California Public Agency Labor & Employment Blog

California Public Agency Labor & Employment Blog

Useful information for navigating legal challenges

Tips from the Table: Responding to Requests for Information

Posted in Labor Relations, Negotiations

We are excited to continue our video series – Tips from the Table. In these monthly videos, members of LCW’s Labor Relations and Negotiations Services practice group will provide various tips that can be implemented at your bargaining tables. We hope that you will find these clips informative and helpful in your negotiations.

NLRB Ruling Denies Northwestern University Football Players Petition To Unionize

Posted in Labor Relations

Football FieldLast year, the National Labor Relations Board (NLRB), through its Region 13 Regional Director ruled that Northwestern University football players who receive grant-in-aid scholarships and have not exhausted their playing eligibility are “employees” under the National Labor Relations Act (NLRA), and therefore have the right to unionize and engage in collective bargaining with their “employer.”  We reported on the potential implications of that decision and the likelihood of subsequent legal challenges to this ruling.

After last year’s decision, Northwestern filed a request for the NLRB Board to review that decision.  The Board granted Northwestern’s request for review.  On August 17, 2015, the Board issued a decision in which it unanimously declined to assert jurisdiction over this matter and dismissed the players’ representation petition.  Importantly, the Board did not determine if the players were statutory employees under the NLRA.  Rather, the Board decided that asserting jurisdiction would not “effectuate the policies of the Act” and “would not serve to promote stability in labor relations.”

As pointed out in our report on the initial ruling, the NLRB does not have jurisdiction over public universities.  Of the approximately 125 college and university teams in NCAA Division I FBS football, the vast majority of these competitors are public colleges and universities for which the NLRB cannot assert jurisdiction.  This means that if the NLRB chose to assert jurisdiction over only the Northwestern team players, there would very likely be ramifications and possibly some substantial unintended consequences for the other NCAA football teams.  For instance, it would likely significantly impact competitive balances for players on one team and not others to have federally mandated collective bargaining rights.  This would not promote stable labor relations across the league.  Indeed, Northwestern is the only private school in its conference (the Big 10).  The NLRB has no jurisdiction over any of its primary competitors.  In its conclusion, the Board also noted that “recent changes as well as calls for additional reforms, suggest that the situation of scholarship players may well change in the near future.”  For all these reasons the NLRB declined to assert its jurisdiction here.

Again, the Board did not decide whether these players were statutory employees.  Also, the Board’s decision was very narrowly focused to the specific facts and circumstances of this case and applies only to the Northwestern players in this case. This means that this issue can and likely will be reconsidered in the future.

It will likely take many years and many more legal challenges to play out this issue and its potential implications on the employer/employee relationship in the context of college athletics.

Your Employee Did What?? – HR Lessons Learned From Real Cases – 2015 Edition

Posted in Employment

AnotherGavel.jpgIt’s that time of year again when we look at some of the unbelievable employment cases and what lessons may be learned from them.

The “Devil’s” in the Details

Velma Craig sued the City of New York, her former employer, because the City refused to accommodate her religious beliefs.  Craig, a school safety officer, would not wear the City’s new identification cards because she believed the card’s computer chips storing fingerprints and other information were “the marks of the beast” and she would be “jeopardizing her salvation” if she agreed to accept the card.  Craig was disciplined several times and eventually resigned.  Representing herself, Craig remarkably won her case.  The judge asked the City how it would be burdensome to accommodate Craig’s beliefs but received no meaningful response.  Although Craig won her case, she suddenly dropped her lawsuit prior to a determination of damages.  The judge awarded her $1.00.

Lesson learned:  Even if an employee’s claims seem to be outlandish, the employer still is obliged to consider reasonable accommodations for religious beliefs.  The employer was unable to show why the request to use the old identification card was unreasonable or burdensome, which led to the court ruling in the employee’s favor.

That Ain’t No Charlotte’s Web!

A West Virginia employer was sued by a former employee because he believed he was not provided a safe work environment.  The employee was painting a room in the nursing home facility where he worked when a spider fell from the ceiling and bit him on his right arm.  The employee claimed his employer had a gross disregard for his safety, health and welfare which caused him to have contact with the poisonous spider.

Lesson learned:  The employer in this case most likely would not be liable for “gross disregard” unless the employee could show there was a history of poisonous spiders in the building, a known poisonous spider infestation, or some other circumstance that would place the employer on notice of a potentially dangerous condition.  Here, the employee seems to have simply run into some bad luck.

Gonna Wash That Gray Right Outta My Hair

Plaintiff Sandra Rawline sued her former employer, Capital Title of Texas, LLC, for age discrimination.  Rawline claimed she was fired because she refused to color her gray hair.  The employer disputed that was the reason for her termination and claimed she was fired for coming in to work late smelling of alcohol.  Notably, the employer did not deny a comment was made about Rawline’s hair, but explained it was in the context of suggesting to her that she try “wearing clothes that are more appropriate for the workplace and maybe such as getting her hair trimmed and dyed.”  The employer claimed the comment was made because several complaints were received about her lack of professionalism.  The court disagreed that the comment was evidence of age discrimination and dismissed the lawsuit.

