Monday, January 16, 2017

Third Appellate District Upholds Award of Penalties for Late Advance Disability Pension Payments

In the recently decided Gage v. Workers Compensation Appeals Board, (CA3, Nov. 22, 2016 No. C081618)  the Court upheld the ability for employees to receive penalties for late advance disability pension payments. In this case, a Sacramento County Sheriff’s Deputy, represented by Greg Gomez of Mastagni Holstedt, APC, sustained a job-related injury and applied for an industrial disability retirement. In cases like these involving peace officers, the injured party can also apply for advance disability pension payments in order to cover living expenses while the disability retirement application is being decided.

Here, Gage petitioned for these advance payments and applied for industrial disability retirement on March 6, 2015. When payments did not arrive, Gage petitioned for late payment penalties against the County on June 2. The County claimed not to have received the application until June 11. The County also asserted that the Workers Compensation Appeal Board (WCAB) did not have authority over advance payments of pension because that would fall under another a different law (County Employees Retirement Law of 1937), and thus it could not apply penalties.

While this issue was being decided, the County continued to stall payments due to some additional technicalities (legal joinder). On June 29, it finally approved payment of benefits. Gage filed a petition for penalties because the benefit check wouldn’t arrive until July 2, almost 4 months after her initial request.

A workers compensation judge initially agreed with Gage that disability pension payments were considered compensation, and thus were subject to penalties for late payment. The County appealed arguing that advance pension disability payments were an obligation of the retirement system, and thus not subject to the penalty. On appeal, the WCAB overturned the workers compensation judge’s initial decision.

When the case was finally appealed to the Third Appellate District, the Court explained that the workers compensation law was intended to be liberally construed for the purpose of extending benefits to those injured in the course of employment. This includes making sure that those in law enforcement are given all the rights attendant to the workers compensation law. The advance disability pension payments are specifically provided to help officers who would otherwise have difficulty making the monthly bills if they had no income due to being injured. In fact, the payment of such benefits was made mandatory in 2002.

The Court also discredited the County’s argument that under the applicable code section, the repayment of retirement benefits was outside of WCAB’s jurisdiction. The Court stated that while the repayment of retirement benefits once disability retirement was approved was outside the scope of the WCAB’s jurisdiction, that did not bar it from asserting penalties on late payments, because such payments are considered compensation and therefore fall under WCAB’s jurisdiction. While the court remanded the case to determine if the delay in this case was sufficiently unreasonable such that penalties were required, this case still stands as a big win for employees seeking disability retirement. Mastagni Holstedt, APC is requesting that this case be published so that it has precedential value.

Mastagni Holstedt, APC is privileged to have represented the Sacramento Deputy Sheriffs Association and Ms. Gage in obtaining this important result. Greg Gomez of Mastagni Holstedt, APC represented Ms. Gage in this matter.

Court Allows Officer's Retaliation Lawsuit to Proceed Over Anti-SLAPP Motion

In Armendariz v. City of Burbank, the Second Appellate District held that a Burbank Police Officer’s retaliation lawsuit against his employer could go forward, despite the City’s attempt to strike the complaint on anti-SLAPP grounds. The Burbank Officer sued his employer alleging that they had terminated him due to his outspoken criticism of the Department’s leadership decisions. The City asserted that their internal affairs investigation against the Officer was protected by the first amendment and thus, the Officer’s lawsuit should be stricken.

Specifically the Officer asserted in his complaint that he complained to his department about unlawful arrest and citation quotas being imposed on officers. He also complained repeatedly and publicly about the Chief of Police’s management of the department and new disciplinary guidelines while acting in leadership positions with the Police Officer’s Association. He also complained about the Department's decision to fill senior positions within the Department with outside officers and without complying with civil service protocols. These statements were also made to the press. Not long after these statements and complaints, the Department initiated a series of internal affairs investigations into the Officer.

The general purpose of California’s anti-SLAPP (Strategic Lawsuit Against Public Participation) statute is to protect against lawsuits which are aimed at preventing or punishing protected first amendment speech. Part of this protection extends to statements made in connection with an “official proceeding authorized by law.” In recent years, cities and counties have been asserting that their internal affairs investigations are such protected proceedings. When employees sue their employers after being terminated due to an internal affairs investigation, employers often try to use anti-SLAPP to shut the lawsuit down.

