California Public Agency Labor & Employment Blog

California Public Agency Labor & Employment Blog

Useful information for navigating legal challenges

Am I a Municipal Corporation? Maybe. Does it Matter? Yes!

Posted in Public Sector

Work BlocksCalifornia employers are subject to numerous state and federal statutes that regulate employee compensation and hours of work. Whether California Labor Code provisions, such as those that guarantee penalties for the late payment of final wages, apply to a specific employer must be evaluated on a case-by-case basis. Do they? For most private school employers, the answer is yes. For county and charter city employers, the answer is generally no. Indeed, Labor Code section 220(b) states that numerous key sections of the Labor Code do not apply to “employees directly employed by any county, incorporated city, or town or other municipal corporation.” (Cal. Lab. Code section 220(b).) For public agencies that are not counties, cities, or towns, i.e. school districts, special districts, and non-profit corporations performing public functions, the answer depends on whether the entity falls under the definition of “municipal corporation.”

Multiple Interpretations of “Municipal Corporation”

The term “municipal corporation” is used throughout various California statutory schemes and has been interpreted differently by courts depending on the legislative intent behind the statute that references the term. For example, in a recent case, Merced Irrigation District v. Superior Court, the California Fifth Appellate District Court of Appeal, in a matter of first impression, held that an irrigation district is not a municipal corporation as the term is used in section 10251 of the California Public Utilities Code, which authorizes municipal corporations to recover damages from persons who harm the facilities or equipment of a municipal corporation. However, irrigation districts have been found municipal corporations under other statutes, such as the California Irrigation District Act.  And while no court has explicitly held that an irrigation district is a municipal corporation under Labor Code 220(b), in Johnson v. Arvin-Edison Water Storage District (2009), the Fifth District Court of Appeal held that water storage districts are municipal corporations for purposes of Labor Code 220(b). To complicate matters further, the court arrived at its conclusion by equating water storage districts with irrigation districts and water districts, writing that their public function is the same.

New Test for “Municipal Corporation” Under Labor Code 220(b)

Recently, the Third Appellate District, in Gateway Community Charters v. Heidi Speiss (2017), took up the meaning of “municipal corporation” for purposes of Labor Code 220(b) in the context of charter schools – specifically, a private nonprofit benefit corporation that operates public charter schools.  In analyzing whether the school owed a former teacher waiting time penalties pursuant to Labor Code section 203, the Court provided a list of characteristics common to counties, incorporated cities, and towns that the entity must possess to characterize it as a municipal corporation per section 220(b):

  • Does the entity perform an essential government function for a public purpose?
  • Is the entity governed by an elected board of directors?
  • Does the entity have regulatory or police powers?
  • Does the entity have the power to impose taxes, assessments, or tolls?
  • Is the entity subject to open meeting laws and public disclosure of records?
  • Can the entity take property through eminent domain?

Applying these factors to the employer-defendant in the Gateway case, the Court held that although providing public education through its charter schools was an essential governmental function, and even though the schools were subject to the Brown Act and the CPRA, the private nonprofit benefit corporation was not a municipal corporation under Labor Code 220(b). According to the Court, “without the publicly elected board, the geographical jurisdictional boundary, and the power to forcefully raise funds or acquire property from people within its geographical jurisdiction” the corporation “bears little resemblance to a ‘county, incorporated city, or town’” or to the districts deemed as municipal corporations.

Where Does This Leave Us?

Courts have held that public school districts, public hospitals, and water storage districts are municipal corporations under Labor Code 220(b), which means individuals directly employed by these entities are not entitled to waiting time penalties under Labor Code section 203, among other Labor Code protections set forth in sections 200 – 211 and 215 – 219.  (See Division of Labor Law Enforcement v. El Camino Hosp. Dist. (1970); see also Kistler v. Redwoods CCD (1993); see also Johnson.) On the other hand, an appellate court has held that a private nonprofit benefit corporation that operates public charter schools is not a municipal corporation under Labor Code 220(b) and thus its employee are entitled to waiting time penalties. (Gateway) And while no courts have specifically opined as to whether irrigation districts, parks districts, sanitation districts, transit districts or other quasi-public municipal entities are municipal corporations under Labor Code 220(b), such districts are likely to be found municipal corporations as long as they are subject to the Brown Act and the CPRA, and have a publicly elected board, a geographical jurisdiction, and the power forcefully to raise funds or acquire property from those within its geographical jurisdiction. However, public benefit corporations that have considered themselves municipal corporations due to their public purpose, i.e. to provide an essential government function, should not rely on that characteristic alone to define themselves as municipal corporations. Instead, such entities must review other factors to evaluate whether they are sufficiently similar to counties, cities, and towns to satisfy the requirements of Labor Code 220(b). If not, they will be subject to the Labor Code.

Tips from the Table: Dealing with Elected Officials

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.

Writings Concerning Public Business Are Public Records – Even If They Are Sent, Received, Or Stored On An Employee’s Personal Email, Phone, Or Computer

Posted in Privacy

couthouse-flag.JPGThis post was authored by Alison R. Kalinski

The California Supreme Court today reversed the Court of Appeal in City of San Jose v. Superior Court (Smith), and held that communications by a city employee concerning public business on a personal account, such as email, phone or computer, may be subject to disclosure under the California Public Records Act (“PRA”).

