Private Education Matters: October 2023 by lcwlegal

October 2023

Private Education Matters

Table Of Contents EMPLOYEES

STUDENTS

Handbooks

Investigations

Terminations

Did You Know?

Disability

Constructions Corner

New Legislation

Business & Facilities

Labor Relations

LCW Best Practices Timeline

Consortium Call Of The Month

Contributors: Grace Chan Partner | San Francisco Hannah Dodge Associate | San Francisco

Brett A. Overby Associate | San Diego Madison Tanner Associate | San Diego Abigail Clark Associate | San Francisco

Connect With Us! Copyright © 2023 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

Private Education Matters is published monthly for the benefit of the clients of Liebert Cassidy Whitmore. The information in Private Education Matters 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.

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employees

handbooks

One subject that schools across the country are currently facing is how to address changing concepts related to gender identity. Escondido Union School District (District) recently adopted a gender identification policy where: (1) there is school-wide recognition of any student’s newly expressed gender identification and (2) when communicating with a student’s parents, there is an enforced requirement of faculty confidentiality and non-disclosure regarding a student’s newly expressed gender identification. The result of this policy is that a teacher ordinarily may not disclose to a parent the fact that a student identifies as a new gender, or wants to be addressed by a new name or new pronouns during the school day. Under the policy, communication with parents is permitted only if the child first gives consent to the school. A teacher who knowingly fails to comply is considered to have engaged in discriminatory harassment and is subject to adverse employment actions. Other District policies are in tension with this new policy. For example, one District policy states that parents have a right and obligation to be engaged in their child’s education and to be involved in the intellectual, physical, emotional, and social development and wellbeing of their child. Another policy states that being dishonest with students, parents, staff, or members of the public, including falsifying information in school records, is inappropriate employee conduct. At the start of the 2022 school year, two teachers sought religious accommodations in response to the policy. The District did not contest the sincerity of their religious beliefs, but did not grant the accommodations. The two teachers filed suit, seeking a preliminary injunction to stop the District from taking adverse employment actions against them in the event they violated the policy.

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California Court Stops Enforcement Of School District’s Gender Identity Policy.

The teachers argued that they maintain sincere religious beliefs that communications with a parent about a student should be accurate; communications should not be calculated to deceive or mislead a student’s parents. The teachers also argued that parents enjoy a federal constitutional right to make decisions about the care and upbringing of their child. The teachers stated they had a well-founded fear of adverse employment action should they violate the policy. The Court gave great weight to medical opinions on this topic, and concluded that the confidentiality and non-disclosure of a student’s gender identity to parents is not conducive to the health of students. Specifically, the court reviewed the opinions of medical experts, which indicated that when a child presents a desire to use a new name or pronoun, the first step should be careful assessment by a mental health professional with expertise on the topic. The Court also stated that mental health practices should not drive a wedge between parents and children, because this creates distrust and tension. The Court also considered that parental consent is required to provide medical and psychological treatment to minors. In part, this is because the science of mental health recognizes that the best evidence regarding a minor’s mental and emotional well-being comes from first-hand accounts by parents, rather than potentially biased accounts from minor children. The Court also considered that children tend to make “impetuous and ill-considered life decisions.” The Court considered that children are more transitory, less fixed, and as they mature, their recklessness and impetuousness may subside. The Court considered the federal Constitutional rights of parents. The Court referenced the United States Supreme Court’s continued position that parents have a right, grounded in the U.S. Constitution, to direct the education, health, and upbringing, and to maintain the well-being of, their children. The Court also noted that the United States Court of Appeals for the Ninth Circuit,

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which California is a part of, recently acknowledged the continuing vitality of a parent’s constitutionally protected interest in raising a child. The Court considered that the Family Educational Rights and Privacy Act (FERPA), which requires schools to provide parents the opportunity and right to inspect and review their child’s educational record, likewise speaks to the importance of parental involvement in their child’s education. FERPA indicates that the privacy right of a child takes second place to the parent’s right to “know.”

a condition of their employment. The Court agreed that the teachers have a direct disagreement with the policy, but disagreed that this policy impacted them outside of the school doors. The Court noted that the teachers could probably make a freedom of speech claim if the policy compelled them to violate the law or deliberately convey an illegal message, which could come up if, in response to the teachers’ requests for religious accommodations, the teachers were required to communicate misrepresentations to parents about student names and pronouns.

The Court considered California’s right to privacy, which extends to minors. The Court noted that the general rule is that medical care can be provided to minors only with the consent of the minor’s parent or guardian. There are certain types of medical services that minors can obtain without parental consent, however, gender transitioning is not among the exceptions. The Court was not persuaded that a child has a right to privacy surrounding their name and pronouns, especially because one element of a right to privacy is a reasonable expectation of privacy. A student who announces the desire to be publicly known in school by a new name, gender, or pronoun, does not have a reasonable expectation of privacy. The Court considered a child’s right to privacy as a quasi-right, in that, certain parental rights, including the parental right to know and the parental right to control and direct the activities of their child, are superior to a child’s rights to privacy.

The Court also considered whether the policy impacted the teachers’ free exercise of religion. The teachers argued that the policy violated their freedom of religion because they believe the relationship between parents and children is an inherently sacred and life-long bond, ordained by God, and that God forbids lying and deceit. The District argued that the policy does not require lying, which the Court did not find persuasive. The Court concluded that the teachers faced an unlawful choice to lose their faith and keep their job, or keep their faith and lose their job.

