California Public Agency Labor & Employment Blog

California Public Agency Labor & Employment Blog

Useful information for navigating legal challenges

Application of the U.S. Civil Rights Act to Sexual Orientation Discrimination

Posted in Discrimination

Gavel-and-Books.JPGTitle VII of the U.S. Civil Rights Act of 1964 (hereafter “Title VII”) has long prohibited discrimination on the basis of sex in the terms, conditions or privileges of employment. One question of ongoing statutory interpretation has not been definitively answered: what constitutes “sex” for the purposes of employment discrimination? Are the terms “sex” and “gender” interchangeable under the law? And does the prohibition of discrimination on the basis of sex extend to a prohibition of discrimination on the basis of sexual orientation?

In 1989, the U.S. Supreme Court, in Price Waterhouse v. Hopkins, determined that Title VII’s prohibition of discrimination on the basis of sex extended to discrimination on the basis of sex-stereotyping; i.e. a person’s perceived failure to comply with socially constructed gender norms.  But, the Court has not to date proclaimed that the prohibition of discrimination on the basis of sex stereotyping prohibits sexual orientation discrimination. Neither has Congress amended Title VII to explicitly include “sexual orientation” as a protected classification. (“Sexual orientation” discrimination is expressly prohibited by California’s Fair Employment and Housing Act (“FEHA”)).

Absent a position by the Supreme Court, the Equal Employment Opportunity Commission (“EEOC”), the federal agency that administers Title VII, issued a bulletin in 2015 proclaiming that the agency interprets and enforces Title VII’s prohibition of sex discrimination as “forbidding any employment discrimination based on gender identity or sexual orientation,” regardless of any contrary state or local law.  Also in 2015, the EEOC issued an administrative decision that “sexual orientation” discrimination is discrimination based on sex and therefore violates Title VII.  In Baldwin v. Dep’t of Transportation, the EEOC explained:

Discrimination on the basis of sexual orientation is premised on sex-based preferences, assumptions, expectations, stereotypes, or norms. “Sexual orientation” as a concept cannot be defined or understood without reference to sex. A man is referred to as “gay” if he is physically and/or emotionally attracted to other men. A woman is referred to as “lesbian” if she is physically and/or emotionally attracted to other women. Someone is referred to as “heterosexual” or “straight” if he or she is physically and/or emotionally attracted to someone of the opposite-sex. [citations omitted.] It follows, then, that sexual orientation is inseparable from and inescapably linked to sex and, therefore, that allegations of sexual orientation discrimination involve sex-based considerations.

The EEOC then concluded, “[s]exual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee’s sex.”

On April 4, 2017, the U.S. Court of Appeals for the Seventh Circuit (headquartered in Chicago) became the first federal appeals court to agree with the EEOC that Title VII’s prohibition against sex discrimination includes discrimination on the basis of sexual orientation as a “form of” sex discrimination.  In Hively v. Ivy Tech Community College of Indiana, the Court explained that “all gay, lesbian and bisexual persons fail to comply with the sine qua non of [i.e. inseparable from] gender stereotypes – that all men should form intimate relationships only with women, and all women should form intimate relationships only with men.”  In this decision, the Court endeavored to clean up an outstanding contradiction that resulted from the Supreme Court’s 2015 decision in Obergefell v. Hodges where the Court determined that the due process and equal protection clauses of the U.S Constitution protect the right of same-sex couples to marry.  Obergefell, in conjunction with prior federal appeals court decisions that refused to recognize sexual orientation discrimination as sex discrimination under Title VII, created a “paradoxical legal landscape in which a person can be married on Saturday and then fired on Monday for just that act.”  Looking to the Supreme Court’s decision, the Seventh Circuit issued its ruling in consideration of “what the correct rule of law is now.”  It concluded, there is no line between a gender nonconformity claim and a claim based on sexual orientation:

Any discomfort, disapproval, or job decision based on the fact that the complainant—woman or man—dresses differently, speaks differently, or dates or marries a same-sex partner, is a reaction purely and simply based on sex. That means that it falls within Title VII’s prohibition against sex discrimination, if it affects employment in one of the specified ways…The logic of the Supreme Court’s decisions, as well as the common-sense reality that it is actually impossible to discriminate on the basis of sexual orientation without discriminating on the basis of sex, persuade us that the time has come to overrule our previous cases that have endeavored to find and observe that line.