In 2009, Ted Smith presented the City of San Jose with a PRA request for communications regarding a development project for the City.  Specifically, Smith sought voicemails, emails or texts sent or received on personal electronic devices used by the mayor, city council members and staff.  The City agreed to produce records stored on its servers and those transmitted to or from private devices using City accounts, but did not produce communications from the individuals’ personal electronic accounts that were stored solely on personal devices or servers.

Smith filed a successful action for declaratory relief in Superior Court which found that the City was required to produce the requested communications notwithstanding the fact that the communications were not directly accessible by the City since they had been sent from and received on private devices using private accounts.  The Court of Appeal reversed on the basis that the requested electronic communications were not public records because they were not “prepared, owned, used, or retained” by the public agencies that are the subject of the Act.

The Supreme Court unanimously reversed the Court of Appeal, holding that a city employee’s communications about public business are not excluded from the PRA just because they are sent, received, or stored in a personal account.  The Court emphasized the PRA’s purpose is to provide public access to “the conduct of the people’s business” and the California Constitution’s mandate to broadly construe statutes providing for access to public information.  In reaching its decision, the Court focused on the definition of a “public record” under the PRA and explained that “a public record has four aspects. . . (1) a writing, (2) with content relating to the conduct of the public’s business, which is (3) prepared by, or (4) owned, used, or retained by any state or local agency.”  Writings include electronic communications and “must relate in some substantive way to the conduct of the public’s business” to meet this test.  The Supreme Court disagreed with the Court of Appeal on the meaning of “prepared by any state or local agency.”  State and local agencies can only act through their individual officials and employees, so when individual employees are conducting public business, they are acting on the agency’s behalf.  Thus, writings relating to the public’s business prepared by agency employees are public records, regardless of whether the employee prepared the record on a personal or agency account.  The Court explained that the location where the writing is stored is irrelevant; a writing does not lose its status as a public record merely because it is stored in an employee’s personal account.

The Supreme Court also addressed policy concerns implicated by its decision.  Because there is no law requiring public employees to only use government accounts for public business, government employees could simply hide any communications from disclosure by using their personal account.  This would be incompatible with the purposes of the PRA.  Moreover, the Court explained privacy concerns would still be considered because the PRA exempts many documents from disclosure and even has a catchall exemption to balance privacy concerns.  The focus in determining whether a communication is a public record should always be on the content of the record – not its location or the medium of the communication.

How does this decision affect your agency?

Because public agencies will likely be concerned about how to search and obtain public records that may reside in employees’ personal accounts, the Supreme Court issued guidance on this issue.  Since the Court was not ruling on any specific search, the Court’s instructions are not legal precedent, but likely will be looked to in the future by other courts and can act as a roadmap to agencies in navigating obtaining public records from employees’ personal accounts.

  1. Agencies only need to conduct reasonable searches; “extraordinarily extensive or intrusive searches” are not required.
  2. Agencies can develop their own internal policies for conducting searches and request and “reasonably rely on [their] employees to search their own personal files, accounts, and devices for responsive material.” The Court noted employees can be trained how to search for and segregate public from private records.  In addition, agencies can satisfy their obligations under the PRA when employees act in good faith and submit an affidavit with sufficient facts to show the information in their personal records is not a public record under the PRA.
  3. Agencies can also adopt policies requiring employees to refrain from using their personal accounts for public business, or requiring them to copy communications to their government accounts when they do so. This would minimize public records from existing solely on personal accounts.

The Supreme Court’s guidance places the burden on public agencies to develop proper policies and procedures regarding the use of personal devices by employees and officials to conduct public business.  A failure to timely comply with the PRA can result in an order to disclose records as well as an order to pay attorney’s fees.  While the safest approach to comply with the PRA based on this decision would be to require all employees and officials to only use agency computers and accounts for communications about public business, that policy may not be advisable for some agencies.  In those cases, a strong policy that puts the burden on agency employees to verify they have conducted a thorough search for public records will be the agency’s best defense to PRA claims.  Agencies will also want to provide training to their employees on these policies and document the training. Strong policies and training of employees on those PRA policies will minimize the risk to public agencies of non-compliance with the PRA.

Spring Cleaning – Have You Reviewed Your Personnel Rules Lately?

Posted in Workplace Policies

Woman-in-front-of-computerWe are settling into 2017 and winter is fading away.  As springtime approaches and we clean out our closets and desks, it is also a good time to review your agency’s personnel rules and policies and give them a thorough “spring cleaning.”   While reviewing and updating your personnel rules can be time-consuming, it is well worth the time in the long-run.  Having updated personnel rules can help your agency implement current best practices and, most importantly, reduce potential liability.  So take the time to make sure your rules comply with all new employment laws and regulations, cover all essential areas in these fast-changing times, and delete any confusing or obsolete rules.

Compliance with New Laws and Regulations

There are new employment laws and regulations taking effect all the time.  We have previously reported on new laws affecting California employers for 2017 including the following three examples you should consider when updating your agency’s rules.

  1. Minimum Wage

Effective January 1, 2017, the California state minimum wage increased to $10.50 per hour.  The state minimum wage will increase to $11 per hour on January 1, 2018; $12 per hour on January 1, 2019; $13 per hour on January 1, 2020; $14 per hour on January 1, 2021; and $15 per hour on January 1, 2022.  After that, the state minimum wage will continue to be adjusted annually based on the consumer price index (CPI).  Are your rules and pay schedules in compliance?  Do you have a plan for updating as necessary each year as the minimum wage continues to increase to $15 over the next several years and becomes adjusted annually after that?