The Court next considered whether the policy impacted the teachers’ free speech rights. The teachers argued that their right to speak freely on matters of public concern do not end at the school doors, and that the policy forces them to adhere to an ideology, with which they directly disagree, as

In light of these findings, the Court granted the preliminary injunction. Mirabelli v. Olson (S.D.Cal. Sep. 14, 2023) 2023 U.S.Dist.LEXIS 163880. Note: Several California school districts are passing local policies that require school officials to notify parents and guardians if their child asks to use a name or pronoun different than what was assigned at birth, or if they engage in activities and use spaces designed for the opposite sex. Although this case involved a public school and these local measures apply to public schools, the arguments presented may help inform private schools as they navigate gender identity matters and create gender identity policies.

Liebert Cassidy Whitmore Named Most Admired Firm to Work for 2023 by Los Angeles Business Journal! View the press release here.

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October 2023

new to the Firm! Dana Segal, an Associate in the Los Angeles office, provides advice and counsel on all employment law and litigation related matters. Prior to joining LCW, Dana served as a Deputy District Attorney in the Los Angeles District Attorney’s Office.

Louis Lee, an Associate in the San Francisco office, provides advice and counsel to our clients in all matters pertaining to labor and employment law. Louis has experience in all phases of litigation and has handled matters ranging from investigations and antitrust class actions to administrative actions and False Claims Act suits.

Kelsey Ridenhour, an Associate in the Los Angeles office, provides labor and employment law expertise in matters pertaining to our public agency clientele. Prior to joining LCW, Kelsey served as a Judicial Clerk with the Central District of California.

Jacqueline “Jackie” Lee, an Associate in the Los Angeles office, provides advice and counsel on all employment law and litigation related matters. Prior to joining LCW, Jacqueline externed for the Honorable Edward J. Davila at the United States District Court, Northern District of California.

Belinda Tommarello, an Associate in the Los Angeles office, provides litigation expertise in labor and employment law matters. Prior to joining LCW, Belinda was a Senior Litigation Associate at an Orange County based law firm.

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terminations

Court Upholds District’s Termination Of Teacher For Anti-LGBTQ TikToks. Kari MacRae, a teacher, operated a TikTok account where she liked, shared, posted or reposted six memes that contained themes of homophobia, transphobia, and racism. MacRae agreed that some of these posts could be viewed as derogatory towards transgender people. MacRae was preparing to run for the Bourne School Board, and posted a video to her TikTok account regarding her position as a school board candidate. In that video, MacRae expressed her view that critical race theory should not be taught in public schools and that students should not be taught that they can choose whether or not they want to be a boy or a girl. In May 2021, MacRae was elected to the Bourne School Board. Two months later, MacRae was hired to teach in Hanover Public School District. On the same day that the District in Hanover hired MacRae, the Bourne School Committee received a complaint regarding MacRae’s social media post. On September 17, 2021, the Cape Cod Times published an article regarding MacRae’s activity on TikTok and her role on the Bourne School Committee. On Monday, September 20, 2021, the District superintendent became aware of the article and social media posts and placed MacRae on paid administrative leave while the District conducted an investigation. Nine days later, the District decided to terminate MacRae’s employment, citing the negative impact on student learning at the school. MacRae sued, asserting a claim for First Amendment retaliation. To evaluate a First Amendment retaliation claim, the Court set out a three-part test: (1) whether the employee spoke as a citizen on a matter of public concern; (2) whether the balance of interests of the employee, as a citizen, in commenting on matters of public concern weighed more heavily than the interest of the state, as an employer, in promoting the efficiency of the public services it performs through its employees; and (3) whether

the employee has shown that the protected expression was a substantial or motivating factor in the adverse employment decision. In applying the three-part test, the parties did not dispute that MacRae spoke as a citizen on a matter of public concern. Rather, the District argued that the decision to terminate MacRae’s speech was because it caused a disruption to teaching and learning, which justified her termination under the second factor. MacRae argued that no actual disruption took place. The Court concluded that the District provided ample evidence to show that MacRae’s speech had the potential to disrupt the District’s learning environment, even if actual disruption had not yet occurred. The Court reasoned that there were students in MacRae’s classroom and within the District that embodied characteristics that MacRae’s posts appeared to denigrate. At least some of MacRae’s speech was at odds with the District’s stated mission of providing a safe learning environment based on respectful relationships and promoting respect for human differences. MacRae argued that she never shared her personal views in the classroom, and she made this speech outside of school, prior to her employment by the District. The Court concluded that given the media coverage and controversy surrounding MacRae’s posts in Bourne, the District had a basis for being concerned about a risk to their operations. Even if this speech occurred prior to her employment, it had the potential to disrupt her role as a public-facing employee of the District. In balancing MacRae’s interests against the District’s interests, the Court concluded that the District was justified in its termination decision. The Court reasoned that, as a public school teacher, MacRae had contact with the public, including students and parents who may have been members of groups that MacRae’s posts disparaged, which was part of her dayto-day responsibilities. Colleagues recognized the posts as inconsistent with the District’s mission, and the District’s concerns about the posts were directly tied to a risk of disruption in student learning. A greater risk of disruption

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October 2023

arose from the growing media attention on these posts. Finally, MacRae’s TikTok comments regarding transgender students were in direct conflict with the District’s mission, garnered media attention, and implicated concerns regarding the District’s ability to create a safe learning environment for all. The Court granted summary judgment for the District. MacRae v. Mattos (D.Mass. Sep. 25, 2023) 2023 U.S.Dist.LEXIS 170146. Note: This case is noteworthy because the school district’s decision to terminate this teacher was upheld due to the potential for a disruption to student learning. The teacher had only been working at the school for a few weeks when the videos went viral.

