UpdateClient
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2 • Los Angeles • San Francisco • Fresno • San Diego • Sacramento • Table Of Contents Copyright © 2022 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. 11 Benefits Corner 12 Did You Know...? 14 Consortium Call Of The Month 16 Spotlight Article 18 On The Blog Connect With@lcwlegalUs! 03 Firm Victories 05 First Amendment 08 Discrimination 09 WorkplaceViolence 10 Unruh Civil Rights Act Contributors: Cynthia O’Neill Partner | San Francisco Brian Dierzé Associate | Los Angeles Ashley Sykora Associate | Los Angeles Elizabeth Tom Arce Partner | Los Angeles La Rita Turner Associate | Los Angeles Jennifer Puza Associate | Sacramento
LCW Wins Defense Verdict In Civil Rights Act Case Against Police Department Administrators.
LCW Partner Jennifer Rosner and Associate Attorneys Joung Yim and La Rita Turner won a defense verdict in a trial of a U.S. Civil Rights Act case. A city police officer sued the police department’s former chief, the current chief, and a former lieutenant, under 42 USC Section 1983. The plaintiff officer alleged he was retaliated against for exercising his First Amendment free speech rights concerning his union activities. The initial lawsuit also alleged a cause of action for gender discrimination under the Fair Employment and Housing Act, but the court dismissed that cause of action on a motion for summary judgment. The plaintiff officer dismissed the city from the lawsuit at the start of the trial. The plaintiff officer alleged that the department denied him a School Resources Officer (SRO) assignment because of his activity on behalf of the police officers association (POA). The officer contended that command staff (consisting of lieutenants, captains and the chief) unfairly judged POA board members as disloyal and had ranked him and other POA board members lower on ‘promotability’ than other nonmember officers. The officer further alleged that administrators began a pattern of retaliation for his association and involvement with the POA and its Atwork.trial, the officer asked for a total of $8 million in past and future emotional distress damages. During the trial, the LCW team disputed that the command staff retaliated against the plaintiff officer because of his union activity. Other than the SRO assignment, the officer had received every single special assignment he had ever applied for with the Department. In fact, even in this circumstance, the officer was offered two different special assignments that the department had deemed a better fit for his skills and experience. The LCW trial team also pointed to numerous occasions when the command staff was supportive of the POA, thanked them for their efforts, and recognized the merit of the work of several POA board members, including the plaintiff officer.
The LCW trial team emphasized that the damages the officer requested were clearly unwarranted, given that the officer admittedly did not seek any medical help despite his alleged distress, and later turned down other prestigious assignments the department offered. After the selection of a foreperson, the jury was out for only 45 minutes before returning with a defense verdict for all three defendants.
LCW Defeats Police Officer’s Challenge To His Termination.
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LCW Associate Attorneys Joung Yim and Matt Nakano succeeded in upholding a city’s termination of a police officer. In the only one year and a half that the officer had worked for the city, he received multiple “below standards” performance evaluations on basic skills, and was involved in multiple incidents of misconduct. In early January 2020, the officer responded to a call to take a report of domestic violence. Instead of doing so, he guilted the victim out of making a report, conduct that was only discovered when the victim was battered again just four days later. The officer had a duty to write a report, regardless of the victim’s statement. Later in January 2020, the officer responded to a call of a stolen tile saw. The victim provided a description of the three suspects and the make and model of their car,
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In sum, the Hearing Officer noted that the officer’s dishonesty and poor judgment rendered him unsuitable for further employment and that the record was clear that the officer “was provided more than generous notice and opportunities to improve and that no amount of further training, support, and opportunities to improve would result in changed behavior.” Because dishonesty and lack of integrity are inconsistent with the position of a police officer, the Hearing Officer upheld the termination.
Seana Azad is an associate in the San Francisco office of Liebert Cassidy Whitmore. As a litigator, Seana has represented dozens of clients in arbitration and state and federal court and has experience representing clients from prelitigation through trial.
After reviewing the officer’s sworn testimony, the Hearing Officer determined the officer was simply not credible. Supporting this determination, the Hearing Officer cited several pages of LCW’s closing brief, which laid out the several instances when the officer was not credible or had undermined his own credibility.
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In February 2020, the officer responded to a call regarding the theft of a cell phone. The victim reported her phone was stolen at a restaurant and she had witnessed the theft on the restaurant’s surveillance footage. The victim provided a description of the suspect and his vehicle, and the license plate number. The officer falsely told the victim he could not go to the city where the vehicle was registered. The officer attempted to refer the victim to the city’s online crime reporting system. The victim pushed back. The officer stated he would prepare a theft report for the felony grand theft, but instead only filed a lost property report. The officer provided false and misleading information on the report, omitting critical information, such as the suspect information and even the fact that a theft occurred.
