Private Education Matters: September 2022

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

duty of care

District Owed Duty Of Care To Protect Student Stabbed By Third Party While On Campus.

Plaintiff C. Achay was a tenth grade student and member of the track team at the Huntington Beach Union High School District. After her track practice ended early one day, Achay and her friend walked to a nearby Starbucks and returned to campus approximately 45 minutes later to grab books from her school locker. While the students were walking back to campus, they encountered a former student who they thought was “suspicious” and “kind of weird.” While Achay was walking from the school’s locker room to the school parking lot, the former student stabbed her and she suffered serious injuries.

Achay sued the Huntington Beach Union High School District, alleging that the District breached its duty to provide proper security on campus. The District filed a motion for summary judgment, arguing it owed Achay no duty of care at the time of the stabbing, and even if it did owe her a duty, there was no basis for a reasonable juror to find a causal connection between the District’s alleged negligence and the injury, which was unpredictable. The trial court granted the District’s summary judgment motion, finding that the District did not owe Achay a duty of care because at the time of the stabbing, she was no longer on campus during school hours during a school-related activity. Achay appealed.

The Court of Appeal disagreed with the trial court. The court held that the District owed Achay a duty of care because at the time of the stabbing, Achay was on campus to retrieve her books from an open locker

room after her track practice, and another sports team was still practicing nearby. The fact that the student left campus and later returned had no effect on whether the District owed her a duty because she was stabbed on school grounds during ongoing after-school sports activities. The court stated that Achay’s brief departure from school is a “red herring,” and there was a triable issue of fact as to whether the District used reasonable security measures to protect Achay from an arguably preventable injury. The court further held that a factfinder could conclude that had campus supervisors been present, the tenth grader would have sought their protection.

Achay v. Huntington Beach Union High School District (2022) 80 Cal.App.5th 528.

Note:

This case is a helpful reminder that schools owe a duty of care to students or other individuals that are on school campus to protect them from foreseeable harm.

3 September 2022 • www.lcwlegal.com • students

We are thrilled to

Lisa S. Charbonneau San Francisco

Christopher M. Fallon Los Angeles

Paul D. Knothe Los Angeles

Alysha Stein-Manes Los Angeles

Joung H. Yim Los Angeles

4 • Los Angeles • San Francisco • Fresno • San Diego • Sacramento • Danny Y. Yoo Los Angeles

Anti-SLAPP Motion Denied In Suit Against Archdiocese Over Priest Who Sexually Abused Minors.

Seven adults (Does 1-7) sued the Roman Catholic Archbishop of Los Angeles and its related entities (the Archdiocese). The plaintiffs alleged they were sexually molested by Father Christopher Cunningham, a priest of the Archdiocese, when they were minors. The plaintiffs alleged causes of action for child sexual abuse/sexual battery and negligence.

Prior to Father Cunningham’s ordination in 1989, the Archdiocese received complaints that several of its priests had sexually molested children. The Archdiocese thereafter adopted written policies for the prevention of child molestation and provided copies to all priests. The policy prohibited priests from spending time with minors in their living quarters, taking minors on unchaperoned outings, and tickling, wrestling, kissing, or hugging minors.

The plaintiffs all alleged that Father Cunningham sexually molested underage boys since his ordination in 1989 and throughout the 2000s. Additionally, the plaintiffs alleged that rather than taking action in response to suspicions and accusations against Father Cunningham with investigations, supervision, or limitation of access to children, the Archdiocese reassigned Father Cunningham to other parishes where he continued to molest other children. The plaintiffs alleged multiple instances where Father Cunningham violated the Archdiocese policy to prevent child molestation by spending time alone with and hugging and wrestling multiple underage children. The plaintiffs alleged instances where Father Cunningham’s behavior was reported to head priests and the Vicar of Clergy, yet no investigation was conducted into the reports.

Despite all the complaints that Father Cunningham was sexually abusing underage boys, Father Cunningham was promoted pastor of his own church in 2001, where he continued to sexually abuse minors. In 2015, another victim (not a plaintiff in this case) sued Father Cunningham for sexual abuse. In 2017,

the Los Angeles County Sheriff’s Department began a criminal investigation into complaints against Father Cunningham.