  1. Minding the wage-gap

We have also reported on recent changes to Labor Code section 1197.5.  In 2016, California Labor Code section 1197.5 was amended to prohibit wage differentials based on sex.  Effective January 1, 2017, Section 1197.5 was amended also to prohibit wage differentials based on race or ethnicity.  This means the Labor Code now prohibits employers from paying an employee a wage rate less than the rates paid to employees of the opposite sex, or of a different race or ethnicity, for substantially similar work, when considering skill, effort, and responsibility, which is performed under similar working conditions.  Additionally, under this new law, prior salary alone cannot justify a disparity in compensation based on gender, race, or ethnicity.  Wage differentials are still permissible, however, if they exist pursuant to a seniority system, a merit system, a system which measures earnings by quality or quantity of product, or another bona fide factor other than sex, race, or ethnicity.

Have you reviewed your Equal Employment Opportunity (EEO) policies and any rules or practices related to compensation to identify and remedy any discrepancies based on an employee’s sex, race or ethnicity for positions that perform substantially similar work?  Failure to do so can leave your agency vulnerable to discrimination lawsuits.

  1. Harassment Training for Elected Officials

Effective January 1, 2017, all local agency officials must receive sexual harassment prevention and education training if the agency provides “any type of compensation, salary, or stipend” to any of its officials.  Agencies must also retain records of the dates local officials satisfy training requirements and of the entity that provided the training for at least five years following the training.  Have you revised your harassment, discrimination and retaliation policies to reflect this?  How about your training and records retention policies?

These are just a few examples of recent changes. There are always new laws and regulations on the horizon.  A regular review will help ensure that your agency is in compliance with current laws and regulations.

Cover the Essential Areas

Policies on leaves and discipline are often easy to find in most agency personnel rules.  But there are many other essential policies that are often left out of personnel rules.  Some employees work two or more jobs in addition to their agency employment.  But do the agency’s personnel rules have an outside employment policy that could identify any potential conflicts of interest?  Employees are issued smartphones, tablets, laptops, email addresses, official social media accounts or vehicles.  But does the agency have an equipment use policy that regulates use?  And even more specifically, does the equipment policy even reference email, current commonly used electronic devices or social media?  Most agency personnel rules cover harassment and most likely discrimination, but what about retaliation?  Retaliation cases have been on the rise for many years.  Likewise, workplace violence and bullying have increasingly become more prevalent.  Does your agency have workplace violence and abusive conduct policies?  It is important that your agency’s rules cover all the essential areas that affect employers in this day and age.  It can be difficult to keep up with all the latest technological changes and workplace issues.  That is why a regular review of your rules and policies is critical to maintain effective management and to reduce potential liability.

Delete Obsolete or Confusing Rules

Many personnel rules and policies have not been updated for years – in some cases, decades.  This can leave rules that refer to departments, positions or technology your agency no longer has. While this may seem harmless, in some cases obsolete rules can lead to confusion in interpretation or enforcement.  If supervisors and managers are confused about who the rules apply to or how to apply the rules, it may lead to uneven enforcement which can leave the agency vulnerable to a discrimination claim. It is best to review the rules periodically to make sure the rules make sense and to remove obsolete or confusing rules.

Finally, keep in mind that adoption of or changes to your personnel rules or policies may need to be negotiated with affected employee organizations.

Check Which Policies You May Be Missing

 

Political Discussions in the Workplace

Posted in Employment, Workplace Policies

White-HouseEven though the 2016 Presidential election is almost four months in the rear view mirror, controversy continues, with the news each day describing what looks like a three ring circus in Washington D.C.  Pundits have opined that our country is polarized by politics as never before: cities vs. rural areas; college educated vs. high school educated citizens; red states vs. blue states, etc.  As a result, politics remains a major topic of discussion between friends, relatives and, of major importance to us, co-workers.

What options are available to employers when these disputes spill over into the workplace? What can an employer do if two or more employees get into heated, boisterous, and perhaps even physical altercations over issues such as the new President’s actions or statements, nominations for cabinet positions, votes taken in the Congress, or the Supreme Court vacancy?

As shall be explained, an employer’s permissible reactions are generally limited to prohibiting political activity only when it impacts the work environment, but even then ideally only if the employer has in place and has communicated to its employees rules requiring that political activity not interfere with the proper functioning of the workplace.

First of all, it needs to be noted that political opinion is not a protected classification under either federal or state anti-discrimination laws.  You will not find it listed in the California Fair Employment and Housing Act or the 1964 U.S. Civil Rights Act.  However, political activity tied to a protected classification could lead to charges of discrimination or harassment, and could require an employer to conduct an investigation and to take appropriate remedial actions.  As an example, an employee with a disability might claim discrimination or harassment for speaking out about President Trump’s mocking of a disabled news reporter during the campaign.  Another example could be a claim made by a Latino employee who alleges retaliation for speaking out against the President’s plan to build a wall along the U.S.-Mexico border.

