California Public Agency Labor & Employment Blog

California Public Agency Labor & Employment Blog

Useful information for navigating legal challenges

5 Lessons I Learned at Harvard’s Kennedy School This Summer

Posted in Lessons Learned

Harvard_University_Widener_LibraryThis summer I had the opportunity to attend Harvard Kennedy School of Government’s Senior Executives in State and Local Government course.  It is a 3-week class designed to help state and local government officials, and those of us who serve them, effectively manage operations and employees; and to hone skills to exercise leadership in an environment where agencies face greater scrutiny from a skeptical public, and where the need for services continues to grow despite the relatively scarce resources available.

Among the approximately 60 participants in the class, there were City Managers, police and fire personnel, lawyers who work with or for public agencies, human resources professionals, elected officials, and others.  In many ways, being in this class felt like being back in college again.  We lived with roommates in the dorms on Harvard’s campus, ate campus cafeteria food paid for with our Crimson Cards, completed homework and group projects, participated in daily study groups, and attended over 30 lectures taught by the accomplished faculty at the Harvard Kennedy School.

When some of my colleagues at my firm suggested I write about my experience this summer, I struggled to try to synthesize what I learned so as to present it in a way to benefit the clients we serve.  In an attempt to impart practical information that can be incorporated into our daily routines, I decided to develop a list of 5 primary lessons I learned:

1. Have a vision.

In class one day, Professor Marty Linsky said: “If you care enough about something, you’ll do something about it.”

As I thought about this comment during the class, and in continuing to think about the statement more since being back in California, it struck me how critical this seemingly straightforward sentiment is in our respective professions.  Without a vision, we risk working without a focus or purpose, and thereby setting ourselves up for feeling aimless or unfulfilled in our positions.

Figuring out what we care enough about to take risks for is the penultimate challenge to establishing a vision.  The ultimate challenge is to devise a plan that helps us execute the vision.  I challenge to think about what your vision is.  What will you leave behind at your agency?  What will you be remembered for?

In addition to establishing a vision, it is important to write a vision statement that you revisit periodically to help you assess your work toward achieving the vision, and to help you periodically consider whether it continues to be the vision you want to pursue.

2. Set priorities like you did in college: major in one, and minor in one or two others. 

It is easy to fall into the trap of trying to do too much.  We find ourselves committing to too many tasks, and some of us puzzle over when we will finally learn to say no.   If you desire to advance your vision, it will be very important not to over-commit or try to do too much.  By setting your own priorities, you will set an agenda for yourself that allows you to determine what tasks help promote your vision, and what tasks serve as a distraction from your vision.  The challenge is to identify what tasks will help you achieve your goals, to stick to those tasks, and to diplomatically turn down the ones that serve as detractors.

3. Take time to think about how to change things to reach your desired result. 

Once you have a vision in mind, it is important to devise a plan to help you accomplish it.  First, identify what goals you want to accomplish.  Then, evaluate what barriers, hurdles or constraints exist that threaten your ability to achieve your goals.  Next, assess what resources you have available to help you reach your goals.  Finally, develop a strategy to help you execute a plan to meet the specified goals.  It sounds like basic advice, but a failure to put the time in on the front end to plan will hinder your ability to recognize internal and external challenges to accomplishing your goals.

4. Whatever your task is, figure out what group dynamic is effective.

Arguably, you are far less likely to be successful in achieving your goals if you are trying to forge ahead on your own.  You need resources, including people, to help you.  Similarly, to be successful in promoting your vision, you typically must work with a collective or group to help you advance your mission.

While working with other people, particularly teams or groups, it is important to pay attention to the dynamics.  Every group has its own set of forces that are informed by the unique personalities of the group members, their positions or jobs, their current and past experiences in professional settings, their personal history, and so on.

Given the diverse nature of groups, it is important to spend time thinking about what the group dynamic is that you are confronted with, and to be flexible in how you work with a particular group.  Your strategy for achieving your goals will be affected by the conditions that exist within a particular group.  If you do not spend the time to evaluate the group dynamics, you may forge ahead with a strategy that suits your needs, but is not conducive to the interests of the group whose support you are trying to solidify.  Think creatively about how to work with your group rather than trying to work around your group.

5. Don’t underestimate the use of humor.

The occasional injection of humor can bring a welcome amount of levity to otherwise difficult situations.  But it is important to be aware of when using humor is and is not appropriate.  Doing work on yourself to hone listening and communication skills will help you understand when humor is appropriate and when it diminishes your ability to be effective.

Although these 5 lessons I have identified for you appear simple on the surface, it takes a good amount of time, reflection, and planning to put the lessons into practice.  The reward for incorporating these lessons into your professional life is a deliberate vision marked by a set of goals whose fulfillment will result in a more satisfying professional experience.

