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.

U.S. Supreme Court Strikes Down Law Allowing Police to Search Hotel Registries

On June 22, 2015, the U.S. Supreme Court held in City of Los Angeles v. Patel that police searches can no longer be conducted on hotel and motel registries without a warrant absent consent or exigent circumstances. The case considered the constitutionality of Los Angeles Municipal Code 41.49. The Code stated all hotel and motel operators shall make their records available to any officer of the Los Angeles Police Department for inspection at any time. If operators failed to turn over these records, they could be charged with a misdemeanor. A group of motel operators and lodging associations challenged the law, asserting such searches were unreasonable under the Fourth Amendment.

The U.S. Supreme Court ultimately held searches without warrants of hotel and motel registries are unconstitutional absent consent or exigent circumstances. The Court stated the subject of a hotel registry search must be afforded the opportunity to obtain pre-compliance review before a neutral decision maker.

The Supreme Court outlined several ways an officer may search hotel registries absent a special need or consent from the operator. First, an officer could serve the hotel operator with an administrative subpoena, allowing the hotel operator an opportunity to challenge the subpoena in front of a judge before suffering any penalties for refusing to comply. An officer also could apply for a warrant. Additionally, if officers fear the destruction of the records while awaiting an available judge, they are permitted to guard the registry until a hearing could occur.

PERB: Blanket Restrictions on Communications Interfere with Protected Rights

The Public Employment Relations Board's recent decision in Los Angeles Community College District (2014) PERB Decision No. 2404 held blanket restrictions on communications may interfere with employees' right to engage in concerted activity. This long awaited decision brings PERB alongside National Labor Relations Board precedent holding "blanket" instructions to employees to maintain confidentiality during a workplace investigation may interfere with protected activities if they are overbroad and the employer lacks a proper business justification.

In Los Angeles Community College District, a professor disagreed with the District reducing his work hours and salary. He made statements to students and handed out materials criticizing District administration. The District placed the professor on administrative leave pending a fitness for duty evaluation and issued the following admonishment: "You are hereby directed not to contact any members of the faculty, staff, or students."

PERB ruled the directive interfered with the professor's protected activities. PERB found the District's directive was overbroad and contained no qualifiers limiting its scope. Although the directive did not explicitly restrict protected rights, PERB found "the directive not to contact faculty, staff or students would reasonably be construed to prohibit the employee from participating in a variety of protected activities including discussing working conditions with his coworkers or union, or initiating a grievance." In addition, the District lacked a business justification for the directive.

This case law may have practical application to public safety professionals subject to personnel investigations because many agencies issue admonish them from communicating with coworkers during the investigation. Employee organizations should insist that internal affairs confidentiality directives are narrowly tailored, for example, limited to witnesses who have not been interviewed. Overbroad gag orders will likely give rise to an unfair labor practice.

Court of Appeal Denies Administrative Appeal for Officers' Involuntary Transfers

On December 9, 2014, the California Court of Appeal held the Public Safety Officers' Procedural Bill of Rights Act ("POBR") does not afford officers the right to an administrative appeal of a transfer of assignment solely because the transfer may lead to negative employment consequences. In Los Angeles Police Protective League v. City of Los Angeles, the Court of Appeal denied two peace officers an administrative appeal for their involuntary transfers of assignments.

In City of Los Angeles, two officers were involuntarily transferred to different assignments. The City based one transfer on the officer's negative performance in the areas of counseling, communication, and management skills toward subordinate employees. The City transferred another officer because a discipline investigation supposedly damaged the officer's relationships with his coworkers. The City claimed his transfer provided an opportunity for a "fresh start with new coworkers."

POBR affords officers an opportunity for administrative appeal of "transfers for purposes of punishment." The officers alleged their transfers were punitive. As evidence, one officer asserted that the transfer would not allow her to work as many overtime hours and she would lose her department-issued take-home vehicle. The other officer showed he was placed on restrictive duty status, which prohibited him from carrying a gun, and the transfer damaged his reputation. Both officers asserted the transfers would adversely affect their opportunities for promotion in the department.

