Monday, September 28, 2015

Ninth Circuit: Time Spent Transporting Gear is Noncompensable Under the FLSA

On September 4, 2015, in Balestrieri v. Menlo Park Fire Protection District, the Ninth Circuit ruled the time firefighters spent transporting their gear to temporary duty stations for overtime shifts was noncompensable under the Fair Labor Standards Act ("FLSA").

Under the FLSA, as amended by the Portal-to-Portal Act, employees are not paid for time before and after work that is not "integral and indispensable" to the employee's principal duties. Since a firefighter is free to take his or her gear home and go straight to the "visiting station" for the overtime shift without having to return to the "home station" to retrieve the gear, this activity was not integral and indispensable to the firefighter's duties. By way of analogy, the court stated, "no one would expect to pay an office worker for the time it takes to shave and put on a tie.." Similarly, the District was not required to pay firefighters for time transporting their gear.

In addition, the court held payments for unused leave time were not part of the firefighters' "regular rate" of pay and should not be used to calculate overtime rates under the FLSA. It is well settled that payments for vacation buyback are not included in regular rate of pay for overtime. However, circuit courts are split on whether sick leave buyback is excluded from regular rate of pay. In Balestrieri, the parties' Memorandum of Understanding did not separate sick leave and vacation leave. The court was unable to differentiate between unused sick leave buyback and unused vacation buyback. Consequently, the issue of whether sick leave buyback should be included in an employee's regular rate of pay remains unsettled in the Ninth Circuit.

Wednesday, September 9, 2015

Fair Pay Act Heads to Governor for Signature

On August 31, 2015, the California Senate unanimously passed SB 358. Titled the "Fair Pay Act," this bill amends California Labor Code section 1197.5 which prohibits wage disparities based on gender. SB 358 strengthens the procedures and protections for employees who report a violation of section 1197.5. Importantly, section 1197.5 applies to public employers. With these new protections, public employees may use section 1197.5 more efficiently to challenge discrepancies in wages between genders within classifications.

The Fair Pay Act requires an employer justify a disparity in wages between men and women who perform the same job. A wage differential is appropriate when the employer reasonably applies one of the following factors: 1) a merit system; 2) a seniority system; 3) a system which measures earnings by quantity or production; or 4) a bona fide factor other than sex such as education, training, or experience. For the last element, the employer must demonstrate the factor is not based on or derived form a sex-based differential in compensation, is job related with respect to the questioned position, and is consistent with a business necessity. If the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential, then the employer may not use this factor as a defense.

The Fair Pay Act also adds additional protections for employees who complain about wage disparities. Employers may not fire, discriminate, or retaliate against an employee who invokes the Fair Pay Act's provisions. Employees may disclose their own wages, discuss the wages of others, and inquire about another employee's wages without fear of reprisal.

To enforce the Fair Pay Act, an employee can either file a confidential complaint with the Department of Labor Standards Enforcement or bring a civil action. Any civil action must be commenced within one year of the alleged violation.

This bill is one of the most aggressive attempts in the country to remedy the wage disparity between genders. According to the Los Angeles Times, women in California on average make 84 cents to every dollar earned by a man. Nationally, the average is 74 cents. Women of color are even more disadvantaged with Latinas making only 44 cents to every dollar earned by a man.

Wednesday, September 2, 2015

Appellate Court Rules Los Angeles May Not Require Police Officers to Pay for Training

The California Court of Appeal for the Fourth Appellate District ruled in In Re Acknowledgment Cases the City of Los Angeles ("City") may not force former employees to pay for their academy training. The City had adopted an ordinance which required officers who quit to pay a pro rated portion of their training. These policies have been used throughout California as a tactic to prevent officers from transferring to other agencies. Some policies even demand repayment wages during probation. The Court of Appeal here ruled the City's policy violated California Labor Code section 2802.

The City requires all of its police officers to attend and graduate from the Los Angeles Police Academy. In early 1990, the City realized many of the police officers it trained left within a few years to join other agencies. To discourage employees from leaving, the City enacted an ordinance which required officers who left the City within five years of employment and joined another law enforcement agency within one year of leaving the City to reimburse the City for a portion of the academy costs. Former officers sued when the City attempted to recoup its training cost loses under this ordinance.

