The House of Representatives Passes H.R. 82 – Social Security Fairness Act of 2023

    On November 12, 2024, the United States House of Representatives passed H.R. 82, the “Social Security Fairness Act of 2023” by overwhelming bipartisan margins. This bill has been top priority for public safety labor nationwide, including the IAFF and PORAC, because it eliminates the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), provisions that unfairly punish retired police officers, fire fighters, and other public employees. Although this Bill was was co-sponsored by 303 of 435 members of the House of Representatives, it had stalled in the powerful House Ways and Means Committee for nearly two years.

    "This discharge petition marks a critical victory in our long fight for fair retirement benefits for peace officers and public servants,” said Brian R. Marvel, President of PORAC. 

    This bill was introduced in January of 2023 with the purpose of repealing provisions from the Social Security Act (42 U.S.C. 401, et seq.)  that reduce Social Security benefits for individuals who receive other government benefits, such as state or local pensions. Specifically, this bill eliminates the government pension offset which reduces Social Security for spouses, widows, and widowers who also receive their own government pensions. 

    Additionally, the bill eliminates the windfall elimination provision which could have reduces Social Security benefits for individuals who also receive a pension or disability benefit from an employer that does not withhold Social Security taxes from the individuals’ paychecks. The Bill strikes 42 U.S.C. 402(k)(5) which outlined how an individual’s Social Security benefits would be reduced if they received additional periodic benefits from federal, state, local, or any other government service within the last five years. 

As such, the provisions outlining spousal benefits are only contingent on the restrictions put forth in Section 202(q) and no longer are limited by Section 202(k)(5) should the spouse (and widow/widower) receive benefits of their own. Subsection (q) reduces a spouse’s insurance benefits should the employed individual begin receiving retirement benefits before reaching the statutory retirement age. Elsewise, Section 202 subsections (b)(2) and (c)(2) dictate that spousal benefits for each month are to be one-half the primary insurance amount of the primary insurance amount of his or her spouse (or, in the case of a divorcee, former spouse.) Under subsections (e)(2)(A) and (f)(2)(A), a widow’s or widower’s benefits for each month are to be equal to the primary insurance amount of his or her spouse. 

The bill also struck provisions altering the computation of benefits under the Social Security Act. Section 415 subsections (a)(7), (d)(3), and (f)(9) were all struck which covered delayed retirement, continued work after retirement, and the windfall elimination provision. Subsections (a)(7) and (f)(9) increased benefits for an individual who delayed claiming benefits beyond their full retirement age, thus incentivizing individuals to remain actively working, capping at age 70. Subsections (a)(7) and (d)(3) comprise the Social Security Windfall Elimination Provisions which reduce an individual’s Social Security benefits to reflect the person’s entitled to other benefits (such as old-age insurance or retirement benefits).  

    This bill repeals the Windfall Elimination provision and Government Pension Offset for individuals as well as their spouses or widow(er)s who receive benefits of their own from the government. These eliminated provisions have unfairly reduced retirement benefits for peace officers, firefighters, and their families as well as other public employees merely because they and their spouses can also claim alternative benefits. Additionally, by incentivizing increased service beyond the retirement age and penalizing early retirement, individuals are compelled to make decisions to keep working when doing so may not benefit them or their families. 

    By eliminating these provisions, firefighters or officers who are forced to retire early due to the demanding aspects of their careers can finally receive the full financial security in retirement benefits that they spent their entire career paying into. With the passing of this bill, the House of Representatives has made a critical step in ensuring financial stability for public employees in their post-retirement years. 

Now that H.R. 82 has passed the House, the bill moves to the Senate. The Senate version of this Bill has 62 co-sponsors, so the filibuster should not prevent enactment of this important Bill. 

IAFF General President Edward Kelly aptly stated, “[w]hile we’re proud of the work our team did to get this bill through the House, this is only half the battle. Now it’s time for Senators to step up and send this bill to the President’s desk.”