The court held the transfers were not punitive and the officers were not entitled to an administrative appeal. The court held the loss of possible overtime did not result in a "reduction of salary" because the officers were not entitled to particular amount of overtime and it varied depending on departmental needs. The court also found officers were not entitled to take-home vehicles, and it did not result in any reduction of salary. In addition, the City presented evidence that involuntary transfers would not hurt the officers' chances of promotion. This is an unfortunate case for peace officer's appeal rights.

Illinois Supreme Court: Pensions Protected By State Constitution

In Kanerva v. Weems (July 3, 2014), the Illinois Supreme Court ruled health-insurances subsidies for retired state workers are protected under the Illinois Constitution. The ruling poses a challenge to Illinois’ recent pension reform legislation and may force the State to consider raising revenue rather than cutting benefits.

Recently, the State attempted to reform the pension system by imposing healthcare insurance premiums on its retired workers, reducing cost-of-living increases for pensions, raising retirement ages, and limiting the salaries on which pensions are based. Retirees challenged a recent amendment to the State Employees Group Insurance Act, arguing it violated pension protection clause of the Illinois Constitution. The high court agreed, finding the pension protection clause applies to an Illinois public employer’s obligation to contribute to the cost of health care benefits for employees covered by one of the state retirement systems.

In a similar case, David E. Mastagni and Isaac S. Stevens, obtained a decision in the Los Angeles County Superior Court for the Los Angeles City Attorneys’ Association (LACAA). They argued the City of Los Angeles’ freeze ordinance, which capped retiree medical premiums at $1,190 with no increases, unconstitutionally impaired a contractual obligation to LACAA’s members because a maximum medical plan premium subsidy is a vested right. The court agreed, finding the freeze ordinance was an impairment of a vested right to a substantial or reasonable benefit and issued a writ of mandate directing the City to compute and provide the health insurance premium to LACAA’s members without regard to the City’s freeze ordinance.

Court of Appeal Rules Employer May Seek a Second Doctor's Opinion About Fitness for Duty After Employee Returns from FMLA Leave

On March 15, 2014, the California Court of Appeal in White v. County of Los Angeles held an employer may order a second fitness for duty evaluation after the employee returns from medical leave under the Family Medical Leave Act ("FMLA").  Under the FMLA, an employee must be reinstated to work after being cleared by the employee's medical provider.  However, once reinstated, the employer may then order the employee to submit to an additional fitness for duty evaluation.

The White case involved a Senior District Attorney Investigator with the Los Angeles County District Attorney's Office.  After the investigator's brother-in-law passed away, she began having trouble at work.  The County was concerned with her work performance and questioned her judgment on occasions she was working in the field.  She took FMLA leave on June 6, 2011 to seek treatment for anxiety and depression.  After treatment, her medical provider determined she could return to work on September 7, 2011.

Upon the investigator's return, the County ordered her to appear for a medical evaluation conducted by a County-designated medical provider.  She did not attend the scheduled fitness for duty evaluation.  She then filed a lawsuit seeking to prevent the County from ordering her to attend the fitness for duty evaluation.  She argued the County violated her right under the FMLA to be restored to employment upon her doctor's certification alone.

The Court of Appeal held that under the FMLA, the employer must accept the employee's physician's certification for reinstatement.  However, after reinstatement, the FMLA protections no longer apply.  At that time, the employer may require an additional fitness for duty evaluation even if it is based on conduct occurring before the FMLA leave.  Since she had been officially reinstated to her position before the County ordered the fitness for duty evaluation, the County could legally order the evaluation.

Mastagni Firm Wins Landmark Decision on Vested Rights in Los Angeles

The Mastagni Firm won a landmark decision from the Los Angeles Superior Court invalidating the City of Los Angeles’ attempt to cap employees’ retiree medical benefits.   In an order issued last week, the court held that the cap impaired Deputy City Attorneys’ vested rights to a retiree medical subsidy. The court granted LACAA’s petition for a writ directing the City to compute and provide the health insurance subsidy without regard to the freeze ordinance. The impact of this decision has been estimated at approximately $71,000,000.  The ruling follows the Mastagni Firm’s similar victories in Pacific Grove and Stockton defending employees’ constitutionally protected vested rights against contract impairments.

