Client Update: March 2023

Client Update

firm victories

LCW Partner Morin Jacob And Associate Attorney Nathan Jackson Win Dismissal Of Former Fire Chief’s Retaliation Claim.

An LCW team led by Partner Morin Jacob and Associate Nathan Jackson won the dismissal of a lawsuit against a fire district client. In October 2018, a fire district hired its interim fire chief as its fire chief under a two-year employment contract. During this time, the fire district was investigating misconduct allegedly committed by the previous fire chief. The new fire chief assisted with numerous investigations into issues regarding his predecessor.

At some point during his employment, allegations surfaced that the fire chief discriminated against a fire district employee based on age. The fire district then investigated the fire chief. On July 27, 2020, the district informed the chief his employment contract as fire chief would not be renewed and would expire on October 3, 2020.

On November 30, 2020, the now-former fire chief’s attorney sent a demand letter to the fire district’s counsel: accusing the district’s board of retaliation by not renewing the fire chief’s employment contract; demanding three years of salary as damages; and asking the board to rescind its decision to allow the employment contract to expire. The former chief filed a complaint alleging retaliation on February 7, 2021.

On September 2, 2021, the fire district’s attorneys informed the former chief’s attorneys of the district’s intention to file a motion for judgment on the pleadings on the grounds that the chief had not filed a timely governmental claim as required by the Governmental

Claims Act (GCA). On September 9, the former chief filed a petition to be relieved of the GCA requirements, arguing that his attorney’s settlement demand letter substantially complied with them.

While his petition to be relieved from the GCA was pending, the former chief amended his retaliation lawsuit to allege that his November 30 demand letter substantially complied with the GCA. The trial court denied the chief’s petition, finding that the settlement demand letter did not substantially comply. The district once again filed a motion to dispose of the complaint for failure to comply with the GCA. This time, the trial court granted the motion without offering the former fire chief an option to amend. The chief appealed to the California Court of Appeal.

The Court of Appeal upheld the trial court’s decision. First, the Court noted that case law has consistently held that: 1) a document must be submitted to the specific address and/or individual that the governmental agency has specified in its claims procedures to be accepted as a claim; and 2) communications addressing the potential settlement of a claim do not meet the requirements of the GCA. The Court found that the former chief’s November 30 demand letter fell under this “settlement” umbrella, and did not meet the GCA requirements. In addition, the chief did not provide the letter to the appropriate individuals at the designated address. Thus, the letter was not a valid claim.

The Court also noted that former chief’s petition to be relieved of the requirements of the GCA simply repeated that the November 30 demand letter substantially complied with the GCA. The Court found the chief failed to offer any evidence why he should be excused to file a late claim. Therefore, the case was dismissed.

LCW Partner Geoff Sheldon, Senior Counsel Dave Urban, And Associate Daniel Seitz Won The Early Dismissal Of A Constitutional Political Speech Lawsuit.

An LCW team led by Partner Geoff Sheldon, Senior Counsel Dave Urban, and Associate Daniel Seitz won the dismissal of a lawsuit against the County of Los Angeles. 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 litigate the case. Another option is to file a motion to dismiss, 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 motion, the court usually gives the person suing an opportunity to try again to file a successful lawsuit.

The LCW team took the more challenging option and won. Here, County employee Michael Craine joined Local 119 of the American Federation Of State, County, And Municipal Employees Council in 1999. Craine later decided to withdraw from the union. He sent a letter to Local 119 on January 19, 2022. Craine's letter withdrew his authorization for the union to deduct his dues from his paycheck.

After Local 119 refused to process his request until a later time, Craine filed a lawsuit. Craine alleged that taking the dues deductions without his permission violated his constitutional right to decide whether to fund political speech. Upon receiving the lawsuit, Local 119 cancelled Craine’s dues deduction and mailed Craine a check reimbursing him for dues deducted after January 19, 2019, along with interest on that amount.

Geoff, Dave, and Daniel filed a motion to dismiss alleging that Craine’s lawsuit was moot. To proceed in federal court, Craine needed to prove: he was injured because of another’s conduct, there was a causal connection between his injury and the conduct, and his injury could be redressed by a court.