California Appellate Court of Appeal Upholds City Manager’s Decision to Terminate Officer and Reject Advisory Arbitration Award

    

    On September 13, 2024, the Fourth District Court of Appeal of California ruled in Ramirez v. City of Indio, finding that the Memorandum of Understanding ("MOU") between the City of Indio and the Indio Police Officers' Association ("POA") did not constrain the City Manager's authority to revoke an arbitrator's advisory findings and recommendation supporting an officer's reinstatement. 

    Former police officer Sergio Ramirez filed for writ of mandate challenging the determination by the Indio City Manager, upholding the decision to terminate Ramirez's employment, contrary to the arbitrator's recommendation. 

    Ramirez had been employed by the City of Indio Police Department since 2005. In August of 2016, he was charged with rape and two additional counts of sexual assault. Subsequently, the City placed him on administrative leave, asked him to turn in his work cell phone, and initiated an internal affairs investigation. Ramirez was acquitted of all criminal charges. However, in 2019, Ramirez was terminated by the Chief of Police. 

    Ramirez administratively appealed the decision under the "Appeals Procedure" outlined in the MOU between the City and the POA by requesting an evidentiary appeal to arbitration. The mutually agreed upon arbitrator conducted a three-day evidentiary hearing after which it was recommended that Ramirez was reinstated with full back pay and benefits. 

    In reviewing the arbitrator's findings and recommendations, the MOU, the Chief's Notice of Intent to Terminate, the City policies, the internal affairs investigation, transcripts from the criminal trial, and associated transcripts, motions, responses, briefs, and exhibits, the City Manager issued a final written decision rejecting the arbitrator's findings and affirming Ramirez's termination. Ramirez petitioned the Superior Court for a writ of mandate challenging the City Manager's administrative decision. On May 30, 2022, the Superior Court denied the writ petition. Ramirez then appealed to the Fourth District Court of Appeals, contending that the Superior Court incorrectly interpreted the arbitrator's role in the administrative appeal procedure and the City Manager's refusal to defer to the arbitrator's recommendation violated his due process rights. 

    Under the Public Safety Officers Procedural Bill of Rights (POBRA; Gov. Code § 3300 et seq.), police officers have a statutory right to an administrative appeal of punitive action that shall be conducted in conformance with the rules and procedures adopted by the local public agency. (Gov. Code § 3304.5) Such rules and procedures were outlined in the MOU which guided the court's interpretation of Ramirez's appeal. The rules and procedures must afford constitutional due process for an officer before depriving him or her of any significant property interest in employment. The court views the MOU as a whole, rather than disjointed sections in order to effectuate the mutual intent of the parties as it existed at the time of contracting. 

    The MOU Appeals Procedure in this case was "designed to provide an appeal system for the fair and just resolution of any dispute..." Specifically, the MOU did not grant binding arbitration to the parties in the case that an appeal hearing was held. Rather, the arbitrator was permitted to render a written statement of advisory findings and recommendations. Therefrom, the City Manager was required to review the arbitrator's findings and recommendations but had authority as the final decision maker to affirm, revoke, or modify the findings as appearing warranted. 

    In his appeal, Ramirez acknowledged the City Manager's final decision-making authority. However, he argued that the MOU must be interpreted to constrain the City Manager's discretion by requiring him to defer to the arbitrator's determinations of the relevancy, weight, and credibility of testimony and evidence presented during the hearing or at least afford them great weight. The Court found that this suggested interpretation ignores the rules of contractual interpretation by disregarding the MOU's express language and framework. Nothing in the MOU indicated intent by the parties to extend the arbitrator's authority beyond the hearing itself or require deference by the City Manager. Suggesting such would circumvent POBRA by requiring that an administrative appeal not be held in conformance with the rules and procedures adopted by the public agency. Ramirez's interpretation would effectuate binding arbitration on an MOU that explicitly designated advisory arbitration. 

