Update on the POST Commission’s Implementation of SB 2

This article by David E. Mastagni was originally published in the Legal Defense Fund update section of "PORAC Law Enforcement News", April 2023,  pg. 37 & 38. 

(To read the article in the magazine click this link.)

As most PORAC members already know, S.B. 2 requires the Peace Officer Standards and Training (POST) Commission to implement its decertification process on January 1, 2023.  Given the short amount of time the Legislature afforded POST to enact regulations on the process, hire investigators and begin applying such a monumental change in law, many are asking how POST’s implementation is progressing.  We have some answers.

In addition to amending the Tom Bane Civil Rights Act, the primary purpose of this Bill was to establish a POST licensing regime for peace officers and decertification process that requires employee agencies to notify POST of any allegations of serious misconduct by certified officers and the outcome of the agency internal affairs investigation.  POST must conduct its own investigation or review of the agency investigation to determine if the officer’s license should be suspended or revoked.  If action is taken, POST must afford the officer multiple layers of due process.

To administer the decertification process, SB 2 mandates the establishment of the Peace Officer Standards Accountability Division within POST.  The Division must review investigations conducted by employing agencies into serious misconduct and conduct additional investigations as needed to evaluate whether potential grounds for suspension or revocation of a peace officer’s certification.  The Division also reviews grounds for decertification and makes findings as to whether grounds for action against an officer’s certification exist. Affected officers are then notified their findings and afforded the right to request review before the Peace Officer Standards Accountability Advisory Board, comprised of 9 members.  The Board holds public meetings and makes recommendations to the POST Commission regarding any action against an officer’s certification. 

Ultimately, the Commission reviews the recommendations, the entire investigatory record and any response from the officer before making a final determination whether serious misconduct has been established by clear and convincing evidence, and if so what action to take.   Any suspension or decertification must be adopted by a 2/3rds vote of the Commission. If action is to be taken against an officer's certification, the officer may commence a formal evidentiary appeal which is governed by the Administrative Procedure Act.

Reporting

Within 10 days of receipt, agencies employing peace officers must to report the allegations of serious misconduct to POST.  The notification duty may be triggered by a misconduct complaint, finding from a civilian oversight body, sustained disposition of an IA investigation, or civil judgment/settlement based on alleged serious misconduct.  Of concern, many of the serious misconduct definitions, which are set forth in Penal Code section 13510.8(b)(1)-(9), are vague and overbroad.  As a result, we expect that POST will be deluged with notices of complaints and that agencies will construe the definitions of serious misconduct disparately. 

To date, POST has received approximately 3,500 case notifications.  Of those cases, about 68% were retroactive cases. By July 1, 2023, agencies must report the above qualifying events that occurred between January 1, 2020, and January 1, 2023.  POST’s ability to suspend or revoke retroactively based on serious misconduct that occurred prior to January 1, 2022 is limited to dishonesty, sexual assault, use of deadly force resulting in death or serious bodily injury, or circumstances where the employing agency makes a final determination regarding its investigation after January 1, 2022.

Although the POST investigation will still proceed, the Bill permits officers to voluntary surrender their certificate.  So far, POST has issued 1 Voluntary Surrender.  Two (2) former officers have been placed on an ineligible status due to felony convictions, and twelve (12) Immediate Temporary Suspensions (ITS) have been issued. ITS’s have been issued for serious misconduct cases where there is a need to protect the public welfare by placing the peace officer’s certification on a temporary hold while the full adjudication process unfolds.  All permanent decertification’s are required to be made available to the public and can be found on the POST website at: https://post.ca.gov/Decertification-List.

Investigations

SB2 has given POST the authority to review investigations completed by law enforcement agencies and, as necessary, conduct additional investigation into serious misconduct that may provide grounds for action against a peace officer’s certification.  For now, POST will rely on the employing agency to conduct the investigations.  The employing agencies are responsible for conducting and completing their internal investigations, as well as any complaints which POST receives (POST will forward those complaints to the employing agencies).  Once the investigations are completed and findings issued, the information is forwarded to POST.  If additional investigation is warranted, such investigation will be conducted after the conclusion of the agency investigation.  

By statute, POBR only applies to the employing agency, and so is not required to be afforded during the POST decertification investigation.  While a legal concern, as a practical matter the exclusion of POBR should not have a significant practical impact.  The most applicable section of POBR is Government Code section 3303, which sets forth the procedural rights during an investigation.  These rights are afforded during agency investigations and POST appears inclined not to conduct its own investigations for now.  Moreover, POST has stated it will provide similar rights should it decide to interrogate an officer.  The appeal rights in POBR are unnecessary, as S.B. 2 provides for fairly comparable appeal process.