Here, Local 119 stopped its dues deductions once Craine sued, refunded the dues it deducted, and provided him interest on the dues deductions. As a result, Craine had no ongoing injury and a moot lawsuit. Once the LCW legal team learned these facts they immediately moved for dismissal. The judge then granted the dismissal without leave to amend. This helped the County avoid time-consuming and expensive discovery and trial.

LCW Partner Suzanne Solomon And Associate Abigail Clark Convince The Ninth Circuit That A Probationary Police Officer’s Release Was Lawful.

An LCW team led by Partner Suzanne Solomon and Associate Abigail Clark won an appeal in the U.S. Court of Appeals for the Ninth Circuit on behalf of a city client.

The case arose after a police officer was released on probation. A public outcry had occurred in the wake of the discovery that the officer had been charged with excessive use of force in his prior employment. The police officer sued the city, alleging that his release was an arbitrary and capricious government action that violated his substantive due process rights.

To prevail on a substantive due process claim, the police officer had to show that his government employer took specific action, such as a governmental “blacklist”, that effectively excluded him from his chosen profession of law enforcement. The Ninth Circuit agreed with the District Court that the officer had failed to allege that: he had been blacklisted from the police force; and the city was otherwise responsible for the public outcry over his hiring. The Ninth Circuit affirmed the district court’s denial of leave to amend, concluding that the District Court had acted within its discretion in determining that leave to amend would be futile.

LCW Partner James Oldendorph And Associates Aleena Hashmi And Lee Heard Win Dismissal Of Discrimination And Failure To Accommodate Lawsuit.

An LCW team led by Partner James Oldendorph and Associates Aleena Hashmi and Lee Heard won the dismissal of a lawsuit against a city client. A fire inspector had knee replacement surgery in November 2016. On April 21, 2017, he was cleared to work with no work restrictions. His city employer scheduled a Functional Capacity Evaluation (FCE) to determine whether he could safely work.

In April 2017, the inspector returned to light duty at his same salary, seniority, and benefits. In May 2017, the FCE confirmed the inspector did not need any work

restrictions or accommodations. The inspector’s treating physician concurred with the FCE.

In June 2017, the inspector returned to work without any restrictions, and signed a Full Duty Work agreement confirming he needed no accommodations, and would tell his supervisor immediately if he: suspected he might need accommodations in the future; or believed any job activity was unsafe or painful; or needed additional leave.

In October 2021, the inspector sued the city alleging age and disability discrimination and failure to accommodate. The inspector alleged that his medical leave was extended in 2017 because no light duty work was available while he was awaiting the results of the FCE, and that his workload doubled when he returned. He also alleged that throughout his tenure his coworkers repeatedly asked him when he was going to retire. The inspector claimed these actions led to his constructive discharge.

The Court granted the city’s Motion for Summary Judgment dismissing all of the inspector’s claims. The Court found no substantial evidence of any discriminatory animus or any adverse employment actions.

First, the Court found that the inspector’s failure to accommodate claim was time-barred by the three-year statute of limitations. The Court also rejected the inspector’s claims that the City failed to engage in the interactive process and failed to accommodate him by reducing his double workload. The inspector admitted that due to technical computer issues he was not expected to, and did not actually complete, a double workload. Nor did the inspector ever complain about it. The inspector also failed to identify anyone to whom he made accommodation requests, or that he ever asked his supervisor for an accommodation as required by his Full Duty Work agreement.

Second, the Court noted that the co-worker comments and questions about retirement age are commonplace. The inspector admitted there was a similar dynamic at the City, and that his coworkers frequently discussed how retirement was a perk. The Court further noted that none of the alleged comments amounted to adverse actions in and of themselves, nor did they lead to or relate to any City-imposed adverse employment actions.

Finally, the inspector also failed to prove that his working conditions were so intolerable, aggravated, or severe to force a reasonable person to retire.

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.

Wage&Hour

Highly Compensated Employee Gets FLSA Overtime Because He Was Not Paid On A Salary Basis.

From 2014 to 2017 Michael Hewitt worked for Helix Energy Solutions Group on an offshore oil rig. Hewitt typically worked 12 hours a day, 7 days a week for 28 days. He would then have 28 days off. Hewitt oversaw various aspects of the rig’s operations and supervised 12-14 workers.

Hewitt’s pay consisted of his daily rate (about $1,000 a day) multiplied by the number of days he worked. So if Hewitt worked only one day in the work week, he received about $1,000 a week. If Hewitt worked seven days in the work week, he received about $7,000 that week. He was not paid overtime. This pay arrangement computed to over $200,000 a year.

