Liebert Cassidy Whitmore Will Be Live Tweeting At The ACWA 2011 Spring Conference

Posted by Guest Author on April 28, 2011

This guest post was authored by Liebert Cassidy Whitmore

twitter-newbird-blue.pngIn two weeks, more than 1,000 California water district professionals will gather at ACWA's 2011 Spring Conference & Exhibition. Liebert Cassidy Whitmore Attorneys, Shelline Bennett and Morin Jacob will be presenting on two areas of our practice: hiring/reference checks and social media.  In addition, we will be live tweeting Morin’s presentation on social media, “Caught in the Net: Tools and Tips for Managing Employee Misconduct and Other Issues Arising in Social Media Sites” on Thursday, May 12 from 2:15 p.m. to 3:45 p.m. Join us on Twitter and use the hashtags #lcwsocialmedia #ACWAConf.

Here is a calendar of the LCW presentations:

Wednesday, May 11 | 2:15 p.m. to 3:45 p.m. | Human Resources Program: "You’re Not the Person I Hired!" Unearthing an Applicant’s Past Before it Buries You | Shelline Bennett

Thursday, May 12 | 2:15 p.m. to 3:45 p.m.  | Caught in the Net: Tools and Tips for Managing Employee Misconduct and Other Issues Arising in Social Media Sites | Morin Jacob

For those attending the ACWA Conference, please stop by the Liebert Cassidy Whitmore booth in the exhibition hall to meet Susan Bonner from our San Francisco Office and learn more about services.

To view other upcoming LCW speaking engagements, please visit our website.  To learn how you can have an LCW presentation at your association meeting, contact info@lcwlegal.com.

Employee Travel Out Of The Office - Part II

Posted by Jeffrey C. Freedman on April 26, 2011

Work-Travel.pngA few weeks ago, we provided some guidelines on how to deal with employees whose jobs require them to travel away from their office during the regular work day and how to determine whether their travel time is or is not compensable.  That post dealt with situations where employees leave from and return to their homes on the same day and drive to various locations in the same metropolitan area.  How are situations handled where the employee travels out of their home city and returns on the same day?  What if the employee is required to stay out of the city overnight?

The regulations of the U.S. Department of Labor, implementing the Fair Labor Standards Act (FLSA), deal with these situations (29 C.F.R. sections 785.37 and 785.39) for hourly non-exempt employees.

What if an employee who lives and works in Los Angeles is assigned to travel to San Francisco to attend a business meeting and return home the same day?  The time the employee spends driving from home to the airport is considered non-compensable commute time.  However, compensable time begins when the employee arrives at the airport and ends when the employee returns back to and leaves the airport in Los Angeles at the end of the day.  The employee’s normal meal period, if normally “off the clock,” would also be unpaid in this situation as long as the employee is totally free from any work activities.

The same would be the case if an employee who lived and worked in San Diego was sent to Los Angeles for the day by train for a work-related activity.  The employee’s drive time from home to the train depot would be non-compensable commute time but the time from arrival at the train depot to Los Angeles and then back again to the San Diego train depot would be compensable with the exception of an unpaid meal period.

What if an employee is sent out of the City overnight?  Say for example an employee who lives and works in San Francisco is sent to Sacramento for a two-day meeting at the office of a state agency.  The employee decides to drive a personal vehicle.  The FLSA regulations do not specify how to deal with this sort of situation where the employee uses his or her own car.  The best practice would be to treat the drive time between San Francisco and Sacramento as compensable but only to the extent that it exceeds the employee’s normal commute time between home and work.  The employee’s work day would end in Sacramento whenever the meeting ends that day and the employee would remain off the clock for the balance of the day and overnight as long as he or she was totally free from any work-related activities.  The employee would go back on the clock the next morning on arriving at the meeting site and continuing until the employee arrives back in San Francisco that afternoon or evening, again netting out an unpaid meal period and the normal commute time between the employee’s regular work place and home.

These questions can be intricate and your employment law counsel should be consulted if you have any questions about how to handle employee travel time issues.  Of course, these examples only apply to hourly non-exempt employees; employees who are truly exempt as professionals, administrative or executive employees are salaried and therefore, these concerns are not applicable to them.