In order to strike claims in a lawsuit using anti-SLAPP, a defendant must show that the claims of the plaintiff arise out of protected activity. Once demonstrated, the plaintiff may only continue its case if it can establish that its claims have minimal merit. In Armendariz, the court made clear that anti-SLAPP can only be used to strike the individual claims to which the protection applies; it does not destroy the entire complaint if it contains other claims.

In this case, the court decided that the Officer’s claims of retaliation did contain allegations relating to protected activity (the internal affairs investigation). Thus, statements or writings generated in connection with the investigation were protected activity within the meaning of the anti-SLAPP statute. However, the Officer was able to establish that his claims had at least minimal merit and likelihood of success. This was due partly to the City’s almost complete failure on appeal to address the Officer’s arguments and evidence submitted, offering only a single paragraph of bare argument in response to over 220 pages of evidence.

The City offered several other token defenses such as failure to exhaust administrative remedies, governmental immunity, and litigation privilege, all of which were denied. Governmental immunity did not apply because while a government entity is protected from vicarious liability from its employee's actions, this protection does not apply when the Officer is seeking to hold the City directly responsible for its violations of the law. Litigation privilege, which precludes liability arising from a publication made in a judicial proceeding, did not apply because the Officer’s claims arose out of the City’s actions of termination, and not necessarily from its statements during the IA process. 

Accordingly, the court allowed the Officer’s lawsuit to go forward and permitted him to recover his costs on appeal.  Although the officer's suit survived the anti-SLAPP motion, this case also illustrates the difficulties presented by the anti-SLAPP statute when challenging adverse employment actions arising from internal affairs investigations.

Tuesday, January 10, 2017

Mastagni Holstedt joins PORAC in Prop 66 Supreme Court Challenge

PORAC files application/amicus brief in support of the constitutionality of Prop 66, which provides for expedited appeal of death penalty sentences and time limitations within which appeals must be complete.  The Death Penalty Reform and Savings Act of 2016 is being constitutionality challenged, notwithstanding the fact that Prop 61, repealing the death penalty, failed and Prop 66 passed. 

Mastagni Holstedt, APC is honored to have filed the brief on behalf of PORAC and its members. The brief can be viewed by clicking this link:

Thursday, December 29, 2016

Cal Supreme Court Rules Time Spent Monitoring Radios During Breaks Constitutes Work

In Augustus v. ABM , the California Supreme Court ruled that requiring security personnel to monitor radios and respond to calls during breaks meant they were not relieved of all duty and therefore still working. The court held, "During required rest periods, employers must relieve their employees of all duties and relinquish any control over how employees spend their break time."

This case was brought under California Labor Code sections and Wage Orders that require California employers to provide 10 minute rest breaks every 4 hours of work where the employees are relieved of all duties.  These authorities also require provision of a meal period which may be unpaid if the employee is "relieved of all duty."  Labor Code § 226.7 provides: “An employer shall not require an employee to work during a meal or rest or recovery period mandated pursuant to an applicable statute, or applicable regulation, standard, or order of the Industrial Welfare Commission.”  Employees are entitled to an hour of pay for violations.

ABM required employees during their breaks to keep their pagers and radio phones on, and remain vigilant and responsive to calls when need arises.   The guards claimed ABM failed to provide bona fide rest periods because they were required to remain on call during their breaks, e.g. on duty.  They were required to monitor their radios and pagers and interrupt their break to respond if a need arose.  The trial court the guards approximately about $90 million. The Court of Appeal reversed, but the Supreme Court reinstated the $90 million judgment. Our Supreme Court reasoned that the guards were still working and thus did not have full personal  use of their break time.  Because rest breaks must be compensated, "when forced to take on-duty rest periods, ―an employee essentially performs . . . 'free' work, i.e., the employee receives the same amount of compensation for working through the rest periods that the employee would have received had he or she been permitted to take [off-duty] rest periods."

While this case was brought by private sector security guards under California Labor Code and Wage Order sections, the Court's determination that time spent monitoring a radio during a break or meal period must be compensated has farther reaching impacts.  For public sector safety employees, this ruling provides strong support that unpaid meal periods where employees are required to monitor their radios violate the Fair Labor Standards Act (FLSA).  Unpaid rest breaks have been long held to violate the FLSA.