Hewitt sued Helix seeking overtime pay under the Fair Labor Standards Act (FLSA). The issue was whether Helix had paid Hewitt on a salary basis. If not, Hewitt would be entitled to overtime pay.

The FLSA guarantees that covered employees receive overtime pay

when they work more than 40 hours a week. But an employee is excluded from overtime pay requirements, if he works “in a bona fide executive, administrative, or professional capacity,” as defined in the FLSA regulations. The regulations allow an employer to exclude an employee from overtime pay if the employee: 1) is paid on a “salary basis”; 2) is paid at least $455 a week (that minimum amount is now $684 a week); and 3) performs high-level job duties that fall into at least one of several regulatory categories.

Still another way an employer can exclude an employee from overtime is under another FLSA regulation regarding highly-compensated employees (HCE) who make more than $100,000 a year. Under the HCE regulation, there is a higher income threshold and a shortened list of required duties, but the salary basis rule remains the same.

The FLSA regulations give an employer two general options for paying an employee on a “salary basis”: 1) pay the employee a predetermined amount of pay every work week, even if the employee only works part of that work week (29 CFR Section 541.602(a)); or 2) pay the employee a hourly, daily or shift rate that is guaranteed to be no

less than $455 (now $684) a week regardless of the number of hours worked, and the guaranteed amount must be roughly equivalent to the usual earnings for the employee’s normally-scheduled work week. (29 CFR Section 541.604(b)).

Justice Kagan explained that these FLSA salary test regulations “create a compensation system functioning much like a true salary—a steady stream of pay, which the employer cannot much vary and the employee may thus rely upon week after week.”

Helix acknowledged that Hewitt’s compensation did not meet the second option under the FLSA regulation 29 CFR Section 541.604(b). Thus, the Court focused on whether Helix paid Hewitt on a salary basis under the first option described in the FLSA regulation at 29 CFR Section 541.602(a).)

The Court decided Hewitt was not paid on a salary basis. This is because the amount of his pay was subject to reduction because of variations in the quantity of work he performed each week. The Court noted that a daily-rate worker’s weekly pay is always a function of how many days the worker has labored; as a result, the weekly pay is not a predetermined amount. A salaried employee,

conversely, receives at least his or her same salary for any week in which any amount of work is performed. Hewitt, however, would only receive his salary pro-rated to how many days in the pay period he worked. Hewitt, therefore, was a non-exempt employee entitled to overtime compensation.

Helix Energy Solutions Group, Inc. v. Hewitt (U.S., Feb. 22, 2023, No. 21-984) 2023 WL 2144441.

Note:

This case illustrates the high stakes involved in FLSA overtime-exemption cases. This employer appeared to believe that paying a high wage would mean it was not required to pay overtime pay. This employer’s mistaken belief resulted in a back pay award of thousands of dollars.

Public Safety Seminars

Liebert Cassidy Whitmore's public safety experts understand the unique challenges, both legal and societal, that law enforcement agencies face, and we use that understanding when handling or advising on the entire scope of personnel issues that law enforcement executives will encounter, from recruiting and hiring through separation and retirement of both sworn and civilian personnel.  LCW attorneys not only provide advice, counseling and representation services, but we also train agency personnel on a host of subjects. See below for all of our upcoming public safety seminars!

The New Landscape: 2023 Peace Officer Employment

Central California: April 21, 2023 | Fresno, CA

Southern California: September 6, 2023 | Buena Park, CA

Best Practices for Conducting Fair and Legally Compliant Public Safety Administrative Investigations

Northern California: May 23 & 24, 2023 | San Ramon, CA

Southern California: October 25 & 26, 2023 | Buena Park, CA

Investigations and Discipline in Critical Incidents

Southern California: August 2, 2023 | Buena Park, CA

Visit

military Leave

Ninth Circuit Says A Jury Should Decide Whether Non-Military Leaves Are Comparable To Military Leaves Under USERRA.

The Uniformed Services Employment and Reemployment Act (USERRA) says at section 4316(b)(1), that a person absent from employment due to service in the uniformed services shall be “entitled to such other rights and benefits not determined by seniority as are generally provided by the employer” to other employees on non-military furloughs/ leaves of absence.

