CalPERS Issues Circular Letter Clarifying Uncertainties Raised By AB 1028 On Post-Retirement Employment And Raising New Ones

Posted by Guest Author on January 31, 2012

This guest post was authored by Steve Berliner 

Retirement.jpgAssembly Bill 1028, which took effect on January 1, 2012,  amended certain provisions of the Public Employees’ Retirement Law (“PERL”)  pertaining to the limits on post-retirement employment.  Just recently, the California Public Employees’ Retirement System (“CalPERS”) issued Circular Letter No. 200-002-12 clarifying the importance of AB 1028 on CalPERS employers and retirees.  While the Circular Letter discusses the intended impact AB 1028 was to have on post-retirement work under Government Code sections 21221(h), 21224 and 21229, it is most significant to the majority of our clients because it interprets the meaning of the addition of the words “temporary” to “appointment” and “specialized” to “skills” under sections 21224 and 21229.  AB 1028’s addition of these words to the existing statutes caused considerable confusion among public agencies that contract with CalPERS.  This Special Bulletin will focus exclusively on these two sections.  Links to the Circular Letter and our blog post on AB 1028 are provided for their discussion of section 21221(h). 

Section 21224 applies to post-retirement employment with a CalPERS contracting agency and section 21229 applies to post-retirement employment with a CalPERS school employer.  These sections do not require appointment by the governing body.  Instead the retiree can simply be employed by administration.  The hours worked by the retiree may not exceed 960 hours in a fiscal year. 

The Circular Letter indicates that AB 1028 amended sections 21224 and 21229 “to include the word ‘temporary’ to clarify that these sections apply to retirees employed as temporary ‘extra help’ appointments – during an emergency to prevent stoppage of business or to perform work of limited duration…”  The examples CalPERS gives for “extra help” appointments are “elimination of backlog, special projects, work in excess of what permanent employees can do, etc.” 

However, and most importantly, CalPERS stresses that “Retirees should not be appointed to vacant permanent part-time, permanent intermittent, or permanent full-time positions, even if the hours worked will not exceed 960 hours per fiscal year…”  If agencies are employing CalPERS retirees in these vacant permanent positions, even if keeping hours worked below 960 in a fiscal year, the retirees “will be subject to mandatory reinstatement from retirement.” 

The Circular Letter also states that retirees are not limited to working during only one fiscal year.  It does not, however, state how long the retiree may work.  Presumably, if the “extra help” project that the retiree is appointed to work on extends over multiple fiscal years, CalPERS will not object.  What remains unclear is at what point the temporary “extra help” appointment appears to be a permanent assignment.  Given that the Circular Letter states that the retiree may not be appointed to a permanent vacancy, there should never be a situation requiring that analysis.  Nonetheless, public agencies will need to carefully monitor “extra help” appointments that span several fiscal years to ensure that the retiree is not in reality simply filling a vacancy of a permanent position and that the work remains within what CalPERS considers an extra help appointment.  This is in addition to monitoring the number of hours worked each fiscal year. 

AB 1028 further adds the word “specialized” to clarify that retirees hired as temporary extra help under sections 21224 and 21229 must have “specialized skills” required to perform the job. CalPERS states that the employer generally determines what specialized skills are required.  Presumably, any reasonable claim that a retiree has the requisite specialized skills will suffice.  

Employers are reminded that where a retiree works for more than one CalPERS employer during a fiscal year, the total hours worked for all CalPERS employers are included within the 960 hours-per-fiscal-year maximum.  The retiree’s rate of pay (as set forth on the published, publicly available pay schedule) must be comparable to that paid to other employees performing comparable duties. 

AB 1028 and the CalPERS Circular Letter serve to clarify and impress upon CalPERS employers and retirees alike that the general rule is that post-retirement employment for a CalPERS employer is not permitted without reinstatement to the system.  In order for a CalPERS retiree to work for a CalPERS employer, the employment or work must squarely fit within a statutory exception.  It is anticipated that with AB 1028 and this Circular Letter, CalPERS will be cracking down on retirees and employers who are abusing the statutory exceptions to post-retirement employment, particularly now with the recent requirement that employers report hours worked by CalPERS retirees.

What Does The Supreme Court's Ruling In US v. Jones Mean For GPS Tracking By Employers?