The officers argued Labor Code section 2802 and other wage protection statutes, including the Fair Labor Standards Act, prevented the City from recovering the cost of training. Section 2802 requires an employer to reimburse its employees for any costs incurred by the employee as a direct consequence of his or her employment. A good example of this is a travel reimbursement. The question here was whether training is a reimbursable expense under section 2802.

The Court of Appeal concluded the City might be able to recover some training cost, but not all of the costs demanded. The court noted that no court had previously ruled on whether training costs were reimbursable under section 2802. However, the Department of Labor Standards Enforcement ("DLSE") did issue an opinion letter concluding if the training was required by law, then the employee bore the cost of the training. However, if the training was just required by the employer, then the employer had to reimburse the employee for the training costs.

The Court of Appeal adopted the same analysis as the DLSE. The academy training consisted of 644 hours of statutorily mandated Commission on Peace Officer Standards and Training ("POST") courses and 420 hours of training specific to the City. The Court of Appeal concluded the City could require reimbursement for the POST training, but could not require reimbursement for the  City specific training.

In the end the Court of Appeal invalidated the entire reimbursement ordinance as the City failed to present evidence apportioning the costs. At trial, the case was tried on an all-or-nothing basis--either the reimbursement ordinance was enforceable or it was not. The Court of Appeal ruled no part of the acknowledgment could be enforced and invalidated the entire ordinance. Because the ordinance was invalidated, the court did not reach the officers' other claims, including that the acknowledgement violated the FLSA.

This case stands in contrast with Oakland v. Hassey where the court upheld a similar policy. To encourage police officers to stay with the department longer, Oakland entered into a MOU with the Oakland Police Officers' Association in 1996 authorizing the city to require those who went through training at its academy to reimburse the city for training costs if the person left the police department before completing five years of service. In the instant case, the Court of Appeal distinguished Oakland v. Hassey because that case did not consider the application of section 2802.

This case calls into question the legitimacy of similar ordinances and policies throughout the state.

Tuesday, September 1, 2015

The California Public Safety Labor Blog Makes the Cut in the Expert Institute's Legal Blog Competition

From a field of more than 2,000 potential nominees, the California Public Safety Labor Blog has received enough nominations to join 250 legal blogs participating in one of the largest competitions for online writing today. With your support we can win this competition and reach a wider audience of public safety employees. You can vote for the blog by clicking on the nomination image on the side bar of this blog or by clicking here. Voting ends on October 7 so vote as soon as you can.

Founded in 2011, The Expert Institute is a technology-driven platform for connecting qualified experts in every field with lawyers, investment firms, and journalists looking for technical expertise and guidance. The Expert Institute also maintains one of the internet’s most visited blogs on expert witnesses, in addition to an extensive case study archive and expert witness resource center.

Friday, August 28, 2015

California Supreme Court Grants Review of Mastagni Holstedt, APC Workers Compensation Case

The California Supreme Court agreed to hear oral arguments on one of Mastagni Holstedt, APC's workers compensation cases. At issue in the case is whether a permanent peace officer is entitled to the maximum temporary disability benefit as a result of an on the job injury.

Officer John Larkin was injured in a motor vehicle accident in November of 2008 while employed as an active police officer with the City of Marysville. He received benefits under Labor code section 4850 which expired. He then received temporary disability benefits. The temporary disability benefits are paid at two thirds the weekly earning rate. Officer Larkin's weekly earnings were $1008 resulting in a $671 weekly temporary disability benefits rate.

However, Labor Code section 4458.2 states temporary disability benefits are paid at the maximum statutory rate for eligible peace officers. The maximum rate in 2008, the time of the case, was $916 per week. Labor Code section 4458.2 makes reference to Labor Code section 3362 which defines who is eligible for the maximum benefit. Labor Code section 3362 states that every person registered as an active police officer shall be considered an employee of the municipality he or she works for.

Labor Code section 3362 has evolved over time. Originally the language included only men and specified the peace officer had to be a volunteer to receive the maximum benefit. However, the California State Legislature in 1989 modernized the statute including both genders and removing the word "volunteer." This evidences the intent of the legislature to provide maximum benefits to all peace officers.