Lesson learned:  Even though the employer successfully defended the case, commenting to an employee that he or she should consider coloring gray hair probably is not the best idea.

Fighting Fire with Fire

A fire captain sued his employer for releasing him from his employment.  The captain was let go because of his fear of entering burning buildings.  In his lawsuit, the captain claimed he was discriminated against because of his disability—which he claimed was a fear of fire.  The department’s position was that he was terminated because he created a danger to himself and others due to his fear of entering burning buildings.  In his disability discrimination lawsuit, the captain was awarded $362,000.  On appeal, however, the court reversed the decision, noting that no reasonable jury could find that a firefighter’s fear of fire is a disability under the ADA or any other state law.

Lesson learned:  Sometimes, it is not possible to accommodate an employee’s alleged disability and sometimes, as in this case, what the employee believes is a disability actually is no disability at all.  Logic in this case prevailed.

Search for a One-Armed Man

The EEOC sued Florida Commercial Security Services for disability discrimination following the firing of a one-armed security guard.  The president of the community association where the guard was assigned wrote to the company, stating “The company is a joke.  You sent me a one-armed security guard.”  The company removed the guard and did not send him to a new assignment.  The EEOC argued that relying on discriminatory customer preferences and stereotypes violates the Americans with Disabilities Act (ADA).  The jury awarded the employee $35,922 in damages.

Lesson learned:  In this case, the employer should not have relied on the discriminatory statement to remove the guard from his position.  Instead, the employer was required to determine whether the guard was able to perform the essential functions of his position with or without accommodation.

Not An Employment Case But Interesting Nonetheless

An Oregon man sued an Idaho police department for monetary damages, alleging that police officers destroyed the mystical powers of his medicine bag.  The man was stopped by police and arrested for drunk driving.  In his lawsuit, he claimed he was persecuted because of his religious beliefs and he wanted damages for the destruction of the mystical powers.  According to the man, the bag provided protection, had been blessed by a medicine woman in 1995, had not been opened since then, and the powers were destroyed when police opened the bag.

The California Supreme Court Holds that a Supervisor’s Daily Log is not a “File Used for Any Personnel Purposes” Under the Firefighters Procedural Bill of Rights

Posted in Public Safety Issues

Fire-Helmet.jpgIn a long anticipated decision, the California Supreme Court has held that a supervisor’s daily log, or file, was not a “file used for any personnel purposes” under the Firefighters Procedural Bill of Rights.  In 2013, the Court of Appeal ruled that a fire captain’s daily log documenting firefighter performance should have been disclosed to the firefighter prior to the captain using the information to prepare a performance evaluation.  The California Supreme Court disagreed and held that “because the log was not shared with or available to anyone other than the supervisor who wrote the log, it does not constitute a ‘file used for any personnel purposes by his or her employer’ and [Government Code] section 3255 does not apply.”


The Firefighters Procedural Bill of Rights (FBOR), enacted in 2007, was intended to provide firefighters similar rights as those guaranteed to public safety officers by the Public Safety Officers Bill of Rights (POBR).  In many areas, the FBOR contains identical language to that of the POBR.  One of these areas is Government Code sections 3255 and 3256 of the FBOR (which mirror that of Government Code sections 3305 and 3306 of the POBR):

Government Code Section 3255

A firefighter shall not have any comment adverse to his or her interest entered in his or her personnel file, or any other file used for any personnel purposes by his or her employer, without the firefighter having first read and signed the instrument containing the adverse comment indicating he or she is aware of the comment. However, the entry may be made if after reading the instrument the firefighter refuses to sign it. That fact shall be noted on that document, and signed or initialed by the firefighter.

Government Code Section 3256

A firefighter shall have 30 days within which to file a written response to any adverse comment entered in his or her personnel file. The written response shall be attached to, and shall accompany, the adverse comment.

Fact Summary

Steve Poole is a firefighter with the Orange County Fire Authority (OCFA).  From 2008 to 2010, Poole was supervised by Fire Captain Brett Culp, who was responsible for evaluating Poole’s performance.  To assist in preparing the written evaluations of his subordinates, Captain Culp prepared daily logs on the firefighters he supervised.  The daily logs were maintained by Captain Culp on a flash drive and in folders that were kept in his desk at the fire station.  According to Captain Culp, the daily logs included “[a]ny factual occurrence or occurrences that would aid . . . in writing a thorough and fair annual review.”  Captain Culp used his informal daily logs to assist him in preparing Poole’s annual performance evaluation for 2009.

Prior to preparing Poole’s performance evaluation, Captain Culp addressed certain performance and behavior issues with Poole.  The daily log reflected descriptions of Poole’s activities and Captain Culp’s discussions with him.  Not all the incidents mentioned in Captain Culp’s daily log were included in Poole’s performance evaluation.  On occasion, Captain Culp also discussed Poole’s performance with Culp’s supervisors, human resources personnel, and attorneys for the OCFA.  However, he never provided copies of his daily log to these individuals and never allowed other employees to review it.