Posted by Elizabeth Arce on January 31, 2012

GPS.JPGLast summer we reported that an employer may under California law use GPS devices to track employer owned or leased vehicles.  We recently revisited this issue in light of the U.S. Supreme Court’s unanimous ruling in United States v. Jones.   Although Jones does address the use of GPS devices to track vehicles, the holding will not likely impact an employer’s ability to place Global Positioning System (GPS) devices on its own vehicles to track employee movement. 

In Jones, the government obtained a warrant to attach a GPS device to a vehicle registered to respondent Antoine Jones’ wife.  However, Jones was the exclusive driver of the vehicle.  Although the warrant authorized the device’s installation on the undercarriage of the vehicle in Maryland within 10 days, the government installed the GPS on the 11th day and in the District of Columbia.  The government used the device to track the vehicle’s movements for the next 28 days and the data collected from the device was used to convict Jones of multiple drug related charges.  

The Supreme Court ruled that the government’s attachment of a GPS device to a vehicle without a warrant, and its use of that device to monitor the vehicle’s movements, violated the Fourth Amendment to the U.S. Constitution.  The Court’s ruling is contrary to the result in United States v. Pineda-Moreno, where the U.S. Court of Appeals for the Ninth Circuit found that the government did not violate the Fourth Amendment when it placed a GPS tracking device on the undercarriage of a suspect’s car without a warrant. 

There are at least two reasons why the holding in Jones will likely not affect a California employer’s ability to use GPS tracking.  First, Jones examined the use of GPS in a criminal investigation, not in an employment setting.  Second, it is already a crime under California law to use an electronic tracking device to determine the location or movement of a person unless the vehicle is owned or leased by the individual or employer doing the tracking.  Thus, if the employer owns or leases a vehicle, the employer may use GPS or similar electronic tracking devices to monitor the location or movement of its employees in that vehicle.  

However, we recommend that employers who wish to use GPS should only do so when they have a legitimate business reason to track, and they should give employees notice that they will be monitored.  It is a good practice for employers to implement a written policy that informs employees that their usage of employer owned or leased vehicles will be monitored.  The policy should also discuss the business reasons for monitoring such as measuring productivity, locating stolen vehicles and ensuring that employees are following their assigned routes. 

Finally, at least one Superior Court has ruled in an unpublished decision that a public employer, Metrolink, was not required to meet and confer with an employee bargaining unit before installing two inward-facing cameras in all of its locomotive cabs for purposes of monitoring the activities of its engineers.  Although public employers have a management right to use devices, such as electronic tracking technology, to monitor employees, they must negotiate the effects of the policy, such as discipline. 

An in depth discussion on the use of GPS tracking devices can be found in LCW’s workbook on Privacy Issues in the Workplace.  The workbook also contains sample policies regarding electronic device tracking.  LCW can assist employers with drafting a policy.

Handling Layoffs After Elimination Of Redevelopment Agencies

Posted by Guest Author on January 26, 2012

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This guest post was authored by Melanie L. Chaney.

Since the California Supreme Court issued its ruling at the end of last month upholding the 2011 statute (AB 1X 26) that eliminated redevelopment agencies (RDAs) throughout the State as of February 1, 2012, we have received many questions about the impact this law will have on public agencies. One hot topic is how public agencies, who are already facing financial difficulties, should deal with potential layoffs resulting from the elimination of RDAs.

While AB 1X 26 is quite lengthy, there is very little in it that addresses what an agency should do with RDA employees.  The law only eliminates RDAs; it does not serve to separate RDA employees automatically.  In today’s tough economic times, many agencies cannot afford to keep all, or even some, of the RDA employees and must now consider layoffs.  Below is a general overview for handling the layoff process. 

If layoffs are being considered, agencies need to review and comply with any procedures relating to layoffs contained in memoranda of understanding (MOUs), personnel rules and other policies. This includes compliance with any timelines associated with the layoff process.  Agencies should pay specific attention to:

  • any “no layoff” provisions in current MOUs;
  • written agency procedures establishing the manner in which employees may be selected for layoff and any exceptions to the established order of layoff;
  • provisions regarding seniority or bumping rights (general law cities may be required to “observe the seniority rule” in implementing a layoff for economic reasons [Government Code section 45100]);
  • provisions regarding rights to transfer to vacant positions; and
  • provisions regarding reemployment lists or recall from layoff, including restoration of seniority and benefits.