• Los Angeles • San Francisco • Fresno • San Diego • Sacramento • and potential license plate numbers, and indicated she wanted to file a police report. Rather than take the report, the officer admitted he referred the victim to the city’s online crime reporting system and told her to complete her own report. The officer did not perform any follow-up investigation.
Brent Richardson, an associate in our Fresno office, brings his vast expertise in municipal law, employment law, public safety, wage and hour, business contracts and facilities matters to aide LCW clients throughout the state. Brent is also a seasoned litigator who handles all facets of defense-side employment litigation, from pre-litigation through jury trial and appeal.
Julia Franco, an associate in our Los Angeles office, provides representation and counsel to LCW clients in all aspects of employment law, including wage and hour law. Julia is also skilled with alternative dispute resolution, including experience at all levels of the mediation process, from material preparation to settlement.
Cara Strike, an associate in our Los Angeles office, specializes in matters concerning public agency employment and education law, and has experience litigating harassment and discrimination matters. We are happy to announce the new graduate law clerks! Please welcome Larissa Alvarez, Morgan Johnson, Alexandra Seymour, Jophiel “Anthony” Co and Gabriella Kamran.
On the question of whether Hernandez’s posts were protected by the First Amendment, however, the Ninth Circuit decided that the trial court was wrong. To prevail on a First Amendment retaliation claim, public employees must show that: 1) they spoke on a matter of “public concern,” 2) they spoke outside the scope of their “official duties,” and 3) their speech interests outweigh the countervailing administrative interests of their agency employer.
The Ninth Circuit acknowledged that the social media posts “expressed hostility toward, and sought to denigrate or mock, a major religious faith and its adherents.” In the Ninth Circuit’s view, the U.S. Supreme Court had made clear that the inappropriate or controversial character of a statement is irrelevant to the question whether the statement deals with a matter of public concern. The Ninth Circuit emphasized that even if the “public concern” test is met, speech that has a biased or bigoted character would “be of particularly low First Amendment value at the next step of the Pickering balancing test.” The fact that Hernandez’s posts had received extensive Ninth Circuit Provides Guidance For Responding To An Officer’s Hateful, Off-Duty Speech. In 2013 and 2014, Sergeant Juan Hernandez, who worked for the City of Phoenix Police Department, posted news articles and memes on his Facebook page that denigrated Muslims and Islam. Hernandez posted the content while off duty and he did not state he was a City employee, although other content on his Facebook page showed him in uniform. The posts generated no controversy or disruption in the Department for several years.
The Ninth Circuit also found that the following provisions of the Department’s social media policy were potentially invalid as overbroad: 1) “Employees are prohibited from using social media in a manner that would cause embarrassment to or discredit the Department in any way”; and 2) “Department personnel may not divulge information gained while in the performance of their official duties.” The Court did clarify, however, that the Department could prohibit the disclosure of confidential information. The Court was careful to point out that its decision to overturn the trial court’s decision as to these two provisions of the social media policy meant that the Department could still try to present evidence to support its need for these provisions.
Hernandez sued in federal court. He claimed that the Department was retaliating against him for his First Amendment-protected speech.
• www.lcwlegal.com • the Department.” The Ninth Circuit noted that most of the challenged restrictions on employee speech directly promoted the same interests that the U.S. Supreme Court had already found to be valid. Namely, government employers have a strong interest in prohibiting speech by their employees that undermines the employer’s mission or hampers the effective functioning of the employer’s operations.
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Hernandez appealed to the Ninth Circuit.
The Ninth Circuit affirmed that the district court properly rejected Hernandez’s over-breadth challenge to the social media policy. The Ninth Circuit found that the City’s social media policy could lawfully prohibit social media posts that: 1) are “detrimental to the mission and functions of the Department,” 2) “undermine the goals and mission of the Department or City,” or 3) “undermine respect or public confidence in
In 2019, the Plain View Project, an organization that collects and maintains a database of Facebook posts from law enforcement departments nationwide, disclosed the posts, along with others from members of the Department that reflected bias. Once the posts were publicized, they generated significant criticism of the Department and media attention. In response, the Department took steps to discipline Hernandez for four of his Facebook posts, which it viewed as violating the Department’s social media policy.
Hernandez also challenged the Department’s social media policy as overbroad and vague, and thus unconstitutional. The federal trial court granted the City’s motion to dismiss and concluded that: 1) the City did not retaliate against Hernandez in violation of the First Amendment because his speech was not on a matter of “public concern,” and 2) the City’s social media policy was not overbroad or vague.
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The Ninth Circuit remanded the case in part back to the trial court because the district court had erroneously determined that Hernandez’s speech could not constitute a matter of public concern.
A Board’s Censure Of Its Own Member Was Lawful. In 2013, David Wilson was elected to the Board of Trustees of the Houston Community College System (HCC). Wilson often disagreed with the Board about the best interests of HCC and brought multiple lawsuits challenging the Board’s actions. By 2016, Wilson’s escalating disagreements led the Board to publicly reprimand him. At a 2018 meeting, the Board adopted a resolution “censuring” Wilson. The Board also imposed penalties which made Wilson ineligible for Board officer positions during 2018.
