Thursday, August 25, 2016

NLRB Improves Backpay Formula for Unlawfully Terminated Workers

In a recent 3-1 decision, the National Labor Relations Board ("NLRB") modified its backpay formula to make unlawfully terminated workers whole. In King Soopers, the NLRB found that its previous formula was inadequate to fully compensate workers who were unlawfully terminated. Specifically, the Board found search-for-work expenses and interim work expenses should be treated as a separate component of the backpay award, rather than an offset against interim wages.

When an employee is terminated for union activities, he or she is required to find and maintain interim employment to mitigate damages while the unfair labor practice case is decided. The pay the discriminatee receives from interim employment is deducted from the backpay award. However, the search for interim employment, and sometimes the interim employment itself, often causes the discriminatee to endure additional financial hardship. This is especially true if the discriminatee is forced to relocate, commute longer distances, or pay for additional training for the interim employment.

In the past, the NLRB treated search-for-work expenses and interim employment expenses as offsets to interim earnings. This prevented discriminatees who were unable to find interim employment to receive any compensation for search-for-work expenses. Similarly, discriminatees whose interim job wages were less than their total expenses were not compensated for the amount of expenses that exceeded their interim wages.

The Board now treats search-for-work expenses and interim work expenses as a separate component of the backpay award. The purpose of make-whole relief is to restore, as nearly as possible, that which the discriminatee would have earned if he or she had not been unlawfully terminated, and to deter future unfair labor practices. The Board found that this new formula better serves both purposes. As a result, discriminatees who prevail on their unfair labor practices will be fully compensated for the financial hardships caused by their unlawful terminations.

The Public Employment Relations Board currently treats search-for-work expenses and interim employment expenses as offsets to interim earnings. But PERB will likely follow suit and treat search-for-work expenses and interim job expenses as a separate component of the backpay award to ensure discriminatees are fully compensated.

New Law Requires Public Officials to Disclose Compensation Increases

Gov. Jerry brown signed SB 1436 on Monday, which requires local governments to announce any increases in pay or benefits for their executives, publicly before they are adopted. Senator Patricia Bates (R-Laguna) introduced the bill in response to the outrageous pay increases some public executives in California had provided themselves, as illustrated by the City of Bell scandal.  The new law requires a report on future increases in open session that includes a summary of the benefit and salary increases.

This bill addresses concerns of hypocrisy that some public executives call for transparency in rank and file public employee compensation while discretely providing themselves lavish compensation packages.  As Senator Bates noted, “Local agency executives, such as agency CEOs and city managers, are offered fringe benefits including health care coverage and pensions in amounts that can have a significant long-term impact on the budget and that deserve particular scrutiny by the public.”

Wednesday, August 24, 2016

Court of Appeal Breaks from Supreme Court Precedent in Upholidng Prospective Reduction of Pension Benefits

The attack on public employee pensions continues with the California Court of Appeal's recent decision in Marin Association of Public Employees et al. v. Marin County Employees' Retirement Association et al. The Court of Appeal upheld the Marin County Employees' Retirement Association's ("MCERA") implementation of the Pension Reform Act (A.B. 197) in the face of constitutional challenges by employee organizations.

MCERA is subject to the County Employees Retirement Law of 1937 (often referred to as "CERL" or "the '37 Act.") Effective January 1, 2013, the Legislature amended CERL to exclude certain categories of compensation from pension calculations of current employees (A.B. 197). In the wake of A.B. 197, MCERA voted to implement these changes to calculations of its current employees pensions. Under the new policy, MCERA would begin to exclude standby pay, administrative response pay, call-back pay, cash payments for waiving health insurance, and other pay items from employees' final compensation after January 1, 2013. Four employee organizations and four plaintiffs challenged these changes on the basis that they were unconstitutional impairments of current employees' vested rights under the state and federal contract clauses.

The Court found that A.B. 197's prospective changes to pension calculations, and MCERA's implementation of such changes, were constitutional. The Court agreed that current employees have vested rights to a "substantial" and "reasonable" pension, but held they do not have an "immutable entitlement to the most optimal formula for calculating the pension." Rather, in this Court's view, pensions are subject to "reasonable" modification before they become payable.