As noted, California’s FEHA explicitly prohibits discrimination on the basis of sexual orientation (as well as gender identity and gender expression).  However, the Ninth Circuit Court of Appeals (covering California) has not explicitly applied Title VII to sexual orientation discrimination. Indeed, its rulings on this issue leave open an opportunity for further exposition.

For example, in Schwenk v. Hartford the Ninth Circuit in 2000 relied on Title VII cases to conclude that violence against a transsexual person was violence because of gender under the Gender Motivated Violence Act.  The Court proclaimed that the term “sex,” as used in Title VII, means both “sex” (then described as the biological difference between men and women) and “gender” (described as an individual’s sexual identity, or socially constructed characteristics.)  Therefore, the Court concluded, discrimination based on sex included discrimination based on socially constructed gender characteristics.

Without precluding the possibility that Title VII could apply to sexual orientation discrimination, the Ninth Circuit in 2002 held that an employee’s sexual orientation was “irrelevant for purposes of Title VII.”  In Rene v. MGM Grand Hotel, Inc., the Court explained that Title VII “neither provide[d for] nor preclude[d] a cause of action for sexual harassment.” The Court determined that the fact that an alleged harasser was, or may have been, motivated by hostility based on sexual orientation was similarly irrelevant to a sexual harassment claim.  The Court explained that it is enough to assert a cause of action under Title VII based on allegations that the harasser engaged in “severe or pervasive unwelcome physical conduct of a sexual nature.”  Whether that conduct was “because of” the victim’s sexual orientation, a personal vendetta, misguided humor, or boredom, was beside the point.

Later, in 2011, the Northern District Court for California (the federal trial court headquartered in San Francisco) re-asserted that neither Title VII nor any other federal law protects against discrimination on the basis of sexual orientation. Accordingly, it dismissed a plaintiff’s “failure-to-promote claim” based on alleged sexual orientation discrimination. See Johnson v. Eckstrom. More recently, in 2015 the Central District Court for California (headquartered in Los Angeles) rejected the Northern District ruling and concluded that claims of sexual orientation discrimination are gender stereotype or sex discrimination claims covered by Title VII (and Title IX, which applies specifically to federally supported education). See Videckis v. Pepperdine University.  Also, see Nichols v. Azteca Rest. Enters., Inc., a 2001 decision of the Ninth Circuit holding that discrimination against either a man or a woman on the basis of gender stereotypes is prohibited.  Like the recent Seventh Circuit decision, the California Central District in its 2015 decision in Videckis v. Pepperdine University concluded that sexual orientation discrimination is not a category distinct from sex or gender discrimination. Rather, it held, “claims of sexual orientation discrimination are gender stereotype or sex discrimination claims.”

Based on the Ninth Circuit’s varying application and interpretation of Title VII’s application to sexual orientation discrimination, the split reasoning regarding its application by the lower District Courts, and based on the Seventh Circuit’s more complete exposition of sexual orientation discrimination as a form of gender discrimination, this issue is likely ripe for the Ninth Circuit’s review.  Indeed, given the split among U.S. Courts of Appeal, the issue may well be ripe for Supreme Court consideration.

New Regulations Give Applicants and Employees with Criminal History a Fresh Start; Employers Should Take a Fresh Look at their Decision-Making Practices

Posted in Employment

InterviewCalifornia’s Department of Fair Employment and Housing (“DFEH”) revised an existing regulation and adopted a new regulation regarding employers’ use of employees’ and applicants’ criminal history in employment decisions, effective July 1, 2017.

Restrictions that are specific to the use of criminal records were moved from California Code of Regulations, Title 2, Section 11017 to the new regulation, Section 11017.1.  Importantly, these regulations do not override state or federal laws or regulations prohibiting persons with certain convictions from holding particular jobs, or requiring a particular criminal background screening process for them, such as peace officers, individuals employed at health facilities where they will have regular access to patients and/or controlled substances, and employees supervising children.

First, the regulation prohibits employers from seeking or requesting the following information when making employment decisions such as hiring, promotion, training, discipline, layoff and termination, regardless of whether there is an adverse impact on a protected class:

  • Arrests or detention that did not result in a conviction.
  • Referral to or participation in a pretrial to post-trial diversion program.
  • Convictions for which the record has been judicially ordered sealed, expunged, or statutorily eradicated. (Note: This prohibition was identical in the old regulation; however the new regulation eliminates a previous prohibition on considering misdemeanor convictions for which probation has been successfully completed or otherwise discharged.)
  • Any arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while a person was subject to the process and jurisdiction of juvenile court law. This adds a prohibition on considering unsealed juvenile records that was not contained in the old regulation.
  • Any non-felony conviction for marijuana possession that is two or more years old.