After Poole received a substandard performance evaluation, he had an opportunity to review and respond before it was entered into his personnel file.  After the evaluation was entered into his file, Poole requested a copy, which he shared with his union representative Bob James.  James was suspicious of the level of detail in the evaluation and thought Captain Culp must have maintained a separate “station file” on Poole.  Poole asked for that file, which was provided to him.  Poole complained to the OCFA that he did not have an opportunity to respond to the notations in the daily log in violation of the FBOR.  He asked for all negative comments based upon the logs to be removed from his file.  The OCFA denied his request.

Poole filed a petition and complaint, requesting the OCFA to enter adverse comments in Poole’s files only after complying with Section 3255 of the FBOR.  The trial court denied the petition, likening the daily logs to “post-it” notes that were intended to remind the supervisor of events when he prepared the annual performance evaluation.  The trial court concluded the daily logs were not part of the personnel file and Poole had no right to respond to the adverse comments contained in the daily log.  Poole appealed.  The Court of Appeal held that the daily log was a personnel record for purposes of the FBOR.  The OCFA appealed that decision to the California Supreme Court.

Court’s Ruling

On August 24, 2015, the California Supreme Court determined that adverse comments placed in a fire captain’s informal “daily log” used to detail positive and negative performance of subordinate firefighters was not subject to Government Code sections 3255 and 3256 of the FBOR.

The California Supreme Court noted that the FBOR does not define the phrase “used for any personnel purposes” as set forth in Government Code section 3255.  Therefore, the Supreme Court considered the plain language of the statute and concluded that section 3255 must be reviewed along with two other sections of the FBOR to determine its intent.

Section 3255 provides that the firefighter has the right to review and respond to adverse comments entered into the personnel file.  Section 3256 allows a firefighter to respond in writing to any adverse comment that is entered into the personnel file, which is then attached to the adverse comment.  Section 3256.5 allows the firefighter to inspect “personnel files that are used or have been used to determine that firefighter’s qualifications for employment, promotion, additional compensation, or termination or other disciplinary action.”  The firefighter further has a right to request that incorrect information be removed from the file. (Gov. Code, section 3256.5, subds. (c), (d).)

The Supreme Court, therefore, determined the Legislature was concerned not with “any and all” files but with those that related to the firefighter’s “qualifications for employment, promotion, additional compensation, or termination or other disciplinary action.”  As such, a “supervisor’s log that is used solely to help its creator remember past events does not fall within the scope of that definition.”  The Supreme Court further noted that this interpretation would be the same under the Public Safety Officers Procedural Bill of Rights.

The Supreme Court also emphasized that Captain Culp was not Poole’s employer and he had no authority to take any adverse disciplinary action, such as demotion or discharge, against Poole on behalf of the OCFA.  Rather, Culp’s comments could only adversely affect plaintiff if and when the comments were placed in a personnel file, or in some other form, and those who had the authority to discipline Poole had access.  The Supreme Court found no evidence that this occurred in the Poole case, thus, Culp’s supervisor’s file was not subject to the requirements of section 3255.

The Supreme Court also found that the Court of Appeal’s application of Miller v. Chico Unified School District (1979) 24 Cal. 3d 703, which interprets Education Code section 44031 regarding an educator’s right to review and comment on information of a “derogatory nature” before being placed in a personnel file, was misplaced.  The Supreme Court distinguished Miller because the supervisor in that case used her notes to prepare memos that were sent directly to the Board of Education so that it could make a determination regarding Miller’s employment.  Here, the Supreme Court noted that although Captain Culp discussed Poole’s performance with his Battalion Chief, he did not share the actual logs.  The Supreme Court found that the FBOR does not “regulate a supervisor’s preliminary verbal consultations with his superiors or human resources personnel prior to completing an evaluation.”

Practice Pointer

While this case holds a supervisor’s logs are not a “personnel file” under section 3255, it is important to note the limitations of the decision.  The Supreme Court remarked several times that because the logs were not available or shown to anyone else, they did not constitute a “personnel file.”  Moreover, the Supreme Court noted that the fire captain did not have any independent authority to take an adverse action against Poole employee.  A change in these facts may have resulted in a different holding.

This case will most likely have an effect on law enforcement agencies as well given the almost identical language in these sections under the POBR (Government Code sections 3305-3306) as in the FBOR sections reviewed by the Supreme Court (Government Code sections 3255-3256).

Fire Departments and Law Enforcement Agencies with employees covered under the FBOR and POBR should review their current practices and procedures regarding the use of a supervisor’s file or other informal daily log to track performance to ensure that supervisors understand that the manner in which the supervisor maintains his or her supervisor’s file may determine whether the subject officer or firefighter has a right to review comments prior to submission in the file.  While a supervisor can apparently discuss the contents of a supervisor’s file with superior officers or human resources personnel without bringing the file within the purview of the FBOR or POBR, sharing the contents of the file with superiors or other employees may have a different outcome.  Thus, agencies may contemplate protocols to prevent inadvertent disclosure or sharing of supervisor’s files.