The plaintiffs in this case also alleged the Archdiocese had continuously paid for Father Cunningham’s maintenance and support since 2005, and did not stop its support in response to the 2015 lawsuit or criminal investigation. The Archdiocese paid the legal fees of Father Cunningham’s lawyers and hired an investigator to “dig up dirt” on his victims. The Archdiocese also paid for Father Cunningham to fly to Los Angeles to attend a deposition of his victim in an attempt to intimidate and silence them. In January 2019, Father Cunningham settled the 2015 lawsuit. The plaintiffs alleged that even after this settlement, the Archdiocese continued to pay for Father Cunningham’s legal fees so that his lawyers could lobby the Los Angeles District Attorney against pressing criminal charges.

The Archdiocese filed an anti-SLAPP motion, which allows for the early dismissal of a case that thwarts constitutionally-protected speech. A court examines an anti-SLAPP motion in two parts: 1) whether a defendant has shown the challenged cause of action arises from protected activity; and 2) whether the plaintiff has demonstrated a probability of prevailing on the claim. Speech made in connection with a public issue falls within protected activity under the anti-SLAPP statute. Statements made in a judicial proceeding, called litigation activity, are also protected conduct for anti-SLAPP purposes.

The Archdiocese argued that the allegations of its support of Father Cunningham in the 2015 lawsuit and the sheriff’s criminal investigation were protected litigation activity. The Archdiocese also argued that its decision not to speak about the allegations against Father Cunningham to the parish communities, its failure to communicate the Archdiocese’s policy for the prevention of molestation to nonpriest staff and members of the community, its failure to educate, train, and warn plaintiffs about sexual abuse, and its failure to inform staff about their duties to report sexual abuse under the law, were all protected activity.

The case made its way to the California Supreme Court, which remanded the case with directions

to the Court of Appeal to reconsider its decision in light of the Supreme Court’s recent decision in Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995. In Bonni, the California Supreme Court held that courts must analyze each individual cause of action to determine whether the challenged claims arise from protected activity in analyzing an anti-SLAPP motion.

The Court of Appeal denied the Archdiocese’s anti-SLAPP motion. Under the plaintiffs’ first cause of action of sexual abuse/sexual battery, the plaintiffs alleged that the Archdiocese should be liable for Father Cunningham’s molestation of plaintiffs due its authorization and ratification of his conduct. The Court of Appeal rejected the Archdiocese’s argument that the allegations as it pertained to plaintiffs’ sexual abuse/sexual battery cause of action were “litigation activity” because of the Archdiocese’s alleged financial and legal support of Father Cunningham. Rather, in addition to the Archdiocese’s financial and legal support, the plaintiffs allege that the Archdiocese failed to investigate and supervise Father Cunningham and instead transferred him to different parishes, which was not litigation activity.

The Court found that the Archdiocese similarly attempted to narrowly construe the allegations supporting plaintiffs’ negligence cause of action. The Court of Appeal agreed with the Archdiocese’s argument that the right to free speech includes the right not to speak. However, the Court held that the Archdiocese’s failure to inform the parish community about Father Cunningham’s sexual abuse was not protected activity because the conduct was not in furtherance of the right of free speech. Therefore, the Archdiocese’s failure to warn allegations are additional allegations of negligent conduct by the Archdiocese and not subject to attack by an anti-SLAPP motion.

Ultimately, the Court of Appeal denied the Archdiocese’s anti-SLAPP motion.

Ratcliff v. Roman Cath. Archbishop of Los Angeles (2022) 79 Cal. App. 5th 982.

Note:

Anti-SLAPP motions are a powerful tool for the early dismissal of lawsuits involving issues of protected speech. Here, the Court of Appeal disagreed that the Archdiocese’s purported failure to speak regarding the suspected abuse of minors by the priest constituted conduct in furtherance of the Archdiocese’s right to free speech. The plaintiff’s complaint identified specific instances where the Archdiocese failed to investigate, discipline, or supervise the priest, and even concealed evidence of the sexual abuse of children. Therefore, the Archdiocese’s conduct was not protected activity for anti-SLAPP purposes.

contracts

Law School Did Not Breach Contract With Student Who Alleged The School Failed To Provide A Timely And Accurate Copy Of His Transcript.

Marcus Silver (Silver) enrolled in West Los Angeles School of Law (Law School) in 2011. He took an introduction to law course in the summer of 2011 but the Law School academically dismissed Silver for receiving a failing grade in the course. He was therefore not able to enroll in any courses in the fall of 2011. In the spring of 2012, Silver allegedly retook the introductory course and earned a B. However, this grade was omitted from his official transcript. Silver alleged he then took a criminal practice course that summer, which was the only course he was allowed to take, and earned a D.