POST’s Legislative Liaison Meagan Poulos has advised that currently, “POST is reviewing and analyzing Internal Affairs cases and felony arrests, indictments and convictions received for serious misconduct.”  In order to satisfy S.B. 2’s mandated workload, POST is currently hiring law enforcement consultants who will be analyzing cases submitted to POST to determine the extent of actionable serious misconduct cases.  The State has approved POST to hire 32 such consultants to staff its Peace Officer Standards Accountability Division, as so far 14 of those positions have been filled.  Ms. Poulos has indicated that POST is working diligently to fill those positions as quickly as possible, but has experienced significant challenges in hiring, as have agencies throughout the state.  She further stated, “As an interim solution, POST is hiring Retired Annuitants who meet the Law Enforcement Consultant qualifications to help address the workload.”

Presumably, if an agency investigation clears an officer, POST should not take any action on the officer’s license.  The evidentiary standard applied by the employing agency is preponderance of the evidence, whereas the evidentiary standard for decertification is clear and convincing, which is higher.  Thus, it would seem legally impossible for POST to reach a contrary conclusion under a higher standard if the agency investigation was properly conducted.  

Another open question is how POST will treat allegations that were sustained by the agency and then overturned in an administrative appeal.  Although the statute does not directly address this issue, PORAC sponsored amendments to provide a tolling of time limitation for POST to take action during the pendency of any administrative appeal.  The intent of the amendment, coupled with an amendment requiring consideration of the entire record not just the Board recommendation, was that POST consider the outcome of any appeal.  The same consideration of the evidentiary standards applies to administrative appeals as well.

Advisory Board

The Board’s nine members are appointed by the Governor and legislative leaders. The Board is comprised of: one current or former police officer with command experience; one current or former peace officer with management rank; two members of the public with experience working at a nonprofit or academic institution; two members of the public with experience working with community-based organizations related to police accountability; two members of the public with strong consideration given to individuals who have been subjected to wrongful use of force likely to cause death or serious bodily injury by a peace officer or who are surviving family members of a person killed by the wrongful use of deadly force by a peace officer; and one attorney.

To date, there has been one appointment to the 9-member Advisory Board that will recommend license revocations to the POST Commission for consideration.   The appointed Board member is Lizzie Buchen. While serving as Director of Criminal Justice for ACLU Northern California, she passionately strived to enact legislation on use of force, as originally introduced in A.B. 931 and 392.  During my advocacy on behalf of PORAC and its membership I routinely met with Ms. Buchen and President pro Tempore of the California Senate Toni G. Atkins to discuss our competing views on the force legislation.  She was appointed to the position for a person with experience working on police accountability with community-based organizations.

As the remaining eight positions are unfilled, anyone wishing to apply for an appoint can follow this link.

Serious Misconduct Definitions

The Bill delegates authority to POST to further define serious misconduct through administrative regulations.  Several stakeholders, including PORAC, CAL Chiefs, the ACLU and public defender organizations, have submitted competing comments recommending narrowing and expanding the definitions set forth in the statute.  To date, the section 1205 regulations largely mirror the statute and POST has declined most of the recommendations it received. (11 CCR § 1205)

POST has added some important clarifications and criteria to evaluate the appropriate response to sustained serious misconduct.  For dishonesty, POST will consider whether the dishonesty related to material issue and whether the officer acted willfully, with the intent to deceive.   While these clarifications are implicit in a dishonest finding some commentators had urged POST to extend dishonest to unintentional mistakes.  Similarly for abuse of power, POST will consider the extent to which the abuse of power was a knowing abuse of the power and authority of a public office.  POST clarified that the bias definition does not limit First Amendment rights. 

Regulation section 1213, titled, “Suspension and Revocation of Peace Officer Certification” sets forth extensive criteria mostly advocated by PORAC and other law enforcement advocates the Commission will consider in deciding “whether to take action against a peace officer's certification, and in considering whether a revocation or suspension is appropriate in light of the facts of the particular case.”  Significantly the Commission will consider mitigating or aggravating factors and/or evidence of rehabilitation, disparate treatment, the severity of the conduct, the intent of the officer, and whether the misconduct was committed under color of authority, among many other factors.  This regulation is of particular importance given the overbreadth of several of the definitions, such as abuse of power and physical abuse.  

Post also set the outer limit of a suspension at 3 years.

Conclusion

The implementation of S.B. 2 and the administrative regulations is still a work in progress.  Many of the regulatory proposals regarding the serious misconduct proceedings before the Board and Commission have been amended and were considered by the Commission at its meeting on March 22, 2023.