In addition, if the notes are utilized by individuals who have the authority to make decisions regarding “qualifications for employment, promotion, additional compensation, or termination or other disciplinary action,” the outcome may also be different.  For example, if the supervisor maintaining the file does have the discretion and authority to impose discipline, would the supervisor’s file fall within the parameters of section 3255 (FBOR) or 3305 (POBR)?  While the Poole decision is a good one for public agencies, it does leave open several questions.

Poole v. Orange County Fire Authority (Aug. 24, 2015, S215300)

If you have questions about this issue, please contact our Los Angeles, San Francisco, Fresno, San Diego, or Sacramento office.

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Preparation is the Key to Success: Applicable Large Employers and Employers Sponsoring Self-Insured Health Plans Prepare for Affordable Care Act Reporting and End of Year Deadline

Posted in Healthcare


This blog post was authored by Shardé Thomas and Heather DeBlanc.

With a little less than four months left in 2015, now is the time to evaluate your Affordable Care Act (“ACA”) compliance.  If you are an applicable large employer or an employer that sponsors a self-insured health plan, you must provide written statements (e.g. copy of completed reporting form) to employees no later than January 31, 2016 and must file reporting forms with the Internal Revenue Service (“IRS”) by February 28, 2016 (March 31, 2016 if filing electronically).  The IRS recently released new draft forms and instructions for 2015 reporting.  They also increased reporting penalties for noncompliance.  Review the steps below to ensure your timely and accurate compliance.

Confirm ACA Plan

As of January 1, 2015, applicable large employers have exposure to potential penalties under the ACA for failure to offer affordable coverage to full-time employees (“employer mandate”).  Employers with around 50 full-time employees should document the “applicable large employer” calculation.

  • Employers with 50+ full-time employees, including full-time equivalents, per the calculation must comply with reporting requirements.
  • Employers with 50 to 99 full-time employees, including full-time equivalents, per the calculation have relief from exposure to penalties in 2015 but still must report.

Employers who know they are applicable large employers should:

  • Confirm method for identifying full-time employees (Monthly v. Look Back Measurement Method Safe Harbor (“LBSH”));
  • If using the LBSH, review practices and follow the complex rules relating to timing of full-time status, reasonable expectation analysis, and calculation of hours of service;
  • Identify whether offered coverage is affordable and select affordability safe harbor;
  • Review applicable contracts to determine how full-time status of employees could interact with existing contract provisions for eligibility for health benefits.

New Reporting Forms and Instructions Released for 2015

The IRS released new draft reporting forms and instructions for 2015 reporting.  Applicable large employers will need to report the following information for each month of the calendar year:

  • Identity of each full-time employee (using ACA’s full-time definition);
  • Whether minimum essential health coverage providing minimum value was offered;
  • Whether the offer was made to dependent children and spouses;
  • Whether the offer was affordable (identify of the affordability safe harbor); and
  • The employee’s premium contribution to the lowest cost employee-only plan.

Employers offering self-insured coverage will also need to report the identity and social security numbers of covered employees and beneficiaries.

The IRS stated that the recently released 2015 forms are drafts only and should not be used until final versions are released.  Presumably, the IRS will release the final forms at the end of this year and before the reporting deadlines.

Preparing for 2016 Reporting Deadlines

The applicable large employer (or employer with a self-insured plan) must report 2015 calendar year data, even if it has a non-calendar year plan.  Employers should be reviewing the 2015 reporting instructions and forms to familiarize themselves with the documents.  We recommend that you do the following:

  • Identify which forms you are required to file;
  • Identify potentially applicable reporting codes;
  • Identify procedure to gather relevant data;
  • Identify your timeline and procedure to identify full-time employees;
  • Prepare timeline for gathering data and completing forms;
  • Identify any issues or questions to get them resolved early.

Increased Reporting Penalties

The IRS recently increased reporting penalties under the ACA for general reporting failures, including failure to file by the due date, failure to include required information or failure to provide accurate information.  These penalties are $250 per return ($3,000,000 maximum penalty).  If the employer corrects or files the return within 30 days after the required filing date, then the penalty will be reduced to $50 per return, up to a maximum of $500,000.  If the failure to file results from intentional disregard, the penalty increases to $500 per return with no maximum cap.  These penalties also apply separately to each individual written statement that an employer must provide to employees under these reporting requirements.

The draft versions of the revised reporting forms and instructions can be found at the links below:

Form 1095-C:–dft.pdf

Form 1094-C:–dft.pdf

Form 1094-C and 1095-C Instructions:–dft.pdf

Form 1095-B:–dft.pdf

Form 1094-B:–dft.pdf

Form 1094-B and 1095-B Instructions:–dft.pdf

Repeated and Uninvited Discussions of Voluntary Retirement May Lead to a Jury Trial in Age Discrimination Cases

Posted in Discrimination, Employment

age_discriminationFrequently, in a lawsuit, a defendant will use a procedural device known as a motion for summary judgment to dismiss either the entire lawsuit or certain claims from the case.  The motion for summary judgment is an invaluable tool because, where successful, it precludes a lawsuit from reaching a jury.  A recent Ninth Circuit Court of Appeals decision, however, France v. Johnson, et al., takes the position that it does not “take much for a plaintiff in a discrimination case to overcome a summary judgment motion.”