Retired Employees Not Likely To Trigger Affordable Care Act Penalties As Long As The Employer Adopts The Look Back Measurement Method Safe Harbor

Posted in Retirement

Retirement-Sign.jpgThis blog post was authored by Heather DeBlanc

As employers begin to prepare for the Affordable Care Act’s (“ACA”) Employer Mandate scheduled to take effect January 1, 2015, two main questions arise relating to retired employees who return to work:

Can retired employees subject the employer to a penalty? – Yes!

Should employers offer health coverage to retired employees? – Probably not.  Doing so would be in excess of post-retirement and CalPERS could reinstate the retiree to CalPERS membership. Instead, the employer should adopt the Look Back Measurement Method Safe Harbor.

The ACA does not carve out an exception for retirees who return to work. They are considered employees and, if they meet the definition of “full time” under the ACA’s employer mandate, they could potentially trigger a penalty to an employer. However, in order for a full-time employee to trigger a penalty, that employee must purchase coverage through Covered California and receive a government subsidy. If a retiree is eligible for Medicare, he or she will not qualify for a subsidy and therefore will not trigger a penalty.

To qualify for a subsidy through Covered California an individual must have an annual household income between 138% and 400% of the Federal Poverty Level, not be eligible for other public health coverage such as full-scope Medi-Cal, premium-free Medicare Part A, or military coverage, and must not have affordable access to health insurance through an employer. Therefore, any retiree over age 65 who returns to work will be eligible for Medicare and therefore will not typically trigger a penalty.  Any individual receiving any retiree health benefits will also not trigger a penalty because they will already have health coverage through a source other than Covered California.

When a retiree age 65 or younger returns to work, a new dilemma arises for those employers who are CalPERS members. Under the CalPERS system, a retired person may serve without reinstatement from retirement and without loss of retirement benefits in limited circumstances, which we discussed on the following blog posts – “California Legislature Enacts Further Changes To Post-Retirement Employment For PERS Retirees” and “CalPERS Issues Circular Letter Clarifying Uncertainties Raised By AB 1028 On Post-Retirement Employment And Raising New Ones.” In order to avoid reinstatement, the employee must not receive any benefits or compensation in lieu of benefits. Also, the retiree must not work more than 960 hours in any fiscal year. The dilemma occurs when a retiree averages over 30 hours of service in a given month, thereby making him or her full-time for purposes of the ACA. If that employee is not offered affordable coverage, he or she could trigger a potential penalty by obtaining subsidized coverage through Covered California.

In order to mitigate potential penalties, employers are making sure to adopt the Look Back Measurement Method Safe Harbor. This safe harbor allows an agency to measure hours of service of an employee over a period of 12 months. If the employee averages 30 hours of service over 12 months (i.e. 1560 hours of service), then the employee will be deemed full-time during a period of time called the stability period which follows the 12 month measurement period. Because retirees are limited to 960 hours in a fiscal year, it is unlikely that a retiree who returns to work under this circumstance would ever reach the 1560 threshold. If the employer sets its measurement period to coincide with the fiscal year, then it can be certain that these employees will never hit 960 hours, let alone 1560 hours. Those employers who measure hours of service for 12 months starting in November, could have a scenario (however, unlikely) where an employee whose hours remain under 960 hours during the fiscal year, but reach 1560 hours during the measurement period. Nonetheless, by adopting the Look Back Safe Harbor, the employer can avoid having a retired employee trigger a penalty for a single month during which that employee averages 30 or more hours of service. This is one of many reasons an employer should adopt the Look Back Measurement Method Safe Harbor. For more information on the ACA’s Employer Mandate and the Look Back Measurement Method Safe Harbor, please see the following links:
“Your Questions Answered: The ACA’s Final Regulations on the Employer Mandate”
“ACA’s Final Regulations on the Employer Mandate”

Campus Free Speech – A Review of Policies Can Avoid Litigation

Posted in Education, First Amendment

College Campus Free Speech

It has been 50 years since the Free Speech Movement began at UC Berkeley in 1964, and approximately 40-50 years since near-riotous conditions overwhelmed college campuses in the late 1960’s and early 1970’s.  In our own time, it is about three years since the 2011 Occupy events and large-scale tuition protests erupted on college campuses.  This year, in contrast, may be a quiet Fall of 2014 on college campuses (although one never knows).