Later in 2012, Silver enrolled in North Western California University School of Law (NWCU). Toward the end of his first year there, he learned he needed to submit an official transcript from the Law School to the State Bar of California’s Office of Admissions (Bar) before taking his final exams. In October 7, 2013, Silver requested a copy of his transcript from Law School on an expedited basis. On October 25, he resubmitted his request but did not receive the transcript until December 5, 2013. By that time, the exam deadline passed.

Silver brought a breach of contract claim against Law School, alleging that his two requests for his transcript in October 2013 constituted written contracts between Silver and Law School; that Law School breached the contracts by “failing to timely satisfy its obligation to release accurate transcripts.” Additionally, Silver alleged that the transcript was not accurate and had omitted records of classes he had taken and passed. Silver alleged that due to the breach, he suffered damages of over 3 years of “wasted time, book, tuition and transportation expenses, anger, shame, embarrassment and career earnings.”

The Law School moved for summary judgment and argued that no contract existed between it and Silver. It submitted evidence that Silver authorized the Law School to charge his credit card $50 for transcripts, and the Law School advised him that the payment was declined due to insufficient funds and that Silver contact the Law School to complete payment. The Law School also submitted evidence that the transcript showed him earning a Cin the introduction to legal studies course and the Law School sent a letter to Silver informing him that he had been academically dismissed for failing to meet the minimum academic requirements due to his grade in the introductory course, but that Silver could file a petition for readmission. The letter also stated that Silver would be refunded all charges for the Fall 2011 semester.

The transcript also showed that Silver enrolled in three courses for the Fall 2011 semester but did not receive a credit or grade in those courses. As for the summer 2012 criminal practice course, the transcript showed Silver earned a D. The Law School also submitted a letter in August 2012 informing Silver that he had been academically dismissed for failure to maintain the minimum academic requirements at the end of the summer 2012 term. The letter again noted that Silver could petition for readmission.

The trial court agreed with the Law School and entered judgment for the Law School. Silver appealed.

The Court of Appeal agreed with the trial court and upheld the judgment. The elements for a breach of contract claim are (1) the existence of a contract, (2) the plaintiff’s performance of the contract or excuse for non-performance, (3) the defendant’s breach of the contract, and (4) resulting damage to the plaintiff. The Court of Appeal held that the Law School established it did not breach any contractual duty to Silver and Silver suffered no damages.

The Court of Appeal also rejected Silver’s notion that his transcript was not timely issued because the Law School presented evidence that the initial delay in producing the transcript was because Silver’s credit card payment was declined. When Silver resubmitted new payment information, the Law School issued the transcript within four days, on October 29, in compliance with the Law School’s policy that

charges would be processed within seven business days. Therefore, there was sufficient evidence to show the Law School complied with its contractual duty (if any) to timely issue Silver’s transcript.

Additionally, Silver offered no evidence that the Bar did not receive the transcript in a timely fashion after the Law School issued the transcript on October 29. Silver also offered no evidence that the transcript was inaccurate. As to Silver’s alleged damages, the Law School presented a December 2013 letter from the Bar to Silver informing him that he was officially registered

with the State Bar’s Office of Admissions. Therefore, if there was a delay in the Law School issuing the transcript, Silver was not prevented from registering from the Bar or taking his final exams at NWCU.

Silver v. Univ. of W. Los Angeles Sch. of Law (Cal. Ct. App. July 20, 2022) 2022 WL 2826399 (unpublished).

Note: Private K-12 schools, colleges, and universities should review their enrollment contracts, policies, and procedures to ensure they are consistently responding to requests for transcripts and other pupil records.

Celebratory Highlights!

1.Liebert Cassidy Whitmore is proud to announce that we have been ranked 11th in Law360’s 2022 Pulse Diversity Snapshot.

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.

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.

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.

employeestitleix

College’s Nonrenewal Of Coach’s Contract Was Adverse Employment Action

Supporting A Title IX Retaliation Claim.

Carroll College (College) is a Catholic liberal arts college in Helena, Montana. The College employed Bennett K. MacIntyre from 20062016, first as the Community Living Director and later as the Associate Athletics Director. MayIntyre also received a stipend for serving as the head coach for the College’s golf team.

In September 2015, MacIntyre wrote in his employee self-evaluation that he aimed to “assist Carroll Athletics in becoming Title IX compliant.”

In January 2016, MacIntyre informed the College’s Title IX Coordinator and Director of Human Resources about potential Title IX violations. MacIntyre also alleged workplace harassment, hostile work environment, and discrimination involving Kyle Baker, the Interim Director of Athletics, and Dr. Tom Evans, the President of the College.