To prevail on a motion for summary judgment, a defendant must demonstrate that no genuine dispute as to any material fact exists and the right to a defense judgment is appropriate as a matter of law.  In employment discrimination cases where the plaintiff lacks direct evidence of discriminatory animus, a motion for summary judgment is typically considered under a three-step process (commonly called the McDonnell Douglas framework).  Under this framework, a plaintiff must carry the initial burden to establish a prima facie case that creates an inference of discrimination.  If the employee establishes a prima facie case, an inference of discrimination arises and the burden shifts to the employer to produce a legitimate, nondiscriminatory reason for its employment action.  If the employer does so, the burden shifts back to the employee to prove that the employer’s explanation is a pretext for discrimination.

In France, John M. France, the Plaintiff, was employed as a border patrol agent assigned to the Tucson Sector of Border Patrol (an agency of the United States Department of Homeland Security, “DHS”).  In March 2007, Tucson Sector Chief Patrol Agent Robert Gilbert, established a pilot program which split Assistant Chief Patrol Agent positions into two categories: GS-14 and GS-15.  The GS-15 position offered an increased pay grade. Four GS-15 positions were created. Twenty-four candidates applied and twelve were invited by Gilbert for the first round of interviews. France was one of the twelve.  The panel of interviewers for the first round consisted of Gilbert, and two other DHS officers.  After the interviews, the panel selected six top-ranked candidates for final consideration.  France was not selected.  Gilbert recommended four of the six to Chief Border Patrol Agent David Aguilar, who were recommended by Aguilar to the ultimate decision-maker.  France was 54 years old, and the four selected candidates, all of whom were in the top-ranked group, were 44, 45, 47, and 48.  France sued the DHS, alleging that it discriminated against him based on his age.

Following discovery, DHS moved for summary judgment.  DHS presented evidence of nondiscriminatory reasons for not promoting France.  Agent Gilbert provided evidence that France lacked the leadership and judgment for the GS-15 position.  Agent Aguilar gave six reasons for why he did not recommend promoting France, including France’s lack of leadership, flexibility, and innovation.  In opposition, France provided evidence that Gilbert expressed his preference for “young, dynamic, agents” to staff for the new positions and that Gilbert had repeated retirement discussions with him, despite France’s clear indication that he did not want to retire.  France also offered testimony from two other DHS officers who stated that Chief Border Patrol Agent Aguilar preferred to promote younger, less experienced agents.  The District Court granted DHS’s motion for summary judgment.  Subsequently, Ninth Circuit Court of Appeals reversed the ruling.

In finding that the District Court erred in granting the motion for summary judgment, the Court of Appeals reached several notable conclusions.  First, the Court found that an average age difference of less than ten years between the plaintiff and the replacement is presumptively insubstantial and does not support a claim for age discrimination.  The Court held, however, that this does not preclude a plaintiff who is less than ten years older than his or her replacement to produce evidence that rebuts the presumption and demonstrates that the employer considered his or her age to be significant.

The Ninth Circuit Court then explained that in opposition to DHS’s Motion for Summary Judgment, France produced “direct” and “circumstantial” evidence. Direct evidence consists of statements by persons involved in the decision-making process that directly reflect the alleged discriminatory attitude. Circumstantial evidence includes stray remarks not directly tied to the decision-making process but nonetheless relevant.  The Court indicated, without expressly ruling, that, Gilbert’s remarks about his preference for “young, dynamic agents” to staff the GS-15 positions were likely direct evidence.   The Court also ruled that France presented circumstantial evidence consisting of Gilbert’s repeated retirement discussions, which demonstrated Gilbert’s bias in his decision-making process.  The Court emphasized that the District Court had to “cumulatively” consider the direct and circumstantial evidence together. The Court concluded that the totality of the evidence presented by France was sufficient to defeat DHS’s motion for summary judgment and send the case to the jury.

Employers frequently speak with employees about their retirement options.  The France decision is a lesson to employers to tread lightly when broaching the subject of retirement with employees over the age of 40.  The Court remarked that standing alone Gilbert’s remark about his preference for “young dynamic agents” would be “thin support to create a genuine dispute of material fact.”  In combination with Gilbert’s repeated retirement discussions, however, the Court found the evidence sufficient to defeat the motion for summary judgment.

Therefore, where retirement is voluntary, supervisors and managers should be wary of “nudging” senior employees to retire.  Rather, employers should limit their inquiries to asking employees about their retirement plans.  Employers can also inform their employees about their retirement options.  Managers and supervisors, however, should generally curb discussions regarding voluntary retirement with employees who have expressed their disinterest in retirement.

Proposed Department of Labor Rule Expands Entitlement to Overtime For White Collar Employees

Posted in Wage and Hour


This blog post was authored by Paul S. Cooley.