There is one exception though, and it is a significant one – lawsuits.  There is a fair chance colleges will see an increase in expensive lawsuits brought by students or outsiders to challenge campus policies in the name of free speech.  Challenges are expected to involve policies that impose definitions of the campus areas where expressive activities may take place, those that require students or outsiders to wait several days before access to those areas, and those that require permits for area use.  Targeted policies may also include those that impose prohibitions on speech in the form of student codes of conduct or harassment policies.  At an increasing pace, civil rights lawyers are already filing these types of lawsuits, and prominent commentators and journalists are joining the debate – often on the side of those challenging college policies.

A lawsuit was recently brought by students at the University of Hawaii at Hilo against administrators for allegedly restricting speech activities to a small area of campus, and prohibiting a student from distributing literature outside the area.  Another lawsuit was brought against a community college in southern California asserting that its free speech areas on campus were too small and that the school had a harassment policy applicable to students that was overbroad.  Both lawsuits were filed in federal courts.  They ask that the challenged policies be found illegal and that the plaintiffs be paid damages and their attorneys’ fees.  These types of cases can attract substantial media attention, which in turn can lead to public outcries (well-founded or not) against the university or college for having supposedly engaged in censorship.

A major proponent of these lawsuits is the Foundation for Individual Rights in Education (“FIRE”), a campus free speech advocacy group headquartered in Philadelphia.  FIRE announced at a press conference in Washington D.C. on July 1, 2014, that it was supporting four separate civil rights lawsuits filed that day against institutions of higher education in different parts of the country for alleged free speech violations.  FIRE stated ominously that they expected more lawsuits of this type to be filed against colleges soon.

Colleges and universities can take measures to protect themselves against such lawsuits, and at the same time insure they are advancing principles of free speech, by a careful review of existing policies governing freedom of expression on campus.

The following are key policy items to review:

Free speech areas or zones:  Many public colleges have “time, place, and manner” regulations which require that speech activities by students or outsiders — such as demonstrations, picketing, leafleting, rallies, and other similar activities — take place in particular identified areas of campus.  However, free speech areas or zones that are too small, or so remote that speakers do not have sufficient access to audiences on campus, can result in claims of free speech violations.  If a college chooses to limit expressive activities to specific areas, it must ensure that the size and location of those areas provide ample access to passersby on campus and opportunities to draw spectators.  The areas should not be situated in a way that unreasonably deprives the speakers of meaningful access to their intended audiences.  The college’s specification of areas as limited or designated public forums ideally should correspond to the way students and outsiders already use those areas for free expression.

Many constitutional rights advocates believe that public colleges should not be able to limit speech activities to specific zones on campus at all, especially when the speakers are students.  Case law may issue in the next year to provide further guidance on this point.

Permit Requirements:  Colleges should be mindful of prior restraint concerns.  A prior restraint exists when the exercise of protected expression is contingent upon pre-approval or licensing by government officials.  Prior restraints are not unconstitutional per se, but Courts will review them very carefully to see if they meet a number of stringent legal tests.

Prior restraint concerns can arise if a college requires students or outsiders to obtain permits in advance to use the speech areas, and if those permits involve some oversight or review process.  If administrators are authorized to review activities or materials to decide whether the speech activities are “appropriate,” or words to that effect, there can be serious constitutional problems, as this type of vague standard would effectively allow administrators to censor speech.

To avoid prior restraint concerns, many institutions do not require any license, permit, or pre-authorization, and instead simply ask that those using designated areas check in and provide contact information before doing so.  Also, many colleges do not have any waiting period for use of free speech areas.

Insurance or indemnification requirements:  Insurance or indemnification requirements may also present constitutional free speech problems.  Some public colleges require all those who wish to engage in expressive activities, such as rallies, demonstrations, or picketing, to provide proof of insurance, or to indemnify the college for any accidents or injuries resulting from their activities.  Such requirements present First Amendment concerns because they limit those who are able to use the areas, sometimes regardless of whether they actually engage in an activity that risks property damage or injury.  A review of case law involving cities and counties which have imposed such policies can be useful to colleges in formulating these types of requirements.  But care must be taken in determining precisely how they are structured.  The best course from a constitutional perspective is not to impose insurance or indemnification requirements.

Vague or Overbroad Standards in Student Codes of Conduct or Harassment Policies:  If a college has rules that – even if well-meaning – encompass too much speech as potentially prohibited, then a court may find that the rules violate the First Amendment.  Examples include “bullying” policies that, among other things, contain a prohibition on simply “offending” anyone.  Another example might be a sexual harassment policy that contains overly broad definitions of the types of speech that are included.  This type of language is potentially broad enough to encompass speech that normally would never be considered harassment and that instead would traditionally be considered protected.