Beyond the possibility of a statutory claim, private sector employers have greater leeway here, as the First Amendment free speech right only applies to governments.  For public employers, by contrast, the First Amendment protects employee speech if it is on a matter of “public concern” and outside the scope of the employee’s official duties – in such circumstances, Courts apply a balancing test to determine if the public employer can nevertheless restrict the speech.  Also, in California, specific statutory provisions further limit the right of public employers to restrict political activities by their employees. Government Code section 3203 severely limits the right of cities, counties and most districts to place any restriction on the political activities of employees.  One clear exception is that employees are totally prohibited from participating in political activity while in uniform.  (Gov. Code sec 3206.)  Labor Code section 1101 prohibits employers from forbidding or preventing employees from engaging or participating in politics.

Another caveat concerns situations where a political discussion or argument among employees touches on areas involving employee benefits or working conditions. An employer’s action to stop such discussions could amount to an unfair labor practice as employees have the right to discuss issues relating to their wages, hours and other terms and conditions of employment.

Of course, political spats that involve physical altercations should be addressed with existing agency rules prohibiting workplace violence.

Nonetheless, the Government Code does allow local agencies to adopt rules and regulations that prohibit or otherwise restrict employees from engaging in political activities during working hours and/or on the agency’s premises.  (Gov. Code sec 3207.)  However, in order to avoid applying this provision too broadly, the definitions of “politics” and “activity” need to be examined.  California’s statutes provide no guidance in this regard.  The California courts have had only a few opportunities to define “politics,” and have adopted a very broad definition in those situations where they needed to do so.  Politics is not limited to supporting or opposing a candidate; it includes advocating or opposing a position or policy on any issue of public concern, such as civil rights, employment discrimination, war, foreign affairs, you name it!  The dictionary definition of “activity” is even more broad: “behavior or actions of a particular kind” or “the quality or state of being active” with “active” defined as “characterized by action rather than by contemplation or speculation.”

In light of all these considerations, the following is recommended:

  • Employers and all supervisors should remain neutral and never take sides on any public issue when dealing with other employees.
  • Employers and all supervisors should never give preferential treatment to employees whose political views are the same as theirs and should never give less favorable treatment to employees whose political views are opposed to theirs.
  • Employers may adopt reasonable rules and regulations prohibiting political activities during work hours and/or on the agency’s premises. The rules and regulations should be specifically communicated to every employee in writing.
  • These rules and regulations should specifically prohibit employees from allowing themselves to get into political disagreements with members of the public.
  • As a practical matter, employers should be reluctant to warn, counsel or reprimand, let alone discipline, employees who engage in political discussions unless this interferes with or unduly interrupts the agency’s necessary work performance, involves a physical altercation, or poses an unreasonable risk of injury to person or property. In most situations, the manager’s action should not go beyond saying, “Hey, get your work done. This is something you can discuss at another time!”

The bottom line is that employers need to tread lightly in dealing with these sorts of situations and limit responses to situations which unduly interfere with getting the agency’s work done or which cross the line into areas protected by law, such as those where a protected classification is implicated.  Legal counsel should be consulted if there are any questions that arise.

Are You Ready for Upcoming Negotiations? – Know Your Contract Costs

Posted in Labor Relations, Negotiations

Calculating-DataIt’s that time of the year when we begin to negotiate labor agreements set to end on June 30th.  Have you started your preparations for the negotiating process? One critical step in labor negotiations is costing your existing MOU.  What do we mean when we say “costing?”  It means you should be able to identify what each item in the MOU costs on a fiscal year basis and thereby determine the total cost of the contract to your agency.

Direct & Indirect Costs – What are They?

Collective bargaining agreements contain both direct costs and indirect costs.  It is important to understand each of these concepts and determine their value.  Direct costs are items that send cash out the door – compensation components and employer paid benefits are the two largest types of direct costs.  Direct costs break down even further into categories such as pensionable, taxable, or those paid to a third party on behalf of an employee.  Some direct costs can be determined by position; others are “bucket items” for which multi-year averages are the best method to determine costs. Indirect costs are typically the value of contract provisions where cash isn’t necessarily leaving the organization but the provision has a value, for example, sick leave.  For most employers, the value is a productivity cost.  However, in other cases where you have minimum staffing, sick leave may result in direct costs via the payment of overtime (to cover the work of the sick employee).

Costing Methodology 

The process of costing is time-consuming and can be tedious.  Also, often agencies rely on what they previously budgeted to spend vs. what they are actually spending.  It is recommended that you understand the difference and focus on what you are actually spending.   In addition, it is important to establish your costing methodology and then communicate it to key stakeholders (i.e. City Manager, Finance Director, HR Director, Elected Officials, etc.).  It is easier to start with the costing of the current MOU and reach consensus on the methodology long before you engage in developing proposals and seeking authority for the next MOU.  A good example is a frequently asked question – what would a 1% salary increase cost?

Well, we need to be clear about the question – 1% of base pay or 1% of total comp? Are we including the value that 1% has on overtime costs?  Have we factored in escalating provisions that we have previously agreed to pay the employer rate for retirement benefits or the impacts of health insurance premiums that were already negotiated and exist in the MOU?  If the base pay for a bargaining group totals $6,287,290 and the total cost for the group is $9,664,591 – then thinking through the 1% question in this way makes a big difference!