    Lastly, the Court found that the Appeals Procedure in the MOU more than satisfied due process requirements as Ramirez was given the opportunity to respond to the Notice of Termination in writing. Additionally, the City maintained the burden of proof at the appeal hearing while Ramirez was permitted to present evidence and cross-examine witnesses. 

    The Court ultimately affirmed the Superior Court's denial of the writ based upon interpretation of the MOU as it complies with POBRA. 

    It is important to understand that the local rules and procedures, so long as they adequately retain an officer's constitutional due process rights, govern administrative appeals. If an MOU does not order binding arbitration or grants authority to a city official rather than an arbitrator, the results of an appeal hearing through arbitration may not be binding and a city may still choose to uphold an administrative decision. 

District Court Rules Vista Fire Department Battalion Chiefs Exempt from Overtime

On September 30, 2023, the district court in the Southern District of California granted summary judgment in favor of City of Vista Fire Department and against three Battalion Chiefs for the filed a collective action pursuant to the Fair Labor Standards Act (“FLSA”) alleging the City misclassified them as exempt employees and failed to pay them overtime. The City moved for summary judgment claiming the Plaintiffs qualified as exempt employees under the executive, administrative, and highly compensated employee exemptions of the FLSA. Plaintiffs opposed the motion, arguing the Department of Labor’s “first responder regulation” under 29 C.F.R. § 541.3(b) established a bright-line rule excluding all firefighters from FLSA exemptions.

The court held that the first responder regulation did not categorically exclude all levels of firefighters from exemption. Rather, FLSA exemptions turn on the nature of an employee’s actual primary duties, and as such, the inquiry is highly fact-specific. Here, Plaintiffs spent the majority of their on-duty time performing non-manual office work, including management tasks and “special projects” related to the administration of the Department. Critically, Plaintiffs spent an average of only 1.79% of their total shift time on emergency response. Based on these facts, the court held the Battalion Chiefs were not covered by first responder regulation. The court further held that these Plaintiffs met the three requirements to be exempt under the FLSA highly compensated employee exemption. Therefore, the court granted summary judgment for the City and dismissed the case.

FACTS

The Vista Fire Department Battalion Chiefs’ Duties were Primarily Managerial

A thorough understanding of Plaintiffs’ regular duties is essential to the exemption analysis as it depends on individualized circumstances. As Battalion Chiefs, Plaintiffs ranked third in the Department’s chain of command, under the Fire Chief and two Deputy Fire Chiefs. During the discovery phase of this case, Plaintiffs affirmatively admitted that they spent the majority of their on-duty time performing office or non-manual work including management tasks and administrative “special projects.” In contrast, they spent very minimal time performing emergency response duties.

Management Duties – Plaintiffs oversaw the operations of six fire stations, supervising six Captains (one at each station) and 12 to 24 Firefighter Engineers and Paramedics, including:

• Ensuring adequate staffing to respond to emergencies;
• Checking that no employee worked unauthorized overtime;
• Ensuring Captains were following Department polices and standards;
• Monitoring and evaluating Captains’ performance and issuing disciplinary actions;
• Coaching, counseling, and/or reprimanding lower ranked firefighters;
• Completing annual performance evaluations for Captains, which impacted pay;
• Reviewing Captains’ performance evaluations of lower-ranking members;
• Conducting trainings on effective emergency response and fire suppression operations.

Special Project Duties – each Battalion Chief was assigned non-manual office work necessary for Department operations in one of three areas.

• Records management – ensuring proper recordkeeping of fire incidents; generating summaries for the Fire Chief; learning and training staff on new software.
• Purchasing equipment and supplies – maintaining inventory; purchasing replacements as needed; ensuring all firefighters were adequately outfitted with PPE; tracking access.
• Maintaining fire engines and firefighting equipment - coordinating maintenance and repairs for all fire engines, scheduling testing and repairs for equipment; obtaining necessary certifications required for the firefighters to use their equipment.

