2003 opinion letter, was expressly rejected by the courts in Flores, and the DOL provided no additional support for the 20% bright-line rule when promulgating its new Rule in 2019. Thus, the Flores holding was still correct. Second, the opt-out fees were not cash payments at all, thus rendering the 20% ceiling inapplicable. The Court held that the County properly excluded the Flex Credit opt-out fees from the employees’ regular rate of pay under 29 U.S.C. Section 207(e)(4). Sanders v. County of Ventura, et al, 87 F.4th 434(9th Cir. 2023). Note: This is the first published Ninth Circuit opinion to address the DOL’s 20% rule for bona fide plans since the 2016 Flores case. Once again, the Court has decided this DOL rule was undeserving of deference.

The Court dismissed each of these arguments. As to the argument that the exception did not apply because it was meant to exempt contributions for an employees’ own health care, and not for the health care of others, the Court found that the reference in the exception to “employees” did not mean the individual employee themselves. Instead, the opt-out fees were still irrevocably contributed towards health plans “for employees” overall, rather than for specific employees.

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Join us at LCW’s 2024 Public Sector Employment Law Conference! Registration is still open for the 25th Annual LCW Conference taking place February 8-9, 2024, in San Francisco! 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: February 8 -9, 2024 Where: Hyatt Regency San Francisco Five Embarcadero Center San Francisco, CA 94111 2024 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 with some fun activities mixed in! We're creating exciting ways for attendees to decompress and have some fun. Stay tuned!

• Los Angeles • San Francisco • Fresno • San Diego • Sacramento •

January 2024

We are also excited to announce three Optional Add-on Sessions! Wednesday, February 7 9:00 a.m. - 4:00 p.m. * Please note that you must register for an optional add-on session separately from the LCW Conference.

Option 1: Costing Labor Contracts 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 also part of our Labor Relations Certificate Program.

Option 2: Investigations and Discipline in Critical Incidents

The legal and political environment in which decisions about use of force investigations and discipline must be made is very different than it was just a few years ago. Civil liability is not necessarily the predominant concern anymore. This seminar will examine issues related to the investigation of critical incidents involving officers. More specifically, this seminar discusses the issues surrounding criminal, civil and administrative investigations of these matters, particularly the administrative investigative issues. In this training, you’ll hear from experienced public safety attorneys examine best administrative practices that your agency should follow and how to evaluate issues ranging from the implications of SB 2 to SB 16 to potential criminal prosecution of officers.

Option 3: Training Academy for Workplace Investigators

The Civil Rights Department (CRD) guidelines recommends that all investigators receive a full day of investigation instruction that covers information about the law shaping investigations, recommended practices, and skillbuilding exercises. This preconference session meets these CRD guidelines and recommended best practices. Presented by two leading workplace investigators, this session includes: • When to investigate • Standards for conducting a legally compliant investigation • Investigator qualifications • What to investigate • How to investigate • Core investigative skills • Skill-building exercises

Registration:

Click here to register for the Conference AND one of the optional add-on sessions. Click here if you are ONLY interested in attending a one day optional session.

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meyers-milias -brown act MMBA Preempted Employer’s Lawsuit For Trespass And Unlawful Picketing. Between April 2021 and June 2022, Palomar Health District, a public healthcare district, negotiated with two unions for successor collective bargaining agreements (CBAs): the California Nurses Association (CNA); and the Caregivers and Healthcare Employees Union (CHEU). Under the current CBAs, unions could only access Palomar Health’s facilities by notifying security upon their arrival, wearing identification, and refraining from interfering with employees’ duties or facility. The union regularly communicated with its employees in non-work areas of the facilities, including outdoor spaces and cafeterias. In April and May 2022, while negotiations were still ongoing, union organizers went to Palomar Health’s Medical Center Escondido (PMCE) to inform employees about the ongoing negotiations. They set up at tables near the hospital’s café and in the cafeteria, and also passed out leaflets at the entrance regarding a potential strike. Hospital supervisors told the organizers they could continue their efforts in the employee parking lot, but otherwise must leave. The District sued the unions and requested the superior court to grant an injunction prohibiting trespassing and unlawful picketing. The unions requested the court to dismiss the suit, alleging that the Public Employment Relations Board (PERB) had exclusive jurisdiction over these issues. The next day, the unions jointly filed an unfair practice charge (UPC) that alleged the District was unlawfully interfering with their right of access to the employer’s premises, as protected by the Meyers-Milias-Brown Act (MMBA). PERB intervened in the District’s lawsuit against the unions.