The Court began its analysis by stating it would give “long settled and established practice” regarding the meaning and application of the U.S. Constitution “great weight”. The Court noted that since colonial times, assemblies had the power to censure their members at the federal, state, and local level. Thus, verbal censure is in line with centuries of a practice that has been found to be consistent with the First Amendment.
The Court said its conclusion was bolstered by the fact that after receiving the verbal censure, Wilson continued to fight for what he thought was right. Indeed, Wilson had already received another verbal censure that did not come with additional disciplinary attributes. Wilson did not contest that this censure violated the First Amendment. The Court found this cut against Wilson’s case because Wilson was essentially arguing that a verbal censure that also carries discipline was more material than a “plain” verbal censure. The Court implied that “discipline,” such as not being able to hold certain positions, does not actually materially affect an individual’s ability to speak freely and exercise their First Amendment rights.
On appeal, Wilson reiterated his claim that the verbal censure he received was a retaliatory action after the fact for his protected speech.
Wilson claimed that this censure violated the First Amendment of the U.S. Constitution. After multiple appeals, the U.S. Court of Appeals for the Fifth Circuit held that the verbal “reprimand against an elected official for speech addressing a matter of public concern is an actionable First Amendment claim.” HCC appealed to the U.S. Supreme Court.
The Court emphasized that the remand did not mean “that the Department will face a particularly onerous burden to justify disciplining Hernandez for his posts, given the comparatively low value of his speech.” This is because the courts give considerable deference to a police department’s determination that an officer’s off-duty speech warrants discipline, and departments may consider the special status officers occupy in the community. An officer’s speech that suggests bias against racial or religious minorities can hinder that officer’s ability to work effectively and undermine the department’s ability to effectively carry out its mission.
6 • Los Angeles • San Francisco • Fresno • San Diego • Sacramento • media coverage supported its finding that the posts were a matter of public concern.
The Court next analyzed the First Amendment claim under the contemporary doctrine, which requires the individual suing to show, among other things, that the government took a material adverse action in response to the individual’s speech that it would not have been taken absent the retaliatory motive. The Court held that a verbal censure was not a material adverse action for two important reasons. First, Wilson was an elected official. Elected officials are generally expected to shoulder a degree of criticism about their public service and continue exercising their free speech rights when the criticism comes -- in this case in in the form of a verbal censure. Second, this censure was simply a form of speech that admonishes another member of the same governmental body. The First Amendment guarantees the right to speak freely on questions of government policy, so one individual’s speech cannot “be used as a weapon to silence other representatives seeking to do the same”. By attempting to sue the Board and HCC for this censure, Wilson was attempting to silence the Board’s proper exercise of its First Amendment rights.
Hernandez v. City of Phoenix, 43 F.4th 966 (9th Cir. 2022). Note: If a public employer learns of an employee’s off-duty social media posts that appear bigoted or hateful, the employer must consider whether the First Amendment protects the speech. The employers must be able to identify the specific disruption that the speech caused to the agency, such as: an impairment to co-worker relations; an impact on the officer’s ability to carry out job duties; or the undermining of the agency’s ability to operate effectively.
LCW exceeded Law360’s Pulse benchmarks by 1.7 points with an 18.8% score for equity partners, 35.3% score for nonequity partners, and 29.2% score for associates. A total of 291 firms were evaluated in the 2022 edition of the Diversity Snapshot. The overall goal stands to increase diversity in the legal field, for the betterment of clients and firms alike.
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A common theme in the Court’s analysis was that this censure was from members of a governing body against another member, that is, peer-to-peer. None of the censuring members had any amount of inordinate power over the censured member. Finally, a verbal censure is simply a statement that reprimands the receiving individual. The censure was itself an exercise of First Amendment Rights. The censure did not prevent the censured individual from continuing to exercise his own First Amendment rights.
Attorneys Megan Atkinson, Amy Brandt, and Alysha Stein-Manes have been named to the 2023 Best Lawyers: Ones to Watch in America list. Brandt and Stein-Manes were both recognized for their excellence in Litigation – Labor and Employment while Atkinson was recognized for her outstanding work in Labor and Employment Law – Management.
Note: This case illustrates the latitude a governing Board has to censure and punish its own members. The Court did mention that certain censures from a body with more power and agency, against an individual with less, may indeed amount to a First Amendment violation.
• www.lcwlegal.com
Houston Cmty. Coll. Sys. v. Wilson, (2022) 142 S. Ct. 1253, 1258, 212 L. Ed. 2d 303.
Celebratory Highlights!
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Partner Steven M. Berliner has been named to the 2023 edition of Best Lawyers for his professional excellence in private practice. Steve is the Chair of the firm’s Retirement, Benefits and Disability Practice Group and works to ensure that LCW stays on the cutting edge of the law related to these important areas. He has an extensive labor relations practice and unparalleled retirement law expertise. This recognition marks Berliner’s first year receiving this distinction.
