Monday, October 31, 2011

Court of Appeal Denies CalPERS Credit for Lump Sum Back Pay

In Molina v. Board of Administration (2011) 2011 WL 4491809, the Second District Court of Appeal rejected an employee's argument that back pay should be counted toward service credit under the Public Employee's Retirement Law (PERL).  After Molina was terminated from his job with the City of Oxnard, he filed an action for wrongful termination and subsequently settled for a lump sum.  Following the settlement, Molina requested CalPERS increase his pension entitlement, characterizing the settlement amount as “back pay.”  However, CalPERS refused to recognize the settlement amount as earnable compensation and denied his request.

The Court held the settlement amount could not count towards the employee’s “compensation earnable” because it did not meet PERL’s requirements to be “payrate” or “special compensation.”

Payrate must “either: (1) [be] paid to similarly situated employees; or (2) [be] paid in accordance with a ‘publicly available pay schedule for services rendered on a full time basis during normal working hours.’ (Gov. Code, § 20636, subd. (b)(1).)”

To qualify as special compensation, one must show the pay “(1) was available to similarly situated employees under a labor policy or federal requirement; or (2) was determined by the CalPERS Board to have been available to other, similarly situated employees as required by PERL. (Gov.Code, § 20636, subd. (c)(2); 2 Calif. Code of Regs., § 571(b)-(d).”

The Court noted CalPERS had advised Molina and the city "that a portion of the settlement payment could potentially be eligible for inclusion in Molina's pension, but only if Molina were reinstated for  a full year in a valid position under a legitimate salary based on a salary schedule."   That never happened.  As a result, the Court rejected Molina’s appeal, leaving his existing pension calculation unaltered.

Thursday, October 27, 2011

Governor Releases "Twelve Point Pension Reform Plan"

On October 27, 2011, Governor Edmund G. Brown Jr. released his 12 proposed major reforms for state and local pension systems. The governor stated the proposals “would end system-wide abuses and reduce taxpayer costs by billions of dollars over the long term” and cut in half the cost to tax payers of state employee pensions.

The “Twelve Point Pension Reform Plan” and its explanation are set forth as follows:

1. Equal Sharing of Pension Costs: All Employees and Employers: Will require that all new and current employees transition to a contribution level of at least 50 percent of the annual cost of their pension benefits.

2. “Hybrid” Risk-Sharing Pension Plan: New Employees: The “hybrid” plan will include a reduced defined benefit component and a defined contribution component. The hybrid plan will be combined with Social Security to provide an annual retirement benefit of about 75 percent of an employee’s salary. The 75 percent target is based on 30 years for safety employees and 35 years for non-safety.

3. Increase Retirement Ages: New Employees: For most new employees, retirement ages will be set at the Social Security retirement age, now 67. The retirement age for new safety employees will be less than 67, but commensurate with the ability of those employees to perform their jobs.

4. Require Three-Year Final Compensation to Stop Spiking: New Employees: Eliminates one-year rule to discourage efforts in the last year of employment to increase the compensation used to determine pension benefits.

5. Calculate Benefits Based on Regular, Recurring Pay to Stop Spiking: New Employees: Will require that compensation be defined as the normal rate of base pay, excluding special bonuses, unplanned overtime, payouts for unused vacation or sick leave, and other pay perks.

6. Limit Post-Retirement Employment: All Employees: Will limit all employees who retire from public service to working 960 hours or 120 days per year for a public employer. It also will prohibit all retired employees who serve on public boards and commissions from earning any retirement benefits for that service.

7. Felons Forfeit Pension Benefits: All Employees: Will require that public officials and employees forfeit pension and related benefits if convicted of a felony in carrying out official duties, in seeking an elected office or appointment, or in connection with obtaining salary or pension benefits.

8. Prohibit Retroactive Pension Increases: All Employees: Will eliminate unfunded liability from increased pension benefits.

9. Prohibit Pension Holidays: All Employees and Employers: Will prohibit all employers from suspending employer and/or employee contributions necessary to fund annual pension costs to avoid repeat of past where many public employers stopped making annual pension contributions during wall street boom years.

10. Prohibit Purchases of Service Credit: All Employees: Will avoid the investment risk associated with allowing purchase of service credit for time not actually worked.

11. Increase Pension Board Independence and Expertise: Will add two “independent” persons with financial expertise to the CalPERS Board and require that persons and their family are not eligible for CalPERS pension. Will also replace State Personnel Board representative on the CalPERS board with the Director of the California Department of Finance. Intended to achieve greater independence and greater sophistication.

12. Reduce Retiree Health Care Costs: State Employees: New state employees will be required to work for 15 years to become eligible any retiree health care and required to work for 25 years to become eligible for the maximum state contribution. Will encourage local governments to make similar changes.

These proposals will have to be debated and passed by the California Legislature before Governor Brown can sign them into law.