The trial court denied the District’s request for injunction, on the grounds that the District had: an adequate remedy to resolve the dispute through PERB; not shown irreparable injury necessary to support an injunction; and not established that the unions had done any unlawful act. The trial court also denied the unions’ demurrer, and found that the trial court could maintain jurisdiction. The unions appealed. As the appeal was pending, the Administrative Law Judge issued a proposed decision on the unions’ UPC, concluding that the MMBA gave the unions a right of access to PMCE. The proposed decision found that the District’s lawsuit was brought for an unlawful purpose or retaliatory motive, and ordered the District to stop preventing access to the hospital. The California Court of Appeal also agreed with the unions that the claims in the District’s lawsuit were arguably an unfair labor practice under the MMBA and subject to PERB’s exclusive jurisdiction. The District’s lawsuit addressed the same controversy that the unions asserted at PERB. The Court agreed with PERB’s argument that since the same controversy was before PERB, there was a substantial danger that a judicial decision would interfere with PERB’s primary jurisdiction over this labor dispute. The District’s claims for trespass and unlawful picketing were preempted and subject to PERB’s exclusive jurisdiction. The Court of Appeal ruled that the trial court’s order overruling the unions’ demurrer must be reversed, and dismissed the District’s claims. Palomar Health v. National Nurses United (Public Employment Relations Board), 2023 Lexis 966.

• Los Angeles • San Francisco • Fresno • San Diego • Sacramento •

January 2024

new to the Firm! Margarite M. B. Sullivan is an Associate at the San Diego office where she provides advice and counsel in labor and employment law matters.

Tevon F. Edwards is a Labor Relations Consultant in the San Francisco office of where he provides advise and counsel in employment and labor related matters. Tevon also serves as an experienced negotiator.

Allison Berquist is an Associate in the Los Angeles office of where she provides advice and counsel on a variety of issues.

New Webinar!

What Employers Need to Know: An Overview of FEHA’s Provisions against Discrimination due to Cannabis Use

Wednesday, January 10, 2024 10:00 a.m. - 11:00 a.m. Register here. • www.lcwlegal.com •

r s n o b o i t a

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UC Applied Correct Wage Increase To An Unrepresented Classification That Was Added To A Bargaining Unit.

Teamsters Local 2010 (Teamsters) petitioned to add the unrepresented classification of Administrative Officer II (AO2) to the clerical bargaining unit it represented. The University of California (UC) did not object, and the AO2s “accreted” to the Teamsters unit in October 2020. The post-accretion negotiations required UC and the Teamsters to divide the AO2 pay range at each campus into discrete steps, and to place incumbent AO2’s to each step. Adding to the complexity of the negotiations, was that some campuses provided unrepresented AO2s more favorable bonuses under incentive award programs (IAPs) that the Teamsters clerical unit received. A dispute arose involving IAPs while the post-accretion negotiations were pending. The Teamsters filed unfair practice charges alleging, among other things, that the UC unilaterally changed the status quo in violation of the Higher Education Employer-Employee Relations Act (HEERA) when it applied the IAP provisions from the existing Teamsters collective bargaining agreement (CBA) to the AO2s while the post-accretion negotiations were pending. An administrative law judge agreed with the Teamsters. The UC appealed to the Public Employment Relations Board (PERB). The case turned on how to identify the status quo when a wage adjustment comes due for the accreted employees during the post-accretion negotiations. UC argued that it followed the status quo by giving the AO2s: the wage increase they would have