Further, employers who consider convictions can be found to have discriminated against employees or job applicants where a use of that information has an adverse impact based on a protected classification.  The new regulation, Section 11071.1 specifies that it is the applicant or employee’s burden to prove an adverse impact; however, it also provides that state- or national-level statistics showing substantial disparities in the conviction records of one or more categories enumerated in the FEHA are “presumptively sufficient to establish an adverse impact.” In its Final Statement of Reasons for the new regulation, the DFEH specifically cited such statistics published by the EEOC, the California Attorney General’s Criminal Justice Statistics Center, and its OpenJustice initiative. The employer may rebut this presumption by making a showing that there is “a reason to expect a markedly different result after accounting for any particularized circumstances such as the geographic area encompassed by the applicant or employee pool, the particular types of convictions being considered, or the particular job at issue.”

If an employee or applicant establishes an adverse impact, the employer can avoid liability by demonstrating that using the conviction information was job-related and consistent with business necessity.  The regulation states, “in order to establish job-relatedness and business necessity, any employer must demonstrate that the policy or practice is appropriately tailored,” and requires that the employer consider at least the following three mandatory factors: the nature and gravity of the offense or conduct; the time that has passed since the offense or conduct and/or completion of the sentence; and the nature of the job sought.

In order to demonstrate that a policy or practice of considering conviction history is appropriately tailored, and therefore job-related and consistent with business necessity, the employer must either:

  • Demonstrate that any “bright line” consideration of conviction information can properly distinguish between applicants and employees that do and do not pose an unacceptable level of risk and that the convictions considered have a direct and specific negative bearing on the persons’ ability to perform the duties or responsibilities necessarily related to the employment position. DFEH will presume that any “bright-line” rule that relies upon convictions that are more than seven years old is not job-related and consistent with business necessity.  An employer may rebut this presumption with evidence.


  • Demonstrate that it conducts individualized assessments of the circumstances and qualifications of applicants or employees excluded by the conviction screen. This individualized assessment must include notice to the employee or applicant that they have been screened out because of a criminal conviction discovered through research, and give them a reasonable opportunity to demonstrate that the exclusion should not be applied due to their particular circumstances.  The employer must then consider that information, and determine whether the policy as applied to the individual employee or applicant is job-related and consistent with business necessity.

Finally, even if an employer demonstrates that its policy or practice of considering conviction history is job-related and consistent with business necessity, it may still be liable if an employee or applicant can demonstrate that there is a less discriminatory policy or practice that serves the  employer’s goals as effectively as the challenged policy or practice, such as a more narrowly tailored list of convictions or another form of inquiry that evaluates job qualification or risk as accurately without significantly increasing the cost or burden on the employer.

If your agency, special district, or school considers criminal background information in employment decisions, you should review your practices prior to July 1, 2017, to ensure compliance with the new regulations, and contact employment counsel if you have any questions or concerns.

Apples and Oranges: Daily Meal Expenses Properly Excluded from the Regular Rate

Posted in Wage and Hour

ManThis post was authored by Juliana Kresse

Many agencies provide their employees with per diem stipends while the employee is traveling for work.  Is your agency including this amount when calculating the regular rate of pay for overtime under the FLSA?  In Sharp v. CGG Land, Inc. (10th Cir. 2016) 840 F.3d 1211, the Tenth Circuit confirmed that agencies may properly exclude per diem stipends from the regular rate calculation.


In the Tenth Circuit case, the employer, CGG Land Inc. (“CGG”), provided seismic mapping services in remote areas around the United States.  To provide these services, CGG required its employees to travel to and stay at, or near, a job site for four to eight weeks.  While traveling, CGG employees often worked more than 40-hour weeks and CGG calculated their overtime based on the regular rate of pay.  CGG provided its employees, who traveled for work, with a $35 per day stipend for meals.  CGG did not include this stipend when calculating the employee’s regular rate of pay.

A group of CGG employees filed a collective action, alleging that CGG had violated the FLSA by underpaying their overtime hours because it had improperly excluded the daily meal expense from the regular rate.