The next month, Baker submitted a performance review of MacIntyre and gave him the lowest possible score in each category. MacIntyre

then filed a formal grievance alleging, among other things, discrimination and hostile work environment. To resolve complaints, the College and MacIntyre entered into a settlement agreement in which the College agreed to remove Baker’s negative review, pay MacIntyre in back wages, and hire MacIntyre as a full-time golf coach for two years from 20162018. Meanwhile, the new Athletic Director, Charlie Gross, learned of MacIntyre’s grievances and Title IX complaints from various memos and from MacIntyre directly. MacIntyre also complained of gender inequity to a member of the College’s Board of Trustees.

Around this time, the College started experiencing budget problems because of declining student enrollment. In June 2017, the Vice President of Finance, Lori Peterson, emailed Gross about the need for budget cuts in the athletic department, asking whether the College needed a head golf coach or whether the position was stipendonly. Two months later, Gross proposed reductions in the athletic department budget, including the recommendation to make the golf coach a stipend-only position. The Board of Trustees adopted those recommendations. As a result, MacIntyre’s pay reduced significantly and he lost some of his employment benefits.

MacIntyre filed another grievance in June 2018, alleging retaliation for complaining about Title IX violations. An outside investigator investigated his claims, but could not determine by a preponderance of the evidence that the alleged violations occurred.

MacIntyre filed a lawsuit against the College, alleging the College refused to renew his contract in retaliation of his complaints about gender inequity. The College moved for summary judgment and the trial court granted the motion, holding that MacIntyre failed to allege a prima facie case of retaliation under Title IX. Specifically, the trial court held that the nonrenewal of MacIntyre’s contract was not an adverse employment action.

The Ninth Circuit disagreed with the trial court. In order to make a prima facie case of retaliation, a plaintiff without direct evidence of retaliation must show that (1) they engaged in protected activity, (2) they suffered an adverse action, and (3) there was a causal link between the two. A plaintiff only needs to make a minimal threshold showing retaliation, and is not required to prove their retaliation claims to the level of a preponderance of the evidence standard.

The Ninth Circuit explained that an adverse employment action is one that may be reasonably likely to deter employees from engaging in protected activity, like reporting discrimination. Here, the nonrenewal of an employment contract is likely to deter a reasonable employee from reporting discrimination. MacIntyre and another coach testified that they expected their contracts to be renewed, which was enough to make a minimal threshold showing that MacIntyre suffered an adverse employment action when his contract was not renewed.

The Ninth Circuit reversed the trial court’s grant of summary judgment to the College and remanded the case.

new to the

MacIntyre v. Carroll College (2022) --- F.4th ---- [2022 WL 4101176].

Note: Private K-12 schools, colleges, and universities that receive federal funds should be mindful that plaintiffs have a low burden of proof to allege an adverse employment action in a Title IX retaliation claim. We also note that the proposed Title IX regulations, released in June, clarify that Title IX protects a person from retaliation, and define retaliation as “intimidation, threats, coercion, or discrimination against anyone because the person has reported possible sex discrimination, made a sex-discrimination complaint, or participated in any way in a recipient’s Title IX process.”

We are pleased to announce that Ronnie M. DeCesare, has joined Liebert Cassidy Whitmore as our newest Executive Director. Ronnie has over 20 years of leadership experience in the legal industry with a proven record for strategic business successes. He remains a committed leader who believes in fostering internal collaboration that ultimately provides our clients with the best legal counsel and superior service levels.

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.

Cara Strike, an associate in our Los Angeles office, specializes in matters concerning employment and education law, and has experience litigating harassment and discrimination matters. She is also well-versed in Title IX issues and claims.

We are happy to welcome our new law clerks! Please welcome Larissa Alvarez, Morgan Johnson, Alexandra Seymour, Jophiel “Anthony” Co and Gabriella Kamran.

violence

Employer Must Show A Credible Threat of Violence To Get A Restraining Order On Behalf Of Its Employee.

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.

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.

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 incompetence.”

The next day, Rafat 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.

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.”

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. The Court of Appeal was forced to reverse the trial court’s judgment and vacate the WVRO.

Tech. Credit Union v. Rafat, 2022 WL 3444075 (Cal Court of Appeal).

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.

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.

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 full-time employees, including full-time equivalents, during the preceding calendar year.

The ACA affordability test is based on the employee-share 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).

1) Federal Poverty Line Safe Harbor

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).

2) Rate of Pay Safe Harbor

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.

3) Form W-2 Safe Harbor

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.

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. The penalty is triggered when an employee purchases coverage through Covered California and receives a subsidy. 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.