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Liebert Cassidy Whitmore is proud to announce that we have been ranked 11th in Law360’s 2022 Pulse Diversity Snapshot.
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8 • Los Angeles • San Francisco • Fresno • San Diego • Sacramento • contract is mutual consent and that a contract cannot exist unless both parties have agreed to the same thing. Here, the CRD never consented to resolve disputes with Cisco by arbitration, so it was not contractually bound to arbitrate. This finding did not end the inquiry. Cisco argued that the arbitration agreement also bound the CRD because the CRD was acting as Doe’s proxy. This theory also failed. The California Legislature gave the CRD the independent authority to sue an employer for some violations and to decide which course of action to pursue. The CRD acts independently from any employee-claimant, does not assume any obligations, and does not have an agency relationship with the claimant.
Dep’t of Fair Emp. & Housing v. Cisco Sys., Inc., 82 Cal.App.5th 93 (2022).
The CRD notified Cisco of Doe’s complaint, investigated it, and decided it had merit. At that stage, the CFD tries to resolve the claim informally with the employer. If a claim is not resolved informally, the CRD has the following options: 1) decline to pursue the matter further and issue a right to sue notice, which allows the employee to sue the employer; or 2) CRD may sue the employer. The claimant employee may participate in a CRD lawsuit but is not required to do so.
Note: This case serves as a helpful reminder that, no matter what sort of agreements may exist between an employer and employee, the CRD is a separate entity that can pursue claims of its own accord.
ArbitrationEmployee-EmployerAgreement
Did Not Apply To The California Civil Rights Department. John Doe signed an arbitration agreement in 2015 as a condition of his employment with Cisco Systems, Inc. The agreement required Cisco and Doe to arbitrate “all disputes or claims arising from or relating to” Doe’s employment, including claims of discrimination, retaliation, and harassment.
Several years after signing the arbitration agreement, Doe filed a complaint with the California Department of Fair Employment and Housing, which was renamed as the California Department of Civil Rights or CRD effective July, 2022. Doe’s CRD complaint alleged discrimination on account of his ancestry or race. Doe also alleged Cisco retaliated against him after he complained.
discrimination
On appeal, the California Court of Appeal framed the issue as whether a contract, such as an arbitration agreement, binds a third party who did not sign the contract. The Court of Appeal quickly agreed with the trial court, stating that a fundamental aspect of any
The CRD attempted to resolve Doe’s claim, but was unsuccessful. The CRD filed a lawsuit against Cisco. Doe did not join as a party to the CRD lawsuit. Cisco filed a motion to compel arbitration, contending that the CRD was bound by Doe’s arbitration agreement. The trial court denied the motion, and Cisco appealed.
9 2022September • www.lcwlegal.com • workplace
The Court of Appeal was forced to reverse the trial court’s judgment and vacate the WVRO.
returned to the Bank, made a video recording of himself outside the Bank, and momentarily entered the Bank to get another business card. He did not interact with M.L. while in the Bank.
On March 26, Rafat sent M.L’s manager another email attaching the video he had taken as well as threatening to both file a lawsuit and a complaint with an unnamed federal agency.
Employer Must Show A Credible Threat of Violence To Get A Restraining Order On Behalf Of Its Employee.
Tech. Credit Union v. Rafat, 2022 WL 3444075 (Cal Court of Appeal).
M.L. explained to Rafat that Bank policy prevented her from opening a business account for him on the same day he requested one. Instead, Bank policy required Rafat to first complete a questionnaire for review. M.L. began working with Rafat to complete the questionnaire, but Rafat became aggressive, frustrated, and began belittling her once she asked the first question regarding the nature of Rafat’s business. Rafat began videotaping M.L. and kept getting closer and closer to the plexiglass screen that separated them. Rafat ignored M.L.’s repeated requests to stop videotaping her. Rafat left the Bank after M.L. eventually gave him both hers and her manager’s business cards.
NOTE: It is becoming exceedingly common for public-facing employees to receive rude and aggressive behavior. This case illustrates the difficulty in obtaining a WVRO if no violence or threat of violence occurs. Even if the WVRO standard cannot be met, employers should give their employees a safe workplace through other means. Maintaining up-to-date security procedures can also help employees feel safe.
On March 24, 2021, Matthew Mehdi Rafat visited a local branch of the Technology Credit Union bank. Rafat made a cash deposit with the assistance of a Bank employee named M.L. The court refers to this employee by her initials only to preserve her privacy. After the cash deposit, Rafat wanted to open a business account.