Court’s Analysis

In analyzing the employees’ claim, the Court looked first at the language of the FLSA and the applicable regulations to see how the regular rate is defined.  The Court affirmed that the regular rate is all remuneration paid to, or on behalf of, an employee, subject to eight exceptions.  One of those exceptions is travel expenses, which the regulations define as “living expenses” incurred while the employee is “traveling over the road for his employer’s business.”  In other words, travel expenses do not have to be calculated into the regular rate.

The employees argued that the meal stipend did not fall under the travel expenses exception because (1) meals are not a living expense; (2) once at the job site the employee is no longer “traveling over the road”; and (3) the per diem stipend is a “scheme” to pay an artificially low hourly rate to keep overtime pay low.

Meals are a living expense.  The Court disagreed with the employees and found that meals and the cost of food while traveling for work are a “living expense.”  The Court relied primarily on U.S. Department of Labor opinion letters that had already analyzed this issue and determined that eating a meal away from home is an additional expense incurred by the employee for the employer’s benefit.

While at a job site, employees are traveling.  The Court also declined to adopt the employees’ hyper-literal interpretation of the term “traveling over the road” in the regulations.  The employees essentially argued the plain language of the regulations only excluded travel expenses incurred while in transit, and that once they reached a job site, they were no longer “traveling,” and any per diem stipends paid while they were at the job site should be included in the regular rate.  The Court held that “traveling” included more than just time spent in transit from one job site to another, but more broadly includes time away from home.

Per Diem Stipends are not a Scheme.  Lastly, the Court held that CGG’s meal stipends were not a scheme to underpay workers by setting an artificially low hourly wage.  This holding was based, one, on the fact that the employees had agreed that the stipends were a reasonable amount that approximated their meal expenses and, two, on the fact that the stipends were not tied to amount of hours the employee worked.


Per diem stipends for meals may be excluded when calculating the regular rate under the FLSA.  Even though this is a Tenth Circuit case, it is likely that California courts (which are in the Ninth Circuit) will follow this decision in light of the Court’s sound conclusion and reasoning.

In this case, CGG was calculating the regular rate correctly, but is your agency doing the same?  If you are a Human Resources, Payroll, or Finance employee for your agency, it is important to stay on top of the latest legal developments that impact what should be included in the regular rate and what may be properly excluded.  Take this opportunity to look at your agency’s overtime practices and consult an attorney to find out if your FLSA calculations comply with the law.


FLSA-Guide-CoverLiebert Cassidy Whitmore recently updated the 2017 Fair Labor Standards Act: A Public Sector Compliance Guide, a publication that provides California’s public employers with the important information they need to know to ensure that your agency’s employment policies and procedures are in compliance with the Fair Labor Standards Act. Learn more >


CalPERS School and Local Agency Members May Now Recover Service Credit and Compensation Earnable Upon Administrative, Arbitral or Judicial Reversals of Terminations

Posted in Retirement

CashCalPERS contracting agencies and schools should be aware that effective January 1, 2017, if an employee’s termination is overturned on appeal, back pay is not the only thing the employee will be able to recover. On June 21, 2016, we reported that Assembly Member Cooper introduced a new bill, AB 2028, which if passed, would allow CalPERS school and local agency members reinstated by administrative or judicial order following an involuntary termination to retroactively receive service credit and compensation earnable as though they were never terminated. The Legislature enacted, and Governor Brown signed, AB 2028 this past Fall.  The new law went into effect on January 1, 2017.

AB 2028 permits CalPERS members who were involuntary terminated from employment on or after January 1, 2017, and subsequently reinstated pursuant to an administrative, arbitral or judicial proceeding (collectively, a “proceeding”) to receive service credit and compensation earnable as though they were never terminated. The Bill clarifies that administrative proceedings include proceedings before the governing board of a school district, a charter school, a county office of education, or a community college district.  The reinstatement of these benefits will be effective as of the date from which retroactive salary is awarded in the proceeding.

AB 2028 addresses a gap in existing law, where state employees who have been subject to an involuntary termination that is subsequently overturned receive service credit retroactively.

However, such a mechanism did not, until AB 2028, apply to employees of a CalPERS contracting local agency or school. While pre-AB 2028 law allowed all CalPERS members who retired after an involuntary termination and who were subsequently reinstated to their employment to receive retroactive benefits, CalPERS school and contracting local agency members who did not retire after involuntary terminations were not eligible to receive retroactive benefits upon reinstatement.