We do know several important aspects of the implementation though.  First, the investigations into misconduct are going to largely, if not completely, be conducted by the employing agency.  POST’s hiring difficulties probably preclude parallel investigations at this time anyway. Regarding the misconduct definitions, POST has taken a caution and balanced approach by closely following the statutory definitions but also providing needed criteria for evaluating degree of action to be taken.  Lastly, we know little regarding how smoothly the appeal process will work, as no appeals are pending and the Advisory Board has not been fully appointed.  Stay tuned for updates as the process is rolled out.

Mastagni Law Firm Won Ruling that Cathay Pacific Pilots Are Not Exempt “Professionals” Under California Wage and Hour Laws

 In 2018, Mastagni Holstedt, A.P.C., filed a class action lawsuit on behalf of five pilots and other similarly situated individuals against their employers, Cathay Pacific Airways Ltd. and U.S.A. Basing Ltd. (“Cathay”), seeking unpaid overtime wages, minimum wages, meal periods and rest break payments, waiting time penalties, and other penalties. While working for Cathay, these pilots flew transatlantic flights to and from Hong Kong out of their home bases in San Francisco and Los Angeles. They were required to perform pre-flight and post-flight duties throughout their employment without being compensated for their time. The pilots also did not receive overtime or double-time, despite the fact that their regular flight took approximately 14 hours.  

In California, pilots’ compensation requirements are governed by Wage Order 9, which has adopted the U.S. Department of Labor’s (“D.O.L.”) Administrative, Executive, and Learned Profession Exemptions as were in effect in 2001. Previously, the Plaintiffs obtained published rulings that the Plaintiffs were subject to California labor law because they were home based in California, even as to work performed outside California’s borders. The California Supreme Court ultimately confirmed the District Court’s ruling.

On January 18, 2023, Cathay filed a motion for summary adjudication, based on its last remaining affirmative defense, claiming Plaintiffs were exempt from California’s Labor Code under California’s “Learned Professional Exemption.” The Plaintiffs filed a cross-motion arguing against the application of the exemption. In part, the Plaintiffs argued that the 2001 version of 29 C.F.R. § 541.301, is inapplicable because the exemption “customarily” requires attaining a college or advanced degree as a standard prerequisite to satisfy the first prong of the exemption. Neither Cathay nor the applicable licensing standards require even a high school diploma to be a pilot, notwithstanding the requisite technical skills typically acquired through flight experience and instrument ratings. Plaintiffs also argued Plaintiffs do not spend the majority of their time performing exempt tasks requiring intellectual learning or independent judgment.

On April 3, the Court issued its ruling, granting the Plaintiffs’ motion for summary adjudication and denying Cathay’s. Through this ruling, the Court knocked out Cathay’s last major affirmative defense in this case. The Court concluded that the Plaintiffs are not exempt from California’s wage and hour protections. The Court stated, “[n]o one disputes the importance of a commercial pilot’s work or the weight of their responsibility. Nor does anyone dispute that their expertise is highly technical and even specialized. But no reasonable juror could conclude that the airline pilots, in this case, meet the definition of a learned professional set forth in Wage Order 9 and 29 C.F.R. § 541.301.”

The Court agreed with the Plaintiffs that “learned professions are those that ‘customarily’ entails ‘an advanced academic degree [a]s a standard (if not universal) prerequisite.’ 29 C.F.R. § 541.301(e)(1); see also 29 C.F.R. § 541.301(d) (explaining that the word ‘customarily’ is used to ‘meet a specific problem,’ that is, to account for the rare professional who attains the same level of knowledge as their peers through means other than the usual formal education).”  The Court noted that neither the “Airline Transport Pilot License, the F.A.A.’s highest level of certification attainable by commercial pilots,” nor Cathay “require an advanced degree or even a high school diploma as a condition of employment.”

The Court concluded that pilots’ extensive training consists “primarily of flight hours and other practical experience, not extensive intellectual study.” Further, the Court determined Plaintiff’s job duties were “not primarily intellectual in character.” The Court concluded that “[a]lthough commercial pilots are occasionally called upon to exercise discretion and independent judgment, most commercial flights are routine if not largely automated.”

This ruling is significant because the dispute over the application of the Learned Professional Exemption is an issue of first impression in the Ninth Circuit. A Circuit split over whether pilots meet the learned professional exemption exists between the Third and Fifth Circuits. While taking a position of non-enforcement, the D.O.L. has indicated in administrative guidance that the exemption does not apply to pilots. District Court Judge Vince Chhabria found the D.O.L. analysis more persuasive than the Fifth Circuit precedent, marking a significant win for airline workers in California.