Rafat emailed M.L.’s manager that same day to say that M.L. had refused to open an account for him and to ask the manager to investigate M.L.’s “refusal and slash or Theincompetence.”nextday,Rafat
The Bank filed a request for a Workplace Violence Restraining Order (WVRO). The trial court found that Rafat was overly aggressive and lost his cool on March 24, 2021, but concluded that this conduct did not meet the WVRO standard. But, the trial court found that Rafat’s conduct on the following day did meet the WVRO standard because: Rafat had returned to the Bank; posted the video of the interaction to YouTube; and concerned M.L’s manager so much that she hired security for the Bank. Rafat appealed.
The California Court of Appeal reiterated the standard for a WVRO. For an employer to obtain a WVRO on behalf of its employee, the employer must show that the employee endured “unlawful violence or a credible threat of violence.”
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The Court of Appeal found there was no unlawful violence. Next, the Court of Appeal reviewed whether Rafat made a credible threat of violence, and determined he did not. The Court characterized Rafat’s conduct as “indisputably rude, impatient, aggressive, and derogatory”. The only threats Rafat made were of litigation and a complaint to a federal agency. The only actions he took towards M.L. were berating her, complaining to her supervisor, and posting an accurate video of their March 24 interaction. This video also contained no implication nor suggestion of violence.
10 • Los Angeles • San Francisco • Fresno • San Diego • Sacramento • unruh civil
To view these articles and the most recent attorney-authored articles, please visit: www.lcwlegal.com/news
Brennon sued the District alleging disability discrimination under the Unruh Civil Rights Act. The Unruh Civil Act states that people with disabilities and other protected groups are entitled to equal treatment and services “in all business establishments of every kind whatsoever.” The Act also provides enhanced remedies for those who win their cases, including penalties and attorney fees. The trial court sustained the District’s motion to dismiss the case on the grounds that the District was not a “business establishment” subject to the Act. Brennon petitioned for a writ of mandate to the California Court of Appeal. The appellate court examined the legislative history of the Unruh Act and California Supreme Court decisions, and found that public school districts were not business establishments under the Unruh Act.
Public Schools Are Not Subject To Unruh Civil Rights Act.
Brennon B. was a 14-year-old special education student in the West Contra Costa Unified School District (District). Brennon alleged that he was sexually assaulted by other students and by a school-district staff member.
On appeal, the California Supreme Court addressed the issue of whether a public school district could be liable under the Act. After examining the language of the Act, its purpose and history, and prior case law, the Court unanimously held that public schools are not subject to the Act. In reaching its decision, the Court noted that “Educating students is a task that is fundamentally different from what could fairly be described as ‘regular’ business transactions.” The Court concluded that public schools, as governmental entities that provide free and public education, are not “business establishments” within the meaning of the Act. When acting in their core educational capacity, public school districts do not perform “customary business functions,” nor is their overall function to protect and enhance economic value.
LCW In The News
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After Brennon’s initial complaints, the District agreed to assign a supervisor to accompany Brennon to the restroom and on the school bus but failed to do so, and he was assaulted again.
Brennon B. v. Superior Court, 13 Cal.5th 662 (2022).
• Featured by Employment Risk Management Authority (ERMA) in their most recent Legal Alert, LCW Partner Elizabeth Tom Arce and attorney La Rita Turner authored an article entitled “The California Supreme Court Makes It Easier for Employees to Blow the Whistle,” which focuses on whistleblower retaliation and the laws California has implemented to protect employees. You can read the full article in our “Spotlight Article” section on page 16.
Note: Although this case applies to public school districts, the California Supreme Court’s reasoning indicates that the Unruh Civil Rights Act does not apply to local government public entities either. The Court said that a “business establishment” under the Act is an entity that must operate as a business or commercial enterprise.
a. The employee’s required contribution toward the lowest-cost plan offered to the employee cannot exceed 9.12% of the federal poverty line for a single individual, divided by 12. ALEs may use the federal poverty line threshold in effect within six months before the first day of the plan year. The 2022 federal poverty line for a single individual in the contiguous 48 states (including D.C.) is $13,590. Therefore, in order for coverage to be affordable under this safe harbor, the employee’s required contribution cannot exceed $103.28, broken down as follows: $13,590 x 0.0912 = $1,239.40 / 12 = $103.28).
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a. This safe harbor assesses the affordability percentage (9.12% for 2023) based on the rate of pay for hourly full-time employees (0.0912 x hourly rate of pay as of the first day of coverage x 130 hours) and salaried full-time employees (0.0912 x monthly salary). That calculation is then used to determine the affordability threshold. If the employee’s required contribution toward the lowest-cost, employee only coverage offered to the employee is below the threshold, then coverage is affordable.