On June 30, 2015, the United States Department of Labor (“DOL”) proposed updating its current regulations governing which white collar workers (i.e., executive, administrative, and professional employees) are entitled to overtime pay under the Fair Labor Standard Act (“FLSA”).  The DOL’s proposed changes primarily include raising the base salary thresholds from which overtime must be paid and providing automatic increases to these salary thresholds over time tied to the Consumer Price Index (“CPI”).  The higher thresholds will expand eligibility of white collar workers to include an estimated five million additional workers by raising the minimum salary threshold to $50,440 per year by 2016.


Since 1940, the DOL’s regulations generally required three tests to be met to exempt white collar workers from the requirement that they be paid overtime compensation:

  • Employee was paid a pre-determined and fixed salary not subject to reduction because of variations in the quality or quantity of work performed;
  • Salary paid met a minimum specified amount, and;
  • The employee’s job duties primarily involved executive, administrative, or professional duties.

Under current regulations, highly compensated employees (“HCE”) can also be exempted from overtime pay requirements if they earn total annual compensation of $100,000, perform office or non-manual work, and customarily and regularly perform at least one of the exempt duties or responsibilities of an executive, administrative, or professional employee.

Proposed Revisions

Under the new rules proposed by the DOL, the salary level required for white collar workers to be considered employees exempt from FLSA’s overtime requirements will be raised significantly.  Specifically, the DOL proposes the following:

  • Setting the standard salary level to $970 per week, or $50,440 annually (these are the amounts likely to be in effect, as the law calculates them, at the time the law goes into effect at the beginning of 2016);
  • Increasing the total annual compensation requirement needed to exempt highly compensated employees to $122,148 annually, and;
  • Establishing mechanisms to automatically update the salary and compensation levels moving forward (tied to C.P.I).

Rationale Behind Expansion

The DOL’s stated reasons in proposing these changes are to ensure that intended overtime protections are fully implemented and make the white collar exemptions easier to understand for both employers and workers.  The DOL notes that the proposed rule will clarify overtime requirements for approximately 11,000,000 workers earning below the proposed salary threshold.

If the proposed rule becomes law, approximately 5,000,000 white collar workers, according to the DOL’s own estimates, will be newly entitled to overtime compensation.  Additionally, approximately 6,000,000 white collar employees currently entitled to overtime will have their eligibility “clarified” because it will now be determined by the application of the new, bright-line salary test.

Changes to the Standard Duties Test?

The proposed regulations do not propose any specific changes to the Standard Duties Test (“SDT”) used to determine which white collar employees are subject to overtime exemptions.  However, the DOL is seeking comments during a 60-day period after June 30, 2015 as to whether the current SDT is working as intended to screen out employees who are not “white collar” exempt employees.  The DOL should issue further guidance after the 60-day comment period as to what types of changes may be proposed to the SDT.

Estimated Costs to Employers

The DOL estimates the average direct employer costs created by the proposed rule change will be somewhere between $239,000,000 to $255,000,000 per year.  In addition to these direct employer costs, the rule will also translate to between 1.18 and 1.27 billion in additional higher earnings for employees who will now need to be paid overtime.

Impact In California

The impact of the DOL’s proposed changes in California may not be as significant as it will be in other areas of the Country.  Due to the high standard of living, most public sector employees currently earn in excess of $70,000.  Thus, raising the salary level to $50,440 may not have a significant impact on California’s public sector white collar employees.  The largest portion of the impact, if any, will likely be felt in California’s private sector.

It will be important to monitor proposed changes to the SDT if they become part of the final DOL regulations.  These possible changes to the SDT could create traps for unwary public sector employers even for white collar employees earning incomes well above the “bright-line” salary test of $50,440.  LCW will continue to monitor the status of proposed changes after the 60 day comment period and notify in subsequent blog posts of any possible ramifications.

Tips from the Table: Dealing with Conflicting Policies

Posted in Labor Relations, Negotiations

We are excited to continue our video series – Tips from the Table. In these monthly videos, members of LCW’s Labor Relations and Negotiations Services practice group will provide various tips that can be implemented at your bargaining tables. We hope that you will find these clips informative and helpful in your negotiations.

PERB Exercises Jurisdiction Over Bargaining Units That Include Peace Officers Individually Excluded by Statute and Will Not Consider Affirmative Defenses Based on Undisputed Facts Alone

Posted in Labor Relations, PERB

Gavel-and-Books.JPGWhen the Legislature amended the Meyers-Milias-Brown Act (MMBA) in 2001, it gave PERB jurisdiction over the statute, but not over certain agencies, and not over “persons who are peace officers as defined in Section 830.1 of the Penal Code.” (Gov. Code Section 3511, emphasis added.)

In the more than 14 years  since then, however, one lingering question has been whether Section 3511  precluded PERB from exercising jurisdiction over charges filed by or against labor unions representing units comprised of both Section 830.1 peace officers and either persons defined as “peace officers” under different sections of the Penal Code, such as 830.5, or civilian employees.