Register for the California Legal Symposium! Thursday, November 9, 2023 8:30 a.m. - 2:00 p.m. Cal-ISBOA is once again partnering with Liebert Cassidy Whitmore (LCW) to bring you a virtual California Legal Symposium this fall. The Symposium will feature top brass from LCW who will provide a deep dive into current legal issues facing independent schools, with an emphasis on operating in California's legal and regulatory environment. This is a must-attend event for anyone who has to make important decisions for their school. We hope to see you there!

For more information, visit Cal-ISBOA's website here.

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disability The Americans With Disabilities Act Applies Only To Physical Places. Dominick Martin and Rusty Rendon are both blind and serve as “testers” to assess whether places of public accommodation are compliant with the Americans with Disabilities Act (ADA). They filed suit against Thi E-Commerce, alleging among other things, that the company’s website contained numerous access barriers that prevented visually impaired individuals from equal access to the site. They further alleged that Thi failed to correct these barriers, even after receiving notice from Martin and Rendon. The trial court dismissed the case, noting that websites are not public accommodations under the ADA unless barriers present in the website impede a disabled person’s access to benefits at the website holder’s physical facility. No such physical facility was alleged here. Martin and Rendon then appealed. The California Court of Appeal affirmed. Title III of the ADA provides, “No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.” The law provides 12 categories with specific examples to help define a “place of public accommodation.” The Court concluded that a “place of public accommodation” requires a physical location for several reasons. First, it is the most natural usage of the phrase “place.” Second, the examples provided in the law are places that traditionally operate out of a physical location open to the public. And third, other relevant regulations define the phrase in terms of a “facility” which is explicitly defined in terms of physical structures. The Court noted that while the existence of websites was not considered in 1990 when the Act was established, there were other types of businesses in operation at that time that were not traditional brick-and-mortar buildings, such as mail order catalogues. The Court concluded that Congress intentionally used “place” to exclude business without a physical presence. Because this website did not involve or implicate benefits at a physical facility associated with the website, its failure to provide services to assist the visually impaired did not constitute a violation of the ADA. Martin v. Thi E-Commerce, LLC (2023) 95 Cal.App.5th 521.

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October 2023

Introducing LCW's New Partners!

Amy Brandt

Nathan Jackson

Alexander Volberding

Casey Williams

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new Legislation

California Modifies Regulation For Considering Criminal History In Employment Decisions. The California Civil Rights Department recently modified the regulation (2 CCR Section 11017.1) associated with California’s Fair Chance Act. The regulation addresses an employer’s restrictions and obligations for considering an applicant or employee’s criminal history. The modified regulation took effect on October 1, 2023. Below, we highlight some of the key requirements that remain the same and some of the key requirements that have changed for private K-12 schools under the modified regulations. What about private schools’ fingerprinting obligations? The modified regulation does not affect the legal obligation of private K-12 schools to comply with the fingerprinting and criminal background check obligations of Education Code Section 44237, including as follows:

• Private K-12 schools must require each applicant for employment in a position requiring contact with minor pupils to submit two sets of fingerprints prepared for submittal to the Department of Justice for the purpose of obtaining criminal record summary information from the Department of Justice and the Federal Bureau of Investigation. (Ed. Code, Section 44237, (a).)

How do the modified regulations apply to private schools? The modified regulation is very important for private K-12 schools in two key circumstances: 1. When an applicant’s criminal convictions do not automatically disqualify them under Ed. Code, Section 44237, (e) from being employed in a private school in a position requiring contact with minor pupils but the school – nevertheless – wants to deny the applicant employment because of the criminal conviction(s); and 2. When an applicant for a position that does not require contact with minor pupils has criminal conviction(s) and the school wants to deny the applicant employment because of the criminal conviction(s) after it had extended the applicant a conditional offer of employment. When the school intends to deny employment to an applicant in one of the above circumstances due to conviction history (either solely or in part), the school must first conduct an individualized assessment of whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position. As part of the individualized assessment, employers must consider, at minimum, the following factors: 1. The nature and gravity of the offense or conduct;

• Private K-12 schools remain prohibited from employing any applicant until the Department of Justice completes its check of the state criminal history file. (Ed. Code, Section 44237, (d).)

2. The time that has passed since the offense or conduct and/or completion of the sentence; and

• Private K-12 schools remain prohibited from employing any person who has been convicted of a violent or serious felony or a person who would be prohibited from employment by a public school district because of his or her conviction for any crime. (Ed. Code, Section 44237, (e).)

The modified regulation provides examples of the types of information that employers may consider for each of the above factors. First, consideration of the nature and gravity of the offense or conduct may include:

3. The nature of the job held or sought.

• The specific personal conduct of the applicant that resulted in the conviction; • Whether the harm was to property or people;

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• The permanence of the harm; • The context in which the offense occurred; • Whether a disability, including, but not limited to, a past drug addiction or mental impairment, contributed to the offense or conduct, and if so, whether the likelihood of harm arising from similar conduct could be sufficiently mitigated or eliminated by a reasonable accommodation, or whether the disability has been mitigated or eliminated by treatment or otherwise; • Whether trauma, domestic or dating violence, sexual assault, stalking, human trafficking, duress, or other similar factors contributed to the offense or conduct; and/or

• Whether the context in which the conviction occurred is likely to arise in the workplace; and/or • Whether the type or degree of harm that resulted from the conviction is likely to occur in the workplace. The modified regulation states that an applicant's possession of a benefit, privilege, or right required for the performance of a job by a licensing, regulatory, or government agency or board is probative of the applicant's conviction history not being directly and adversely related to the specific duties of that job. The modified regulation also requires employers to consider any evidence of rehabilitation or mitigating circumstances that is voluntarily provided by the applicant, or by another party at the applicant's request, before or during the individualized assessment.