The ACA affordability test is based on the employeeshare of the premium for employee-only coverage under the ALE’s lowest cost provided plan (regardless of which plan the employee chooses) and in which the employee is eligible to enroll. Based on the IRS’ recent adjustments for tax year 2023, ALEs will need to assess whether the coverage it offers is affordable. The IRS provides three safe harbors for ALEs to determine whether their coverage is affordable. ALE’s must apply any given safe harbor on a reasonable and consistent basis (i.e. the same safe harbor to everyone in the same bargaining group).
a. The Form W-2 safe harbor provides that coverage is “affordable” if the employee’s required contribution toward the lowest-cost, employee-only coverage plan option does not exceed 9.12% (2023) of the employee’s wages on IRS Form W-2 in the “Box 1” section. This is generally the least utilized affordability safe harbor since employers may not be able to make determinations ahead of time as to whether their coverage will be “affordable” since form W-2 is not processed until year end.
2) Rate of Pay Safe Harbor
Accordingly, applicable large employers (ALEs) providing health plans to their full-time workforce beginning January 1, 2023 must ensure an employee’s required contribution amount toward the lowest cost plan offered to the employee is no more than 9.12% of the threshold calculated under one of the safe harbor approaches (described below). As a reminder, an employer is an ALE if it employed an average of 50 fulltime employees, including full-time equivalents, during the preceding calendar year.
IRS Lowers The ACA Affordability Percentage For 2023 Tax Year
– Employers Should Revisit Affordability Calculations. In Revenue Procedure 2022-34, the IRS recently announced an important indexing adjustment related to the Affordable Care Act (ACA), providing that the ACA affordability percentage for the 2023 tax year will be 9.12%. This new ACA affordability percentage threshold is down from 2022’s percentage of 9.61%, and it is the lowest affordability percentage the IRS has set since the ACA’s Employer Mandate requirements first became effective in 2015.
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3) Form W-2 Safe Harbor
1) Federal Poverty Line Safe Harbor
The ACA penalty amounts for the 2023 tax year have not yet been released, but the penalty for offering unaffordable coverage for the 2022 tax year is $4,120 annualized, per employee who is offered unaffordable coverage.
The penalty is triggered when an employee purchases coverage through Covered California and receives a subsidy.
• Employers have the right to implement a non-negotiable decision prior to the completion of impacts bargaining.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. ON-DEMANDTRAINING WWW.LCWLEGAL.COM/EVENTS-AND-TRAINING/ON-DEMAND-TRAINING Today.Train
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Know?YouDid The California Department of Public Health has published return to work criteria and isolation guidance addressing Monkeypox cases. Effective July 1, 2022 the Department of Fair Employment and Housing (DFEH) was renamed the California Civil Rights Department (CRD). On August 15, 2022 the CRD began making appropriate updates to their website, posters, and brochures, and can now be reached at: https:// calcivilrights.ca.gov
ALE’s should also note that flex credits or cash-in-lieu can negatively impact the “required contribution” amount in the above calculations. In light of the IRS’ recent indexing adjustments, ALEs should review their benefit arrangements to ensure they are still offering “affordable” coverage for the next plan year. This lower ACA affordability threshold means ALEs may need to contribute more toward employee health premiums in order to make coverage affordable.
The IRS can assess tax penalties to an ALE that offers unaffordable coverage to its ACA defined full-time employees.
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13 2022September • www.lcwlegal.com • INTERESTED? Visit our website: www.lcwlegal.com/lrcp The LCW Labor Relations Certification Program is designed for labor relations and human resources professionals who work in public sector agencies. It is designed for both those new to the field as well as experienced practitioners seeking to hone their skills. Participants may take one or all of the classes, in any order. Take all of the classes to earn your certificate and receive 6 hours of HRCI credit per course! Benefits of Certification to the Participant: • Increase knowledge in all areas of Labor Relations • Increase your value to your agency • Increase respect and recognition in the field • Increase opportunity for upward mobility • Increase marketability and ability to compete in the job market • Increase professional credibility Benefits of Certification to the Agency: • Increase the level of competency of the individual • Encourage and improve job performance • Acknowledge an individual who has developed a high level of professionalism • Use as an aid for retention and recruitment Join our upcoming HRCI CertifiedLabor Relations Certification Program Workshops: 1. September 22 & 29, 2022 - Nuts & Bolts of Negotiations 2. October 20 & 27, 2022 - The Public Employement Relations Board (PERB) Academy 3. November 3 & 10, 2022 - Trends & Topics at the Table The use of this official seal confirms that this Activity has met HR Certification Institute’s® (HRCI®) criteria for recertification credit pre-approval.
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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.
ConsortiumCallOfTheMonth
We have an employee who has been working remotely for the last year because their doctor submitted a note recommending a telecommuting arrangement. We are hoping to begin our fiscal year with everyone working in the office. Can we revisit accommodation?this Yes. When an employee submits a note from a medical professional requesting an accommodation, the employer must engage in the interactive process. But, an employer is not required to implement the medical professional’s recommended accommodation if another option provides a reasonable accommodation. The employer can request more information about the employee’s limitations and then the employer can work with the employee to fashion a reasonable, effective accommodation through the interactive process. Because the interactive process is a continuing obligation, the employer can revisit this accommodation, request an update and more information about the limitation, and then choose an effective accommodation that works for all the parties.