Drug Use And The ADA - A Flexible Approach Prevails

Posted by Guest Author on April 25, 2011

This guest post was authored by Oliver Yee

Employee substance abuse poses significant challenges for employers.  At what point in time is a drug user no longer a user?  Certainly, given the complexities surrounding drug use, addiction and recovery, this is a difficult question for an employer to answer.  The 10th Circuit U.S. Court of Appeals in Mauerhan v. Wagner Corp., was recently posed with this difficult question and its answer should come of little surprise – it’s complicated.

Plaintiff Mauerhan was terminated by his employer, Wagner Corp., for violating its drug policy, but was told by his supervisor that he could return if he got “clean.”  Soon after his termination, Mr. Mauerhan entered into a drug rehabilitation program and tested positive for cocaine and marijuana upon entering the program.  He completed the program in one month and his prognosis at discharge was described by a rehabilitation counselor as “guarded.”  The day after completing the program, Mauerhan contacted Wagner and asked to return to work.  Wagner refused to re-employ Mauerhan in the same position and Mauerhan subsequently filed an action against Wagner alleging discrimination under the Americans with Disabilities Act (ADA) on the basis of his status as a drug addict.

Under the ADA, an employee is not a qualified individual with a disability if he or she is “currently engaging” in the illegal use of drugs when the employer acts on the basis of such use.  42 U.S.C. § 12114(a).  Indeed, section 12114(a) provides a “safe harbor” for employees who are not “currently engaging” in the illegal use of drugs and specifically exempts an employee who “has successfully completed a supervised drug rehabilitation program and is no longer engaging in the illegal use of drugs, or has otherwise been rehabilitated successfully and is no longer engaging in such use….”  Id. at Section 12114(a)(1).

In Mauerhan, the 10th Circuit interpreted the “currently engaging” exception to the ADA.  Mauerhan argued that he was no longer “currently engaging” in the illegal use of drugs because he had completed the one-month addiction treatment program and was no longer engaging in drug use when he sought re-employment.  The 10th Circuit followed several other circuits and refused to adopt a bright-line rule for determining when an individual is no longer “currently engaging” in drug use.  Rather, the Court held that an individual’s eligibility for the safe harbor must be determined on a case-by-case basis.  Specifically, the circumstances of the individual’s drug use and recovery must justify a reasonable belief that drug use is no longer a problem.  With respect to Mr. Mauerhan, the 10th Circuit found that he was “currently engaging” in the use of drugs when he sought re-employment.  The Court relied on the uncontroverted expert testimony of an addiction specialist who declared that approximately three months of treatment would be necessary for an addict like Mauerhan to reach a “threshold of significant improvement.” 

The Mauerhan decision reveals the complexities surrounding drug use, addiction and the recovery process.  By refusing to adopt a bright-line rule for determining when an individual is no longer “currently engaging” in drug use, the 10th Circuit acknowledged that the timeframe for drug addiction recovery is not absolute and that a balancing analysis must be applied on a case-by-case basis.  The Mauerhan decision provides valuable insight to employers.  Employers should strongly consider utilizing a more flexible approach when addressing employees who suffer from substance addiction.

LCW provides a workshop and workbook on Issues and Challenges Regarding Drugs and Alcohol in the Workplace to assist public agencies with these matters.

Employers May Distinguish Between Threats Of Violence As Grounds For Discipline And The Disability Which Causes The Misconduct

Posted by Frances Rogers on April 19, 2011

For the first time, a California court has held that, under the Fair Employment and Housing Act (FEHA), an employer may distinguish between disability-caused misconduct and the disability itself in the narrow context of threats or violence against coworkers. 

In the case of Wills v. Superior Court, Linda Wills was a clerk for the Orange County Superior Court (OC Court) and suffered from bipolar disorder with intermittent bouts of manic episodes.  Wills was newly assigned to a city police department’s lockup facility and, one morning upon her arrival to the department, she angrily swore and yelled at employees, accusing them of intentionally leaving her in the hot sun as she waited to be let in to the secured facility.  She told a police officer and another employee that she had added them to her “Kill Bill” list for leaving her in the heat.  The employees understood Wills’ “Kill Bill” statement was a reference to the film in which the main character made a list of people she intended to kill. The city’s police department reported the incident to the OC Court resulting in her removal from the assignment.  Wills was unaware that she was in the early stages of a manic episode.  Within days, Wills’ doctor placed her on medical leave.