Casey Clarkson, a commercial airline pilot and military reservist, sued his employer for violating the USERRA by not paying pilots who took shortterm military leave (less than 30 days), while paying pilots who took shortterm jury duty, bereavement leave, or sick leave. Clarkson’s employer, Alaska and Horizon Air, moved for summary judgement, claiming that military leave is not comparable to non-military leave “as a matter of law. The Airlines reached this conclusion by considering military leaves of all lengths. Clarkson focused his analysis on only short-term military leaves. The district court granted summary judgement for the Airlines. Clarkson timely appealed.

The Ninth Circuit Court of Appeals first found that the district court erred by comparing all military leaves, instead of just the short-term military leaves at issue in this case. The Ninth Circuit noted that the USERRA regulation at 20 CFR Section 1002.150 lists three comparability factors: duration of leave; purpose of leave; and ability of employee to choose when to take the leave (aka control). The Ninth Circuit stated that the duration of the leave was the most important factor. It reasoned it is entirely possible that a two-day military leave may be comparable to a two-day funeral leave.

Next, the Ninth Circuit found that the issue of comparability of military and non-military leaves was a question of fact for the jury, particularly because the parties had factual disputes relating to all three comparability factors. Regarding the duration factor, there was contradictory statistical evidence due to Clarkson pulling statistics based on short-term military leave alone, while the Airlines looked at all military leaves when compiling their data. Regarding the purpose factor, each side also reached differing conclusions leaving open factual disputes. The Airlines argued that the purpose of military leave is to allow employees to pursue parallel careers. By contrast, Clarkson argued the primary purpose of military leave is to perform a civic duty and public service. Finally, regarding the factor

of control, there was again conflicting testimony on the flexibility pilots had to resolve scheduling conflicts. The Ninth Circuit denied the Airlines’ motion and concluded that the factual disputes were best left to the jury, and not for the court to decide.

Clarkson v. Alaska Airlines, Inc.

Note:

The USERRA only requires an employer to provide a service member equal treatment – not better treatment. If a service member requests military leave, be sure to compare non-military leaves of similar duration to determine whether to pay the service member for the leave. In addition, be sure to carefully analyze California’s military leave statutes, which also require the employer to pay the service member on leave in some instances.

Daily Journal recognizes LCW Case, Stebbins v. California Public Utilities Commission, as a 2022 Top Defense Verdict!

We are pleased to announce that DailyJournal has recognized Stebbinsv.California PublicUtilitiesCommission , won by Partner Suzanne Solomon, Senior Counsel Dana L. Burch, and Attorney Nathan T. Jackson, as a 2022 Top Defense Verdict.

With regard to this win, Suzanne stated, “the team worked tirelessly to obtain this favorable verdict for CPUC. We are thrilled with this result and look forward to continuing our professional relationship with CPUC.”

LCW’s Litigation Practice Group prides itself on being entrusted with our clients’ most high stakes cases. Our litigators draw from a deep well of institutional knowledge and experience trying cases for our clients. LCW’s Litigation Practice team utilizes specialized internal resources including a dedicated Litigation Manager, in house Litigation Support Specialists, and a bevy of self-published resources from our own attorney experts on our client’s employment issues. LCW’s litigators primarily serve defense counsel retained by our clients at the outset of a litigation where we excel at marshalling the evidence, developing defenses, and shepherding the matter through verdict or decision. But clients also turn to LCW for support step in as lead trial counsel as cases approach trial. In these instances, LCW is able to quickly and efficiently pick up a case, work with all stakeholders to develop a winning trial strategy, and then seamlessly step in as lead trial counsel. LCW’s litigation practice also excels at providing advice and counsel in a general counsel-type capacity on litigation matters being handled by insurance-defense counsel. LCW is proud of the variety of ways it is able to provide litigation services to its clients from prelitigation through trial.

public entity immunity

LVN’s FEHA Claims Were Barred By Government Code Section 844.6 Immunity.

Jennifer Bitner and Evelina Herrera were employed as licensed vocational nurses by the California Department of Corrections and Rehabilitation (CDCR). Their duties included one-on-one suicide watch of inmates. Bitner and Herrera contended that male inmates sexually harassed them, and that CDCR failed to appropriately prevent or correct this behavior. Based on these allegations, the LVN’s filed a lawsuit for gender-based hostile work environment and failure to prevent harassment under the Fair Employment and Housing Act (FEHA).