Emergency Calls and Fire Suppression Duties – Plaintiffs spent an average of only 1.79% of their total shift time spent on emergency response, and their emergency duties differed significantly from those of the frontline firefighters they supervised:

• They were dispatched to less than 4% of emergency calls;
• They had discretion to add or remove themselves to and from an emergency call;
• When they did arrive on scene, Battalion Chiefs usually did not perform frontline firefighting work. Instead, about 75% of the time they acted as Incident Commander, a managerial role monitoring equipment, surveilling communications, and directing resources and medical personnel where they were needed;
• They were periodically deployed to help other fire stations at larger fires in neighboring areas or to the Strike Team to help in areas further away.

ANALYSIS

The First Responder Regulation Does Not Categorically Bar Firefighters from Exemption

The court first analyzed Plaintiffs’ contention that the first responder regulation at 29 C.F.R. § 541.3(b) creates a bright-line rule that all firefighters are barred from exempt status regardless of the primary duties of their employment. The regulation explains that FLSA exemptions do not apply to firefighters who perform work such as “preventing, controlling or extinguishing fires of any type” because “their primary duty is not management of the enterprise.”

The court found that the first responder regulation does not override the “primary duty test” that is used to determine exempt status. The court explained the plain reading of the regulation clarifies firefighters are nonexempt “if and because their primary duty is direct physical engagement with fires.” The regulation does not state that any worker within the firefighting field is automatically nonexempt. In fact, the preamble of the regulation explicitly states that certain “high-level police and fire officials” could be exempt if their primary duty consisted of “performing managerial tasks.” Therefore, the Battalion Chiefs could not rely on the first responder regulation to claim nonexempt status, and further examination into their primary duties was necessary to evaluate their claims.

The Vista Fire Battalion Chiefs Were Exempt Highly-Compensated Employees

Finding exemption was not barred by the first responder regulation, the court next analyzed whether the Battalion Chiefs qualified for the FLSA highly compensated employee exemption. 29 C.F.R § 541.601. The court found Plaintiffs satisfied each of the three elements as follows:

1) Annual compensation of at least $107,432 annually (at the time of the suit).

2) Customarily and regularly performed any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee.  Here, Plaintiffs performed executive duties because their “primary duty [was] management of the enterprise,” they regularly directed the work of two or more employees, and their recommendations regarding hiring, firing, and changes in employment status carried weight. See 29 C.F.R. § 541.100(a)(2)-(4). The fact that Plaintiffs were not involved in some personnel duties (i.e., promotions, investigations; labor negotiations; managing budgets, hiring, firing, setting pay levels) did not overcome this relaxed duties test.  

3) Primary duties included performing office or non-manual work. Here, Plaintiffs admitted the majority of their on-duty time was spent on the managerial tasks and non-manual special projects, and only a de minimis amount of on-duty time was spent responding to emergency calls. The Battalion Chiefs’ “principal value” to the employer was in overseeing the operations and personnel of the six fire stations, not on-the-ground firefighting, and they were largely free from direct supervision.

The court frequently referenced two cases that provided guidance in its analysis. In Morrison v. Cnty. of Fairfax, VA, 826 F.3d 758 (4th Cir. 2016), the court found the fire captains were nonexempt because their primary duty was first response. On the other hand, Emmons v. City of Chesapeake, 982 F.3d 245 (4th Cir. 2020),held the battalion chiefs were exempt because they were the brain of the firefighting operation, and their primary duty was management, not frontline firefighting.

CONCLUSION

The court summarized its findings that the Vista Fire Department Battalion Chiefs were “high-level fire officials whose principal mission was to manage fire station operations and personnel to ensure their operational readiness to respond to emergencies.” These managerial primary duties removed Plaintiffs from the first responder regulation. Based on the specific facts of this case, these Battalion Chiefs qualified for the highly compensated employee exemption under the FLSA. Accordingly, Plaintiffs were not entitled to overtime pay and the court dismissed the lawsuit.