While on leave, Wills forwarded strange and alarming emails and cell phone ringtones to co-workers.  The emails expressed anger toward coworkers and family members who she viewed as betraying her, indicating that “God” would ensure that Wills’ family and friends “will pay for what they put [me] through…” After several weeks, Wills’ doctor released her to work without restrictions.  The OC Court placed her on paid administrative leave pending an investigation into what many complained were threats of violence.

Following the investigation, Wills was terminated by the OC Court for threatening a police officer and other department personnel, threatening and inappropriate communications with co-workers, misuse of court resources, and poor judgment, all in violation of the OC Court’s written policy.  Wills filed a complaint with the Department of Fair Employment and Housing (DFEH) alleging that the OC Court had discriminated against her by denying her family and medical leave.  The OC Court responded to the DFEH charge by asserting that Wills had been granted all requested leave and that it had not terminated her because of her disability.

Wills later brought suit against the OC Court asserting several causes of action.  After summary judgment was granted in favor of the OC Court, Wills appealed.  The Court of Appeal upheld the trial court’s grant of judgment in favor of the OC Court.  In particular, as to Wills’ cause of action for disability discrimination, the Court  found that FEHA authorizes an employer to distinguish between disability-caused misconduct and the disability in the narrow context of threats or violence against coworkers. 

Applying the McDonnell-Douglas burden shifting approach used in motions for summary judgment, the Appellate Court initially found that Wills stated a prima facie case of disability discrimination because there was no evidence in the record that that Wills’ misconduct toward her coworkers prevented her from performing the essential duties of her job.  Instead, the Court held that Will’s threats of violence were better addressed at the next stage of the burden shifting approach. 

The burden then shifted to the OC Court to articulate a legitimate, nondiscriminatory reason for the termination.  It was here that the Court of Appeal held FEHA authorizes an employer to distinguish between disability-caused misconduct and the disability itself “in the narrow context of threats or violence against coworkers.”  This saves employers from the dilemma of either being liable for disability discrimination or failing to provide a safe work environment for all employees.  However, the Court was clear that terminating an employee in this situation is different than situations involving misconduct impacting an employee’s job performance where the employer could potentially address the performance problems through an accommodation.  The Court held that under the circumstances, the OC Court’s termination of Wills for her violation of the OC Court’s written policy against making threats in the workplace was a legitimate, nondiscriminatory reason for Wills’ termination.

The burden therefore shifted back to Wills to prove that the OC Court’s claimed legitimate,  nondiscriminatory reason for her termination was merely a pretext for discrimination based on Wills’ disability.  This was a burden Wills could not meet.

This is an excellent case for employers who may be given the “Hobson’s choice” of risking liability for disability discrimination if it chooses to discipline an employee for disability-caused threats of violence or risking its own negligence for failing to provide a safe environment for all employees.

California Tax Law Now Conforms With Federal Tax Law Regarding Dependent Health Care Coverage

Posted by Elizabeth Arce on April 18, 2011

Medical.jpgIn March 2010, President Obama signed the Patient Protection and Affordable Care Act into law.  This new Act requires that health plans and insurers who offer coverage to children on their parents’ plan make the coverage available until the child reaches age 26.  This law applies to married and non-married children, even if they are no longer a dependent for tax purposes.  However, it does not apply to spouses or grandchildren.  The Act also amended federal tax laws to exclude the value of any employer-provided health coverage for an employee’s child from the employee’s income through the end of the taxable year in which the child turns 26. 

Before this law was enacted, many plans and insurers could remove adult children from their parents’ health care policies because of their age.  This left many college graduates or children who moved away from their parents’ home without coverage.  As a result, approximately 30% of young adults between the ages of 19 and 25 were uninsured.  According to the U.S. Department of Health and Human Services, this rate represented more than one in five of the total uninsured.  This was higher than any other age group. 