In addition, an agency that does not already have a comprehensive layoff provision in its MOU may have to meet and confer with employee organizations regarding the impacts of any layoffs. Agencies should also think about how news about the layoffs should be communicated to employees. 

Absent specificity in an agency's layoff policy, we recommend the following process for initiating layoffs.

  • Consider giving a courtesy notice to the affected labor representatives that a layoff resolution is coming forward for approval. 
  • Have the governing body pass the necessary resolution approving the layoff plan with its anticipated effective date.  If the agency does not already have a comprehensive layoff provision in its contract, the resolution should specify that implementation of the layoff plan is subject to meet and confer to the extent required by law.
  • Give formal notice to the affected labor representatives. If there isn't already a comprehensive layoff provision in the MOU, give reasonable advance notice before the implementation of the layoffs so that the applicable exclusive representative(s) can request bargaining over any impacts of the decision to lay off.  Potential impacts may include such issues as timing and order of layoffs, displacement rights, reemployment rights, severance pay, and continuance of health insurance benefits. 
  • Send individual notices to the affected employees in accordance with the agency’s layoff policy. 
  • Meet and confer over impacts prior to effective date, if requested by exclusive representative(s).  Although the duty to negotiate generally requires employers to continue negotiations until agreement or impasse is reached, under these circumstances employers may be able to implement portions of the layoff (while continuing negotiations on other aspects) before the process is completed.  Contact your legal counsel for further guidance on this subject. 

There are many more issues raised by the law that are too complicated to address here. For example, in many agencies, RDA employees were considered city or county employees, so there may be obligations on the city or county regardless of whether it chooses to become a successor agency to the RDA.  LCW plans to provide a more comprehensive analysis of the effects of AB 1X 26 in a separate article.  In the meantime, if you have questions, please contact our Los Angeles, San Francisco, Fresno, or San Diego office. 

Supreme Court Recognizes That The "Ministerial Exception" Under The First Amendment Precludes Retaliation Claim Brought Under The ADA

Posted by David Urban on January 13, 2012

This post was co-authored by Michael Blacher

Supreme-Court.jpgOn January 11, 2012, the U.S. Supreme Court decided Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, No. 10-553, in which the Court recognized for the first time the existence of the “ministerial exception” to employment discrimination laws.  That exception allows religious organizations, including religious schools, to make employment decisions affecting “ministers” without being subject to anti-discrimination laws.  The ministerial exception is a judicial creation rooted in the First Amendment’s Free Exercise and Establishment clauses, and has been applied for many years by federal and state courts. 

Most observers of the Court expected it to recognize the exception, as it did.  But the more difficult question was how broadly the Court would view the exception.  That is, who qualified as a “minister?”  The Hosanna-Tabor case involved not an actual “minister” – or priest, rabbi, or other individual with strictly religious duties – but a teacher at a religious school who instructed primarily on secular topics. 

The facts of Hosanna-Tabor are as follows (as reported in our earlier blog post of October 11, 2011 following oral argument in the case).  Hosanna-Tabor Evangelical Lutheran Church and School operates a church and an elementary school.  It has two types of faculty: (1) limited-term “lay” or “contract” teachers and (2) for-cause “called” teachers.  Called teachers must complete a course of religious study and receive a certificate of admission into the teaching ministry.  They receive the title of “commissioned minister.”

In 2000, Cheryl Perich began work as a contract teacher but shortly thereafter changed her status to a “called” teacher.  Her employment duties remained essentially the same.  She taught math, language arts, social studies, science, gym, art, and music.  However, Perich also taught a religion class four days per week, attended a chapel with her class once a week, and led her classes in prayer.

In 2004, Perich went out on disability leave.  The School Board ultimately offered Perich a “peaceful release” agreement wherein she would release claims against the School in return for a monetary payment.  When Perich refused and threatened legal action, however, the Board fired her.  It gave the religious reason (as the Supreme Court described it) that “her threat to sue the Church violated the Synod’s belief that Christians should resolve their disputes internally.”

Perich filed a charge with the Equal Employment Opportunity Commission (“EEOC”) for disability discrimination and retaliation under the Americans with Disabilities Act (“ADA”), and the EEOC decided to litigate the charge of retaliation on her behalf.  The district court determined that Perich was covered by the ministerial exception and granted summary judgment to the School.  But the U.S. Court of Appeals for the Sixth Circuit reversed.  It found that because most of Perich’s job duties did not have a religious character, and because her “primary” functions were secular, the ministerial exception did not apply. 