If after conducting the individualized assessment, the employer makes • The age of the applicant when a preliminary decision that the the conduct occurred. applicant's conviction history disqualifies the applicant from Second, consideration of the time employment, employers are that has passed since the offense or required to comply with certain conduct and/or completion of the notice obligations. The modified sentence may include: regulations have modified and expanded upon those notice • The amount of time that has obligations, and generally require passed since the conduct employers to provide a written notice underlying the conviction, which to the applicant that contains all of may significantly predate the the following: conviction itself; and/or 1. Notice of the disqualifying • When the conviction led to conviction or convictions that incarceration, the amount are the basis for the preliminary of time that has passed since decision to rescind the offer. the applicant's release from incarceration. 2. A copy of the conviction history report utilized or relied on by the Third, consideration of the nature of employer, if any (e.g., consumer the job held or sought may include: reports, credit reports, public records, results of internet • The specific duties of the job; searches, news articles, or any other writing containing • www.lcwlegal.com •

information related to the conviction history that was utilized or relied upon by the employer).

October 2023

• The degree of the harm (e.g., amount of loss in theft);

3. Notice of the applicant's right to respond to the notice before the preliminary decision rescinding the offer of employment becomes final. 4. An explanation informing the applicant that, if the applicant chooses to respond, the response may include submission of (a) evidence challenging the accuracy of the conviction history report that is the basis for the preliminary decision to rescind the offer, or (b) evidence of rehabilitation or mitigating circumstances. 5. Notice of the deadline for the applicant to respond, if the applicant chooses to do so, which must be at least five business days from the date of the applicant’s receipt of the notice (the modified regulation provides direction on determining when notice is received based on various methods of transmission). The modified regulation provides a number of examples of evidence, including documentary evidence, rehabilitation or mitigating circumstances that applicants may provide. Employers cannot require applicants to provide evidence of rehabilitation or mitigating circumstances. If, however, applicants choose to provide that information, employers must accept it. The modified regulation further prohibits employers from taking a number of actions during this process, including:

1. Requiring an applicant to provide a specific type of documentary evidence (e.g., a police report as evidence of domestic or dating violence); 2. Disqualifying an applicant from the employment conditionally offered for failing to provide any specific type of documents or other evidence; 3. Requiring an applicant to disclose their status as a survivor of domestic or dating violence, sexual assault, stalking, or comparable statuses; and/or 4. Requiring an applicant to produce medical records and/or disclose the existence of a disability or diagnosis. As under the prior regulation, if an applicant provides timely written notice to the employer that the applicant disputes the accuracy of the conviction history and is taking specific steps to obtain evidence supporting the applicant's assertion, then the applicant must receive at least five additional business days to respond before the employer's decision to rescind the conditional employment offer becomes final. Also as under the prior regulation, employers must consider any information submitted by the applicant before making a final decision regarding whether or not to rescind the conditional offer of employment. The modified regulation, however, provides that when considering evidence of rehabilitation or mitigating circumstances, employers may consider the following factors in addition to those set forth above as part of the individualized assessment: 1. When the conviction led to incarceration, the applicant's conduct during incarceration, including participation in work and educational or rehabilitative programming and other prosocial conduct; 2. The applicant's employment history since the conviction or completion of sentence; 3. The applicant's community service and engagement since the conviction or completion of sentence, including, but not limited to, volunteer work for a community organization, engagement with a religious group or organization, participation in a support or recovery group, and other types of civic participation; and/or 4. The applicant's other rehabilitative efforts since the completion of sentence or conviction or mitigating factors. Employers remain obligated to provide written notice to an applicant when the employer makes a final decision to rescind the conditional offer and deny an application based solely or in part on the applicant's conviction history. Employers may use the sample Final Notice to Revoke Job Offer form, and other forms, from the California Civil Rights Department. Final Note As this article does not address every aspect of the modified regulation, private K-12 schools are encouraged to contact LCW to assist with fully understanding all of the modifications and their impact on the school’s hiring policies and practices.

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Inaccurate Employee Retention Credit Claims May Be Withdrawn. On October 19, 2023, the Internal Revenue Service (IRS) announced a withdrawal process for employers who have submitted Employee Retention Credit (ERC) claims. This process is yet another step the IRS has taken to address the significant number of scams associated with aggressive marketing companies misleading employers regarding ERC credits and causing them to file ineligible claims. Filing ineligible claims can result in employers being required to repay the credit and being assessed penalties and fees. Employers that are eligible to withdrawal an ERC claim must satisfy all of the following: 1. They made an ERC claim on an adjusted employment return; 2. Their only purpose of filing the adjusted return was to claim the ERC (i.e. no other adjustment was requested); 3. They seek to withdraw the entire amount of the ERC claim; and 4. They have not yet received payment on their ERC claim or have not yet deposited or cashed the IRS refund check. If qualified, an employer can submit a withdrawal by following the IRS instructions found here. Withdrawal procedures vary depending on how the ERC credit was initially submitted, if an employer is currently being audited by the IRS, or if an employer has already received but not cashed a check for the ERC credit.