Under AB 2028, contributions to the CalPERS system (the “System”) must be made for any period for which salary is awarded in the proceeding in the amount that the CalPERS member would have contributed had his or her employment never been terminated.  The Bill does not expressly state who is responsible for paying the retroactive contributions into the System, i.e. the agency, the reinstated employee or both.  However, the legislative history suggests that because the Bill is intended to make an employee whole, as if he or she had never been terminated, the contribution obligations would mirror the agency and members’ regular contribution practices.

Finally, AB 2028 requires employers to notify CalPERS of a final decision ordering reinstatement within five (5) days of the decision becoming final. That notice must include the date of involuntary termination, the date on which the employee was reinstated, and any additional information CalPERS may require to implement the bill.  The new law does not require contracting agencies to provide an employee with additional retirement benefits that the employee would not otherwise have been entitled to had he or she not been involuntarily terminated.

Policymaking Employees and the First Amendment

Posted in Constitutional Rights, First Amendment

iconic-collumn.jpgA newly-elected official is going to want to fill top posts in their organization with persons committed to the official’s vision for the future.  In the same way, a top official after a period of months or years may want to change key lieutenants because of political differences.  Indeed, this ability to pick and choose among key advisers and high-level posts in a public organization has long been a traditional element of politics.

But sometimes, these notions come into a conflict with well-established job protections of public employees.  One of these is the First Amendment, which in a number of circumstances prohibits public agencies from taking adverse actions against employees based on their speech or political associations.  For most public employees, their speech and even their criticism of their own agency can have protection under the First Amendment if particular conditions are met.  Under principles of constitutional law, a public employee can assert a First Amendment retaliation claim against his or her employer if:

  1. the employee suffers an adverse employment action because of the employee’s speech,
  2. that speech was on a matter of public concern,
  3. the speech was outside the employee’s “official duties,” and
  4. a balancing test of certain respective interests favors the employee.

Of course, public employees often have numerous other protections against adverse employment actions, including due process rights, contractual “for cause” standards, and protections in collective bargaining agreements.

As far as the First Amendment is concerned, however, for some key employees, there is in fact room for what can appear to be arbitrary action or “patronage” dismissals.  The United States Supreme Court has created a “policymaker exception” to First Amendment protection, recognizing that an elected official must be able to appoint some high-level politically loyal individuals who will help him or her implement the goals or programs for which the public voted.  See Branti v. Finkel.  The U.S. Court of Appeals for the Ninth Circuit (covering California) described in a 1997 case titled Fazio v. City of San Francisco that if an employee is “a policymaker, then . . . his government employment could be terminated for purely political reasons without offending the First Amendment.”  The Court described the following factors a Court must consider in identifying a “policymaking” position:

  • “vague or broad responsibilities,”
  • “relative pay,”
  • “technical competence,”
  • “power to control others,”
  • “authority to speak in the name of policymakers,”
  • “public perception,”
  • “influence on programs,”
  • “contact with elected officials,” and
  • “responsiveness to partisan politics and political leaders.”

In a 2012 decision, Hunt v. Orange County, the Ninth Circuit added some refinements to the “policymaker” test.  The Court held that the exception turned essentially on an overarching factor of whether political considerations had sufficient significance in the job duties of the employee in question.  “The essential inquiry” the Court described “is whether the hiring authority can demonstrate that party affiliation is an appropriate requirement for the effective performance of the public office involved.”  (Emphasis added.)  In the Hunt case, the Ninth Circuit found that Orange County Sheriff Michael Carona could not rely on the policymaker exception to demote a particular high-ranking employee, William Hunt, who had run against him for Sheriff.  Hunt was the Chief of Police Services for the City of San Clemente, which contracted with Orange County Sheriff’s Department for police work.  The Court reasoned: “Here, the record fails to establish that Hunt’s party affiliation or political outlook were relevant to the effective discharge of his professional duties.”  Instead, the factual findings were that “Hunt’s political statements—which were the basis of his demotion—did not cause, and could not have been reasonably predicted to cause, a disruption in the efficient operation of the department.”  The Court’s opinion interprets the applicable test in a way that appears to make it more difficult for employers to invoke the exception.