This week, on January 11, 2012, the U.S. Supreme Court, in a unanimous opinion authored by Chief Justice Roberts, held that the ministerial exception did apply.  The opinion began its discussion by describing that both of the “religion clauses” of the First Amendment (the Free Exercise clause and the Establishment clause) “bar the government from interfering with the decision of a religious group to fire one of its ministers.”  The opinion then recited the history of government interference, or at times deliberate non-interference, in religious organizations’ employment decisions, from the Magna Carta through the Cold War.  The opinion uses this concise narration of history and case law as a prelude to its holding recognizing the existences of the exception.

After acknowledging the existence of a ministerial exception, the Court set about defining its breadth and limitations.  The Court’s noted that “Every Court of Appeals to have considered the question has concluded that the ministerial exception is not limited to the head of a religious congregation, and we agree.  We are reluctant, however, to adopt a rigid formula for deciding when an employee qualifies as a minister.  It is enough for us to conclude, in this our first case involving the ministerial exception, that the exception covers Perich, given all the circumstances of her employment.”

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You Say "Termination;" I Say, "Retirement." Is It Just Semantics Or Are They Mutually Exclusive?

Posted by Frances Rogers on January 10, 2012

Employee-Termination.jpgFor every death certificate filed, there is one “manner” and one or more “cause(s)” of  death.  The manner is essentially whether it was accidental, natural, suicide, homicide or undetermined, but there can be only one.  The cause, though, is more specific, such as exsanguination or a cardiopulmonary embolism and often times there is more than one.

This is similar to the end of an employment relationship.  The end of an employment relationship can essentially be broken down into one of three “manners”: termination, resignation, or death.  However, there can be numerous causes and several may contribute, such as failure to pass probation, misconduct, finding another job, boredom, sickness, and even…retirement.

In 2011, there were no less than three published decisions about whether “retirement” can be the manner, if you will, for the end of the employment relationship.  What I learned from these three cases, in my opinion, is that “retirement” is like a cause, but not necessarily a manner for which the employment relationship ends.

In Service Employees International Union, Local 1021 v. San Joaquin County, an employee terminated for misconduct requested an appeal.  Pending the appeal hearing, the employee applied for a service retirement from the County retirement association.  The Court held the employee’s service retirement did not waive the employee’s right to be heard on the appeal of his termination.  “It was his termination by the County that separated him from employment so that he became eligible to collect retirement benefits.”

In Hall-Villareal v. City of Fresno, after an employee was terminated for misconduct, she applied for service retirement from the City’s pension trust.  She then filed an appeal of her termination with the City’s civil service commission. The court held the employee’s receipt of a service retirement did not divest the commission of jurisdiction to hear her appeal under the City charter and municipal code.  The employment was severed by a termination, not by the service retirement.

In Riverside Sheriffs’ Assoc. (Sanchez) v. County of Riverside,  a public safety officer was placed on involuntary unpaid leave because the County found that she was unable to perform the essential functions of her job with or without reasonable accommodation. The officer disagreed. The County applied for disability retirement with CalPERS and later approved the retirement over the objections of the officer. The officer requested an appeal hearing under the terms of the MOU which the County denied. The Court held that the officer was entitled to an appeal hearing both under the MOU and the Public Safety Officers Procedural Bill of Rights Act (“POBRA”) for the County’s “disciplinary actions” in denying the officer “wages and other benefits of her employment” when it forcibly placed her on unpaid leave. 

These 2011 cases build upon previous cases including:

County of Los Angeles Dept. of Health Services v. Civil Service Commission (2009):  An employee’s service retirement after a termination for cause has no “transformative effect” on the discharge to the extent that, if the discharge was unlawful, the employee’s retirement does not cure any unlawfulness.

Riverside Sheriffs’ Association v. County of Riverside (2009):    When an employer terminates a local safety officer for physical or mental unfitness for duty before the employer applies for and approves a disability retirement from CalPERS, the officer remains entitled to appeal the termination under the employer’s rules unless or until there is a final determination upholding the involuntary disability retirement under the Public Employees’ Retirement Law (“PERL”).

Zuniga v. Los Angeles County Civil Service Commn. (2006):  A voluntary service retirement by the employee during employment is akin to a “resignation.”