To avoid challenges, policies on student conduct and harassment should include prohibitions that are concise, clear and narrowed to conduct of legitimate concern to the college.  The college should avoid subjective terms that could confuse reasonable people about what is actually prohibited.  In addition, policies should be reviewed to determine if anyone could reasonably construe any provision as discriminating against particular viewpoints.

Carefully crafted policies and procedures are the key to winning free speech challenges. The best litigation strategy is, obviously, to put such policies into effect before any dispute arises.

One other important point: in California, it is not just public colleges and universities that must insure that policies comply with constitutional free speech principles.  By statute, private universities must do so as well, insofar as the policies apply to students.  California Education Code section 94367 provides: “No private postsecondary educational institution shall make or enforce a rule subjecting a student to disciplinary sanctions solely on the basis of conduct that is speech or other communication that, when engaged in outside the campus or facility of a private postsecondary institution, is protected from governmental restriction by the First Amendment to the United States Constitution or . . . the California Constitution.”  There is scant case law interpreting section 94367, which has been in effect since 1992.  But it is clear that the language means that private colleges and universities must also respect the free speech rights of their students, and insure that defensible policies are in place.

We will report on the recently filed cases as developments occur, especially if they generate new law that will be relevant to colleges and universities in their policies affecting free speech on campus.

Applicability of ACA “Contraceptive Mandate” to Religious Non-Profits an Open Question in Wake of Recent Supreme Court Decisions

Posted in Healthcare

Healthcare.jpgThis blog post was authored by Jessica Frier

The Supreme Court’s recent decision in Burwell v. Hobby Lobby Stores, Inc., while limited in scope to closely-held private companies, is of interest to religious non-profits as well as for-profit employers.

The ACA requires health insurance providers to cover preventive health services, including FDA-approved contraceptives, without charging co-pays, deductibles, or co-insurance, often referred to as the “contraceptive mandate.”

A key difference between closely-held corporations like Hobby Lobby and religious non-profits is that faith-based non-profit employers are eligible for an accommodation that allows them to shift the burden of complying with the contraceptive mandate to a third-party administrator or insurer, an accommodation not available to closely-held for-profit employers.

To invoke the accommodation and avoid civil penalties, a religious non-profit must file a self-certification form stating (1) that it “opposes providing coverage for some or all of any contraceptive services required to be covered under [the regulation] on account of religious objections, (2) [that it] is organized and operates as a nonprofit entity, [and] (3) [that it] holds itself out as a religious organization.”  (45 C.F.R. section 147.131(b).)

A series of cases challenging the accommodation and exemplified by Little Sisters of the Poor v. Sebelius, are working their way through the circuit courts and headed for likely Supreme Court review.  The plaintiffs, religious non-profit employers, contend that signing a self-certification form to qualify for the “eligible organizations” accommodation, and then delivering those forms to an insurer or third-party administrator unduly burdens their free exercise of religion.

A few days after issuing the Hobby Lobby decision, the Supreme Court issued an injunction ruling that Wheaton College of Illinois, a religiously-affiliated non-profit institution, need not use the form (EBSA Form 700) prescribed by the government to invoke the accommodation, and need not send copies of the form to health insurance issuers or third-party administrators, until a final decision is made on the college’s appeal of the contraceptive mandate.

The order can be found at Wheaton Coll. v. Burwell.  LCW will continue to monitor and report on this developing area of the law.

What Does The Affordable Care Act Have To Do With Independent Contractors?

Posted in Wage and Hour

This blog post was authored by Jennifer Rosner and Heather DeBlanc.hourglass-small-copy.jpg

When we think of the Affordable Care Act (“ACA”), we invariably think of health insurance.  The ACA mandates that any employer with 50 or more full time equivalent employees may face penalties unless it offers affordable health insurance to its full-time employees.  This ACA requirement applies to employers with 50 or more full time employees, including full-time equivalents (referred to in ACA as “applicable large employers”).  The ACA defines full time employees as those who average 30 or more hours of service per week.

What about the implications of the ACA on independent contractors?  Many public entities use independent contractors for services such as maintenance, security, building inspection, planning, engineering, janitorial and pest control.  Under the ACA, independent contractors do not count as employees when determining whether an employer meets the minimum threshold as a large employer.  Also, an independent contractor is not counted as a full-time employee who could trigger a potential penalty or impact the penalty calculation.  The ACA’s “individual mandate” requires that all individuals, as of January 1, 2014, have health insurance or face penalties (unless exempt due to low income or religious beliefs).  However, an employer will not be penalized for failing to offer coverage to its independent contractors.