District court cases decided after Hunt provide examples of what types of employees were considered policymakers.  In 2013, in Wittenberg v. Public Utility Dist. No. 1 of Skamania County, the U.S. District Court for the Western District of Washington determined that a general manager of a public utility district, selected by three elected officials, was a policymaker.  In 2015, in Summers v. City of McCall, a District Court in Idaho determined that a City Chief of Police in that case met the definition.  In 2016, in Kaelble v. Tulare County, the District Court for the Eastern District of California found that a Supervising Deputy District Attorney to be a policymaker where each of the relevant criteria was satisfied.

In conclusion, deciding that an employee meets the definition of a policymaker can obviously have important ramifications for the employee – and for the agency, if it makes a politically motivated decision as to someone whose job does not actually meet the definition.  Accordingly, it is best to obtain legal advice if there is any doubt.

Discontinuation of a Long-Standing Practice of Accommodating Disabled Employees through Light-Duty May Be a Violation of FEHA

Posted in Public Safety Issues, Retirement

Police-Cars.jpgThis post was authored by Jennifer Rosner

In a recent decision by a California Court of Appeal, a Court held that it was not unreasonable for the City of Los Angeles to assign temporarily injured recruit officers to light-duty administrative assignments in light of the City’s past policy and practice of doing so.

Plaintiffs were recruit police officers and entered the Police Academy shortly after they were hired.  During the Academy training, each of the three officers suffered injury.   The City had a policy whereby if a recruit became injured while at the Academy,  the City placed him or her in the Recycle program, which provided recruits with light-duty administrative jobs until their injuries were healed and they could return (or recycle back) to the Academy.  While in the Recycle program, recruits received full compensation and benefits.  In accordance with this policy, Plaintiffs were assigned to light-duty administrative positions.

The City’s Recycle program (of allowing police recruits to remain in the Recycle program indefinitely) conflicted with Penal Code section 832.4 and regulations issued by the California Commission on Peace Officer Standards and Training (POST), which require recruits to complete their training and the 12-month probationary period within two years.  Thus, in an attempt to ensure compliance with this rule, the Department revised its Recruit Officer Recycle Policy to provide “any recruit officer with a work restriction(s) or any other condition that precludes them from fully participating in all aspects of the Basic Course, which has or will extend beyond six calendar months, is no longer eligible to remain in the POST Basic Course.”

When the City required the Plaintiffs to return or resign from their employment because they were not able to return after six months of injury, they filed this lawsuit alleging, in relevant part, disability discrimination and failure to accommodate under the Fair Employment and Housing Act (FEHA).  As to their claim for disability discrimination, FEHA makes it unlawful for an employer to discriminate against an employee because of the employee’s disability.  However, FEHA specifically limits the reach of FEHA by “excluding from coverage those persons who are not qualified, even with reasonable accommodation, to perform essential job duties.”  Here, the Court found that Plaintiffs were unable to show that they were “qualified individuals” because they could not perform the essential functions of a police recruit even with reasonable accommodation.  The Court stated that in determining whether the Plaintiffs were “qualified individuals,” the City was not required to eliminate an essential function of the position of police recruit, such as modifying the Academy training program or requirement, waiving the POST certification requirement, or eliminating from a recruit officer’s job duties the ability to make forcible arrests and control suspect.

However, the Court rejected the City’s argument that the plaintiffs, as trainees, were not entitled to reassignment to the Recycle program as a reasonable accommodation as a matter of law and as such, the City was liable for failure to reasonably accommodate.  The Court stated that FEHA protects “probationary” employees, including by requiring reassignment, where such reassignment is reasonable.  The Court found that reassignment to the Recycle program, until the plaintiffs healed or became permanently disabled, was not unreasonable under the facts of this case, especially where the Department had a long-standing practice of allowing injured recruits to remain in the Recycle program indefinitely until they healed and could return to the Academy or until their disabilities became permanent.

While the Court did not question the legitimate reasons the City had for discontinuing the Recycle program, it held that “having created the Recycle program and allow[ing] past recruit officers to stay in the program until they recovered or became permanently disabled, the City could not deny the same accommodation to the plaintiffs, who entered the program before the City’s change in policy.”

While FEHA does not require employers to temporarily accommodate injured employees indefinitely or to convert a temporary position into a permanent one, to the extent an employer’s policies and practices indicate such accommodations are reasonable, an employer may violate FEHA by not making those accommodations available to all employees.  Thus, in determining reasonable accommodation, employers should review their policies and past practices to make sure that they are consistent in their application (or discontinuation) of any light-duty assignments that they may make.

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 Collective Bargaining 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.

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