Who handles the costing?  Is it the finance department, the budget office, Human Resources?  Hopefully, it is a collaborative effort. If you are fortunate to have a finance system that can prepare costing information and create costing scenarios – you are LUCKY!  For most agencies, downloading data from payroll and finance systems into Excel spreadsheets to run costing calculations is more common.  Have a conversation with your bargaining team leadership and chief negotiator early so you can determine the plan for costing.

Is Costing Really Helpful?

Absolutely! Understanding what each item costs sets the framework for identifying what each proposal in the negotiation process costs.  Both agency and union proposals need to have a value identified in order to determine the feasibility of the proposal.  Additionally, when you have analyzed the cost, you will clearly see what the real impact of a proposal might be.  Clear costing data adds credibility to the meet and confer process.  You should be able to share costing information across the table and it can serve as an effective tool in explaining why items may not be able to be realized during negotiations.  If you find yourself at an impasse and engaged in the fact-finding process, then your costing data will be essential during the fact-finding hearing.

As public agencies begin to see improvements in the financial condition of their organization, costing will continue to be a critical component in labor negotiations.  The long-term sustainability of the compensation structure and the ability to work within the structure require a solid and complete understanding of labor costs.  Effectively using costing to determine one-time costs, the best use of a dollar, structural costs that increase in future years, etc., are issues elected officials want to understand and that you should understand as well.


Learn More

Want to learn more about the process of costing? Join us at the LCW Pre-Conference workshop:

Costing Labor Contracts | March 8, 2017 | 9AM – 4 PM | Disneyland ® Hotel

The keys to successful negotiations include planning and costing. Just like planning a vacation, the amount of time and effort you put into planning and costing can determine the success of the trip. Costing contract proposals is similar to costing excursions on a vacation – they all sound like a good idea but can we afford them? Join us at this workshop to learn the importance of costing and methods you can use to make costing easy.  Register Today (select Pre-Conference ONLY)

LCW Labor Relations Certification Program

Also, this presentation is the first workshop that is a part of the new LCW Labor Relations Certification Program©. This program is designed to provide labor relations practitioners education combined with practical hands-on experience in a variety of core areas.

Participate in individual seminars and receive a certificate of completion for each completed course or participate in all seven to earn the Labor Relations Certificate.  Learn more >

Are They Ever Coming Back? – Taking a Proactive Approach to Leave Management and Employees who are on Long-Term Leaves of Absence

Posted in Retirement

Leave RequestThis post was authored by Michael Youril.

Leaves of absences are one of the most complex and frustrating areas of personnel management that public agency employers face.  There are several complex, overlapping, and intersecting laws to apply and navigate.  In many situations, it is difficult for the agency to determine its rights and obligations.

Employers must determine if a leave is protected under the Family Medical Leave Act (“FMLA”) and the California Family Rights Act (“CFRA”), the Paid Sick Leave Law, kin care, the Americans with Disabilities Act (“ADA”) and the Fair Employment and Housing Act (“FEHA”).  The workers’ compensation system and the agency’s retirement system can also create additional obligations for the employer.  Violating an employee’s rights under any of these various leave and disability laws, among others, may subject the agency to expensive lawsuits and liability.  At the same time, employers have a need to determine whether an employee is going to return to work and to address its staffing needs.

A common problem employers face are long-term leaves created through the “serial note.”  An employee may turn in a doctor’s note putting them off for a short period of time that can be accommodated by the employer.  However, when the leave is coming to an end, the employee turns in another note extending the leave by a similar period.  This pattern can go on for months or years and it becomes uncertain when, if ever, the employee will return from leave.  Employers face further uncertainty because each leave viewed in isolation appears to be reasonable and finite, but when viewed in its totality creates a hardship and is indefinite.

Employers are often uncertain what rights and obligations they have when an employee is on a leave of absence and are left with many unanswered questions.  When can the employer request more information regarding the employee’s leaves or work restrictions?  How can the employer request more information with violating leave and disability laws or the employee’s privacy rights?  When should leave be provided as a reasonable accommodation and when is it no longer protected under disability and leave laws?  When is another interactive process meeting necessary?

Answering these questions and navigating the various laws often requires a long-term strategy and requires an adaptive multi-step approach.  Agencies must make a case-by-case assessment while still trying to maintain consistency in the way it manages leaves for all of its employees.  Employee leaves are highly fact specific, but a differing treatment of similarly situated employees may leave the agency open to discrimination or retaliation lawsuits.

Public agencies subject to the California Public Employees’ Retirement System (“CalPERS”) and the County Employees Retirement Law of 1937 (“CERL” or “’37 Act”) also must determine when they have an obligation to apply for disability retirement on behalf of an employee.  Under these systems, an employer cannot separate a vested employee for disability.  Instead, they must apply for disability retirement on the employee’s behalf and must often take preliminary steps to ensure that the agency has satisfied its obligation under disability laws and afforded the employee due process when required.


We are here to Help!

LCW is offering a leave of absence review program to assist agencies in developing a tailored, proactive approach to managing employees who are on long-term leaves of absence.  We will provide specific advice and strategies to address each employer’s needs and every employee’s circumstances.  These services include reviewing agency-wide leave concerns and policies, reviewing medical documentation for sufficiency and necessary follow-up, reviewing specific leaves of absence, engaging in the interactive process, developing best practices protocols, and navigating the disability retirement process.  For more information on LCW’s leave review program, visit www.lcwlegal.com/leaves-management.