Has your agency correctly classified its independent contractors?  When you strip down the title, are they really just employees in disguise?  The IRS recently issued a final audit report estimating that employers misclassify millions of workers as independent contractors instead of employees, thus avoiding the payment of employment taxes.  However, correctly determining who is an employee and who is an independent contractor can often be a cumbersome task.  Simply because a worker has been labeled as an independent contractor is not sufficient proof of independent contractor status.  Indeed, the IRS and other governmental agencies are not bound by any agreement between the worker and the agency classifying the worker as an employee or an independent contractor.  Similarly, the fact that a worker is issued a 1099 form rather than a W-2 form is also not determinative.  (See S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341; see also Toyota Motor Sales U.S.A., Inc. v. Superior Court (1990) 220 Cal.App.3d 864.)

The ACA incorporates the ERISA definition of an “employee” as “any individual employed by an employer.” (29 U.S.C. § 1002(6)).  However, this doesn’t clearly define the term “employee” for compliance purposes.  Final regulations refer to the common law “employee” definition of “right to control.”  (26 C.F.R. § 54.4980H-1(a)(7).)  The common law “employee” definition determines whether a worker is an “employee” or “independent contractor” based on whether the agency has the “right to control and direct the worker in the way of when, where, how and what work is performed.”

To help determine whether a worker is an employee under the common law rules, the IRS has identified 20 factors that may indicate whether the employer can exercise enough control to establish an employer-employee relationship.  These factors, set forth in Revenue Ruling 87-41, were based on the circumstances that courts have identified and relied upon to assess whether an employment relationship exists.  Not all of the factors must be present to find an employment relationship, but the factors are guidelines used to assess whether an individual is an employee or an independent contractor.  An employer must weigh the following:

  • Is the worker required to comply with instructions on where, how and when the work is to be done?
  • Is the worker provided training to perform the job in a particular manner?
  • Are the services performed an integral part of the organization’s operations?
  • Must the services be rendered personally?
  • Does the business hire, supervise and pay assistants to help the worker on the job?
  • Is there a continuing relationship between the worker and the business?
  • Does the organization set the work schedule?
  • Is the worker required to devote his/her full time to the organization?
  • Is the work performed at the company’s place of business or at specific places designated by the company?
  • Does the organization direct the sequence in which work is performed?
  • Are oral or written reports required to be submitted?
  • Are payments to the worker made by the hour, week or month?
  • Are travel and lodging expenses reimbursed?
  • Does the organization furnish tools and materials?
  • Does the worker have an investment in the equipment or facilities?
  • Does the worker stand to realize a profit or loss as a result of the work?
  • Does the worker work exclusively for the organization?
  • Does the worker work predominantly for the organization or are services available to the general public?
  • Can the worker be discharged for reason other than nonperformance of contract provision?
  • Can the worker terminate the relationship without liability?

There are significant consequences which could follow if agencies misclassify a worker as an independent contractor who, in fact, is an employee.  If an independent contractor is misclassified, the agency must, among other things, withhold state and federal income taxes, enroll him or her as a CalPERS member when the worker meets eligibility requirements and provide workers’ compensation insurance coverage.  It would also be responsible for offering the employee (and his or her dependents) health insurance to avoid penalties if the employee is considered full-time under the ACA.

Moreover, if an IRS audit reveals that an employer has misclassified its independent contractors and reclassifies those workers as W-2 employees, the employer could be subject to penalties for failing to offer healthcare coverage.  That penalty is $2,000 per year multiplied by the number of full-time employees (less 30, or less 80 during 2015 only) if the large employer is not offering coverage to substantially all (95%, or 70% during 2015 only) of its full-time employees and their dependents.  If the large employer does offer coverage, but the coverage does not meet ACA standards for minimum value and affordability, the employer could be required to pay a fine of $3,000 for each full-time employee who receives coverage through Covered California and obtains a government subsidy.  On the other hand, if the worker is truly an independent contractor, the worker will not trigger a potential penalty and will not be considered full-time for any IRS penalty determination.  Independent contractors are obligated to make arrangements to pay their own taxes and to provide their own benefits.

The ACA also provides strong whistleblower protection for employees or independent contractors who reasonably believe they are misclassified.  (29 U.S.C. § 218c).  That section defines protected activity quite broadly.  Protected activity includes providing (causing to be provided or about to provide) to the employer, information relating to certain violations of the ACA.  In sum, employees may be engaged in protected activity even if they do not actually complain and even if they are not ultimately correct about whether their employer violated the ACA.

As a result of the strong whistleblower protections, employers must be vigilant about properly classifying their employees.  If an independent contractor is found be an employee, then the employer must determine whether that employee is full or part time.  Under the ACA, an employee can only be classified as part-time if he is reasonably expected to have less than thirty hours of service per week.