With these cases in mind, here are some thoughts on what we can glean from the cases mentioned above:

  • If an employee voluntarily takes a service retirement or disability retirement, the employee has essentially resigned. Make it clear to the employee that the employer “accepts” the resignation and that if the employee decides he or she wants to come back, the agency does not necessarily have to take the employee back.   Employers with a ’37 Act system, however, are cautioned about Government Code section 31725 which provides that an employee who applies for disability retirement, but whose application is denied by the county retirement board, is entitled to reinstatement. 
  • If any employee facing termination for cause before receiving a final notice of termination files for a service or disability retirement, the employer should complete the termination proceedings, including noticing the employee of the right to appeal the decision.  If you do not, institutional memory may fade and you would not want that employee rehired years later because newer management had no record of a termination. In addition, in cases of disability retirement, a termination for cause can sometimes cut off the employee’s right to a disability retirement in certain circumstances.
  • If the sole reason for an employee’s separation from employment is because the employee qualifies for a disability retirement (i.e. the employee is substantially incapacitated from performing the essential functions of the job with or without a reasonable accommodation for a permanent or extended and uncertain duration), the employer should not separate the employee from employment until the effective date of the employee’s disability retirement.  
  • If the employee is involuntarily retired for disability, which can occur with local safety members in a CalPERS agency, the employee has the right to appeal the employer’s decision pursuant to the appeal procedures under PERL and may have a right to appeal the separation from employment under the employer’s rules.  Agencies should carefully evaluate the circumstances and consult legal counsel before committing to a course of action in these cases.

The quagmire is perhaps a little less murky now, but employers should tread cautiously where the end of an employment relationship closely precedes or follows a retirement.

Individual Employees Cannot Be Sued In State Court For Military Discrimination

Posted by Morin Jacob on January 03, 2012

iStock_000013304337Large_72dpi.jpgCalifornia’s Military and Veterans Code contains protections against discrimination for members of the armed forces.  Recently, the issue of whether an individual can be held personally liable for discrimination was addressed. 

In Haligowski v. Superior Court of Los Angeles County, the Court of Appeal held that employees who are members of the armed forces may only hold employers, but not individual supervisors or other employees, personally liable for employment discrimination against armed forces members in violation of California Military and Veterans Code section 394, even though the statute expressly states that “no person” can discriminate against a member of the armed forces. 

In Haligowski, Lieutenant Mario Pantuso was called to active duty with the Navy while working at Safway Services.  He served a six month deployment in Iraq, and sought to return to work to his prior position upon his return.  Instead of being returned to work, his supervisor and the regional manager told Lt. Pantuso that he was terminated.  Pantuso sued Safway, his supervisor and the regional manager for discrimination and retaliation under the California Military and Veterans Code. 

Section 394 prohibits any “person any “person, employer, or officer or agent of any company” from discriminating against military members because of that membership. The Court reviewed the body of case law holding that individuals cannot be liable for discrimination or retaliation under the California Fair Employment and Housing Act (FEHA). Following that reasoning, the Court found that discrimination claims against individuals that arise out of necessary personnel management duties, and decisions that are an inherent and an unavoidable part of the supervisory function, cannot be the basis of a discrimination claim against an individual.  The Court found that a supervisory employee cannot refrain from the type of conduct which could later give rise to a discrimination claim.  In contrast, however, harassment is conduct that is not necessary for the performance of a supervisory job.  Thus, individual employees can be held liable for harassment on the basis of membership in the armed forces.

It is noteworthy that this case does not change the ability of an employee to sue an individual for employment discrimination under federal law.  Under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), an employee can sue an individual employee for employment discrimination based on their membership in the military.

This decision does not change the ability of an employee to sue an individual for employment discrimination under federal law.  Under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), an employee can sue an individual employee for employment discrimination based on their membership in the military. 

The Haligowski decision establishes new precedent under Section 394 in that it prohibits individual supervisor liability for employment discrimination against members of the military.  Regardless, public employers should train its supervisors and employees that it is unlawful to discriminate on the basis of an employee's military service or membership.  This is especially important since, under federal law, plaintiffs can seek to hold individual employees liable for employment discrimination based on their military membership.  Plus, employees can be held liable for harassment on the basis of military membership under state law.  Finally, in this context, the public agency itself can be held liable for discrimination, retaliation, and harassment under state and federal law, thereby making it important to train all employees on how to prevent liability for such claims.