Settlement: The "Stipulation with Request for Award"

    

  This blogger greets you again, but with the topic on the most common way to settle your workers’ compensation injury, the “Stipulation with Request for Award”. But what is a “Stipulation with Request for Award” and how does it work?

    A “Stipulation with Request for Award” generally gives you a lifetime medical award (yes, until you die, even if you switch employers, retire, get fired or move out of state). However, medical care is generally limited to treatment in the insurance company’s medical provider network (MPN) subject to denials of care. Your monetary award will be limited to the value of your percentage of permanent disability (PD) which originates from the impairment assigned from the QME or AME which can be further reduced based on apportionment (how much of your disability is from work or is pre-existing or is from non-industrial factors).

    A “Stipulation with Request for Award” generally pays you the value of your percentage of permanent disability in payments of $290.00 per week (for maximum wage earners) until the sum is paid in full. Note, the payments may have started on the “permanent and stationary” date if you were not working at the time of being found “permanent and stationary” by a doctor. If you were working, you would not have received payments beginning on the permanent and stationary date, thus, retro pay may be paid to make you current and to catch up on payments that would have been paid (but were not because you were working). However, there are exceptions to this general rule on when PD payments start.

    Accrued benefits owed to you are generally paid to your attorney first (if you are represented). Sometimes the accrued PD is not enough to pay the attorney fee and in that case the insurance company will borrow money off the back end of your payments to pay your attorney. Borrowing money off the back end of your payments generally involves a 3% interest rate which is much cheaper than interest rates today. Payments to you should continue until the remainder is paid. Then, no further PD money is owed to you. However, there are exceptions to this general rule and in some cases, additional PD payments can occur.

    Why is permanent disability paid in payments? Well, permanent disability is first translated into a number of weeks of payments under Labor Codes §§ 4453 and 4658. Then, the amount paid per week is determined on your average weekly wage multiplied by two-thirds with a minimum permanent disability payment per week of $160.00 and a maximum permanent disability payment per week of $290.00. Put another way, a 12% permanent disability rating that is worth 38.25 weeks of payments, is worth $6,120.00 to a minimum wage earner and $11,092.5 to a maximum wage earner. Through this example, you can see that the same injury to a minimum wage earner is worth less compared to a maximum wage earner. This concept applies to wage loss supplemental pay as well, which we call temporary disability and highlights how the workers’ compensation system regarding indemnity discriminates based on earnings.

    In a “Stipulation with Request for Award,” you can reopen your claim within 5-years of your original date of injury if your injury worsens, thereby seeking an increase in the percentage of permanent disability. Also, within 5-years of your original date of injury, you can seek compensation for a compensable consequence (a consequential injury that would have never occurred but for the original injury). Within 5-years from your original date of injury, you can also use unspent temporary disability pay if a work comp doctor pulls you off work or gives you work restrictions your employer cannot accommodate (but that is rare if a doctor has already deemed you to be “Permanent and Stationary”).

    In conclusion, I hope this information helps you better understand how the most common settlement type (the “Stipulation with Request for Award”) works. However, please beware, much more can be settled, waived, dismissed or released in a “Stipulation with Request for Award” so you must read and fully understand everything that is agreed upon. That is why having a skilled, trained and knowledgeable attorney is important. Having a good attorney can help you secure a good QME or AME to start with and can help you secure proper compensation and medical care. 

    Mastagni Holstedt attorneys have built a track record of success at trial and on appeal in state and federal courts across California. Founded on attorney-client privilege, we have been assisting police officers, firefighters and other safety workers for decades in matters ranging from internal discipline and criminal defense to wage and hour, disability and workers’ compensation claims. If agreed upon, our office can file your claim for you, direct you to treatment, give you the best advice and see you through your injury until the end. This blog is for educational purposes only. This is not legal advice. There is no substitute for competent legal advice tailored to your specific circumstance. 

By Jonathan Drake Char, Esq. 