In order to reduce potential exposure to liability, large employers should implement procedures for auditing employee classifications and ensure they have properly classified any independent contractor.  Accordingly, if you have independent contractors, you should review your written agreement(s) and conduct a legal analysis of their functions to determine whether the independent contractor has been properly classified.

Tips from the Table: Alternative Approaches to Bargaining

Posted in Labor Relations

We are proud 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.

It’s Summertime! Have You Reviewed Your Dress Code Lately?

Posted in Discrimination, Employment, Workplace Policies

Shirt and TieThe sun is shining and the weather is hot.  This is the time of year when dress code violations creep up as employees dress for the warmer weather and tend to wear clothing that displays more skin and may be more appropriate for the beach than the workplace.  This is a good time to review your agency’s dress code policy to ensure that it is rationally related to a legitimate business concern, does not impermissibly discriminate and is uniformly enforced.

Legitimate Business Concern

Employers generally have the right to adopt reasonable regulations governing employee workplace appearance. An employee’s provocative dress or offensive tattoo could form the basis for a hostile work environment claim by other employees.  For this reason, employers should have a dress code policy that, to the extent permissible by law and practical for the workplace, addresses and restricts clothing, body art and piercings that could offend or be threatening to other employees.  Dress codes must also protect the safety of employees and the public.

Your dress code policy should be rationally related to a legitimate business concern and not just to promote a specific employer’s unique sense of style or taste.  The policy should be tailored to the job requirements.  For instance, the employer should consider whether the employee is visible to the public.  Courts are more likely to enforce stricter policies in positions where employees represent the public agency (i.e., police, firefighters, teachers, etc.), where employees have substantial contact with the public, and where projecting a “professional image” is important.  Where the employee has less or no contact with the public, a strict dress code may be more difficult to justify.

Discrimination and Reasonable Accommodation

Any dress code, tattoo, or piercing policy must not facially discriminate on the basis of race or national origin or any immutable characteristic which is closely associated with a particular race or national origin. Dress codes may not treat some employees less favorably because of their race or national origin, e.g.  prohibiting traditional African or Indian attire.

Reasonable accommodations should be allowed for religious practices or other concerns related to race, gender, and other potential problem areas.  If the dress code conflicts with an employee’s religious practices and the employee requests an accommodation, the employer must modify or permit an exception to the dress code unless doing so would result in undue hardship.   This may involve allowing an employee to cover their religious expression with clothing, bandages, or hats, or allowing a placeholder for a piercing, or any other accommodation which imposes a minimal cost on the employer.  Under California law, an accommodation of an individual’s religious dress or grooming practice that requires that person to be segregated from the public or other employees is not a reasonable accommodation.

Similarly, if an employee requests a reasonable accommodation due to disability, the employer must modify or permit an exception to the dress code unless doing so would result in undue hardship.  This may involve, for example, allowing a pregnant employee with swollen feet to wear sandals that are otherwise prohibited.

Uniform Enforcement

Employers should also ensure that their dress code is uniformly enforced and that supervisors lead by example.  This is because failure to enforce reasonable dress codes can lead to claims of hostile work environment by employees subjected to images or displays considered offensive, threatening, or insensitive.  Uneven enforcement of the dress code could also lead to claims of impermissible discriminatory treatment.

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

Reviewing Your Internal Affairs Investigation Procedures: Four Ways to Help Your Agency Succeed in Disciplinary Appeals

Posted in Public Safety Issues

Police-Officer_Small.JPGThis blog post was authored by Erik M. Cuadros

Prosecuting a disciplinary appeal can be very expensive and time-consuming for agencies.  After spending the time and effort to conduct an investigation and determine that discipline is warranted, an agency certainly wants to make sure that the discipline is upheld in the event the employee appeals.    Despite hundreds of excellent, objective Internal Affairs investigations across the state, agencies frequently find themselves embroiled in disciplinary appeals in which their investigations are attacked.

Among its many services, Liebert Cassidy Whitmore (LCW) provides an in-depth review of Internal Affairs investigation procedures and preparation of Notices of Intent, and creates customized trainings to agencies in those areas.  Our goal is twofold.   First, we know how important it is that the agency comply with the POBR.  Second, in the event that a disciplinary appeal is filed, a strong investigation report will support the agency’s position.  This post addresses four of the most common, yet avoidable, mistakes made during investigations and discipline.  Addressing these issues may reduce the chances that your agency will face a disciplinary appeal and, if so, make it more likely that your agency will prevail.