A Decade of PEPRA: Bargaining for Classic and PEPRA

      

January 2023 marked a decade of the California Public Employees’ Pension Reform Act (PEPRA), which changed the way CalPERS retirement and health benefits are applied and placed compensation limits on employees who entered the pension system as PEPRA members.

As we have passed the ten-year mark since the implementation of PEPRA, we are seeing the number of PEPRA employees in the workforce grow significantly. Many associations are reaching a membership makeup of fifty percent or more of PEPRA-classified employees, meaning the vote of the PEPRA membership is quickly becoming the majority vote.

 Why is this significant?

               There are significant differences between the Classic and PEPRA retirement benefits. PEPRA changed the retirement formula to require employees to work till age 57 in order to maximize their retirement benefits. While some employers contracted with CalPERS at a reduced PEPRA benefit, the maximum benefit under PEPRA is 2.7% at 57. The minimum retirement age remained at 50. However, PEPRA employees who retire at 50 with at least 29 years of service will only receive approximately 58% of their 36-month average in retirement payments. At the same time, Classic members who retire at 50 with 30 years of service will receive 90% of the 12-month or 36-month compensation average. The average for Classic members can vary from 12 months to 36 months, depending on the employer’s contractual agreement with CalPERS. For PEPRA members to reach the 90% range, an employee will have to work until they are 57 with 34 years of service. For PEPRA employees to hit the 90% range and retire at age 57, as seen with the Classic retirement formulas, a PEPRA employee will have to enter the retirement system on or before their 23rd birthday.  

               Another significant difference between Classic and PEPRA retirement benefits are the compensation limits. Gov. Code §7522.20 sets annual compensation limits for PEPRA members. The 2023 compensation limits are $146,042 for employees who are Social Security participants and $175,250 for employees who are non-Social Security participants. This means any compensation earned over the annual compensation limit is not reported to CalPERS as compensable income to be calculated in the employee’s 36-consecutive month employment period. Classic members’ reportable compensation limits are set under IRC section 401(a)(17). The 2023 reportable compensation limit for Classic employees is much higher than PEPRA members and stands at $330,000. Some PEPRA public safety employees have or will start nearing the annual compensation limits. Therefore, PEPRA members not only have to work longer with a reduced retirement benefit, but are also more likely to hit the annual compensation limits, which in turn further reduces their retirement benefits. 

               The differences in retirement benefits can create a divide in interests within association memberships. PEPRA public safety employees who are nearing the annual compensation limit may begin to veer away from bargaining income reportable to CalPERS in an effort to keep from exceeding the compensation limit. However, this strategy negatively impacts the Classic employees, who continue to benefit from increasing their reportable compensation.

Bargainable Solutions                                                                                                                      

One way to address the compensation limits and equalize retirement benefits is to bargain supplemental retirement benefits such as deferred compensation plans and Retiree Health Savings Accounts. In scenarios where the PEPRA employees are nearing their annual compensation limit, consider bargaining deferred compensation plans for PEPRA members only to deposit retirement contributions beyond the compensation limits. This will encourage PEPRA employees to continue to bargain for reportable compensation as it will provide alternative solutions for PEPRA members once they reach the annual compensation limit.

               Another concept to consider is bargaining enhanced benefits with CalPERS. Employers were provided multiple retirement formulas to be adopted under PEPRA. Employers were required to adopt a formula closest to, but lower than, the current formula offered to employees at 55 years of age (PERL § 7522.25 (e)). This resulted in a number of employers adopting a retirement formula of less than 2.7% at 57. If your employer offers a formula less than 2.7% at 57, you can bargain an increased benefit formula prospectively. However, the retirement formula proposed and agreed upon must be permitted under PERL Sections 7522.20 and 7522.25. The employer must request a contract amendment with CalPERS, and CalPERS will ultimately determine if the requested amendments are allowable.

               Lastly, consider proposals supporting long-term health for both Classic and PEPRA employees. For PEPRA employees, extending the retirement benefits to 2.7% @ 57 prolongs employees’ exposure (or years) to the risks of a job in public safety. This further increases the probability of a public safety employee sustaining some job-related injury or death. This increases the risk of Workers’ Compensation claims for the employer, reduces the likelihood of employees being able to work till retirement age to maximize their benefits, and increases the risk of early death. This also prolongs an employee’s exposure to critical incidents, negatively impacting their mental health and well-being. Additionally, it creates an environment where public safety becomes a less attractive job. This can be addressed by bargaining for wellness programs, annual health evaluations, baseline health measurements, exposure monitoring, critical incident de-briefing, and increasing employee assistance programs.

               A decade has taught us a lot about PEPRA’s short comings. It is important to remember to stay united and that there are ways to strategically bargain benefits that help all members.