We also recently hosted a webinar on this topic – Proactive Leave Management and Addressing Long-Term Leaves of Absence. For more information or to register, visit our website.

No Bones About It: No Compensation for Canine Handlers Training to be Canine Instructors

Posted in Wage and Hour

K-9 OfficerThis post was authored by Alison R. Kalinski

The United States Court of Federal Claims (a court with nationwide jurisdiction hearing specialized claims against the federal government) recently held that a group of certified canine handlers were not entitled to compensation for time spent training to become certified canine instructors.  This was because the training was voluntary and its purpose was not to improve their current duties.  The case, Almanza v. United States, was decided on July 26, 2016.

The plaintiffs in Almanza were 290 Customs and Border Protection Officers and Border Patrol Agents (the “agents”) currently or formerly employed by U.S. Customs and Border Protection, Department of Homeland Security (“CBP”).

Background

CBP operates a Canine Training Program based at two training centers.  Agents wishing to work with canines must attend a seven-week training program.  Canines, canine-handler agents, and canine instructors receive their training through this program.  Upon successful completion, handlers are certified to work with a canine for one year, subject to monthly maintenance training under a certified instructor.

Certified canine handlers may also seek additional certification to become an instructor.  Canine instructors perform the same duties as handlers, but also have additional responsibilities assisting handlers maintaining their certification.  Certified canine instructors are eligible for promotion as a canine instructor at CBP’s training centers.  An agent certified as canine instructor, but who does not work as an instructor at a training center, does not get a pay raise, new title, or additional compensation.  Having the canine instructor certification, however, may help the canine handler advance into a supervisory position which could result in a promotion and pay raise, though canine handlers can still advance without the instructor certification.

To become a certified canine instructor, the agent must successfully complete a rigorous 12-week training program called the Detection Canine Instructor Course (the “Course”).  CBP regularly solicits applicants for the Course through memoranda stating that agents who successfully complete the Course will need to perform additional duties, such as providing instruction support or maintenance training for other handlers.  There is no requirement for canine handlers to participate in the Course.  Canine handlers who do not have or seek canine instructor certification do not suffer any adverse consequences in their current jobs and may continue to work as canine handlers without attending the Course.  Handlers must submit an application and interview for the course and selection is competitive; handlers are often denied spots because they lack sufficient experience.  If a handler is accepted but fails the Course, the handler is not demoted or disciplined and can reapply.

To pass the Course, the handlers must pass four exams with a minimum score of 90%.  No working hours are set aside for studying.  The handlers were encouraged to study the material outside of their normal working hours and on the weekend.  The handlers were not paid for time they spent studying.  Accordingly, they sued for back pay and overtime compensation under the FLSA for the time they spent studying.

Decision Process

The Court had to determine whether the studying time was “hours of work” under the FLSA.  Because this case concerned federal employees, the applicable regulation is 5 C.F.R. §551.423(a)(2) which provides that time spent training outside of regular hours is “hours of work” if “(i) [t]he employee is directed to participate in the training by his or her employing agency, and (ii) [t]he purpose of the training is to improve the employee’s performance of the duties and responsibilities of his or her current position.”  While the Court easily concluded that the studying here constituted training outside of regular working hours because the studying was necessary to prepare for the exams, the Court concluded the training was not “hours of work” requiring compensation.

Results

First, the plaintiffs were not required to participate in the training – it was purely voluntary and based on a competitive application.  Canine handlers could continue to serve in their positions without taking the Course.  Second, the purpose of the training was to become a certified canine instructor – not to improve the employee’s duties as a canine handler.  While it was undisputed that the Course would improve the employee’s duties as a canine handler, that was a byproduct of the training, not its purpose.  The goal of the training was to provide new skills to use as a canine instructor.  Accordingly, the plaintiffs did not satisfy the requirements for compensation of training time and the Court granted summary judgment to the CBP.

Application to non-federal employers in California

Almanza is from outside of California and the Ninth Circuit (the federal appellate court covering California) and is not controlling authority in this state.  Nevertheless, it provides guidance on how California employers should determine if training time is hours worked requiring compensation under the FLSA.   For non-federal employers in California, the applicable regulation to determine whether training time must be compensated is 29 C.F.R. §785.27 which provides that training time need not be compensated if all of the following four criteria are met:

  • Attendance is outside of the employee’s regular working hours;
  • Attendance is in fact voluntary;
  • The course, lecture, or meeting is not directly related to the employee’s job; and
  • The employee does not perform any productive work during such attendance.

While the applicable regulation for non-federal employers in California is different than the regulation at issue in the Almanza case, the Almanza case is useful because its discussion is relevant to factors (b) and (c) above, namely, whether the training is voluntary and related to the employee’s job.  In evaluating whether training time is voluntary, employers should consider whether the employee is required to participate and if the training aids an employee in obtaining promotions or pay raises.  Employers should also consider whether the training is directly related to the employee’s job.  If the focus of the training is to provide the employee with new skills or train the employee for another job, then the training is likely not “directly related” to the employee’s job.  This is true even if the training incidentally improves skills needed for the employee’s job.

