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.

Monday, August 24, 2015

California Attorney General Releases Title and Summary for Pension Busting Initiative

On August 11, 2015, the Office of the Attorney General released its title and summary for former San Jose Mayor Chuck Reed's pension busting initiative. The highly divisive initiative would strip pensions from public employees and allow voters to modify compensation packages at will. Fortunately, the Office of the Attorney General's title and summary highlight the problems with this initiative.
 
All ballot initiatives must be submitted to the Office of the Attorney General prior to being placed on the ballot. The Office of the Attorney General creates a title and summary of the initiative to appear on the actual ballot. 
 
The title the Office of the Attorney General gave Reed's initiative is "Public Employees. Pension and Retiree Healthcare Benefits. Initiative and Constitutional Amendment." The summary aptly states the initiative, "[e]liminates constitutional protections for vested pension and retiree healthcare benefits for current public employees." This language demonstrates how drastic this reform is and how it will prejudice California's public employees. The summary also notes the long term effects of the initiative are unknown and "depend heavily on future decisions made by voters, governmental employers, and the courts."
 
Mastagni Holstedt, APC has used the Contracts Clause in California’s Constitution to protect vested employee benefits in several high profile court battles: Stockton (fiscal emergency declaration does not authorize City to renegotiate a closed labor contract), Los Angeles (fiscal emergency declaration does not permit freezing retiree medical benefits or imposing furloughs), Pacific Grove (Ballot measure capping PERS pension contributions unconstitutional).  Similar rulings were obtained by the police and fire unions in San Jose invalidating in substantial measure Reed’s San Jose pension impairments.
 
This pension "reform" effort is led by Democrat Chuck Reed and his lawyers. As we blogged previously, the initiative amends the California Constitution to allow voters to impair employment contracts. While Reed claims his measure will not impair current employees' pensions, even Daniel Borenstein of the Contra Costa Times has acknowledged "the initiative would amend the state Constitution to give voters the right through an initiative or referendum to reduce the future pension accrual rate for current employees…Reed and DeMaio should be honest about it, or abandon the measure."
 
Additionally, the Constitutional amendment would abolish pensions for employees hired after January 1, 2019 and replace them with a "defined-contribution" system unless changes to benefits are approved in an election.  In a defined-contribution system, employees have to pay in a fixed amount with no guarantee of what their retirement income would be.  As a result, this approach shifts the risk and could prevent thousands of public employees from retiring.
 
The proposal is not limited to retirement benefits.  It provides, "Voters have the right to use the power of initiative or referendum... to determine the amount of and manner in which compensation and retirement benefits are provided to employees of a government employer."  As a result, the Constitutional Amendment would likely be used to pursue local voter initiatives to bypass collective bargaining to reduce public safety compensation or due process rights.
 
The proposal also seriously jeopardizes death and disability benefits for public safety employees. The new proposal states it shall not be “interpreted to modify or limit any disability benefits provided for government employees or death benefits for families.” But death and disability benefits are often an integral part of a pension plan. As noted by the Legislative Analyst's Office, death and disability benefits are usually prefunded through a pension plan's normal cost. If voters can modify, or even eliminate, pensions for public employees, this necessarily means the funding for death and disability benefits will be cut.  The measure does not provide any means of securing those benefits.
 
The proposal also seeks to insulate future measures from legal challenge by eliminating the jurisdiction of the Public Employment Relations Board to hear unfair practice charges regarding future measures which impair vested rights or collective bargaining agreements. 
 
Now that the initiative has a summary, the proponents must furnish the required number of signatures in order to make the November 2016 ballot. You can help stop this initiative by educating your family, friends, and community members about the drastic and detrimental effects of this initiative and encourage them not to sign any petition supporting the initiative. You can help stop future attempts to impair retirement benefits by opposing all candidates who endorse this imitative.

Wednesday, August 5, 2015

Mastagni Holstedt, APC Files Amicus Brief at California Supreme Court

Mastagni Holstedt, APC attorneys filed an amicus brief with the California Supreme Court about the application of the California Public Records Act (“CPRA”). The CPRA defines the electronic communications of public officials as public documents. Therefore, any public citizen may acquire the electronic communications of public officials through an information request.

The California Court of Appeal for the Sixth District held when a public official sends an electronic communication using a personal cell phone or e-mail account, those documents are not public records. In its brief, Mastagni Holstedt argues the ruling is incorrect and explains some of the unintended consequences to labor associations. The ruling allows public officials to do business behind closed doors, circumventing the purpose of the CPRA. Furthermore, it prevents public unions and other entities from holding public officials accountable by limiting their access to information.


Mastagni Holstedt, APC filed the brief to bring important legal arguments to the Court’s attention, ensuring the rights of employee organizations are protected. Mastagni Holstedt attorneys David E. Mastagni, Isaac S. Stevens, and Jeffrey R. A. Edwards represent the amici in the matter.