Government Code Section 844.6 grants immunity to public entities that run prisons, such as CDCR. This immunity states that “a public entity is not liable for … [a]n injury proximately caused by any prisoner.” By asserting this immunity as an affirmative defense, CDCR was saying even if Bitner and Herrera’s allegations were accurate, CDCR could not be held liable because of this immunity. CDCR moved for summary judgment using this theory.

The LVN’s countered that the immunity did not apply to FEHA claims. They also argued that their injuries were not proximately caused by the prisoners and therefore the Section 844.6 immunity was not applicable. The superior court disagreed with both of these arguments and granted summary judgment in favor of CDCR. The LVN’s appealed to the California Court of Appeal.

The Court of Appeal analyzed the alleged exception to Section 844.6 immunity first, explaining that the law outlined a variety of exceptions to the rule of immunity, but that FEHA was not one of the exceptions.

The Court of Appeal then analyzed the second claim –that Section 844.6 was inapplicable to their case because the sexual harassment was not proximately caused by the prisoners. Instead, the LVN’s argued they were injured because CDCR failed to intervene on their behalf. The Court of Appeal noted this argument was farfetched because an injury can have more than one proximate cause. Here, the inmates’ harassing conduct was clearly a proximate cause of the injury of sexual harassment. The Court of Appeal held that summary judgment on this issue was proper.

Bitner v. Department of Corrections and Rehabilitation (2023) 87 Cal.App.5th 1048.

Note:

This case shows the broad scope of the Government Code Section 844.6 immunity. The California Supreme Court has also applied the Government Code Section 820.2 discretionary immunity to bar a superintendent’s FEHA claims against school board members who voted to terminate the superintendent’s contract. Caldwell v. Montoya, 10 Cal.4th 972 (1985).

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:

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

18 &

2023

The Public Employment Relations Board (PERB) Academy

INTERESTED?

Visit our website: www.lcwlegal.com/lrcp

California Prison System Ordered To Remediate ADA Violations As To Prisoners With Disabilities.

In 1994, a class of California prisoners known as the “Armstrong class” sued the California Department of Corrections and Rehabilitation (CDCR) and the Governor alleging widespread violations of the Americans with Disabilities Act (ADA) and the Rehabilitation Act (RA). They claimed the prison staff discriminated against them based on disability, and failed to offer them reasonable accommodations. The district court held that the correctional officers’ treatment of disabled prisoners violated the ADA/ RA and ordered the CDCR to produce a plan describing how it would remedy the violations.

In 2020, the Armstrong class returned to court alleging pervasive violations of class members’ ADA rights. At the R.J. Donovan Correctional Facility (RJD), for example, auditors documented instances of correctional officers “forcefully removing inmates from wheelchairs” and assaulting inmates who were secured with restraint equipment.

A “strike team” went to RJD to investigate the auditors’ reports. The strike team found 48 of 102 inmates interviewed “provided specific, actionable information, relevant to the foundational concerns”. The inmates stated the officers targeted disabled inmates for abuse and retaliated against those who reported it. In one “illustrative example” a mobility-impaired inmate requested not to be handcuffed behind his back because he used a cane and a walker. The RJD officer slammed the individual to the ground where he hit his head and went unconscious for several seconds. When he came to, the officer kneed his throat and then kneed his face. The Court noted numerous accounts of mobility-impaired class members being thrown to the ground after asking for handcuffing accommodations. Officers also denied requests for wheelchair pushers, and

would not allow showers after incontinence incidents. One strike-team member noted, “I have never heard accusations like these in all my years…This is a very serious situation and needs immediate attention. If there is any means of installing cameras immediately, I would strongly suggest it…”

In addition, class members recounted several alarming incidents of retaliation. In one incident, an officer refused to help a disabled individual lift a heavy package of mail. The individual replied he intended to file a complaint, and in response, the officer peppersprayed him in the face, hit him in the face with the canister, and then kicked him. In another incident, an officer threatened to file a fabricated rules-violation report against a class member if he reported the officer’s earlier failure to accommodate him. Many reported they were afraid to request accommodations due to the threat of retaliation.