The Act went into effect last fall.  Although California had extended health care coverage to adult children up to age 26 in accordance with the new federal law, California failed to amend its tax laws to conform with the federal law regarding the taxable treatment of the coverage.  Consequently, while parents were able to exclude the value of the health insurance from their income under federal law, the value of such coverage still qualified as taxable income to parents under California law. 

However, on April 7, 2011, Governor Jerry Brown signed Assembly Bill 36.  This conforms California tax law with federal law regarding the taxable treatment of health care coverage for adult children.  Thus, under both federal and California law, parents may now exclude the value of this coverage from their gross income.  AB 36 is effective immediately and is retroactive to September 23, 2010, the day the Act went into effect. 

Because this year’s deadline to file federal and state tax returns is April 18, 2011, employers have already distributed W-2 Forms to their employees for 2010.  These include in wages the value of adult children health coverage.  Thus, employers should consult with their tax advisors and be prepared to handle requests from employees for a corrected Form W-2 adjusting their taxable wages to exclude the value of this coverage.  Employees will need the amended form to file an amended tax return.    

California Supreme Court Denies Review Of Court's Decision That Orange County's Retroactive Retirement Formula Enhancement Is Not Unconstitutional

Posted by Frances Rogers on April 14, 2011

Yesterday, the California Supreme Court denied the County of Orange’s petition to review the decision in County of Orange v. Association of Orange County Deputy Sheriffs (2011) 192 Cal.App.4th 21.  This means the Court of Appeal’s decision stands holding that the County’s grant of a retroactive enhanced retirement formula for employees “all years of service” is not an unconstitutional gift of extra compensation or a violation of the municipal debt limitation.

Retirement2.pngThe County maintains a retirement pension system pursuant to the County Employees Retirement Law of 1937 (’37 Act).  For many years prior to 2001, the County’s peace officers held a retirement formula of 2% at 50.  On December 4, 2001, the County’s Board of Supervisors approved a tentative MOU which provided an enhanced retirement formula of 3% at 50, which would apply to “all years of service,” including those years served by the bargaining unit employees before the date of the Board’s resolution and before the County and the union’s MOU.  The Board approved and renewed the enhanced formula in subsequent MOUs in 2003, 2005 and 2007.

In 2008, after an actuarial analysis concluded that the past service portion of the increased retirement benefit totaled $187 million, the County passed a resolution stating that the enhanced formula’s application to service performed before the County approved of the increased benefit formula was unconstitutional.  The County then filed a lawsuit in superior court alleging that the retroactive benefit formula violated the California Constitution’s municipal debt limitation in Article XVI, Section 18, and the prohibition of payment of extra compensation to public employees in Article XI, Section 10, and sought to enjoin the County Retirement Board from paying out any benefit increases for service rendered before June 28, 2002.  The case eventually found its way to the California Court of Appeal.

Article XVI, Section 18 of the California Constitution generally provides that a city or county may not incur an indebtedness against its general funds beyond the year’s income without first obtaining the consent of two-thirds of the electorate.  Article XI, Section 10 provides that a local government body may not grant extra compensation or allowance to a public officer, employee, or contractor after service has been rendered or a contract has been entered into and performed in whole or in part.

The Court of Appeal held that the unfunded actuarial accrued liability(UAAL) did not represent a present debt that was immediately payable by the County.  As such, it did not unconstitutionally violate the municipal debt limitation.  The Court also held that the increased benefit formula, as applied to past service, did not offend the California Constitution because the ’37 Act specifically authorizes past service pension benefit increases where a Board of Supervisors, by resolution, makes a benefit formula calculation applicable to service credits earned on and after the date specified in the resolution, which may be earlier than the date the resolution is passed.

The Supreme Court’s decision was disappointing for many local agencies that seek to contain pension costs.  Agencies should carefully consider any agreement to increase or enhance pension benefits for their employees and should perform actuarial studies of any enhancement before agreeing to any enhancement.

Free Speech Rights Of Public Employees

Posted by Morin Jacob on April 12, 2011

In March 2011, the United States Supreme Court issued a controversial decision in Snyder v. Phelps, which upheld the First Amendment right of the Westboro Baptist Church congregation to picket military funerals to communicate their belief that God hates the United States for its tolerance of homosexuality, particularly in America’s military.