received if they had remained unrepresented; and the IAP provision in the Teamsters unit’s existing CBA. The Teamsters argued that the AO2s prior coverage in different IAP tiers from those in the Teamsters’ unit made the IAP issue “unique” and therefore not covered by the Teamsters’ existing CBA while the post-accretion negotiations were pending. PERB dismissed the charge. PERB found that after a mid-CBA accretion, both parties have a mutual duty to bargain over terms and conditions of employment for newly added or “accreted” employees. Depending on the length of that bargaining, one or more of the regular wage adjustment cycles may occur before post-accretion negotiations are complete. To maintain the status quo in a wage adjustment cycle that occurs during postaccretion negotiations, the employer must normally afford accreted employees all CBA-mandated wage adjustments. However, if it is unclear how one or more of the CBA’s adjustments should apply, then the status quo for that cycle is the adjustments the accreted employees would have received had they remained unrepresented. PERB found the UC properly maintained the status quo as to the wage adjustments for the AO2s while the postaccretion negotiations were pending. First, both parties concurred that AO2 wages should be adjusted as the unrepresented employee wages for that year. The AO2s had a continuous wage range that was not divided into steps at the time of accretion, while the operative CBA required a step increase. Thus, it was unclear how one or more of the CBA step increases applied to the AO2s, and the status quo required that they be treated as if they had remained unrepresented. Second, the Teamsters’ CBA was sufficiently clear as to the IAP provision given that the three campuses with a more favorable IAP provision

• Los Angeles • San Francisco • Fresno • San Diego • Sacramento •

January 2024

for unrepresented employees had relied upon a CBA provision that tied clerical employees’ IAP eligibility to that of other represented employees. Teamsters Local 2010 v. Regents of the University of California, PERB Decision No. 2884-H (December 6, 2023). Note: PERB’s analysis broadly applies to public sector employees and may be helpful to MMBA-covered public agencies as they respond to requests from employee representatives to add temporary employees into existing bargaining units as a result of new Government Code Section 3507.7 (aka AB 1484).

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!

Join our upcoming HRCI Certified - Labor Relations Certification Program Workshops: 1. February 7, 2024 - Costing Labor Contracts 2. March 14 & 21, 2024 - Communication Counts! 3. April 4 & 11, 2024 - The Rules of Engagement: Issues, Impacts & Impasse

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

Visit our website: www.lcwlegal.com/lrcp

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retaliation

City Could Request Indemnification From Insurer On Whistleblower Retaliation Claim. California Labor Code Section 1102.5 prohibits retaliation against employees for reporting activity they have reasonable cause to believe is unlawful, or for refusing to participate in activity that is unlawful. Retaliation claims are the most common employment claims in California. California Insurance Code Section 533 states that an insurer is not liable for a loss caused by the willful act of the insured. In 2015, six officers in the City of Whittier Police Department sued the City. The officer’s alleged that the City had an illegal quota system, and that the City unlawfully retaliated against officers for refusing to participate in the system. The City ultimately settled with the officers for $3 million. At the time, the City had insurance policies with Everest National Insurance Company and Starr (the Insurers) that provided coverage for employment practice liability for “wrongful acts”, including retaliation. The City tendered the settlement to the Insurers for indemnity. The Insurers denied the request, and the City sued them. Both the agreed-upon referee, and the trial court, ruled in favor of the Insurers. They reasoned that Insurance Code Section 533 prohibits coverage for loss caused by an insured’s willful act, and whistleblower retaliation under Labor Code Section 1102.5 can only be established by evidence of an employer’s motive and intent to violate or frustrate California’s Whistleblower laws. The trial court ruled that since retaliation claims can be established only through proof of an employer’s willful acts, Insurance Code Section 533 barred indemnity. The City appealed. The California Court of Appeal reversed. The Court held that some retaliation claims involve willful conduct, but some involve conduct more akin to negligence. Thus, an insured employer is not barred from seeking indemnification simply because the claim alleges retaliation. The Court reasoned that Labor Code Section 1102.5 is not limited to such obviously intentional misconduct. Instead, an employer could be liable under Labor Code Section 1102.5(c) despite making concerted and reasonable efforts to avoid violating the law. For example, an employer may be liable for disciplining an employee who refuses to participate in conduct that the employer believes is legal, but the employee reasonably believes is illegal. In that example, the employer’s conduct is closer to negligence than intentional misconduct because the employer intends the act—the adverse employment action—but not the consequence—a violation of the employee’s Labor Code rights. Those rights do not become clear until a court has decided the legality of the conduct in which the employee refused to participate. City of Whittier v. Everest National Insurance Co, Et Al, 97 Cal.App.5th 895 (2023).