The Armstrong class requested the district court to impose further remedial measures at RJD based on the State’s failure to investigate and discipline staff in response to these allegations of misconduct. The court granted the request in large part, finding the inmate’s accounts credible because of the consistency among them. Moreover, the CDCR failed to submit any counter evidence.

The Armstrong class members housed in five other California State prisons also submitted declarations regarding officer misconduct. Although the prison did submit counter evidence to some of those claims, the court still sided with the Armstrong class. The court found that the root cause of these ongoing violations was the ineffectiveness of the CDCR’s system for investigating and disciplining staff, leading to a “staff culture” that condones abuse and retaliation against disabled inmates. The district court concluded additional remedial measures were necessary to prevent further ADA violations. The court ordered CDCR to draft new remedial plans, which had to include, among other things, installing fixed surveillance cameras and bodyworn cameras, adding more staff training, implementing anti-retaliation mechanisms, and reforming the staff complaint,

investigation, and discipline processes. The CDCR appealed. It alleged, that the orders did not comport with the Prison Litigation Reform Act (PLRA).

The Ninth Circuit Court of Appeals decided that the record supported the district court’s decision. The PLRA says that a court “shall not grant or approve any prospective relief unless the court finds that such relief is narrowly drawn, extends no further than necessary to correct the violation of the Federal right, and is the least intrusive means necessary to correct the violation of the Federal right.” Here, the district court not only found ongoing violations, but that a common source of those violations t was insufficient accountability for officers’ misconduct. The overwhelming and consistent declarations by aggrieved class members, testimony from experts, the auditor’s memo, the strike-team report, a report from the CA Office of the Inspector General, and CDCR’s own data showed systemic failures of accountability. The Ninth Circuit agreed, opining that a lack of accountability creates a vicious cycle that escalates into a prison-wide culture of abuse.

Armstrong v. Newsom (2023 S.O.S. 20-16921).

Note:

This case illustrates that promptly investigating and addressing misconduct through appropriate discipline is essential to the lawful operation of law enforcement and an appropriate staff culture.

Did You Know?

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

• If labor negotiations covered by the MMBA reach an impasse and applicable mediation and fact finding procedures have been requested and completed in good faith, a public agency may choose to implement its last, best, and final offer after a public hearing, but no earlier than 15 days after the release of the fact finding report. (Gov. Code Section 3505.7.)

• Under the MMBA, layoff decisions are not a subject within the scope of bargaining. However, the impacts and effects of a layoff (e.g., timing and notice) are within the scope of bargaining.

• Under the ADA and FEHA, an employer is required to initiate the reasonable accommodation interactive process when the employer: 1) knows that the employee has a disability; 2) knows, or has reason to know, that the employee is experiencing workplace problems because of the disability; or 3) knows, or has reason to know, that the disability prevents the employee from requesting a reasonable accommodation.

benefits Corner

The ABC Test Does Not Apply To Expense Reimbursement Claims.

By: Stephanie J. Lowe

Fred Bowerman was a vendor for Field Asset Services, Inc. (FAS), which was a business engaged in preforeclosure property preservation. Under Bowerman’s contract with FAS, he was required to cover his own business expenses. Bowerman filed a lawsuit on behalf of himself and other class members alleging FAS willfully misclassified them as independent contractors rather than employees. One of his claims was the misclassification resulted in FAS’s failure to reimburse him for business expenses.

In March 2017, the district court granted partial summary judgment in favor of Bowerman by finding that the class members had been misclassified as independent contractors and FAS was liable for failing to pay their business expenses. The district court relied on the common law test for distinguishing between employees and independent contractors from S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (Borello test). The Borello test primarily considers whether the hiring entity has the right to control the manner and means of the work and then assesses a number of secondary factors about the service relationship

After FAS appealed the district court’s decision, the California Supreme Court issued a decision in Dynamex Operations West, Inc. v. Superior Court, 4 Cal.5th 903 in 2018, which established the ABC test for distinguishing between employees and independent contractors. The ABC test presumes a worker is an employee and only finds that a worker is an independent contractor if: (A) the worker is free from the control and direction of the hirer; (B) the worker performs work that is outside the usual course of the hiring entity’s business; and (C) the

worker is customarily engaged in an independently established trade, occupation, or business.