Wednesday, December 21, 2016

CalPERS to Lower Discount Rate to Seven Percent Over the Next Three Years

The California Public Employees' Retirement System (CalPERS) Board of Administration today voted to lower the discount rate from 7.5 percent to 7.0 percent over the next three years.  The discount rate changes approved by the Board for the next three Fiscal Years (FY) are as follows:

FY 2017-2018:     7.375%
FY 2018-2019:     7.25%
FY 2019-2020:     7.00%

Lowering the discount rate, i.e. the assumed rate of return, will result in increases in employers' normal costs and unfunded actuarial liabilities.  

According to CalPERS, the reductions will result in 1-3% rate increases of the normal cost as a percent of payroll for most miscellaneous plans, and 2-5% increases for most safety plans.  PEPRA employees hired after January 1, 2013, will also see their contribution rates rise. 

Wednesday, November 23, 2016

Court of Appeal: MMBA Requires Bargaining Over Binding Arbitration

In City of Palo Alto v. Public Employment Relations Board, the Court of Appeal held binding interest arbitration is a mandatory subject of bargaining under Government Code section 3507.  As a result, the Court found the City violated the Meyers-Milias-Brown Act when it pushed through a local initiative to repeal binding interest arbitration while refusing to bargain with Palo Alto Firefighters, IAFF Local 1319.  The Court upheld PERB's factual determinations and rejected the City's arguments.  The Court also directed PERB to issue a new remedial order to correct a technical issue.

Palo Alto adopted binding interest arbitration by charter amendment for public safety officers in 1978.  The charter required that a neutral arbitrator would decide disputes about wages, hours, and other terms and conditions of employment if the City and the unions reach impasse in contract negotiations.  In 2011, the City tried to take binding arbitration away so that it could unilaterally impose terms on the firefighters.

At the time, the City claimed it did not have to meet and consult with the union about the change and ignored repeated demands to bargain.  The City claimed an earlier case about binding arbitration under MMBA section 3505 meant it did not have to bargain with the union.

But the Court rejected the City's claims.  The Court decided PERB properly decided that "mandatory subjects for consultation under section 3507 are distinct from mandatory subjects of meeting and conferring under sections 3504 and 3505."  As a result, the Court held, the City had a duty to bargain with Local 1319 under 3507 even though it did not under 3505.

The Court also rejected the City's claim that bargaining under section 3507 is substantially different than bargaining under section 3505.  In its briefs, the City claimed that a "meet and consult" under section 3507 was much less robust than a "meet and confer" under section 3505.  But the Court disagreed, deferring to PERB's determination that the two processes were very similiar, if not identical.  Since the City failed to even meet with the union, the Court held the City clearly violated its duty.

The Court also directed PERB to correct its remedial order.  In its decision, PERB ordered the City to rescind a resolution floating the ordinance.  But the Court noted PERB cannot order a City to rescind a resolution, but it can declare that a resolution is void.  As a result, the Court directed PERB to issue a new order.  Accordingly, the case will go back to PERB for a further order remedying the City's violations of the MMBA.

Mastagni Holstedt attorneys David E. Mastagni, Issac S. Stevens, and Jeffrey R. A. Edwards represented Local 1319 in the appeal.  Mr. Edwards represented Local 1319 in oral argument.

LA Times Quotes David P. and David E. Mastagni on Supreme Court Pension Case

On November 22, 2016, the Los Angeles Times turned to David P. and David E. Mastagni for analysis about the pending California Supreme Court appeal in the MCERA pension case.  The LA Times asked about the Court's decision to consolidate the Marin and Alameda cases.

The Times wrote: "David P. Mastagni, who represents Alameda County deputy sheriffs in the pending case, said the Supreme Court’s decision to wait for a ruling “really to me signals they understand the gravity and significance of the issues.”

Given the complexity and importance of the dispute, he said, he was not surprised that the court of appeal has yet to schedule a hearing. The court is required to issue a decision within 90 days of a hearing.

David E. Mastagni, the elder lawyer’s son and law partner, said it was not uncommon for the California Supreme Court to postpone a decision until a lower court acts first in a similar case.

“It gives them a more complete record,” he said. “They want to have another fully developed factual background.”