9th Circuit: Pooling Premiums Not a Vested Contract Right

On February 13, 2014, the Ninth Circuit issued an opinion in Retired Employees Association of Orange County, Inc. v. County of Orange (2/13/2014) 9th Cir. 12-56706. The Retired Employees Association of Orange County (“REAOC”) filed a lawsuit against the County of Orange when the County decided to stop pooling retired and active employee health insurance premiums.

From 1985 to 2007, the County pooled health insurance premium rates for retired and active employees. Pooling the premiums balanced active and retiree rates and helped lower premium costs for retirees.  But on January 1, 2008, the County and various labor unions reached an agreement to reform the County’s health care program. The agreement split the insurance rate pool so active employee health benefit premiums were separate from those of retired employees.  REAOC sued, arguing the County’s longstanding practice of pooling premiums, and the County’s representations to employees regarding that practice, created an implied contract right for employees who retired prior to January 1, 2008.

California law states where a County intended to create a contractual obligation by resolution or ordinance, the contract may include implied terms derived from experience and practice. The California Supreme Court stated vested health benefits can be implied under certain circumstances from a county ordinance or resolution.

REAOC contended the County established a vested right for retirees to have their health benefit premiums pooled in the future by adopting the pooling scheme year after year. However, the Ninth Circuit held the resolutions supported enrollment in County health plans at a specific rate for a given year, but did not create a vested right to have benefit premiums pooled in the future. In other words, the Board’s approval of health premium pooling in years prior, by itself, did not create an ongoing contractual right.

Ninth Circuit Strikes Down San Diego's CCW Policy

Today, in Peruta v. County of San Diego, the federal Court of Appeals for the Ninth Circuit struck down California's law about concealed weapons permits as a violation the the Second Amendment right to bear arms.  California law says a person has to have "good moral character," complete a training course, and have "good cause" to get CCW.  Sheriffs and police departments have their own policies about when to issue the permits.

This case was about San Diego's application of the law.  In San Diego, the sheriff's department required CCW applicants to "provide supporting documentation" to show good cause.  It also said being concerned about "one's personal safety alone is not considered good cause."  The court said this policy violates the Second Amendment.

The court found, "the right to bear arms includes the right to carry an operable firearm outside the home for the lawful purpose of self-defense."  Accordingly, the court struck down San Diego's requirement that CCW applicants had to have more of a reason than self-defense.

The court stressed that its decision does not affect restrictions on carrying or possessing firearms by criminals or the mentally ill or in sensitive places, like schools.

Supreme Court Rules on Donning and Doffing

FLSA section 203(o) allows employers and unions to bargain about whether to pay employees for time spent “changing clothes” on employer.  However, courts have struggled with interpreting the meaning of “changing clothes” under the section 203(o) exception.  The question is whether “clothes” includes work-related gear not commonly regarded as clothes.  In Sandifer v. United States Steel Corporation the Supreme Court defined “changing clothes” under the FLSA to provide guidance to courts interpreting the section 203(o) exception.

In Sandifer, steelworkers challenged a provision in their collective bargaining agreement about  donning and doffing protective gear.  The steelworkers argued the Fair Labor Standards Act required them to be paid for the time.  The employer argued the steelworkers’ protective gear fell within the Section 203(o) exception, letting them bargain with the union about donning and doffing.    

The court had to decide whether the steelworkers’ gear fell within the statute’s definition of “clothes.”  The gear at issue was a flame-retardant jacket, pair of pants, hood, hardhat, “snood”, “wristlets”, work gloves, leggings, steel-toe boots, safety glasses, ear plugs, and a respirator.  The Court said “clothes” are “items that are both designed and used to cover the body and are commonly regarded as articles of dress.”  Rather than broadly defining “clothes” to include anything worn on the body, the Court distinguished between clothes and wearable items that are not clothes, such as equipment and devices.  Using this definition, most of the steelworkers’ protective gear constituted “clothes” under the statute.  But the eyeglasses, ear plugs, and respirator, were not “clothes” because they are not commonly regarded as articles of dress. 

Since not all of the steelworkers’ gear fell within the statute’s definition of “clothes”, the Court had to decide if employers and courts should separate the minutes spent donning and doffing the non-clothes items from the clothes items.  The Court said this would be tedious and impractical.  The Court’s solution was to group the items together depending on the time spent donning and doffing each article of clothing or gear. 

The Court’s opinion clarifies when employers must compensate employees for time spent donning and doffing work-related clothing and gear.  Under the Court’s meaning of “clothes,” even time spent donning and doffing unique gear can be excluded from compensation if the majority of time is spent “changing clothes.”  Using the same reasoning, if employees spend a vast majority of their time donning and doffing unique gear on the employer’s premises, the time spent changing articles of clothing may also be compensable.

Court of Appeal Re-Affirms Standard for Public Safety Officers’ Industrial Disability Retirement

Public safety officers face the threat of work-related injury every day. Many officers are forced to seek industrial disability retirement if work-related injuries prevent them from performing the required tasks of their positions. Recently, the Court of Appeal recently re-affirmed the legal standard used to determine qualification for industrial disability retirement in Beckley v. Board of Administration of California Public Employees’ Retirement System (CalPERS).

In Beckley, CalPERS deviated from the legal standard when it denied California Highway Patrol Officer Perry Beckley’s application for industrial disability retirement. CalPERS measured Beckley’s application for disability retirement against his usual duties as a Public Affairs Officer, rather than the “14 critical tasks” required of all CHP officers. But the Court of Appeal held an officer’s application for disability retirement must be measured against the officer’s job classification, not the officer’s last job assignment.

CHP has “14 critical tasks” an officer must be able to carry out to perform his or her duties. In 2006, doctors concluded Beckley's injuries prevented him performing the “14 critical tasks”. These tasks include safely extracting a 200-pound victim from a vehicle and lift, carry, and drag the victim 50 feet; physically subdue and handcuff a combative subject; change a flat tire; drive for extended periods of time; and run up and down stairs. Beckley applied for industrial disability retirement, but CalPERS denied his application. CalPERS measured Beckley’s application against his usual duties as a Public Affairs Officer, rather than against the “14 critical tasks”. 

The Court of Appeal found CalPERS applied the wrong standard for two reasons. First, the Court said “[t]ying an applicant’s entitlement to disability retirement to his last specific assignment would tend to lead to highly inconsistent results for persons in identical job categories who suffer from identical disabilities.” Second, California law requires a CHP officer to be able to perform the full range of duties of the position, and does not allow permanent limited duty positions. Thus, the Court ruled CalPERS had to honor the officer's disability retirement application.