The Ninth Circuit held FAS’s appeal in abeyance pending Dynamex. On appeal, FAS argued that the Borello test, and not the ABC test, applied to Bowerman’s reimbursement claim. The Ninth Circuit agreed with FAS. Bowerman’s expense reimbursement claims were based on Labor Code section 2802, which requires employers to indemnify (or reimburse) employees for all necessary expenses incurred in the discharge of duties.

The Ninth Circuit held that Dynamex only applied the ABC test to wage order claims. Since Bowerman’s expense reimbursement claim was rooted in Labor Code Section 2802 and not a wage order, the ABC test did not apply to determine whether class members were employees for purposes of determining whether they were entitled to business expenses reimbursements. Thus, the Borello common law test, and not the ABC test, applies to the expense reimbursement claims. The Ninth Circuit further assessed that there was evidence of both an independent contractor and employee relationship under the Borello test and reversed the district court’s decision that class members had been misclassified.

Bowerman v. Field Asset Services, Inc. (9th Cir. 2022) 39 F.4th 652, amended February 14, 2023.

NOTE:

After the Dynamex case, the Labor Code was amended to apply the ABC test beyond the wage orders, although not to expense reimbursement claims. The ABC test applies to employment status for Workers’ Compensation coverage and Unemployment Insurance coverage.

Agencies Should Maintain Records of ACA Filings

With the March 31st deadline for electronically filing Forms 1094-C and 1095-C quickly approaching, agencies should maintain a file of records after

completing the filings. Keeping a record of the filings will serve to defend the agency in the event the IRS charges the agency with a penalty under for failing to furnish and/or file forms under Internal Revenue Code Sections 6721 and 6722. Employers should retain the following records:

(1) Documentation proving the employer furnished (handed out or mailed) Forms 1095-C to current and former full-time employees by the March 2 deadline.

(2) A copy of all electronic records (Forms 1094-C and 1095-C) within each submission, along with the Receipt ID for each transmission.

(3) A document showing the transmission status when the IRS completes processing. The transmission status should state one of the following: Accepted, Accepted With Errors, Partially Accepted, or Rejected.

(4) If the transmission status is anything but “Accepted,” maintain the Error Data File. The Error Data File contains a detailed list of errors, which are critical to understand for making corrections. Employers should troubleshoot the error and refile the forms without error as soon as possible.

Employers who use a third-party transmitter to file documents should obtain these same records in case the third-party transmitter goes out of business or otherwise becomes unavailable to file corrections for the employer. See IRS Publication 5165 for more information.

ACA Compliance Question: Cash in Lieu

Did you know that cash in lieu of health insurance can affect whether your agency offers affordable minimum essential coverage? Cash in lieu is added to the employee’s required contribution for purposes of calculating affordability. The one exception is where cash in lieu is conditioned on an “eligible opt-out arrangement.” To learn more about what constitutes an “eligible opt-out arrangement,” reach out to us.

BENEFITS BEST PRACTICES TIMELINE

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

March

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

• File Forms 1094-C and 1095-C by March 31, 2023 if filing electronically (file earlier on February 28, 2023 if filing on paper). Ensure the IRS accepts the filing.

• If agency administers the maximum grace period for health FSAs or DCAPs, the period ends March 15 for plan years that ended December 31, 2022.

April

• If the IRS rejects the Forms 1094-C or 1095-C filing, immediately troubleshoot and correct the error and refile.

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

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.

Question:

An employee recently asked if she could take California Family Rights Act leave to care for her friend who has a serious health condition. Is this allowed?

Answer:

Yes, effective January 1, 2023, employees may use leave under the CFRA to provide care to a “designated person” with a serious health or medical condition. The CFRA defines a “designated person” to mean “any individual related by blood or whose association with the employee is the equivalent of a family relationship.” (Gov. Code Section 12945.2(b)(2).) An employer may limit an employee to one designated person per 12-month period for family care and medical leave.

On The Blog

California Supreme Court To Decide Whether Whistleblower Protections Apply When The Employer Already Knows About The Violation

By: Jennifer Puza

The California Supreme Court has agreed to address whether the whistleblower statute, Labor Code section 1102.5, subdivision (b), applies to and protects from retaliation, an employee who discloses violations of law when that information is already known to the governing agency or person of authority at the employer. This question stems from the case People ex rel. Garcia-Brower v. Kolla’s Inc.

People ex rel. Garcia-Brower v. Kolla’s Inc.