1.      Recognize When a Conversation is an Interrogation Triggering POBR Rights

The POBR provides certain rights when a public safety officer “is under investigation and subjected to interrogation…that could lead to punitive action.”  (Government Code section 3303.)  Those rights do not apply to an “interrogation … in the normal course of duty, counseling, instruction … or other routine of unplanned contact….”  The line between which type of conversation is occurring is often unclear, leading to claims that agencies violated POBR during initial conversations with the subject employee before the IA began.  Employees who claim that they were interrogated in violation of POBR will ask a hearing officer to suppress any evidence obtained during the interrogation, a remedy that the POBR does allow.  LCW offers detailed training for supervisors to recognize the difference between a “routine or unplanned contact” and an interrogation that could lead to punitive action.

2.      Nail Down Witness Testimony During the Investigation

Investigators must force each witness to commit to one clearly articulated version of events.  This is easier said than done.  Some witnesses, either intentionally or just as a result of their communication style, do not answer questions precisely.  Investigators must be trained in when to ask leading questions, when to ask open-ended questions, and when to focus on what the witness “recalls” versus asking the witness what happened.  During a disciplinary appeal, witnesses who gave unclear answers during the IA may change their story, which can undermine the agency’s ability to have the discipline upheld.

3.      Resist the Urge to “Throw the Book at ‘Em”

Your investigator sustains seven findings against a peace officer.  What now?  Not every charge must be included in the Notice of Intent to Discipline.  Agencies should be strategic regarding which charges to include, and should be willing to exclude charges that do not support the discipline overall, or will create counter-productive diversions during an appeal of the discipline.

4.      Involve Your Attorney Early in the Investigation Process

The attorney who will defend the agency in the event of an appeal should be involved in strategizing which charges are included in the Notice of Intent.   This small investment will pay dividends during a disciplinary appeal.  That attorney should also either prepare or review a draft of the Notice of Intent.  Early participation allows your attorney to create discipline documents that are well supported by the investigation and that enable the agency to put on a strong case in a disciplinary appeal.


LCW offers a comprehensive analysis of your agency’s policies and procedures regarding Internal Affairs investigations, including on-site meetings and trainings with the boots on the ground to understand your challenges.  We also provide a confidential, attorney-client privileged report outlining specific recommendations.  If your agency is interested in this opportunity, now is a good time to contact LCW Partner Suzanne Solomon. She can be reached at 415.512.3000 or

The Affordable Care Act, As Clear As Mud: What Do Two Contradictory Decisions Mean For Employers?

Posted in Healthcare

Healthcare.jpgThis blog post was authored by Erik M. Cuadros

On July 22, 2014, two federal appeals courts reached opposite conclusions that may affect the future of the Obama Administration’s signature legislative achievement – the Affordable Care Act (“ACA”).  The ACA requires all Americans to have health insurance or pay a fine.  To that end, it urges states to create exchanges, or marketplaces, where individuals can shop for insurance.  The federal exchange operates in those states that fail to establish their own exchanges.  To make insurance affordable for low-income consumers, the ACA offers federal subsidies, or tax credits to qualifying individuals through the state and federal exchanges.

In Halbig v. Burwell, a three-judge panel in the D.C. Circuit Court of Appeals ruled 2-1 that individual consumers purchasing health insurance under the ACA are only eligible for federal tax credits if they purchase coverage through a state-run exchange.  The argument involved a provision of the law that says tax credits are available to individuals who purchase health insurance through exchanges that are “established by the State.”  But the IRS interpreted the law more broadly, authorizing subsidies for insurance purchased through federal or state exchanges.  The Court found that the plain meaning of the statute prohibited the federal government from offering subsidies through federally-run exchanges.

That same day, the 4th Circuit Court of Appeal issued a 3-0 decision in King v. Burwell reaching a contradictory interpretation of the same provision.  The King Court found the language to be “ambiguous and subject to multiple interpretations” because Congress intended to increase the number of Americans with health insurance.  Further, other provisions of the ACA required the federal government to step in and create an exchange on behalf of states that failed to do so themselves.  Therefore, the Court deferred to the IRS interpretation as a permissible exercise of its discretion.  Consequently, the decision permits the government to offer federal subsidies to Americans who buy health insurance through both state and federal exchanges.

Why does this matter?  Only 14 states have fully established their own exchanges.  The federal exchange,, operates in the remaining 36 states.   The 4.7 million Americans who purchased subsidized coverage through could be affected if those subsidies are found to be prohibited by law.

Importantly, the decisions also call into question employer penalties under the employer-shared responsibility provisions of the ACA for states other than California.  A full-time employee must receive a subsidy in order to trigger a potential penalty under the employer-shared responsibility provisions.  If the Halbig decision stands, an employee purchasing coverage through a federal exchange could never trigger a penalty.

In the short-term, these decisions will not have any impact on California because our state implemented its own exchange, Covered California.  However, there may be long-term impacts that California employers should be aware of.