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January 2024

Congratulations to our 2024 Southern California Super Lawyers!

Peter Brown

Geoff Sheldon

Scott Tiedemann

New Webinar! All Those Wage and Hour Provisions in Your MOU – How To Make Sure They Are Working For You Tuesday, January 23, 2024 10:00 a.m. - 11:00 a.m. Register here. • www.lcwlegal.com •

workers' compensation Employee Hurt In Bike Accident On Campus Is Limited To Workers’ Compensation. Rose Jones worked at the University of California (UC) at the Irvine campus. After work one day, Jones left her office, walked her bike to a campus bike path and began to ride home. Jones reached a trench that was cordoned off with orange posts and caution tape. Jones swerved and attempted to brake but fell off her bike and got hurt. Jones sued the UC for her injuries. The UC moved for summary judgment, claiming that Jones’s injuries occurred within the course of her employment and therefore workers’ compensation was her exclusive remedy. The trial court granted UC’s motion for summary judgment. Jones appealed. The California Court of Appeal affirmed. In order to “create a sharp line of demarcation” as to when the employee’s commute terminates and the course of employment commences, courts have adopted the “premises line rule,” which provides that the employment relationship generally commences once the employee enters the employer’s premises. The Court further explained that this rule applies when an employee is coming both to and from work. The Court held that the premises line rule applies if an employee is injured on an employer’s campus just after leaving their workstation for the day. Workers’ compensation is the employee’s exclusive remedy in this case. Jones v. Regents of University of California, 97 Cal.App.5th 502 (2023).

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January 2024

Don't Miss Our Upcoming Webinar! Creating an Effective Workplace Violence Prevention Plan

Did You Know?

Tuesday, January 30, 2024 10:00 a.m. - 11:00 a.m. 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. • Starting on January 1, 2024, a public employer has to provide information to a union about a temporary employee upon that employee’s hire only if the temporary employee was hired to perform the same or similar type of work that it performed by permanent represented employees. (Government Code Section 3507.7(b).) • In mid-December 2023, the California Labor Commissioner issued FAQ’s regarding its interpretation of what employers who frontload all California Paid Sick Leave must do to comply with the 2024 requirement for employees to receive five days – 40 hours of leave instead of three days-24 hours. The Labor Commissioner believes that the employer must either: 1) frontload the additional two days-16 hours on January 1, 2024; or 2) change the annual date for frontloading all five days- 40 hours on January 1, 2024. • The Fair Chance Act makes it generally illegal for an employer to inquire into an applicant’s criminal history, or consider that applicant’s criminal history if discovered another way, before making a conditional offer of employment.