Free SpeechThe analysis used in Snyder also applies to determine whether speech of public employees is protected by the First Amendment.  A government employer’s ability to regulate the speech of its employees is affected by constitutional free speech considerations.  The extent of a public employer’s right to restrict or discipline an employee for speech depends primarily on whether the speech in question addresses a matter of public concern and, secondarily, whether the speech is made pursuant to an employee’s official job duties.

In Connick v. Meyers, the U.S. Supreme Court stated that government officials have “wide latitude in managing their offices, without intrusive oversight by the judiciary in the name of the First Amendment” where the employee speech “cannot be fairly considered as relating to any matter of political, social, or other concern to the community.”  Whether an employee’s speech is a matter of public concern in turn depends upon “the content, form, and context of a given statement.”  A public employee’s speech is usually considered a public concern if it helps citizens to make informed decisions about the operation of their government. 

If the speech does address a matter of public concern, a court must next determine whether the public employee’s statement was made pursuant to his or her official duties.  If it does, the employee does not speaking as a citizen for First Amendment purposes, and the Constitution does not insulate the communication.  Restricting speech that owes its existence to a public employee’s professional responsibilities does not infringe upon any liberties the employee might have enjoyed as a private citizen. It simply reflects the exercise of employer control over what the employer itself has commissioned or created. 

If the employee is speaking as a private citizen on a matter of public concern, the court must conduct a balancing test.  This balancing test requires full consideration of the government's interest in the effective and efficient fulfillment of its responsibilities to the public, which includes the government’s legitimate purpose in restricting the employee’s speech to “promote efficiency and integrity in the discharge of official duties, and to maintain proper discipline in the public service.”  A court would thus balance the employee’s speech against any disruption that speech actually causes to the employer.  Such disruption might include interfering with the ability of supervisors to discipline or control subordinate employees, disrupting co-worker relations, eroding close working relationships premised on personal loyalty and confidentiality, interfering with the employee’s performance of his/her duties, engaging in speech with reckless disregard for the truth, and engaging in speech that violates employer rules.

The free speech rights of public employees are unique.  A controversial case like Snyder demonstrates that speech that is not popular may still be afforded protection.  Given the strong protection rights afforded to speech, it is critical that legal counsel be sought prior to disciplining employees for statements made, or placing restrictions on certain speech, to be sure that the employment decision does not run afoul of the First Amendment and expose your agency to liability.

Department Of Labor Issues Final FLSA "Clean Up" Regulations That Highlight Important Issues For Public Employers

Posted by Guest Author on April 06, 2011

This guest post was authored by Brian Walter and David Urban

Yesterday, the United States Department of Labor issued a new set of final regulations interpreting various provisions of the Fair Labor Standards Act (“FLSA”).  In 2008, the DOL had proposed revisions to its regulations.  After a notice and comment period in 2008, the DOL has now issued its final regulations that take effect on May 5, 2011.  Although there are several revisions to existing DOL regulations, two are of particular interest to public sector employers.

First, the DOL conspicuously did not change the regulations regarding compensatory time off.  See 29 U.S.C. § 207(o)(5).  The DOL has previously opined that an employer must permit an employee to use comp time on the day requested unless the employer can show the use of comp time by that employee would constitute an undue disruption to its operations.  And the definition of what constitutes an undue disruption is even more onerous for public employers, especially public safety, as the DOL has opined that an employer cannot deny a request to use comp time merely because it would have to pay another employee overtime to backfill the position.  The Sixth and Seventh Circuit Courts of Appeal, have recently agreed with the DOL’s interpretation.

However, the Ninth Circuit, which covers California, and the Fifth Circuit have explicitly rejected the DOL’s interpretation of the FLSA rules for use of compensatory time off as set forth in 29 C.F.R. § 553.25 and in DOL opinions.  Both federal appellate circuits held that that an employer does not need to allow an employee to use accrued comp time on the specific day requested by the employee, but can instead honor the request by providing alternative dates within a reasonable time period after the request to use comp time is made.