October 2023

business & Facilities Employers that are ineligible for a withdrawal, but have identified an error in their ERC claim, may reduce or eliminate their claim by filing an amended return. The announcement of this withdrawal process follows the IRS’ September 14, 2023, announcement of a moratorium on processing new claims for at least the rest of the year. The IRS is continuing to process ERC claims received before September 14, 2023, but has slowed processing due to the increase in claims submitted by ineligible employers. The IRS also warns that even with the current moratorium, marketers and scammers are still targeting employers. The IRS is now observing scammers offering employers costly up-front loans in anticipation of receiving an ERC credit. We recommend continuing to remain vigilant in the event you are contacted by a marketer proposing to assist you in submitting an ERC credit, and to seek out the assistance of your trusted tax professional before submitting an ERC claim. LCW attorneys can assist employers in negotiating agreements with companies seeking to advise on submitting an ERC claim, and can also advise employers who have submitted an ERC credit, but may need to submit a withdrawal.

SB 699 Codifies Prohibition On Non-Compete Agreements From Out Of State Employers & Adds Private Right Of Action For Employees. California recently passed SB 699 to expand the existing prohibition on non-compete agreements to agreements with out of state employers and to provide a private right of action to employees that are subject to an attempted enforcement of a non-compete agreement.

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SB 699 adds Business and Profession Code Section 16600.5 that states any contract that is void under the Contracts in Restraint of Trade chapter of the code1 is unenforceable regardless of where and when the contract was signed. While California courts have regularly found non-compete agreements signed out of state to be unenforceable in California, the legislature has now acted to codify the prohibition into law. Further, SB 699 creates a private right of action for employees by stating that an employer that attempts to enforce a contract that is void under the chapter commits a civil violation. An employee, former employee, or prospective employee may bring a private action to enforce the chapter for injunctive relief or the recovery of actual damages, or both. A prevailing employee, former employee, or prospective employee that succeeds in such an action is also entitled to attorney’s fees and costs. Employers continue to include non-compete provisions in employment agreements even though they were void and unenforceable because it still served to restrict employee mobility. The legislature intends for this law to reduce the number of employers who violate this prohibition by increasing the risk of litigation and making it possible for employees to recover damages and attorney’s fees. This law is set to go into effect on January 1, 2024.

Printed Name At The Bottom Of An Email Is Not A Valid Electronic Signature. A California Court of Appeals recently affirmed a trial court’s decision that an employment agreement was not modified by a series of emails simply because the emails include the employee’s printed name in the email signature block. In analyzing whether the employee had agreed to a modification of his employment agreement, the Court evaluated whether the employee’s email signature block was a valid electronic signature. The employer contended that because the employee’s email included his full name, title, address, two phone numbers, email address and webpage URL, it satisfied the requirements under the Uniform Electronic Transactions Act (UETA). (Civil Code Sections 1633.1 et seq.) Under the UETA, an electronic signature has the same legal effect as a handwritten signature, if it meets certain requirements. Significant for the case here, under Civil Code Section 1633.2, in order to be effective an electronic signature must be “executed or adopted by a person with the intent to sign the electronic record.” The Court stated that attributing the name on an email to a particular person and determining the printed name is the act of this person is a necessary perquisite, but is insufficient, by itself, to establish that it is an electronic signature. Further, that the UETA only applies to situations where both parties have agreed to conduct business by electronic means. The evidence in this case demonstrated that the employee’s emails merely represented thoughts and discussions; there was no evidence to show that the employee’s emails were intended to execute a final modified agreement as required under the UETA. This case serves as an important reminder that in order for an electronic signature to be binding, it must strictly comply with the requirements of the UETA. An email signature block in and of itself is likely insufficient.

1 The chapter generally prohibits and voids any contracts that restrict anyone from engaging in a lawful profession, trade or business of any kind. It also sets forth specific exceptions to this prohibition.

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October 2023

r s n o b o

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Non-Profit Employee’s Advocacy To Rehire Former Employee Was Protected Activity Under NLRA.

Sarah Raybon worked at the American Federation for Children Inc., a national school-choice advocacy nonprofit. Steve Smith, a former Arizona state senator, was hired in early January 2019 as the Organization’s Arizona state director. Smith was Raybon’s direct supervisor. When Smith was hired, Raybon was facilitating the rehiring of Gaby Ascencio, a former Organization employee who had lost her eligibility to work in the United States in 2017 due to a change in circumstances in her immigration status. Ascencio was a valued colleague and highly regarded within the Organization, so the Organization undertook the process of sponsoring her for a work permit so she could be reemployed. While this process was ongoing, the Organization held a position for Ascencio. In initial meetings between Smith and Raybon, Raybon brought up that they were in the final stages of rehiring Ascencio and Raybon conveyed the importance of Ascencio to the Organization. In these meetings, they also discussed appropriate website content regarding immigration status for the Organization’s English and Spanish-language websites. Because of these meetings, Raybon formed the belief that Smith did not understand Ascencio’s importance to the Organization or why a position was being held for her. Raybon also had concerns, based on their discussions about the website, about Smith’s leadership impact on the Hispanic community. Raybon received word from her former supervisor that one of Smith’s former colleagues had applied for Ascencio’s position. Smith had also sponsored legislation as a state senator that was “antiimmigrant.”