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benefits By: Stephanie J. Lowe New Student Loan Matching Program Benefit. There’s a brand new benefit employers may establish beginning in plan years during 2024. Under the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act, employers have the option of making matching employer contributions to certain types of employer-sponsored retirement plans based on employee’s student loan repayments. This includes 457(b) and 403(b) plans. Under this new benefit, as employees pay down their student loans, their employer will provide matching contributions to their retirement plan even if the employee is not making their own retirement contributions. The underlying purpose of these new student loan matching programs is to help employees who have student loan debt and who may not have the financial means to contribute to their retirement plan when they have to prioritize paying down student loans. Before SECURE 2.0 was passed, employers started to ask the Internal Revenue Service whether they could make employer matching contributions to retirement plans for employees who are paying down their student loans as a recruitment and retention tool. SECURE 2.0 now establishes this new benefit. The key requirements for the new student loan matching programs are: • Employer matching contributions must be based on qualified student loan payments (QSLP), which are payments on a qualified higher education loan that was incurred to pay for qualified higher education expenses at an eligible education institution.

• A QSLP includes a loan to pay higher education expenses of the employee, the employee’s spouse, or the employee’s dependent. • The employee must provide certification of their student loan payments at least annually. An employer can rely on an employee’s certification. • Even if the employer typically makes matching contributions on an employee’s elective deferrals to a 457(b) or 403(b) plan throughout the year, matching contributions based on a student loan matching program are only required to be made once a year. • An employer can only make matching contributions for student loans on behalf of employees who are or would be eligible to receive matching contributions on elective deferrals. • The matching contributions must be made at the same rate as matching contributions on the employee’s own contributions. The matching contributions must also vest in the same way as the employee’s elective deferral contributions. • Matching contributions are limited to the amount of an employee’s student loan payments. • Student loan matching contributions to a 457(b) plan are also limited to the amount of the 457 plan deferral limit ($23,000 for 2024) or the employee’s compensation if less, minus any plan contributions made by the employee for the year. If your agency is interested in learning more about this new benefit, please reach out to us.

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Reminder: Flexible Spending Account Dollar Limits For 2024. The employee salary reduction contribution limit for health flexible spending accounts (health FSAs) has increased to $3,200 for 2024 (up from $3,050 from 2023). Health FSA funds are tax-free dollars that may be used to pay medical expenses not covered by other health plans. While $3,200 is the new limit set by the IRS, employers should also review the limits set by their own Section 125 cafeteria plan documents. Some cafeteria plan documents may set a lower limit, or may need to be revised if an employer would like to allow employee to make salary reduction contributions up to the IRS limit as it adjusts on an annual basis. The increase to the 2024 health FSA contribution limit also means the IRS will permit employees to carry over up to $640 of unused health FSA funds at the end of a 2024 plan year to the following 2025 plan year. Employers should verify whether they have adopted a carryover option for their health FSA under their Section 125 cafeteria plan, and if so, should check the maximum amount that may be carried over per the terms of their cafeteria plan document. The maximum amount of DCAP benefits does not change year-to-year and remains at $5,000 (or $2,500 if married filing separately) for 2024.

January 2024

corner otherwise covered by health insurance but it does not provide health insurance coverage on its own. It is not going to meet the ACA’s requirements for providing minimum essential coverage. Further, some public agencies offer employees cash in lieu for opting out of employer-sponsored group health insurance. If an agency offers cash in lieu under the terms of an eligible opt out arrangement (which is recommended), then the employee will need to attest that they have alternative minimum essential health coverage for themselves and their entire tax family in order to receive the cash in lieu. Coverage that is not health insurance, such as a medical sharing cost plan, is not minimum essential coverage and will not satisfy the requirements of the eligible opt out arrangement.

LCW BENEFITS BEST PRACTICES TIMELINE Each month, LCW presents a monthly benefits timeline of best practices. This timeline is intended to apply to agencies that are applicable large employers for Affordable Care Act purposes. January • Prepare for the March 1, 2024 deadline to furnish Form 1095-C to employees.

ACA Compliance Question:

• Prepare for the April 1, 2024 deadline to e-file Forms 1094-C and 1095-C.

Question: If an employee enrolls in a private medical cost sharing plan, will it count as alternative health insurance that meets the Affordable Care Act’s requirements?

• If agency would like an automatic 30-day extension to file Forms 1094-C and 1095-C, agency must submit Form 8809 on or before the due date of the returns.