In 1973, the City enacted a retiree medical premium subsidy to provide its retirees no-cost or low-cost health insurance.  Over the years, the City amended the program to ensure the subsidy kept pace with increases in retiree medical costs. In 2011, the City froze the retiree medical subsidy at $1,190 per month, claiming employees did not have a vested right to increases and that the savings were needed to address the City’s supposed “fiscal emergency.”

The Los Angeles City Attorneys’ Association (“LACAA”) sought a writ of mandate to prevent the City from enforcing the freeze ordinance and requiring the City to set the subsidy without reference to the freeze. The City denied the existence of any vested right, asserting that it had the legislative authority to make whatever changes to retirement benefits it wanted.   

The court ruled the freeze unconstitutionally impaired a vested right to receive the subsidy. The court found that the City’s Administrative Code “evidence[d] a clear legislative intent to create private contractual rights in the provision of a medical subsidy that covers all or part of the cost of an employee’s medical plan.” The court further found the Administrative Code “create[d] a vested right in a medical subsidy that covers part or all of the costs of a medical plan to eligible employees.”  The court rejected the City’s defense, ruling the “reservation of rights” did not defeat the finding.

To survive constitutional scrutiny, any changes in pension benefits must be materially related to the theory of a pension system, and any change that results in disadvantages to the affected employees must be accompanied by comparable new advantages.

The court found that the freeze resulted in a disadvantage to LACAA’s members because “a fixed benefit system is disadvantageous when compared to fluctuating or fluid benefit system.”  The court then found the freeze ordinance “merely establishes a disadvantage – a frozen subsidy amount of $1,190 – and fails to establish any comparable new advantages.” Rejecting the City’s claim that the disadvantages resulting from the freeze ordinance were offset by the subsidy the City created for employees whose unions agreed to increase their pension contributions, the court noted that “getting the same benefit as before, at the expense of contributing an extra 4%, hardly constitutes a comparable new advantage.”

The court further found that the freeze ordinance was not materially related to the theory of the pension system.  According to the court, “because the apparent goal of the freeze ordinance is to resolve the City’s pending fiscal emergency, the ordinance is not materially related to the theory of a pension/medical subsidy system and its operation.” The court was also troubled that the freeze was not a temporary measure, stating “it is a permanent and progressively more onerous impairment of a vested right to a medical premium subsidy.”

The court affirmed that retirement benefits are constitutionally protected, and cannot be impaired to address fiscal woes.  In these difficult economic times, employee organizations must be vigilant in protecting the benefits their members earned through years of public service. We strongly urge every employee organization to promptly consult qualified legal counsel to determine the legality of any attempt to cut employees’ retirement benefits.

The Los Angeles City Attorneys' Association is the exclusive employee organization representing over 400 attorneys in the City of Los Angeles’ Office of the City Attorney.  Mastagni attorneys David E. Mastagni and Isaac S. Stevens represented LACAA in this litigation.

Riordan Pulls the Plug on Plan to Gut LA Pensions

Former Los Angeles mayor and Republican gubernatorial candidate Richard Riordan announced today he would no longer try to qualify a local initiative for the ballot on Los Angeles to gut public employees' pensions.  Riordan's plan called for replacing the defined benefits pension most public employees have where employees earn credit for each year they work with a defined contribution plan where retirees would get an unpredictable about of money depending on the stock market and other investments.

The plan was widely criticized by labor groups.  The Los Angeles Police Protective League revealed Riordan never conducted a study on whether the plan saved the city money and that it could actually cost much more in the immediate future.  Other labor groups cited the changing public opinion on pensions since Governor Brown's statewide pension reform package passed in August.  Riordan pulled his plan today acknowledging he would be unable to gather enough signatures to put it on the ballot.