We congratulate our attorneys who have recently been elevated to Senior Counsel!

Leighton Henderson Los Angeles

Alison R. Kalinski Los Angeles

Jennifer Palagi Los Angeles

Julie L. Strom Los Angeles

Kelly Tuffo San Francisco

13• www.lcwlegal.com • Stacy L. Velloff San Francisco

lcw best timeline

OCTOBER 1ST THROUGH 15TH

File Verification of Private School Instruction

• Every person, firm, association, partnership, or corporation offering or conducting private school instruction on the elementary or high school level shall between the first and 15th day of October of each year, file with the Superintendent of Public Instruction an affidavit or statement, under penalty of perjury, by the owner or other head setting forth the following information for the current year:

(a) All names, whether real or fictitious, of the person, firm, association, partnership, or corporation under which it has done and is doing business.

(b) The address, including city and street, of every place of doing business of the person, firm, association, partnership, or corporation within the State of California.

(c) The address, including city and street, of the location of the records of the person, firm, association, partnership, or corporation, and the name and address, including city and street, of the custodian of such records.

(d) The names and addresses, including city and street, of the directors, if any, and principal officers of the person, firm, association, partnership, or corporation.

(e) The school enrollment, by grades, number of teachers, coeducational or enrollment limited to boys or girls and boarding facilities.

(f) That the following records are maintained at the address stated, and are true and accurate:

1. The attendance of the pupils in a register that indicates clearly every absence from school for a half day or more during each day that school is maintained during the year (Education Code Section 48222.)

2. The courses of study offered by the institution.

3. The names and addresses, including city and street, of its faculty, together with a record of the educational qualifications of each.

(g) Criminal record summary information of applicants that have been obtained pursuant to Section 44237.

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.

Compensation Committee Review of Compensation before issuing employee contracts

• The Board is obligated to ensure fair and reasonable compensation of the Head of School and others.

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 Board should appoint a compensation committee that will be tasked with providing for independent review and approval of compensation. The committee must be composed of individuals without a conflict of interest.

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

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:

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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.

• Form 990-EZ

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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.

• 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)).

• 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 business 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.

• Schools should consider following the California Nonprofit Integrity Act when conducting audits, which include formation of an audit committee:

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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 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.

Did

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

• The California Department of Public Health has published return to work criteria and isolation guidance addressing Monkeypox cases.

• The Secretary of State rolled out a new online platform for searching for business entity information, including nonprofit corporations. Additionally, entities can now submit certain filings like initial articles of incorporation, statements of information, and name changes through the online platform.

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Consortium Call Of The Month

Did You Know? LCW has four private education consortiums across the State! Consortium members enjoy access to quality training throughout the year, discounts on other LCW products and events, and unlimited, complimentary telephone consultation with an LCW private education attorney on matters relating to employment and education law questions (including business & facilities questions and student issues!). We’ve outlined a recent consortium call and the provided answer below. Client confidentiality is paramount to us; we change and omit details in the ERC Call of the Month.

Question:

A School is holding a fundraising raffle.

A School administrator asked an LCW attorney if the fundraiser triggers the School’s obligation to file CT-NRP-1 and CT-1 forms with the state. Certain nonprofit organizations must file these forms to obtain a raffle permit number from the Attorney General before holding the fundraising event.

The LCW attorney explained that the School does not need to complete these reporting requirements. Under California Penal Code Section 320.5 subd. (h)(8), the registration and reporting provisions for raffles do not apply “to a charitable corporation organized and operated primarily as a religious organization, educational institution, hospital, or a health care service plan.” Therefore, if the School wanted to hold a raffle, it is free to do so because the requirement to file Form CT-NRP-1 and Form CT-1 does not apply. However, the School still needs to comply with the requirements for a lawful raffle held by an exempt organization laid out in the Penal Code. Additionally, other organizations that benefit the School, such as parent-teacher associations and independent foundations, may still need to register if they do not operate primarily as an educational institution. The attorney recommended to the School administrator that it be clear that the School is the entity conducting the raffle, not any outside organization.

All Consortium members receive complimentary access to the Liebert Library, which houses our Administrator’sGuidetoPrivateSchool Law . For an additional fee, Consortium members can upgrade their Liebert Library subscription from Basic to Premium and have access to a host of forms, checklists, and policies. These forms and checklists are updated regularly – in fact, 10 were added in the month of September!

Answer: Updates on Liebert Library!

If you would like to receive more information about our Consortium services or would like to join, please contact Jaja Hung at jhung@lcwlegal.com.

Liebert Cassidy Whitmore