Although the DOL had initially proposed changes to its regulations to bring them in line with the Ninth Circuit, the DOL changed its mind and decided to keep its existing regulations in light of the clear split in the federal appellate courts.  However, the DOL expressed its belief that its regulations, namely 29 C.F.R. § 553.25, and the Sixth and Seventh Circuit cases were the correct interpretation of the law.  The result of the DOL’s inaction is continuing confusion and threats of litigation over the use of comp time for public employers in many parts of the country that will only be resolved if the US Supreme Court decides to review the issue.  However, California public employers can breathe easier and continue to follow the Ninth Circuit’s decision in Mortensen v. County of Sacramento, which permits them to define a reasonable window of time in which an employee may use comp time instead of permitting the employee to use comp time on the specific day demanded by the employee.

The second important aspect of the new regulations is the elimination of what had been a stumbling block in analyzing whether fire protection personnel qualified for 29 U.S.C. § 207(k) work schedules of between 7 and 28 days.  The existing DOL regulations include a requirement that a public safety employee must spend no more than 20% of his or her time engaging in work that is not fire protection or law enforcement work.  The revision to section 553.212 eliminates the 20% rule for fire protection personnel, but retains the rule for law enforcement personnel.

The DOL agreed with various court decisions that the 20% rule is obsolete for fire departments in light of the 1999 amendment to the FLSA, 29 U.S.C. § 203(y), which defined who is an “employee in fire protection activities.”  Section 203(y) requires a fire department employee who is trained in fire suppression to have “responsibility” and “legal authority” to engage in fire suppression, but not does not require that the employee actually fight fires or engage in related activities for any particular percentage of time in order to qualify.  Since medical work is a fire protection activity if performed by a trained firefighter, perpetuation of the 20% rule caused confusion and unnecessary litigation over who qualified for a 7(k) work period, as fire departments have evolved so that often a majority of the calls received are medical in nature.  Although the 20% rule has been eliminated for fire protection personnel, public agencies must still ensure that law enforcement personnel do not spend more than 20% of their time performing non-law enforcement activities. 

Smokers Need Not Apply: Good Idea Or Illegal?

Posted by Elizabeth Arce on April 05, 2011

Person-Smoking.pngHospitals and other medical-related employers are at the forefront of a growing trend of employers who have adopted policies prohibiting the hiring of smokers.  This practice goes far beyond merely banning employees from smoking in the workplace.  Rather, these employers are actually telling smokers that they need not apply for employment at all, or that they will be fired if they are caught smoking, even if away from the workplace. 

The New York Times recently reported that employers who have implemented smoker-free workplace policies now have applications that “explicitly warn of ‘tobacco-free hiring,’ job seeker must submit to urine tests for nicotine and new employees caught smoking face termination.”  Employers who have adopted policies banning smokers from employment justify this hiring practice as advancing their mission to promote personal well-being and healthier living.  These employers also cite efforts to reduce high health care costs and increase employee productivity.  Opponents of smoker-free policies argue that they invade personal privacy and could pave the way for employers to regulate other lifestyle choices such as consuming alcohol or even fast food.

This growing trend begs the question of whether California employers may legally adopt similar policies that smokers will not be hired.  After all, California was a leader in passing anti-smoking laws that banned smoking in public places such as restaurants, bars and casinos.  Currently, California is considering legislation that if passed would ban smoking at all state parks and beaches.  Even the stereotype of a Californian is that of a health-conscious, physically fit individual. 

However, Californians are also known to be champions of civil liberties.  Thus, California employers will likely face numerous efforts seeking to obstruct implementation of smoker-free policies.  For example, Labor Code sections 96(k) and 98.6 prohibit employers from discharging an employee or discriminating against any employee or applicant for employment because the employee or applicant engaged in lawful conduct occurring during nonworking hours away from the employer’s premises.  Since the act of smoking itself remains legal in California, employers who refuse to hire smokers may be subject to liability under these provisions. 

In addition, smoker-free policies may be challenged on privacy grounds as an improper attempt to monitor and regulate personal conduct.  Finally, an aggrieved smoker may be able to assert a claim for disability discrimination if he or she is able to show that the employer believed that the smoker would be more likely to miss work due to smoking-related illnesses.  Both the Americans with Disabilities Act and the Fair Employment and Housing Act prohibit discrimination based on a perceived disability.