Tuesday, October 25, 2011

ATF Issues Open Letter on Firearms and Medicinal Marijuana

The federal Bureau of Alcohol, Tobacco, Firearms and Explosives issued an open letter to "All Federal Firearms Licensees" outlining the relationship between federal firearms regulations and state marijuana laws.  The letter explains federal law codified at 18 U.S.C. § 922(g)(3) prohibits unlawful users of controlled substances from possessing firearms or ammunition.  Federal law also makes it unlawful to sell firearms or ammunition to someone about whom there is reasonable cause to believe uses or possesses controlled substances, such as marijuana.  Therefore, the letter concludes, it is unlawful under federal law for medicinal marijuana card holders to buy or possess firearms or ammunition, regardless of a particular state's laws.

Wednesday, October 19, 2011

Court Reaffirms Peace Officers' Constitutionally-Protected Right to Privacy While Partially Undressed

Following the Ninth Circuit, the Court of Appeals for the Third Circuit found a female deputy sheriff had a reasonable expectation of privacy while partially undressed and undergoing a decontamination process.  Doe, a deputy sheriff in Luzerne County, Pennsylvania was surreptitiously filmed by a male officer while undergoing decontamination. The male officer uploaded the video onto his work computer and called several officers into his office to view the footage.   He then put in on a county-wide server.  Doe filed a 1983 action against the county and the officer, alleging violations of her right to privacy under the Fourteenth Amendment and her right to be free from unlawful searches and seizures under the Fourth Amendment.

The trial court granted the county's motion for summary judgment. The Third Circuit reversed on the Fourteenth Amendment claim and affirmed on the search and seizure claim.  After looking to other circuits, the court concluded a deputy sheriff has a constitutionally-protected privacy interest in his/her partially clothed body. The court noted:

Although the issue of whether one may have a constitutionally protected privacy interest in his or her partially clothed body is a matter of first impression in this circuit, other circuits—including the Second, Sixth and Ninth Circuits—have held that such a right exists. See, e.g., Poe v. Leonard, 282 F.3d 123, 136–39 (2d Cir.2002) (finding that plaintiff, a female civilian who was participating in a police training video, alleged sufficient facts to raise a triable issue of whether her constitutional right to privacy was violated where the male police officer surreptitiously filmed her in the dressing room while topless and without a bra); York v. Story, 324 F.2d 450, 454–56 (9th Cir.1963) (finding that the plaintiff properly stated a claim for a violation of her constitutional right to privacy where she alleged that, while reporting a sexual assault, a male police officer deceived her into permitting him to photograph her genitals and exposed breasts under the pretext of an investigation), cert. denied, 376 U.S. 939, 84 S.Ct. 794, 11 L.Ed.2d 659 (1964); Brannum v. Overton Cnty. Sch. Bd., 516 F.3d 489, 497–98 (6th Cir.2008) (finding a privacy violation where a middle school's surveillance cameras recorded the plaintiff students in their undergarments while in the school locker room)
(Doe v. Luzerne County (3d Cir., Oct. 12, 2011, 10-3921) 2011 WL 4823387.)

The court concluded the male deputy’s filming did not implicate the Fourth Amendment because it was conducted for personal reasons.

Monday, October 17, 2011

Court of Appeal Permits Waiver of POBR Rights In Limited Circumstances

In Lanigan v. City of Los Angeles (Cal. Ct. App., Oct. 4, 2011) 2011 WL 4552533, the Court of Appeal for the Second District overturned the trial court, finding POBR protections can be waived in a minority of discipline cases. The case concerned a Los Angeles police officer facing several serious discipline charges resulting from his treatment of an officer from another department. The Department proposed termination and the officer entered into a detailed settlement agreement under which he was reinstated.  He also agreed to specific future discipline in the event of additional disciplinary charges being filed against him for harassing or failing to cooperate with officers of an outside agency, and agreed to waive several of his rights under POBR.

Within a year, the officer again faced discipline charges for providing false information and failing to cooperate with an LASD officer.  In response, the Department processed his resignation pursuant to the settlement agreement.  He petitioned for peremptory writ of mandate to obtain judicial review of the LAPD’s decision. The lower court issued a writ ordering the city to set aside its acceptance of the officer's resignation and reinstate him to his position.

The Court of Appeal overruled the trial court, but acknowledged the provisions of POBR are not subject to a blanket waiver because POBR was established for a public purpose. Instead, the Court looked to the California Supreme Court's ruling in County of Riverside v. Superior Court (2002) 27 Cal.4th 793 and concluded a waiver of POBR rights could be permitted in certain unusual circumstances. In this case, the Court noted the officer did not waive all of his POBR rights and his waiver applied to discipline for a specific type of alleged misconduct. The Court also emphasized the original settlement was in lieu of almost certain termination.