In February 2019, Raybon went to Washington D.C. for the Organization’s annual conference and while there, raised complaints about Smith’s management practices and the rehire of Ascencio to her colleagues. Following the conference, the Organization’s president, John Schilling, confronted Raybon that he had received three reports that Raybon called Smith a “racist.” Raybon denied calling Smith a racist, but did acknowledge that she had issues with Smith’s leadership style. Smith demanded that the Organization investigate Raybon. The investigation concluded that there was no evidence that Smith was racist or biased against people of color. Schilling decided to terminate Raybon for creating a toxic atmosphere and making an incendiary accusation that Smith was racist. Schilling called Raybon and told her that several colleagues had confirmed that Raybon had called Smith racist, that she had violated the employee handbook, and Smith was refusing to work with her anymore. Raybon said she would resign. Raybon then worked for another nonprofit schoolchoice advocacy organization, which, like her prior organization, was a member of an Arizona-based school choice coalition. The prior organization took issue with Raybon’s support for an Arizona school official whom the prior organization considered to be a political opponent. Raybon’s new organization was dropped from the invitation list for meetings of the school choice coalition. Raybon filed a charge against the prior organization (American Federation for Children Inc.), alleging they violated the National Labor Relations Act (NLRA) for maintaining unlawful work rules and directives, seeking Raybon’s resignation in retaliation for her concerted protected activity, and their post-discharge efforts to interfere with her new employment.

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Section 7 of the NLRA protects employees who take action in the workplace for when they engage in “protected concerted activity,” which usually involves the employee acting on behalf of themselves and other employees. The Administrative Law Judge (ALJ) concluded that Raybon did not engaged in protected activity in February 2019 with her efforts to rally opposition to Smith’s policies, including Smith’s perceived lack of support for rehiring Ascencio. Specifically, the ALJ concluded that under prior precedent in Amnesty International, employees’ efforts of mutual aid and protection on behalf of a non-employee were not covered under the NLRA. Since Ascencio was not an employee of the Organization, Raybon’s actions were not protected. The National Labor Relations Board (NLRB) overturned the ALJ’s decision and overruled the Amnesty International decision. The NLRB found that Raybon engaged in concerted activity for the purpose of mutual aid or protection when she advocated among her colleagues for their support of Ascencio’s rehiring.

Raybon had a series of conversations with her colleagues, including managers, and those she knew would be more sympathetic to Ascencio’s situation and whom would advocate for Ascencio’s rehire. The NLRB determined that these actions showed Raybon was looking to solicit group action in support of Ascencio’s rehire. The NLRB also concluded that Ascencio was an employee under the NLRA, and her immigration status was immaterial because it did not prevent her from applying for work. Raybon’s actions were for the mutual aid and protection of all current employees because Ascensio was desired as a coworker, and it would benefit all employees if she was rehired. Having determined that Raybon engaged in concerted activity, the NLRB remanded the remaining allegations back to the ALJ. American Federation for Children, Inc. 372 NLRB No. 137. Note: This case is another example of employee protections expanding under the current NLRB appointed by President Biden. This case held that in some circumstances, NLRA protection also applies to actions by workers that are taken in support of non-employees, such as applicants.

Upcoming Webinar! 2024 Private Education Legislative Roundup Thursday, November 16, 2023 10:00 a.m. - 11:00 a.m.

Many new laws affecting California private schools are set to take effect January 1, 2024. The LCW Legislative Roundup webinar will explain what private schools need to know about these new laws and how they may affect your school. Attendees will leave this webinar with insights on the impacts of the new laws, an understanding of new legal obligations, and helpful strategies to comply with the new laws.

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University’s Failure To Abide By Student Handbook Policies During Investigation Results In Breach Of Contract Claim. John Doe attended Butler in the fall of 2019 and developed a friendship with a group of eight to ten fellow students (the “friend group”). Five of the members, including a female student (identified as JF), lived in the same dorm suite (Room 113). Doe and his friend group frequently spent time together in Room 113. In early 2021, Doe moved in across the hall from Room 113. In February 2021, Doe gathered with friends in Room 113, and Doe used JF’s private bathroom while JF was out of town. JF expressed her discontent with Doe upon her return. Doe’s suitemate (identified as BP) misinformed the friend group that Doe compulsively monitored their locations, stared out the window of the suite awaiting members of the friend group’s return, and checked Room 113 multiple times a day to see if people were there. BP also revealed that she was having meetings about Doe with campus security and the dean of students. After this exchange, Doe requested an emergency room change, stating that he felt he was being persecuted and harassed and living in a toxic environment. Doe received a response from the School’s Title IX Coordinator. Doe met with the Title IX Coordinator the next day and Doe learned that JF had filed a claim against him, alleging that Doe stalked her, in violation of Butler’s Sexual Misconduct Policy. The core of the allegations were that Doe used JF’s bathroom without express permission. Doe repeatedly requested that Butler dismiss the stalking claim. Doe claimed that the investigator’s notes were sloppy and littered with typos, incomplete sentences, incorrect pronouns, and incoherent sentences. The investigator also fully redacted student and witness names, creating an incoherent investigation file. Despite Doe’s requests for

legible copies of the evidence and reasonable time extensions, Butler provided none. Doe’s only access to the materials was through nondownloadable files online, limiting his ability to examine the evidence and prepare his defense.

October 2023

investigations

students

Butler’s investigator completed his final report and investigative file, and a hearing was scheduled. A week prior to the hearing, Doe requested a hearing agenda and witness list, which Butler transmitted less than 48 hours before the hearing. Ninety minutes prior to the scheduled start time, Butler canceled the hearing in an email, explaining the investigator had quit that morning. Ultimately, Butler held another hearing, during which the investigation report was not used in determining responsibility. The outcome found that Doe was not responsible for stalking. Doe filed suit against Butler, alleging, among other claims, breach of contract. Butler filed a motion to dismiss, alleging that Doe failed to state a claim upon which relief could be granted. The Court concluded that an implied contract existed between Doe and the University by virtue of Doe’s enrollment and payment of tuition and fees, in exchange for which the University made binding promises in its Student Handbook. The Court determined that in the Student Handbook, Butler made the following contractual promises to Doe: • Parties to an investigation will be given access to an appendix of raw materials gathered in the investigation (e.g., incident reports, documentation submitted by the parties, etc.). • The Title IX Coordinator will send notice of the date, time, and location of the hearing, and the name(s) of decision-maker(s) to the parties at least 14 business days prior to the hearing date. • In scheduling the hearing, the Title IX Coordinator will accommodate the parties’ and advisors’ schedules to the extent reasonable. • The decision-maker will be provided a copy of the Final Investigation Report.