For Better or Worse: Ten Years of the Firefighters Procedural Bill of Rights Act

Posted in Public Safety Issues

Fire JacketIn 2007, the Firefighters Procedural Bill of Rights Act (FBOR) was enacted after several years of unsuccessful attempts to pass similar legislation. Although the FBOR is modeled after the longstanding Public Safety Officers Procedural Bill of Rights Act (POBR) [Gov. Code, §§ 3300 et seq.], that statutory scheme, which was originally intended for peace officers, presents numerous challenges to the fire service.

As described by several members of the fire service, the culture is quite different from the culture of law enforcement. The observations of fire chiefs and captains show that the POBR’s procedures and protections are not necessarily a good fit. An important difference between firefighters and peace officers is that firefighters work twenty-four-hour shifts; additionally, at least 10 days a month while on these 24-hour shifts, firefighters not only work together but also grocery shop, eat, share significant downtime, and live together. Police officers do not live with each other while on shift, and they spend a substantial amount of time engaging in solitary law enforcement activities.

The dynamic created by the firefighters’ living situation is quite different than in law enforcement. Prior to the FBOR, fire captains could have frank discussions with subordinates without the constraints of the FBOR’s procedures. Although the living situations have not changed from before and after the FBOR, many fire service members believe the rigidity and formalities of the FBOR have altered their culture, causing some fire captains to be reluctant to correct or discipline subordinates.

History of the FBOR

The FBOR’s history and the incongruent comparisons of firefighters to peace officers illustrate the effect the FBOR has had on the fire service culture.

In 1999, Assembly Bill 1411 was introduced as the Firefighters Procedural Bill of Rights Act. In an effort to emulate and afford the same rights as the POBR, the bill substituted the term “firefighter” for “peace officer” and was otherwise word-for-word identical to the POBR. AB 1411 ultimately failed to pass the Senate Appropriations Committee. In the 2007 version, not much changed in the statutory language. However, merely inserting “firefighter” in place of “peace officer” is demonstrative of the adage . . . apples and oranges.

According to Assembly Member John Longville, he introduced AB 1411 to “permit firefighters to engage in political activity in the same manner [as public safety officers] and . . .  [to] require the same procedures and conditions for the investigation and interrogation of a firefighter that could lead to punitive action.” It was also intended “to assure that stable relations are continued throughout the state and to further assure that effective services are provided to all people of the state.”

In August 1975, AB 301 (POBR) was signed by the governor of California. In the July 1975 California Organization of Police and Sheriffs (COPS) Journal, POBR was described as necessary to protect the rights of police officers who were “accused of minor infractions, suddenly find[ing] themselves transferred to graveyard shifts or to the furthest reaches of the jurisdiction. Others are given the most tedious or undesirable assignments for long periods of time. There are the ‘serving your punishment’ assignments . . . .” Another example of police officer rights allegedly being abused was the “indiscriminate use of the polygraph against police officers.”

Firefighters work 24-hour shifts—police officers do not. It is not possible to punish a firefighter by assigning him a graveyard shift. When the FBOR bills were introduced, there were no allegations of polygraph abuse or unreasonable punishment in the fire service. What exactly the firefighters wanted in 1999 that they were not already entitled to under constitutional due process remains unclear. Assembly Bill 1411 eventually died in the Senate.

In 2006, another legislative effort failed. AB 2857, which ultimately died in the Assembly, was introduced to extend the POBR coverage to firefighters and to overturn the appellate court decision Gauthier v. City of Red Bluff (1995) 34 Cal.App.4th 1441, which held that arson investigators were the only fire personnel who were covered by the POBR.

Finally, with AB 220, the FBOR was enacted. When AB 220 was introduced, the intent was for the FBOR “to mirror most, if not all, of the provisions in POBOR [an alternative acronym for POBR] and make them applicable to firefighters, including those who are paramedics or emergency medical technicians.”

Comparing the Incomparable

Assembly Bill 220’s proponent, the California Professional Firefighters (CPF), compared firefighters to public safety officers: “Firefighters often find themselves in situations where their sworn duty commands appropriate steps to ensure the safety of the public. The reality is that on the street, there are situations where the role of a firefighter intersects with that of a peace officer.” Staff evaluating the bill, however, expressed skepticism with this comparison, noting that no published cases were found involving a firefighter who alleged his due process rights were violated “by an interrogation or investigation for misconduct while executing his job duties.” When considering the history of the POBR and the FBOR and the reasons cited in support of and in opposition to the statutes, the differences are clear.

In each of the attempts to pass the FBOR, the proponents claimed that firefighters “could be” subject to investigations and interrogations that lead to disciplinary action. Opponents argued that firefighters simply were not the subject of investigations and interrogations to the same degree as peace officers.

One of the comments from opponents of the bill was that the POBR created a “hefty” body of case law resulting from the statutes. Indeed, during the first ten years of the POBR, California appellate courts heard 30 cases involving the POBR. The same cannot be said for the FBOR. In the first 10 years of the FBOR, only two reported cases have analyzed or interpreted the FBOR (Poole v. Orange County Fire Authority and Seibert v. City of San Jose), and a third case in 2016 (Clark v. California Dept. of Forestry and Fire Protection), which was decided by a federal district court, did not serve to interpret member rights and instead only considered a point related to litigation of disputes (it found that the FBOR bars individual liability for firefighters who violate the FBOR due process requirements).