This case primarily concerned statutory rights.  Other pre-termination rights have a federal constitutional dimension that presents additional barriers to waiver.  In Walls v. Central Contra Costa Transit Authority (9th Cir. 2011) 653 F.3d 963, the court found a public employee had not waiver his Skelly rights.  The court noted "federal courts 'indulge every reasonable presumption against waiver of fundamental constitutional rights' and 'do not presume acquiescence in the loss of fundamental rights.'" The court therefore concluded "a waiver [of the right to a pre-termination hearing] should not be implied and should not be lightly found."

Monday, October 10, 2011

Neutral Fact-finding Now Required Before Public Agencies Can Impose on Employees

Governor Brown strengthened collective bargaining rights for local public employees by signing A.B. 646 which establishes new minimum impasse procedures for contract negotiation. Prior to this enactment, public employers could declare impasse and impose terms and conditions on employees with few safeguards. In the current economic climate, management negotiators and representatives often hurry to reach impasse and impose cuts on employees, despite their statutory obligation to meet and confer in good faith. Meeting and conferring in good faith does not require agreement, but does require that the parties endeavor to reach agreement and share information.

A.B. 646 will facilitate good faith negotiations by providing for fact-finding, essentially a form of non-binding interest arbitration. The new process will reduce the incentive for agencies to go through the motions of negotiations with a pre-determined intent to declare impasse and impose terms by requiring both parties to justify their positions, share information, and providing for findings and recommendations. Fact-finding is intended to move the parties toward agreement, but also provides a valuable tool to illuminate bad faith bargaining.

The bill provides that if a mediator is unable to resolve the negotiations impasse after 30 days, the employee representative may initiate fact-finding. Within 5 days of the request for fact-finding, each party must select a panel member and PERB selects a panel chairperson. Within 10 days after its appointment, the panel is to meet with the parties, make inquiries and investigations, hold hearings, and take any other necessary steps. It has the power to issue subpoenas to compel testimony and production of evidence. Public employers are required to provide the panel all records, papers, and information relevant to the investigation.

The fact-finding panel then issues findings and recommendations which consider:
1) the application of laws to the employer;
2) local rules and regulations;
3) stipulations of the parties;
4) the public and employers finances;
5) comparables (compensation and working conditions in comparable agencies);
6) the consumer price index;
7) current overall compensation; and
8) any other facts traditionally taken into consideration in fact findings.

The fact-finding panel must make written findings of fact and recommendations of settlement that are advisory only. The cost of the process is bourne equally between the parties. If the agency’s Charter does not require proceeding to interest arbitration, the employer may then impose its last, best, final offer. The employer may not impose a Memorandum of Understanding, and remains obligated to meet and confer with the employee representative each year on matters within the scope of representation, regardless of whether the imposed terms cover those matters.

Court of Appeal Upholds Furloughs for Correctional Officers

In Brown v. Superior Court of Alameda (1st DCA, Oct. 3, 2011, A127292) 2011 WL 4537946, the Court of Appeal overturned CCPOA's trial court victory, holding self-directed furloughs under two executive orders did not violate California Labor Codes prohibiting “kickbacks” by employers or minimum wage laws.

CCPOA attempted to nullify self-directed three-day/month furloughs. Under the orders, employees were permitted to take the furloughs whenever they preferred. If the employees did not use the three furlough days by the end of the month, the days were to be used at a future date, prior to the employee using any form of paid leave. The furlough days needed to be used prior to June 2012 or they would be eliminated. CCPOA claimed the State was essentially asking its members to work for free.

The Court found the Governor had a right to impose the furloughs as the agencies which members of CCPOA worked for were included in the 2008 and 2009 Budget Acts, which were approved by the Legislature, and were part of the extended furlough program. The Court also found the manner in which the furloughs were implemented did not violate applicable California Labor Codes as employers were not taking “kickbacks” from employees or secretly paying them less. The court also found the furlough program did not violate minimum wage laws. The Court also overturned the trial court’s order for back pay for union members.

Wednesday, October 5, 2011

City Charter Bars Discipline For Accused Firefighters

Recently, Los Angeles City firefighters have been under investigation for allegedly permitting filmmakers to use an engine as the backdrop for a short film.  However, the alleged violations occurred more than two years ago.  In Los Angeles, that means the firefighters cannot be subjected to discipline because of important protections in the City Charter.  The Los Angeles City Charter provides that "charges must be filed within one year of the department’s discovery of the act committed or omitted by a member and in no event later than two years from the date of the act or omission."  (Los Angeles City Charter, art. X, section 1060(a) (emphasis added).)

The Firefighters Procedural Bill of Rights Act, like POBR, has a one-year limitation period with several exceptions.  Most prominently, the one-year period does not begin until a Department discovers the alleged misconduct.  The two-year limit in Los Angeles, however, does not contain these exceptions.  As a result, firefighters there cannot suffer discipline for alleged misconduct that was not serious enough to raise attention at the time and they do not have to reconstruct long-forgotten details and evidence in order to defend themselves.