Both cases are likely to be appealed and the continuing conflict between circuits increases the likelihood of a review by the U.S. Supreme Court.  There could be further conflicting decisions – there are ongoing cases based on related issues simmering in the 7th and 10th Circuits.  If the Supreme Court sides with Halbig, 4.7 million Americans would be ineligible to receive subsidies.  They would likely see their out-of-pocket expenses increase sharply and plans on the federal exchange would become unaffordable.  This would exempt them from the individual mandate, allowing them to purchase low-cost catastrophic health insurance.  We will continue to monitor these cases and update you as they proceed.

Understanding and Protecting the Rights of Transgender and Gender Non-Conforming Employees

Posted in Discrimination, Employment

Locker RoomAlthough the terms “transgender” and “gender identity” have already been protected classifications in the California Fair Employment and Housing Act (FEHA) for a number of years, the State legislature saw a need to provide further clarification to alleviate continued discrimination against transgender employees, as well as employees who may not have had gender reassignment but nonetheless identify with the opposite of their biological gender.  Effective January 1, 2012, The Gender Nondiscrimination Act was enacted to define “gender identity” and add “gender expression” to the FEHA.

Now that two and one half years have passed since the FEHA was amended to include these terms, employers are still left with unanswered questions about their obligations to ensure individuals are not discriminated against in their employment.  FEHA provides the framework with little to no guidance on the practicalities of the workplace and how employers should handle issues that may arise concerning employees who are transgender or gender expressive.

This past March, a Sacramento County Superior Court judge declined to dismiss a lawsuit brought by the Department of Fair Employment and Housing against American Pacific Corporation (AMPAC) for “sex, gender, gender identity, and gender expression” discrimination.  The AMPAC case is a telling example of how an employer can easily make a costly mistake.

When a transgender applicant presented as a male and accepted an employment offer, the human resources department learned during the background investigation that he was biologically female.  There was no evidence that he had undergone any sex reassignment procedure.  AMPAC was concerned about the employee using the men’s locker room and restroom since he had not undergone an actual sex reassignment.  Seemingly not understanding the requirements of the FEHA, AMPAC asked the employee to delay the start of his employment until after sex reassignment surgery was done.  The employee protested, indicating he had been a firefighter who worked in similar situations and was not questioned about using the men’s facilities.  AMPAC, however, apparently refused to allow him to use the men’s restroom and locker room, and required him to use the women’s facilities.

If AMPAC had sufficient information and guidance regarding the rights of employees who are within the protected status of transgender, gender identity, or gender expression, litigation probably could have been avoided.

The express rights of the protected employees include the following:  An employee has the right to be referred to as the sex he or she identifies with, including in employment records.  Intentional refusal to address the employee with the appropriate pronoun or name may be discrimination and/or harassment.  An employee also has a right to use a restroom that corresponds to his or her gender identity or expression.  It is good practice to provide a unisex restroom, but it is not required and employees cannot be forced to use only the unisex restroom.  This is a typical concern, as it was AMPAC’s.  However, the court allayed the employer’s fears about restroom and locker room use by noting that “[i]ndividuals who claim a different gender from day to day, or who do so simply to be disruptive or to sexually harass other employees, do not meet the definition of transgender.”

Employees also must be permitted to dress in conformance with their gender identity.  While employers are still allowed to have and enforce reasonable dress code policies, employees cannot be forced to dress in a manner that does not comport with their gender expression or identity.  Further, employers should not make intrusive inquiries into the employee’s gender unless there is a legitimate business reason.

If an employee is being treated for gender identity disorder or has a serious medical condition related to his or her transgender status, then the employee may be entitled to leave under the Family and Medical Leave Act (FMLA) and/or the California Family Rights Act (CFRA).  On a related note, California has ordered health insurance companies that are regulated by the California Department of Insurance to stop denying health care coverage to transgender individuals based on their gender identity.  However, insurance companies are not required to provide treatment that it does not cover for non-transgender individuals.

Another concern for employers is what to communicate to employees who have a transgender co-worker.  Will the employees complain about the restroom or locker room?  How much can be disclosed to employees about a transgender co-worker?  What if an employee threatens to quit if required to use the same restroom as a transgender co-worker?  Training is the best tool employers have to educate employees about transgender and gender expression issues to avoid these types of occurrences.  Moreover, employers are obligated to train their employees that discrimination and harassment based on transgender, gender identity, or gender expression is unlawful and will not be tolerated.  As always, if an employer is uncertain how to handle a situation related to transgender, gender identity, or gender expression, legal counsel should be consulted.  While avoiding liability is always paramount, establishing an inclusive, nondiscriminatory work environment for all employees should be as well.