Answer: No. A medical cost sharing plan helps individuals pay for their medical costs that are not

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MA E D N

G N I N I TRA

Need To Fulfill Your Ethics Requirement? Check Out Our On Demand Class! AB 1234: Ethics in Public Service Government Code Sections 53234 et seq., codified in 2005 as AB 1234, mandate that ethics training be provided by any local agency that pays any type of compensation, salary, or stipend to, or provides reimbursement for the expenses of, a member of a legislative body. Each member of a legislative body, each elected official, and any employees who may be designated by their agency must receive the training. Any individual holding office must retake the training every two years. This interactive training covers all topics the Government Code requires, including conflicts of interest, gift limitations, honoraria prohibitions, conduct upon leaving office, and government transparency laws. Who Should Receive This Training? Members of a Legislative Body, Elected Officials, and any employees designated by their employer.

For more information, visit our website here! 18

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

Question: We are conducting a workplace investigation. A witness in the investigation wants to meet with their union representative prior to her investigative interview to discuss the investigation. Can our investigator ask the witness what she discussed with her union representative?

Answer: While an employee’s pre-interview conversation with their labor representative is not privileged under California law (American Airlines, Inc. v. Superior Court (2003) 114 Cal.App.4th 881), PERB has repeatedly found that an employer’s inquiries into conversations between employees and their union representatives can interfere with protected union activities. (See e.g., City of Santa Maria (2020) PERB Decision No. 236-M.) To avoid interfering with protected union activities, the investigator should only ask questions that: are narrowly tailored to the allegations under investigation; and seek information regarding or from those witnesses who have personal knowledge of the facts relevant to the allegations.

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January 2024

Consortium Call Of The Month

On The Blog The First Amendment and Political Expression in the Government Workplace – Election Year 2024 By: David Urban With the approaching election year, we can anticipate a high level of political activity from the public to support their views of what should be the country’s future. No doubt, at times this political activity will encroach on the workplace, and for public agency employers, this can create unique problems. State statutes and agency rules limit the political activities of government employees, but at the same time those employees have free speech rights under the U.S. Constitution’s First Amendment, and can sometimes successfully assert those rights against their employer if the employer attempts to limit their speech. As agencies look forward to 2024, advance planning will help maintain an orderly, fair, well-functioning, and legally compliant operation. This post describes various standards for agency management to keep in mind. Employee Free Speech on Social Media, at Events and Rallies, and in the Office Under First Amendment principles, a public employee cannot be disciplined for their speech (1) on matters of “public concern” (2) that is outside the scope of the employee’s “official duties,” and (3) that prevails in a balancing test which weighs disruption of a government agency’s operations against the importance of the speech interest at issue. As Courts have phrased it, the balancing is “whether the [state]’s legitimate administrative interests outweigh the employee’s First Amendment rights.” Suppose a city employee posts publicly on social media that he supports one side in the upcoming election, and harshly denigrates anyone who supports the other side. Then suppose coworkers complain, arguing that they have needlessly suffered an insult from the employee and this has inhibited their productivity. The answer to the existence of First Amendment protection will depend on application of the three elements described above. First, the speech will be on a matter of “public concern” since it relates to an issue, the Presidential election, of great importance to the public at large. Second, since the employee posted during off-work time and without any connection to job duties, their social media speech will pass the “official duties” hurdle of the First Amendment protection test, and proceed to the third element. In that element, the balancing test, Courts would look to whether the speech has disrupted the operations of the agency – would simply offending coworkers be enough? Some cases involving politics do have sufficiently egregious facts and level of acrimony that the disruption test will favor the employer, and result in no constitutional free speech protection for the employee’s statements. On the other hand, what about a reference librarian at a county library who feels it is their duty to mention their own political views to patrons any time they answer a reference question? Answering reference questions is in the librarian’s “official duties,” and no First Amendment protection should exist for them in their speech in carrying out this duty (at least not as to their government employer). The same answers would hold for speech, political or otherwise, rendered pursuant to any employee’s “official duties,” be they a police officer, building inspector, firefighter, or other type of worker. (There is an exception to this “official duties” rule for certain work by professors, as described in LCW’s prior post.)