In this case, the employee worked as a bartender at a night club. The employee told the owner of the night club that she had not been paid wages for her previous three shifts. The employee claimed the owner got upset after hearing her complaint, and he threatened to report her to immigration authorities, terminated her employment that same day, and warned her to never return to the establishment.

After being terminated, the former employee filed a retaliation complaint with the Division of Labor Standards Enforcement (DLSE). The DLSE conducted an investigation and the night club owner acknowledged that the former employee had complained to him about unpaid wages. The DLSE determined that the employer violated the law and ordered the employer to pay the former employee lost wages among other things. The Labor Commissioner then filed an enforcement action against the owners of the business, including a claim under Labor Code section 1102.5.

The trial court determined, however, that the Labor Commissioner had not stated a claim under section 1102.5. The trial court found that there could be no violation of the statute where the complainant had not approached a government agency, here the DLSE, about the employer’s conduct until after the termination. The Labor Commissioner appealed. The case went up on appeal following an entry of default judgment.

California Fourth District Court of Appeal

The Labor Commissioner urged the California Fourth District Court of Appeal to reverse the trial court’s conclusion regarding the section 1102.5 claim.

The appeals court found that the trial court applied an outdated version of section 1102.5. Under the amended statute in effect at the time of the employee’s complaint, an employee was no longer limited to reporting to an agency – they could now also disclose violations to a person with authority over them. Specifically, section 1102.5, subdivision (b) was amended to read:

An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information. . . to a government or law enforcement agency [or] to a person with authority over the employee. . . if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee’s job duties.

The appeals court agreed that reporting the violation to the night club owner would be sufficient, since the owner had authority over the employee. However, the appeals court noted that their analysis did not end there, because they must also consider whether the Labor Commissioner adequately alleged protected activity in its showing in support of default judgment.

For this analysis, the appeals court noted that there must be sufficient factual allegations to support each element of the cause of action. Here, based on their analysis of the meaning of the word “disclosing,” the appeals court concluded that an essential element of the Labor Commissioner’s claim was missing. It determined that the word “disclose” meant “to make known,” or “to reveal in words something that is secret or not generally known.” It found that the state Legislature’s choice of the word “disclose” as opposed to “report” or “tell” was significant. According to the appeals court, an employer’s “state of awareness” regarding a wrongdoing was “absolutely necessary to establishing a violation of the statute.”

Thus, in analyzing the Labor Commissioner complaint on behalf of the former employee, the appeals court concluded that nowhere in the complaint did the Labor Commissioner allege that the former employee “disclosed” to her employer that she had unpaid wages. Rather, the appeals court determined that the facts of the complaint, which describe the employer’s angry reaction to the employee’s claim of unpaid wages, suggests that the employer was already aware of the non-payment of wages, if not responsible for it. As a result, the appeals court held that there was no actual “disclosure,” because the employer already knew about his wrongdoing. However, not all the judges agreed with the majority opinion.

Dissenting Opinion

In the dissenting opinion, the dissent took issue with the majority’s definition of a “disclosure.” According to the dissent, the majority opinion’s interpretation of section 1102.5, subdivision (b) was contrary to the intent of the Legislature and would unduly burden an aggrieved whistleblower employee’s right to relief under the statute, among other things. The dissent argued that section 1102.5 was intended to reflect the broad public policy interest in encouraging workplace whistleblowers to report unlawful acts without fearing retaliation and that the majority opinion’s narrow definition of “disclose” would impede this goal. Therefore, the dissent asked the California Supreme Court to grant review.

California Supreme Court

The California Supreme Court agreed to review this issue and will decide the question: Does Labor Code section 1102.5, subdivision (b), which protects an employee from retaliation for disclosing unlawful activity, apply when the information is already known to that person or agency?

What this means for employers

The California Supreme Court’s interpretation of “disclose” could affect the employer’s burden in defending against whistleblower claims – particularly those claims involving allegations of violations about which the employer already knew. For instance, if the Court were to uphold the majority opinion’s definition of “disclose,” this could lead to a plaintiff having to persuade the jury of what was in the mind of the employer or person of authority who received the complaint, in order to determine if a “disclosure” was actually made.

To date, this issue remains pending before the Court. LCW will continue to monitor this case.

View the full blog here.

Liebert Cassidy Whitmore