US Supreme Court Delivers Big Win For Police Officer in Title VII Challenge to Involuntary Transfer

 On April 17, 2023, the United State Supreme Court ruled in Muldrow v. City of St. Louis (2024) 601 U.S. 346 that to prevail in a Title VII suit, an employee must show some harm from a forced transfer, but the harm does not need to satisfy any particular level of significance. The Court held that changes to working conditions such as responsibilities, duties, schedules, and work perks were sufficient to establish an employment disadvantage. 

A St. Louis Police Department Sergeant, Jatonya Clayborn Muldrow, brought suit alleging that the Police Department violated Title VII by transferring her to another position due to her gender. Between 2008 and 2017, Muldrow worked as a plainclothes officer in the Department’s specialized Intelligence Division. In 2017, the new Division commander initiated a transfer of Muldrow out of the unit against her wished, so that she could be replaced with a male officer. The outgoing commander communicated with the new commander that Muldrow was an exemplary sergeant. The new commander testified that he deemed Muldrow’s male replacement to be a “better fit for the Division’s very dangerous work.” Additionally, the new commander repeatedly referred to Muldrow as “Mrs.” rather than “Sergeant.” 

Muldrow’s rank and pay remained the same, but her perks, responsibilities, and schedule changed. After the transfer, Muldrow no longer worked with high-ranking officials on specialized Intelligence Division priorities and instead supervised the day-to-day activities of patrol officers. Muldrow also had her FBI status and access to an unmarked take-home vehicle revoked and her schedule became less regular and included weekend shifts. 

The District Court granted the City summary judgment which was affirmed by the Eighth Circuit because Muldrow failed to show that the transfer caused her a “materially significant disadvantage.” (30 F.4th 680, 688.) Because the transfer had caused “only minor changes in working conditions” and not “a diminution to her title, salary, or benefits,” Muldrow’s suit could not proceed. 

The Supreme Court overruled the Eighth Circuit, holding that the harm required for a challenged transfer under Title VII need not be significant. Title VII makes it unlawful for an employer “to fail or refuse to hire or to discharge any individual, or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such an individual’s sex.” (42 USC § 2000e-2(a)(1).) The statutory language therefore merely required that Muldrow prove some disadvantageous change to an identifiable employment term or condition as a result of the transfer. The statute does not require that the harm be economic or tangible. 

The transferee does not have to show that the harm was significant or exceeded some heightened bar as “discriminate against” means simply to be treated worse on some basis. Nowhere in the statute is there a demand for significant harm, as was required by the Eighth Circuit. 

The City presented three arguments to justify a heightened significance standard: statutory text, precedent, and policy. The Court held that none of these arguments justified the use of such a bar. The Court rejects the statutory text argument because any harm resulting from a discriminatory employment action is united on that basis, making all effects equal regardless of significance. Additionally, past Supreme Court decisions have only imbued a significant harm standard on retaliatory employer actions serious enough to dissuade an employee from pursuing a discrimination charge. Lastly, the Court found it unpersuasive that employees would flood the courts with litigation without a significant harm standard because courts have multiple ways to dispose of meritless claims. Regardless, the Supreme Court refused to add words to the statutory language to "achieve what the City would deem a desirable result.”

This decision provides police officers additional legal basis to challenge an involuntary transfer, even without a direct loss in pay.  The Peace Officers' Procedural Bill of Rights and the Firefighters Bill of Rights guarantee California public safety employees the due process right to appeal any transfer for the purpose of discipline or resulting in the loss of pay.  However, these statutes provide limited protections for non-disciplinary transfers from desirable or career enhancing assignments that are not associated with special assignment pay. 

        As a result of this decision, an employee who is forcefully transferred to a new role because of sex, gender, race, or some other protected basis may challenge the transfer under Title VII even if there is not a direct loss in pay, so long as there was some harm to his or her employment conditions. The employee need not prove that the transfer caused a significant, serious, or substantial adverse effect, only that there was an adverse effect at all.This decision has since been cited by the Ninth Circuit and the Second District Court of Appeal of California.