Conclusion

After 10 years of the FBOR, fire chiefs, deputy chiefs, battalion chiefs, and captains have cited to the FBOR’s procedures as confusing and irrelevant to the fire service. In support of the FBOR, the Legislature declared that “[f]irefighters who trust their instincts in these volatile emergency situations are deserving of due process rights and protections should those circumstances arise.” However, firefighters already had due process rights and protections, as well as substantial protections through collective bargaining. Perhaps after another 10 years, the effect of the FBOR on the culture will have diminished because by then many of the firefighters will have known only an FBOR-governed fire service.

Court Affirms that PEPRA Does Not Limit County’s Right to Repeal COLA Pickup

Posted in Retirement

Beach background with towel and flip flops and the word Retirement written in sand (studio shot - directional light and warm color are intentional).

On December 20, 2016, the California Court of Appeal for the Third Appellate District reaffirmed the purpose and spirit of the Public Employees’ Pension Reform Act (“PEPRA”) as a law designed to “limit,” rather than “shield,” public employees’ retirement compensation.  In the recent case, San Joaquin County Correctional Officers Association v. County of San Joaquin, the San Joaquin County Correctional Officers Association (CCOA) argued that PEPRA shielded its members, by prohibiting the County from eliminating a pension “pickup” prior to 2018. The Court disagreed.  It found that the County could eliminate the pickup at any point, as long as it did so in accordance with collective bargaining laws.

  1. Employer Pickup under the County Employees Retirement Law of 1937

Under the County of San Joaquin’s retirement system, CCOA members receive a pension benefit and post-retirement cost of living adjustments (COLA). By default, the County Employees Retirement Law (“CERL”) requires increases in COLA contributions to be shared equally between counties and their contributing members.  Prior to PEPRA, the law allowed, but did not require, a county to pay for, or “pick up,” the employee’s share of this contribution.* At the same time, section 31581.2 of the CERL specified that a pickup agreement did not create a vested right for members and that a county could repeal such agreement at any time, subject to meet and confer requirements under the Meyers-Milias-Brown-Act (“MMBA”).  In accordance with the CERL, and prior to PEPRA’s passage, the County of San Joaquin agreed to pick up employees’ shares of COLA contributions.

In September 2012, the County and CCOA negotiated a new memorandum of understanding.  As part of the 2012 negotiation, the County sought to end its COLA pickup, requiring CCOA members to pay their default half of COLA contribution increases.  The County imposed this change following bargaining impasse.

Rejecting the County’s decision to impose this change, CCOA argued that PEPRA prevented the County from imposing the benefit reduction until January 2018.  In support of its arguments, CCOA largely relied on Government Code section 31631.5, which was added to the CERL when PEPRA was implemented.  Under the PEPRA, all “new members,” as defined, are required to pay 50% of the normal cost of the retirement benefits.  However, for those who are not “new members,” section 31631.5 states that counties can require these classic or legacy members to pay 50% of the “normal cost of benefits” up to specified, percent-based limitations for each membership category.  According to the statute, effective January 1, 2018, employers can impose this requirement after meeting and conferring in good faith, through all impasse procedures.  However, the statute also provides that it does not apply to bargaining unit members that are already paying at least 50% of the normal cost and does not modify a county’s authority, as it existed on December 31, 2012, to change the amount of member contributions.  CCOA argued that this statute prohibited the County from changing its COLA pickup, viewing the pickup as part of the “normal cost of benefits.”

The Court denied the CCOA’s argument that this new PEPRA statute sheltered bargaining unit members from the pickup elimination.  The Court did not determine whether the COLA was part of the “normal cost of benefits,” finding the argument irrelevant to the legal issue presented.  Instead, the Court determined, because the County had the authority to repeal its pickup agreement under section 31581.2 of the CERL, at any time, as of December 31, 2012 (and prior), it could repeal the agreement through bargaining despite any time-delayed easing implemented by PEPRA.

Though the legislature delayed giving effect to some provisions of PEPRA, the Court explained that this was done to “ease the transition” and allow changes to be negotiated gradually.  However, the gradual effect of PEPRA was not intended to provide a “shield” to retirement system members, insulating them from properly, and lawfully, imposed pension increases until 2018.  Under the CERL, the County had the “right to reduce any contributions it chose to make toward what would otherwise have been the employee’s half-share of COLA payments.”

  1. Employer Paid Member Contributions under the Public Employees’ Retirement Law

Notably, like the CERL, the Public Employees’ Retirement Law (“PERL”) allows CalPERS contracting agencies to pay all or a portion of a classic member’s “normal contributions.” This is commonly referred to as an employer paid member contribution or “EPMC.”*  Also, like the CERL, the PERL provision that allows employers to cover a classic member’s default contribution, specifies that the contracting agency retains the authority to increase, reduce, or eliminate its payment of the member’s contribution.  Section 20516.5 of the PERL is similar in language to section 31631.5 of the CERL, and both sections were enacted as part of the PEPRA.  Accordingly, applying the reasoning from the Court in San Joaquin County Correctional Officers Association v. County of San Joaquin, PEPRA does not prohibit CalPERS employers from reducing or eliminating employer paid member contributions at any time, in accordance with the PERL, through proper bargaining and impasse procedures.


*After PEPRA, both the CERL and PERL limit employer pickups and employer paid member contributions to classic employees.  PEPRA does not allow employers to pay the member contribution of PEPRA-defined “new members.”