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These provisions describe specific actions that Butler explicitly stated it would take in investigating such cases. The Court concluded that Doe showed enough facts to imply that Butler deviated from its policies by not providing Doe with access to investigative materials, not providing adequate notice of changes to the scheduled hearing time, and permitting the hearing to proceed when the decision-maker did not have a copy of the investigative report. As a result, the Court denied Butler’s motion to dismiss. Doe v. Butler Univ. (S.D.Ind. Sep. 29, 2023) 2023 U.S.Dist.LEXIS 175125. Note: This case serves as an important reminder for schools that the student handbook, and the policies contained therein, create contractual obligations for them.

Congratulations to

Scott Tiedemann for being awarded an

Ally of the Year

by Corporate Counsel's 2023 Women, Influence and Power in Law Awards!

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• The Equal Employment Opportunity Commission (EEOC) released draft enforcement guidance on workplace harassment for the first time in six years. The draft guidance specifically protects LGBTQ+ employees’ rights in the workplace; confirms that sex-based harassment includes harassment based on pregnancy, childbirth, or reproductive decisions; and addresses the impact of digital technology, including social media, on the work environment. The draft guidance will be open for public comments until November 1, 2023. • The U.S. Department of Education issued a report that outlines strategies for increasing diversity and opportunity in high education in light of the Supreme Court’s recent affirmative action decision. The report calls on K-12 and higher education institutions, especially those serving lowincome students, communities of color, and first-generation students, to establish relationships with one another and create outreach and pathway programs. This, in turn, will increase college applications from underserved students. The report also stresses the importance of quantity and quality of high school counselors. • The U.S. Department of Education released new non-regulatory guidance under the Every Student Succeeds Act (ESSA). This guidance is not legally binding, but it is instructive. Under ESSA, a number of programs offer “equitable services” to students and educators in private schools. These services are provided by either a public school district in which a private school is located, by a third-party provider that is contracted by the district, or by the California Department of Education. The recent guidance addresses a wide variety of topics and includes a question and answer section specific to each ESSA program.

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October 2023

did you know...?

construction corner LCW represents and advises private schools and colleges in various business, construction, and facilities matters, including all aspects of construction projects from contract drafting and negotiations to course of construction issues. Through this Construction Corner, LCW will be giving private schools and colleges monthly helpful tips on a variety of topics applicable to campus construction projects. LCW attorneys are available should you have any questions or need assistance with any construction projects no matter what phase you may be in currently.

Construction Payments And Preliminary Notices: Why Am I Getting This? By: Abigail Clark If you receive a “preliminary notice” from a contractor working on a construction project for your school – Do Not Panic! But hold on to it, because you may need it later. In California, a party who provides work related to an authorized improvement to real property has the right to place a mechanic’s lien on the property if the party is not paid for the work or materials provided. As long as specific procedural requirements are satisfied, the mechanics lien will attach to the property and is a means for the party to recoup payment. Foreclosure of the lien can lead to loss of all or part of the property. Parties entitled to a mechanics lien include, but are not limited to, direct contractors, subcontractors, material suppliers, equipment lessors and laborers. (Cal. Civ. Code Section 8400.) Protecting the right to file a mechanics lien typically begins with sending a “preliminary notice.” This notice is a legal document typically sent by subcontractors and suppliers to the property owner, direct contractor, and construction lender, if any, as a notification that the sender is participating in the project, has a right to be paid for their work, and will have a mechanics lien right on the property in the event they are not paid. Preliminary notices must meet certain statutory requirements in order to be effective. In California, the content of the notice must reference the name and address of the owner or reputed owner, and include a general description of the work to be provided, an estimate of the total price of the work to be provided, and the required statutory language for the notice to inform the property owner of the mechanics lien right and its potential effect, among other things. (Cal. Civ Code Section 8102; 8202.) In addition, a preliminary notice must be sent not later than 20 days after the sender first furnished its work or services. (Cal. Civ. Code Section 8204.) Failure to do so will limit the scope of the mechanics lien, which will only be effective for work performed within 20 days prior to the service of the preliminary notice, and at any time thereafter. (Id.) Property owners who receive preliminary notices should understand that the notice itself does not require any action on the part of the property owner: it is simply a notice of the sender’s participation in the project and mechanics lien right. The notice does not mean that a mechanics lien will be filed against the property. However, owners should review the notice and ensure that the details align with the nature of the construction project. Owners of real property who receive a notice, but did not contract for work to be performed on the property, may issue a notice of non-responsibility to avoid the attachment of a mechanics lien to its interest in the property. Property owners should also retain these notices, and keep details regarding the date of receipt and any related correspondence, which could be useful if a later payment dispute arises. In the event that a property owner has questions about the content or effect of preliminary notices, owners should have legal counsel review the notices to ensure compliance with applicable statutory requirements, and potential next steps. For example, if details are inaccurate, communication with the general contractor and/or sender may be appropriate.

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October 2023

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lcw best timeline OCTOBER 31ST THROUGH DECEMBER 5TH

and approval of compensation. The committee must be composed of individuals without a conflict of interest.