In 2013, PERB heard oral argument in Lompoc Peace Officers Association and City of Lompoc.  In that case, which involved a mixed unit comprised of Section 830.1 peace officers and civilian employees, the Administrative Law Judge found that the City had imposed a wage reduction not reasonably encompassed within its last, best and final offer.  He ordered that the City make the civilian employees whole, but excluded the peace officers from that remedy.  Both the City and the Association appealed, and PERB granted oral argument on the issue of whether its remedial authority extended to Section 830.1 peace officers.  PERB, however, never ruled on that issue because the parties settled, and PERB granted the parties’ request to withdraw their appeals.

PERB, however, has now spoken.  In County of Santa Clara (2015), PERB clearly and unequivocally ruled that its authority includes jurisdiction over unfair practice charges filed by “employee organizations representing or seeking to represent  units including persons who are peace officers.”

In Santa Clara, a dispute arose between Santa Clara County and its Correctional Peace Officers Association over a tuition reimbursement program.  The Association, which represents a unit consisting of both Section 830.1 peace officers as well as non-Section 830.1 peace officers, claimed that the County had unilaterally changed the status quo of providing tuition reimbursement to members as authorized by the expired MOU and established past practice.  The MOU provision on tuition reimbursement established a yearly amount to be available to the unit for each year of the MOU, with any unused amounts rolled-over to the next year.  Once the MOU expired, however, any unused amounts were to revert to the County.  Based on the clear and unambiguous language of the MOU, PERB’s Office of the General Counsel dismissed the unfair practice charge.  The Association appealed, and the Board reversed the dismissal and ordered the issuance of a complaint.

Although neither party raised a jurisdictional argument, PERB addressed the issue at the outset of its analysis.  In support of its claim that it had jurisdiction, PERB referred to two other cases in which it asserted jurisdiction over a mixed unit comprised of both civilian employees and “peace officers”: County of Calaveras (2012) and County of Yolo (2013).  It is unclear, however, why PERB relied on those cases because neither case involved Section 830.1 peace officers.  Instead, those cases dealt with persons who were peace officers as defined by Penal Code section 830.5, and thus, clearly within PERB’s jurisdiction.

As PERB explained, it never questioned its authority to entertain unfair practice charges filed by “exclusive representatives” of mixed units of peace officers and non-peace officers.  Reading the MMBA’s statutory provisions together, the Board noted that Section 3511 “precludes jurisdiction only with respect to charges brought by peace officers, not employee organizations.”   As support for its position, the Board cited other provisions in the MMBA which differentiated between natural persons and employee organizations or other entities.  It noted that if the Legislature intended to prohibit PERB from investigating and remedying charges filed by employee organizations, it would have excluded both peace officers and entities that represent peace officers from PERB’s authority.  Thus, the Board stated:

“[W]e make explicit PERB’s authority to hear charges… that are brought by employee organizations, including employee organizations representing or seeking to represent units including persons who are peace officers.”

After addressing the jurisdictional issue, the Board moved on to the substance of the charge. On the issue of whether the County’s conduct (i.e., the cessation of its tuition reimbursement program during ongoing negotiations for a successor MOU) constituted an unlawful unilateral change in policy, the Board noted that “affirmative defenses not raised at the [pleading] stage cannot provide the basis for dismissal, even if the pertinent facts are undisputed.”  The Board concluded that because the County did not assert “waiver” or “consent by agreement” as an affirmative defense in its response to the unfair practice charge, PERB could not consider the defense.  As the Board explained, while PERB regulations require that its agents assist the charging party to state a charge, they do not require that its agent consider affirmative defenses not raised by the respondent.

In support of that holding, the Board cited to Metropolitan Water District of Southern California (2009) (p. 4, fn. 4).  But in Metropolitan, it does not appear that PERB required the Respondent to assert waiver.  Rather, the Board determined the “charge failed to establish that the District had a duty to bargain” because the undisputed facts sufficiently established waiver.  The Board’s decision in County of Santa Clara, however, now seems to hold that even if the “facts” are clear on their face, as evidenced by the clear and unambiguous language in the MOU, PERB will not assume an affirmative defense if the respondent fails to raise it.


The Board’s decision in County of Santa Clara raises two interesting points.  First, this decision makes clear, once and for all, that PERB will exercise jurisdiction over bargaining units comprised of both Section 830.1 peace officers and others.  But it goes further by holding that the exclusion in Government Code section 3511 refers solely to “persons” and not “employee organizations.”  Thus, this case suggests that PERB would assert jurisdiction in an unfair practice charge filed by an employee organization comprised solely of section 830.1 peace officers. Public agencies subject to the MMBA may find themselves facing an increased number of unfair practice charges as a result.

Second, when responding to unfair practice charges, public employers should make sure to assert any and all potential affirmative defenses.   Do not assume that PERB will automatically dismiss a charge as untimely or without merit simply because the undisputed facts warrant that conclusion.  In situations in which affirmative defenses apply, affirmative defenses will not be assumed if they are not raised in the response/position statement.

Transit Agencies in Legal Limbo over PEPRA

Posted in Pension, Retirement


This blog post was authored by Erin Kunze.