Officer Larkin challenged the lower compensation rate in front of the Workers' Compensation Appeals Board. He argued he was entitled to the full $916 per week rather than the $671 per week. The Workers' Compensation Appeals Board argued that since Labor Code section 3362 only applied to volunteer peace officers, Officer Larkin was not entitled to the maximum temporary disability benefit. On appeal, the California Court of Appeal for the Third District upheld the Workers' Compensation Appeals Board determination.

Mastagni Holstedt, APC appealed the decision to the California Supreme Court. In its briefs, the firm argues all officers, regardless of status, are entitled to maximum benefits. This is the clear language of the statute which must be followed by the court system. By reading extra terms into the statute, the Court of Appeal created an absurd result which harms peace officers across the state.

Oral argument for the case will be held on September 2, 2015 at 9 AM in San Francisco. The case will be argued by Mastagni Holstedt, APC attorney Brian A. Dixon. Mastagni Holstedt, APC attorney Gregory G. Gomez assisted in drafting the briefing materials for the case.

Wednesday, August 26, 2015

CalPERS Pension Benefits Generate Over $30 Billion in Economic Activity

The California Public Employees' Retirement System (CalPERS) released a study today demonstrating retirement benefits paid out by CalPERS generated $30.9 billion in economic activity across the State. For every one dollar of public funds invested in CalPERS, the fund returns $9.64 of economic activity throughout the state. CalPERS benefits paid directly to members have large impacts in the housing, restaurant, and health care industries. CalPERS also invests $25.7 billion dollars in California businesses, supporting millions of jobs across the state. The report breaks down the economic impact by state congressional district so tax payers can see how CalPERS benefits their local economy.

For eight decades, CalPERS has built retirement and health security for State, school, and public agency members who invest their lifework in public service. CalPERS serves more than 1.7 million members and administers benefits for more than 1.4 million members and their families in the health program. CalPERS is the largest defined-benefit public pension in the United States. The current market value of the CalPERS general fund is approximately $304 billion dollars.

Tuesday, August 25, 2015

California Supreme Court Finds Limited Exception to Employees' Access to Supervisor Notes Under FFBOR

On August 24, 2015, the California Supreme Court issued a decision in Poole v. Orange County Fire Authority. The Court held Government Code section 3255 did not compel the County to provide a firefighter the opportunity to review and respond to a supervisor's personal notes regarding the firefighters work performance if the notes were not used for a personnel purpose. The supervisor did not share the notes or make them available to anyone with authority to take adverse disciplinary action against the firefighter. For these reasons, the Court held the supervisor's notes did not constitute a file "used for any personnel purposes by his or her employer."

Under the Firefighters Procedural Bill of Rights Act ("FFBOR"), a firefighter has the right to review and respond to any negative comment that is "entered in his or her personnel file, or any other file used for any personnel purpose." In Poole, a supervisor maintained raw notes on his subordinates. The notes documented factual occurrences for his reference when writing employees' annual reviews. Some of the occurrences in the supervisor's notes described instances where the employees had failed to complete assigned duties. The supervisor did not make these notes available to anyone with authority to take adverse action against the firefighter and not all of the notes were documented in annual performance reviews. The Court considered the narrow question of whether the FFBOR required the supervisor to provide employees the opportunity to review and respond to negative comments in his notes that were not included in the employees' annual performance evaluations or performance improvement plans.

It is well established that employers must provide firefighters and public safety officers an opportunity to review and respond to negative comments entered into files used for personnel purposes. For example, in Venegas the appellate court concluded that an index card maintained by internal affairs documenting all complaints against an officer constituted a file "used for... personnel purposes," because it would be available to those responsible for disciplinary action. In addition, in County of Riverside, the county was required to disclose to a police officer adverse comments in a file containing the results of a background investigation the county used to determine whether to continue to employ the officer. And in Aguilar, the appellate court held an officer was entitled to review and respond to an uninvestigated citizen's complaint placed in a confidential investigative file. These cases remain authoritative in compelling employers to provide firefighters and public safety officers the opportunity to review and respond to adverse comments placed in files "used for... personnel purposes."

The Court distinguished this case from other cases interpreting similar statutes on the basis that the supervisor's notes were not available to anyone making personnel decisions in the future. Based on a unique set of circumstances, this case clarified FFBOR protections are not triggered by a supervisor's private notes that were not used for any personnel action.