Submit EEO-1 Component 1 Report

Review employee health and other benefit packages, and determine whether any changes in benefit plans are needed.

• Beginning on October 31, schools with 100 or more employees are required to report their EEO1 Component 1 data, which includes information on the racial, ethnic, and gender composition of an employer’s workforce by specific job categories. The deadline to submit this data is December 5, 2023.

NOVEMBER THROUGH JANUARY Issue Performance Evaluations • We recommend that performance evaluations be conducted on at least an annual basis, and that they be completed before the decision to continue employment for the following school year is made. Schools that do not conduct regular performance reviews have difficulty and often incur legal liability terminating problem employees - especially when there is a lack of notice regarding problems. Consider using Performance Improvement Plans but remember it is important to do the necessary follow up and follow through on any support the School has agreed to provide in the Performance Improvement Plan.

If lease ends at the end of the school year, review lease terms in order to negotiate new terms or have adequate time to locate new space for upcoming school year. Review tuition rates and fees relative to economic and demographic data for the School’s target market to determine whether to change the rates. Review student financial aid policies. Review, revise, and update enrollment/tuition agreements based on changes to the law and best practice recommendations. File all tax forms in a timely manner: Forms 990, 990EZ • Form 990: Tax-exempt organizations must file a Form 990 if the annual gross receipts are more than $200,000, or the total assets are more than $500,000.

Compensation Committee Review of Compensation before issuing employee contracts

• Form 990-EZ: Tax-exempt organizations whose annual gross receipts are less than $200,000, and total assets are less than $500,000 can file either form 990 or 990-EZ.

• The Board is obligated to ensure fair and reasonable compensation of the Head of School and others. The Board should appoint a compensation committee that will be tasked with providing for independent review

• A School below college level affiliated with a church or operated by a religious order is exempt from filing Form 990 series forms. (See IRS Regulations Section 1.6033-2(g)(1)(vii)).

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October 2023

practices Each month, LCW presents a monthly timeline of best practices for private and independent schools. The timeline runs from the fall semester through the end of summer break. LCW encourages schools to use the timeline as a guideline throughout the school year. • The 990 series forms are due every year by the 15th day of the 5th month after the close of your tax year. For example, if your tax year ended on December 31, the e-Postcard is due May 15 of the following year. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. • The School should make its IRS form 990 available in the business office for inspection. Other required Tax Forms common to businesses who have employees include Forms 940, 941, 1099, W-2, 5500 Annual review of finances (if fiscal year ended January 1st) • The School’s financial results should be reviewed annually by person(s) independent of the School’s financial processes (including initiating and recording transactions and physical custody of School assets). For schools not required to have an audit, this can be accomplished by a trustee with the requisite financial skills to conduct such a review. • The School should have within its financial statements a letter from the School’s independent accountants outlining the audit work performed and a summary of results.

committee is responsible for recommending the retention and termination of an independent auditor and may negotiate the independent auditor’s compensation. If an organization chooses to utilize an audit committee, the committee, which must be appointed by the Board, should not include any members of the staff, including the president or chief executive officer and the treasurer or chief financial officer. If the corporation has a finance committee, it must be separate from the audit committee. Members of the finance committee may serve on the audit committee; however, the chairperson of the audit committee may not be a member of the finance committee and members of the finance committee shall constitute less than one-half of the membership of the audit committee. It is recommended that these restrictions on makeup of the Audit Committee be expressly written into the Bylaws.

JANUARY/FEBRUARY Review and revise/update annual employment contracts. Conduct audits of current and vacant positions to determine whether positions are correctly designated as exempt/non-exempt under federal and state laws.

• Schools should consider following the California Nonprofit Integrity Act when conducting audits, which include formation of an audit committee: Although the Act expressly exempts educational institutions from the requirement of having an audit committee, inclusion of such a committee reflects a “best practice” that is consistent with the legal trend toward such compliance. The audit • www.lcwlegal.com •

Consortium Call Of The Month Members of Liebert Cassidy Whitmore’s consortiums are able to speak directly to an LCW attorney free of charge to answer direct questions not requiring in-depth research, document review, written opinions or ongoing legal matters. Consortium calls run the full gamut of topics, from leaves of absence to employment applications, student concerns to disability accommodations, construction and facilities issues and more. Each month, we will feature a Consortium Call of the Month in our newsletter, describing an interesting call and how the issue was resolved. All identifiable details will be changed or omitted.

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October 2023

Question:

Answer:

A school asked for guidance regarding the new 2024 sick leave requirements. The school asked whether LCW would be hosting an information session regarding the new requirements. The school also explained that they currently provide full-time faculty 24 hours of paid sick leave every August, at the start of the academic year, and asked how much paid sick leave they needed to provide beginning January 1, 2024.

The attorney advised that LCW recently issued a special bulletin on this topic and told the school that LCW is offering a webinar on November 16 that will cover new legislation going into effect next year. The new sick leave requirements will be covered as part of this webinar. The attorney advised that under the new law, employees are guaranteed five paid sick days per year (or 40 hours), up from three days (or 24 hours) previously. The attorney explained that if an employer is frontloading sick leave, no less than 40 hours of paid sick leave can be frontloaded every 12 month period. However, the Division of Labor Standards Enforcement (DLSE) has not yet provided clarification on the options for midyear compliance. It may be that the school will need to frontload the 40 hours of sick leave at the beginning of the next fiscal year, and doing so is likely consistent with the statutory language. The attorney advised that LCW expects that the DLSE will issue FAQs regarding these issues, and once those FAQs have been issues, LCW will send out a newsletter on this.

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