A number of California transit agencies, as well as cities and counties that operate and maintain transit systems, are in legal limbo over whether the Public Employees’ Pension Reform Act of 2013 (“PEPRA”) applies to mass transit employees.  The State of California prevailed in its legal challenge against the United States Department of Labor (“DOL”), which threatened to withhold federal grants to agencies complying with the PEPRA.  Under the plain language of the PEPRA, this should have put the issue to rest and agencies could rest assured that PEPRA applied to their mass transit employees. The DOL, however, has made seemingly contradictory statements to California’s public employers indicating that it may continue to adhere to its legal position that compliance with PEPRA is inconsistent with the collective bargaining rights of mass transit employees protected under the Urban Mass Transportation Act (“UMTA”) – often referred to as section 13(c) rights.  To better understand where California transit agencies stand today, the following is a brief history of PERPA / UMTA conflict that has brought us to this point:

  • Under the UMTA, public agencies operating mass transit systems are eligible for federal grant funds to support operations and infrastructure. In accordance with section 13(c), financial assistance is conditioned on protections for transit employees under arrangements the Secretary of Labor concludes are “fair and equitable,” including a preservation of collective bargaining rights.  The DOL must certify that a transit system has “fair and equitable” arrangements in place before the U.S. Department of Transportation can act on applications for grant funds.
  • PEPRA went into effect on January 1, 2013. Among its provisions, PEPRA establishes a lower pension formula for all “new members,” as defined by PEPRA, and requires “new members” to pay one-half of the normal cost of the pension benefit.
  • The DOL issued an administrative determination asserting that PEPRA was inconsistent with section 13(c)’s mandate to preserve pension benefits under existing collective bargaining agreements and mandate to ensure the continuation of collective bargaining rights. The DOL thus determined that PEPRA precluded it from providing 13(c) certification to California transit agencies subject to PEPRA. This resulted in a withholding of $1.6 billion dollars in federal aid to California agencies operating public transit systems.
  • On October 4, 2013, the State of California, and the Sacramento Regional Transit District (“SacRT”), filed a complaint against the DOL in the U.S. District Court for the Eastern District of California (“District Court”) for refusing to certify the California Department of Transportation and SacRT on the basis that PEPRA conflicted with section 13(c).
  • On October 4, 2013, Governor Brown approved urgency legislation, under Assembly Bill 1222 (extended by AB 1783), to specifically exempt specified transit employees from PEPRA until the District Court ruled that the United States Secretary of Labor erred in determining that the application of PEPRA precludes certification under the UMTA, or until January 1, 2016, whichever occurred sooner.
  • On December 30, 2014, the District Court determined that the DOL acted in excess of its authority in denying federal transit grants, and that the DOL’s determination that PEPRA interfered with collective bargaining rights was arbitrary and capricious. The court “remanded” the matter to the DOL for further proceedings “consistent with” its order.
  • On February 25, 2015, the California Public Employees’ Retirement System (“CalPERS”) issued a circular asserting that transit employees hired on or after January 1, 2013 would now be subject to PEPRA. CalPERS explained that the recent federal district court decision (State of California v. U.S. Dept. of Labor, D. Cal., Dec. 30, 2014, 2:13-CV-2069 KJM DAD) 2014 WL 740947) ended the AB 1222 transit worker exemption. CalPERS also clarified that transit employees appointed on or after January 1, 2013 through December 29, 2014 (i.e. after PEPRA, but prior to court’s decision), would retain their “classic” retirement benefits for that period of time.
  • On March 3, 2015, the DOL filed appeal in the Ninth Circuit Court of Appeals.
  • In late March / early April, 2015, the DOL sent letters to various California public employers, stating its opinion that it considered the AB 1222 PEPRA exemption to still be in effect, taking the position that the District Court’s decision did not determine that it had erred, but merely remanded the matter to the DOL. The DOL has stated it may continue to withhold transit funds from California agencies that comply with PEPRA.
  • On April 27, 2015, the DOL filed a motion to dismiss its appeal voluntarily. The State has opposed this motion on concerns that the DOL will strategically attempt to challenge the District Court’s order on remand, causing the need to re-litigate issues currently before the Court of Appeals.
  • In the interim, the DOL has issued various determinations with individual agencies, but has not announced any formal administrative direction. In some cases the DOL certified funds for the period during which the AB 1222 exemption was in effect, i.e. prior to January 1, 2015. In another instance, the DOL certified transit grants on condition that the agency restore pre-PEPRA bargaining rights “if” the DOL adheres to its prior legal position on remand, and if (assuming the DOL adheres to its position), the DOL’s position is not challenged – or is challenged but upheld after all appeals are finally exhausted or the time for filing appeals finally expires.

California transit agencies hang on the potentially-evolving position of the DOL, and there is a good deal of uncertainty as to whether the DOL will continue to adhere to its prior legal position that PEPRA precludes certification under section 13(c); whether the DOL will issue a new administrative decision subject to new judicial challenges; or perhaps, whether the DOL will issue a determination that is wholly consistent with the language of the District Court’s decision. LCW is watching this issue closely and will update employers as the matter progresses.