The Court's ruling contradicts longstanding precedent from the California Supreme Court.  It has been long held that if a there is a change to a pension benefit that disadvantages employees there must be a comparable new advantage, such as providing additional benefits to offset the reduction in pension benefits. The California Supreme Court has made clear a change that disadvantages employees "must" be accompanied by a comparable new advantage.

In this case, the Court did not follow this precedent and claimed the Supreme Court did not intend its use of "must" to to be literal or inflexible. Rather, the Court of Appeal preferred the formulation that a disadvantageous change to pension benefits only "should" be accompanied by a comparable new advantage. In any event, the Court determined under the facts of this case, that the employees received a comparable advantage to the reduction in their pension benefits in the form of reduced employee contributions to the retirement system. Since MCERA excluded standby pay, administrative response pay, and call-back pay from pension calculations, it would no longer collect retirement contributions on such pay.

This case has significant limitations and is sure to be promptly challenged in the California Supreme Court.

Thursday, August 11, 2016

Court of Appeal Rules Correctional Deputies Can Carry Firearms Off-Duty Without CCW

On August 11, 2016, the Court of Appeal, Fifth Appellate District ruled in a published decision that correctional deputies under Penal Code section 830.1(c) have the same right to carry firearms off-duty as as enforcement deputies and police officers who are peace officers under Penal Code section 830.1(a).

In Stanislaus County Deputy Sheriffs' Association v. County of Santa Clara et al., the County argued correctional deputies were not entitled to the same rights as enforcement deputies under the Penal Code because they cease to have peace officer status or authority outside of their particular custodial assignments.  But the Court rejected that claim, finding that correctional deputies under section 830.1(c) are treated the same as section 830.1(c) peace officers with regard to the exemption.  As a result, the Court rejected distinguishing between them and and found that "Section 830.1, subdivision (c), declares without any qualification that a custodial deputy is a peace officer."

Wednesday, July 20, 2016

Dash Camera Video Not Part of Officer’s Personnel Record, Court Rules

A California appeals court ruled this week that dash camera footage is not part of an officer’s confidential personnel record, even though it was used in an internal affairs investigation against the officer. The Court of Appeal ruled in City of Eureka v. Superior Court (Thadeus Greenson) (1st Dist., July 19, 2016) that Pitchess statutes do not protect this kind of video footage from being released to the public.

Eureka Police Sergeant Adam Laird and other officers arrested a juvenile suspected of gang activity. After the incident, the Eureka Police Department opened an internal affairs investigation into Sergeant Laird’s conduct, eventually deciding to fire him. And the Humboldt County District Attorney’s Office charged Laird with misdemeanor assault by a police officer without lawful authority and making a false police report. Both investigations alleged that Laird used excessive force against the suspect, including pushing him to the ground and then kicking or stomping on him repeatedly.

A key piece of evidence in both of these investigations was the video recorded by the dash camera in another officer’s vehicle. This video apparently recorded the whole interaction between Sergeant Laird and the juvenile suspect. Experts hired by both the prosecution and Laird’s defense attorney determined Laird’s use of force was justified under the circumstances. The prosecution dropped the charges and the Department halted its termination of Laird.

However, a local newspaper reporter then filed requests for the video footage. The reporter claimed the video was a public record. A trial judge in Humboldt County agreed and ordered the City of Eureka to release the video. The City appealed the judge’s order, arguing the video was part of Laird’s confidential personnel file and could only be released through the procedures required by the Pitchess statutes.

The Court of Appeal rejected the City’s argument and affirmed the order to release the video. The Court ruled that because the video was recorded before any investigation had begun, it was an independent record and was not part of Laird’s personnel file. Because the video was merely considered during the investigation and was not generated by it, the video was not a record related to “employee advancement, appraisal, or discipline.”

The Court relied on the major decision by the California Supreme Court two years ago in Long Beach Police Officers Association v. City of Long Beach (2014). In that case, the Supreme Court ruled that Long Beach could not withhold the identity of a police officer who had been involved in a shooting, but must disclose it to requesting newspapers. Here, the Court of Appeal ruled that dash camera footage is similar to an officer’s identity and must be released to the public.

The Court of Appeal’s decision is a serious setback to the privacy interests of peace officers across the state. Under the ruling, potentially all dash camera and body camera footage could be subject to public release.