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Question: Answer:
ArticleSpotlight
What was the Confusion About? Before Lawson, courts throughout the State were split in applying the framework for litigating 1102.5 claims. Some applied the McDonnell-Douglas burden-shifting framework, in which an employee must establish a prima facie case of unlawful retaliation by proving (1) they engaged in protected activity, (2) they were subjected to an adverse employment action, and (3) there was a causal link between the two. Once established, the burden shifted to the employer to provide evidence of a legitimate, nondiscriminatory reason for taking the adverse employment action. The burden then shifted back to the employee to prove that the employer’s stated reason was a pretext for retaliation. In contrast, other courts applied the more employee-friendly evidentiary standard under California Labor Code section 1102.6, which requires employers to prove by clear and convincing evidence that they did not retaliate based on the employee’s whistleblowing activities.
By: Elizabeth Tom Arce & La Rita Turner
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The California Supreme Court Makes It Easier for Employees to Blow the Whistle
The Lawson Case Wallen Lawson worked as a territory manager for PPG Architectural Finishes, Inc. (PPG), a paint and coatings Lawsonmanufacturer.alleged his direct supervisor instructed him to intentionally mis-tint slow-selling PPG paint products so that PPG could avoid buying back what would otherwise be excess unsold products. Lawson did not agree with this instruction and filed two anonymous complaints, in addition to confronting his supervisor directly. PPG investigated the issue and told the supervisor to discontinue the practice but did not terminate the supervisor’s employment. The supervisor also continued to directly supervise Lawson. Ultimately, PPG terminated Lawson’s employment upon the supervisor recommendation that he be fired due to performance issues.
Featured by Employment Risk Management Authority (ERMA) in their most recent Legal Alert, LCW Partner Elizabeth Arce and attorney La Rita T. authored an article entitled “The California Supreme Court Makes It Easier for Employees to Blow the Whistle” which focuses on whistleblower retaliation and the laws California has implemented to protect employees.
In January 2022, the California Supreme Court finally dispelled widespread confusion regarding the evidentiary standard for whistleblower retaliation claims bought under Labor Code section 1102.5. In Lawson v. PPG Architectural Finishes, Inc. (Lawson), the Court clarified that an employee-friendly evidentiary framework should be used to decide 1102.5 claims. Not only will this ruling make it more difficult to defend against these types of claims, but employers can also expect to see an increase in whistleblower lawsuits. The Lawson decision combined with the enactment of AB 1947, which authorizes attorney’s fees for successful 1102.5 claims, provides additional incentive for employees to blow the whistle.
The Court observed the McDonnell-Douglas test is inapplicable or not “well-suited” as a framework to litigate whistleblower claims because while McDonnell-Douglas presumes an employer’s reason for adverse action “is either discriminatory or legitimate”, an employee alleging 1102.5 whistleblower retaliation can prove unlawful retaliation “even when other, legitimate factors also contributed to the adverse action.”
Taking these steps is necessary for employers to show by clear and convincing evidence that they would have taken the same adverse employment action even if a plaintiff had not blown the whistle or engaged in the protected activity. “Clear and convincing” means the employer must persuade the jury that is it highly probable that the factual contentions of the defense are true. This is a higher standard of proof than required for employees, which requires the facts to be more likely true than not by a preponderance of the evidence.
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Further, when investigating vague employee complaints, employers should not only determine whether discrimination, harassment, or retaliation occurred based on Fair Employment and Housing Act (FEHA) protected classifications, but they should also investigate whether whistleblowing specifically is a factor.
Lawson sued PPG and alleged he was fired because he “blew the whistle” on his supervisor’s mistinting order, in violation of Labor Code section 1102.5. In considering PPG’s motion for summary judgment, the lower court applied the burden-shifting framework in McDonnell-Douglas. The district court concluded that while Lawson had established a prima facie case of unlawful retaliation “based on his efforts to stop the paint mistinting scheme,” PPG sustained its burden of articulating a legitimate, non-retaliatory reason for firing him, specifically for his poor performance on “market walks” and failure to demonstrate progress under a performance improvement plan. The court concluded that because Lawson was unable to provide sufficient evidence that PPG’s stated reason for terminating him was pretextual, summary judgment must be granted as to Lawson’s 1102.5 claim.
It is now more important than ever for employers to have objective, well-founded reasons supported by documented evidence (e.g., performance evaluations, witness statements, counseling memos) before taking any adverse employment action against an employee. In other words, employers should “cross their t’s and dot their i’s” before terminating, suspending, demoting, or taking any other action or engaging in a course of conduct that (taken as whole) materially and adversely affects the terms, conditions, or privileges of an employee’s employment.
What Practical Effect Does Lawson Have on Employers?