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January 2024

Political Activities on Work Premises or During Work Time Under California law, public agencies can prohibit employees from engaging in “political activities” at the actual workplace, even including political activities during personal time at work. Government Code Section 3207 provides: a local agency “by establishing rules and regulations, may prohibit or otherwise restrict the following: (a) Officers and employees engaging in political activity during working hours” and “(b) Political activities on the premises of the local agency.” The Government Code provides that public agencies should not place restrictions beyond these, however. Section 3203 provides: “no restriction shall be placed on the political activities of any officer or employee of a state or local agency.” Excessive Workplace Discussions About Politics What if employees do not actively “electioneer” at the office, but do distract themselves with lengthy discussion and debates about the election. Public employers should and generally do have rules that prohibit using excessive personal time during work hours. There is nothing wrong with invoking these rules in this circumstance, as long as agencies apply the rules without showing favoritism to one side in a debate or issue. The First Amendment generally authorizes rules at an agency’s office that may affect speech as long as the rules qualify as “reasonable” and “viewpoint-neutral.” Political Activities in Uniform California statutes prevent public employees from being in uniform when engaging in political activities. Government Code Section 3206 provides that “[n]o officer or employee of a local agency shall participate in political activities of any kind while in uniform.” As to public safety officers and firefighters in particular, California law provides that their employers cannot prohibit them from engaging in “political activity,” except when they are on duty or when they are in uniform. (Gov. Code, Section 3302, subd. (a), 3252, subd. (a).) Coercing or Controlling Employee Political Activities Next, public agencies should never appear to be trying to control or coerce their employees into voting a certain way or holding particular political views. Labor Code Section 1102 provides: “No employer shall coerce or influence or attempt to coerce or influence his employees through or by means of threat of discharge or loss of employment to adopt or follow or refrain from adopting or following any particular course or line of political action or political activity.” Labor Code Section 1101 prevents employers from promulgating rules that have the same effect. It provides: “No employer shall make, adopt, or enforce any rule, regulation, or policy: (a) Forbidding or preventing employees from engaging or participating in politics...” or “(b) Controlling or directing, or tending to control or direct the political activities or affiliations of employees.” Public employers have strong arguments that these particular statutes do not apply to them, given current case law interpreting the Labor Code. Nevertheless, the safest course is altogether to avoid any control or coercion of the type prohibited by these statutes. Employee Use of Any Agency Resources for Partisan Politics What if an employee attempts to use copy machines, office supplies, office e-mail, office computer systems, or other resources for political activity related to an election, and actually presents a good reason why this use advances a bona fide purpose of the agency? They could claim educational benefit or public outreach. California law prohibits this use. Merely by way of example, the California Supreme Court in Stanson v. Mott in 1976, held squarely that agency use of resources to support one side in an election (in that case to support passage of a bond measure) violates state law. Enacted in 2001, Government Code Section 54964 writes into law the Stanson holding. In addition, Government Code Section 8314 provides: “It is unlawful for any elected state or local officer, including any state or local appointee, employee, or consultant, to use or permit others to use public resources for a campaign activity...” Another example, for California public educational institutions in particular, is Education Code Section 7054, which provides: “No school district or community college district funds, services, supplies, or equipment shall be used for the purpose of urging the support or defeat of any ballot measure or candidate, including, but not limited to, any candidate for election to the governing board of the district.” The statute imposes criminal penalties for a violation. (There are exceptions described in Section 7054.1, however, for allowing board members and administrators to appear before citizen groups and provide reasons why the board called a bond election and allowing responses to inquiries from the citizen groups.) Conclusion Questions regarding free speech and political activities of agency employees can present complex legal issues, and in most situations, it is prudent to seek advice of counsel.

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Liebert Cassidy Whitmore