Monday, July 18, 2016

Court of Appeal Holds Public Employer Can Refuse to Indemnify Officers Where Malice Found

In David Chang et al., v. County of Los Angeles, --- Cal.App.2d --- (July 1, 2016) 2016 WL 3574063, Sheriff's deputies brought action against the County seeking indemnification of a judgement against them under Government Code section 825.  The County had provided a defense for three employees under a reservation of rights, then refused to pay the resulting judgment for battery and civil rights violations on the ground that the employees acted with actual malice.

The deputies were sued by an inmate for battery and violation of civil rights. On September 9, 2010, following a jury trial, the jury found the deputies violated Franco's federal civil rights, causing injury or harm to him. The jury also found each of the deputies acted with malice, oppression or reckless disregard in violating the inmate's civil rights, and that they acted with malice, oppression, or fraud in committing battery on Franco.

Against each deputy, the jury awarded compensatory damages of $85,000 and punitive damages of $50,000. The total compensatory damage award was $255,000. The deputies were jointly and severally liable for an award of costs of $6,754.80 and attorney fees of $189,331.67. The employees sought indemnification from their employer under Government Code section 825. The trial court granted summary judgment in favor of the employees.  The appellate court reversed.

The deputies signed agreements with the County of Los Angeles setting forth the terms and conditions under which the County would defend them. The first paragraph of each agreement listed circumstances under which the County might withdraw from defending a deputy, including if the deputy did not act within the scope of his employment or he acted or failed to act because of actual fraud, corruption, or actual malice.

On appeal, the public entity contended that because the defense was conducted under a reservation of rights, the deputies had to satisfy the requirements of section 825.2 for indemnification.  The court agreed, holding by implication the County had reserved the right not to indemnify the deputies for acts within the course and scope of their employment that were taken with actual malice. The court pointed out the County showed the jury had acted with malice or at the very least, a triable issue of fact existed as to whether the deputies acted with malice.

By implication, the court found the County reserved the right not to indemnify the deputies for acts within the course and scope of their employment that were taken with actual malice. Having reserved that right, the County could invoke section 825.2 in seeking to deny indemnification.

Federal Appeals Court Vindicates First Responder Regulation in Ordering Overtime for Fire Captains

In Morrison v. County of Fairfax, VA, --- F.3d --- (4th Cir. June 21, 2016, No. 14-2308) 2016 WL 3409651, the Fourth Circuit Court of Appeals enforced Fire Captains' right to overtime under the First Responder Regulations of the Fair Labor Standards Act (FLSA).  

Under the FLSA employees who work overtime generally are entitled to overtime pay.  However, public entities that fail to properly pay overtime often argue Fire Captains and Police Sergeants are exempt from the overtime requirements of the FLSA.  The FLSA does provide an an exception, which must be narrowly construed, for certain “executive” and “administrative” employees whose primary job duties are management-related.

The district court erroneously held that Fairfax County fire captains were exempt executives, and entered summary judgment for Fairfax County.  On appeal, the County doubled down arguing some of the Captains are exempt executives while others are exempt administrators.

However, under the First Responder Regulations of the FLSA, the executive and administrative exemptions to the FLSA overtime requirements did not apply to certain firefighters regardless of rank or pay level unless their primary duty was management or directly related to management, applied to fire captains employed by county fire department.

The Department of Labor applies four factors in determining whether exempt duties constitute the primary duty of an employee: [1] relative importance of the exempt duties as compared with other types of duties; [2] the amount of time spent performing exempt work; [3] the employee’s relative freedom from direct supervision; and [4] the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee. 

The Court ruled that the evidence failed to show that the captains’ primary duty was management related and instead was to respond to emergency calls. First, fire fighting is clearly the more important job when compared to the captains’ exempt duties. Emergency calls take priority and captains do not have discretion to disregard the duty. Second, while captains do have some tasks that are distinct from their first-responder duties, these duties take at most 25 hours out of the working year. Third, the captains’ role is to carry out their supervisors’ orders and are thus in constant contact with their supervisors. And lastly, there was nothing evidencing a significant pay gap between the captains and non-exempt lieutenants just below them. Therefore, the court ruled Fire Captains are entitled to overtime compensation under the FLSA. 


Hopefully this decision will put to rest the boilerplate defense raised in public sector FLSA cases that Fire Captains and Police Sergeants are exempt from the FLSA's overtime protections.  Public safety employees whose primary duty is to investigate crimes or fight fires are not exempt merely because they also direct the work of other employees in the conduct of an investigation or fighting a fire.