On appeal, Lawson argued that the court was wrong to use the McDonnell-Douglas framework. Instead, he argued the issue should have been analyzed under the framework laid out in Labor Code section 1102.6. Under Section 1102.6, Lawson only needed to show that his whistleblowing was a “contributing factor” in his dismissal; he is not required to show that the employer’s reason for termination was pretextual.
In its decision, the California Supreme Court held Labor Code section 1102.6, not McDonnell-Douglas, is the proper framework for litigating 1102.5 whistleblower claims, reasoning that 1102.6 describes the standards and burdens of proof for both parties in a 1102.5 retaliation case. First, the employee must demonstrate “by a preponderance of the evidence” that the employee’s protected whistleblowing was a “contributing factor” to an adverse employment action. Second, once established, the employer must prove by “clear and convincing evidence” that the alleged adverse employment action would have occurred for legitimate, independent reasons, even if the employee were not involved in protected whistleblowing activities.
Additionally, before taking an adverse employment action, employers should consider whether the employee in question engaged in any conduct that could be construed as whistleblowing. While employers often take care to ensure the reason for terminating an employee was not made for discriminatory reasons (e.g., race, gender, age, and disability), employers frequently overlook possible whistleblowing.
Finally, employers should review their anti-retaliation policies and ensure managers and supervisors are adequately trained and informed of the legal ramifications if retaliation claims are not addressed appropriately.
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Noncitizen Voting in Local School Board Elections
By: Jennifer Puza
Across the country, cities have been considering legislation that would allow all residents over age 18 to vote in local school board elections, regardless of citizenship status. Supporters of this movement argue that because noncitizens pay local taxes, volunteer at schools, and participate in school board meetings, they should be able to have a say in selecting the officials who set the district policies that impact their children’s education. One such city to allow noncitizen voting, was San Francisco – the first in California to do so. Circumstances dramatically changed on July 29, 2022, however, when a Superior Court judge struck down San Francisco’s local law, finding it contrary to the California Constitution. As discussed below, this ruling has affected other California cities currently considering noncitizen voting. San Francisco’s Proposition N In 2016, San Francisco voters passed Proposition N, which granted noncitizen parents of San Francisco Unified School District students the right to vote in the November 2018, 2020, and 2022 school board elections. San Francisco County Board of Supervisors later passed Ordinance No. 206-21, extending this voting right indefinitely beyond However,2022.inMarch
2022, a California attorney, James Lacy, filed a lawsuit against the City and County of San Francisco arguing that this local law was unlawful, and stated that “when noncitizens vote in an election, the voting rights of citizens are wrongly diluted.”
Lawsuit Against the City and County of San Francisco In this lawsuit Lacy v. City and County of San Francisco, the defendants, the City and County of San Francisco, argued that despite the California Constitution stating that all voters must be United States citizens, under Article IX, section 16(a) of the California Constitution, charter cities like San Francisco are allowed to provide for the time, manner, and terms for which members of the boards of education are elected. Relying on the word “manner,” the defendants argued that this includes setting voting right qualifications. The superior court was not persuaded. The court first found that absent from article IX, section 16(a) was any mention of voters or their qualifications. The court then looked at Education Code section 5390 which did mention “qualifications of voters.” However, the court found that under this section, the language clearly stated that voter qualifications “shall be governed by those provisions of the Elections Code applicable to statewide elections.” Under Elections Code section 2300(a), which is applicable to statewide elections, “All voters, pursuant to the California Constitution and this code, shall be citizens of the United States.” Taken together, the court ruled that the City and County of San Francisco’s local law granting noncitizen voting rights was contrary to the California Constitution and therefore void and unenforceable.
On BlogThe
Following this ruling, the City and County of San Francisco appealed, while the same plaintiff filed another suit – this time against the City of Oakland.
What This Means For Your City
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In June 2022, the City of Oakland’s City Council voted to place a measure on the November 2022 ballot that would allow noncitizen parents or guardians of school-age children to vote in school board elections. In response to this measure, the plaintiff in the City and County of San Francisco case sued the City of Oakland, seeking a court order to remove this measure from the November ballot. The plaintiff again argued that allowing noncitizens to vote would violate the California Constitution. On August 30, 2022, an Alameda County Superior Court judge said that the measure can appear on the November ballot, as it would be premature to decide before a ballot measure is passed, whether it is constitutional. However, the judge also remarked that the San Francisco ruling was likely correct, but that the issues it addressed would need to be decided by higher courts
Lawsuit Against the City of Oakland
The trend of both extending local election voting rights to noncitizens and facing legal challenges over such proposals is taking shape. The lawsuits against the City and County of San Francisco and the City of Oakland have already caused some California cities, such as the City of San Jose and City of Santa Ana, to reconsider adopting noncitizen voting laws due to the legal challenges they will likely face.
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If your city is considering extending local election voting rights to noncitizens, please reach out to your trusted legal advisors to navigate the potential legal implications. Visit our blog for more information!
Liebert Cassidy Whitmore
