Cal Supreme Court Rules Time Spent Monitoring Radios During Breaks Constitutes Work

In Augustus v. ABM , the California Supreme Court ruled that requiring security personnel to monitor radios and respond to calls during breaks meant they were not relieved of all duty and therefore still working. The court held, "During required rest periods, employers must relieve their employees of all duties and relinquish any control over how employees spend their break time."

This case was brought under California Labor Code sections and Wage Orders that require California employers to provide 10 minute rest breaks every 4 hours of work where the employees are relieved of all duties.  These authorities also require provision of a meal period which may be unpaid if the employee is "relieved of all duty."  Labor Code § 226.7 provides: “An employer shall not require an employee to work during a meal or rest or recovery period mandated pursuant to an applicable statute, or applicable regulation, standard, or order of the Industrial Welfare Commission.”  Employees are entitled to an hour of pay for violations.

ABM required employees during their breaks to keep their pagers and radio phones on, and remain vigilant and responsive to calls when need arises.   The guards claimed ABM failed to provide bona fide rest periods because they were required to remain on call during their breaks, e.g. on duty.  They were required to monitor their radios and pagers and interrupt their break to respond if a need arose.  The trial court the guards approximately about $90 million. The Court of Appeal reversed, but the Supreme Court reinstated the $90 million judgment. Our Supreme Court reasoned that the guards were still working and thus did not have full personal  use of their break time.  Because rest breaks must be compensated, "when forced to take on-duty rest periods, ―an employee essentially performs . . . 'free' work, i.e., the employee receives the same amount of compensation for working through the rest periods that the employee would have received had he or she been permitted to take [off-duty] rest periods."

While this case was brought by private sector security guards under California Labor Code and Wage Order sections, the Court's determination that time spent monitoring a radio during a break or meal period must be compensated has farther reaching impacts.  For public sector safety employees, this ruling provides strong support that unpaid meal periods where employees are required to monitor their radios violate the Fair Labor Standards Act (FLSA).  Unpaid rest breaks have been long held to violate the FLSA.

CalPERS to Lower Discount Rate to Seven Percent Over the Next Three Years

The California Public Employees' Retirement System (CalPERS) Board of Administration today voted to lower the discount rate from 7.5 percent to 7.0 percent over the next three years.  The discount rate changes approved by the Board for the next three Fiscal Years (FY) are as follows:

FY 2017-2018:     7.375%

FY 2018-2019:     7.25%

FY 2019-2020:     7.00%

Lowering the discount rate, i.e. the assumed rate of return, will result in increases in employers' normal costs and unfunded actuarial liabilities.  

According to CalPERS, the reductions will result in 1-3% rate increases of the normal cost as a percent of payroll for most miscellaneous plans, and 2-5% increases for most safety plans.  PEPRA employees hired after January 1, 2013, will also see their contribution rates rise. 

Court of Appeal: MMBA Requires Bargaining Over Binding Arbitration

In City of Palo Alto v. Public Employment Relations Board, the Court of Appeal held binding interest arbitration is a mandatory subject of bargaining under Government Code section 3507.  As a result, the Court found the City violated the Meyers-Milias-Brown Act when it pushed through a local initiative to repeal binding interest arbitration while refusing to bargain with Palo Alto Firefighters, IAFF Local 1319.  The Court upheld PERB's factual determinations and rejected the City's arguments.  The Court also directed PERB to issue a new remedial order to correct a technical issue.

Palo Alto adopted binding interest arbitration by charter amendment for public safety officers in 1978.  The charter required that a neutral arbitrator would decide disputes about wages, hours, and other terms and conditions of employment if the City and the unions reach impasse in contract negotiations.  In 2011, the City tried to take binding arbitration away so that it could unilaterally impose terms on the firefighters.

At the time, the City claimed it did not have to meet and consult with the union about the change and ignored repeated demands to bargain.  The City claimed an earlier case about binding arbitration under MMBA section 3505 meant it did not have to bargain with the union.

But the Court rejected the City's claims.  The Court decided PERB properly decided that "mandatory subjects for consultation under section 3507 are distinct from mandatory subjects of meeting and conferring under sections 3504 and 3505."  As a result, the Court held, the City had a duty to bargain with Local 1319 under 3507 even though it did not under 3505.

The Court also rejected the City's claim that bargaining under section 3507 is substantially different than bargaining under section 3505.  In its briefs, the City claimed that a "meet and consult" under section 3507 was much less robust than a "meet and confer" under section 3505.  But the Court disagreed, deferring to PERB's determination that the two processes were very similiar, if not identical.  Since the City failed to even meet with the union, the Court held the City clearly violated its duty.

The Court also directed PERB to correct its remedial order.  In its decision, PERB ordered the City to rescind a resolution floating the ordinance.  But the Court noted PERB cannot order a City to rescind a resolution, but it can declare that a resolution is void.  As a result, the Court directed PERB to issue a new order.  Accordingly, the case will go back to PERB for a further order remedying the City's violations of the MMBA.

Mastagni Holstedt attorneys David E. Mastagni, Issac S. Stevens, and Jeffrey R. A. Edwards represented Local 1319 in the appeal.  Mr. Edwards represented Local 1319 in oral argument.

LA Times Quotes David P. and David E. Mastagni on Supreme Court Pension Case

On November 22, 2016, the Los Angeles Times turned to David P. and David E. Mastagni for analysis about the pending California Supreme Court appeal in the MCERA pension case.  The LA Times asked about the Court's decision to consolidate the Marin and Alameda cases.

The Times wrote: "David P. Mastagni, who represents Alameda County deputy sheriffs in the pending case, said the Supreme Court’s decision to wait for a ruling “really to me signals they understand the gravity and significance of the issues.”

Given the complexity and importance of the dispute, he said, he was not surprised that the court of appeal has yet to schedule a hearing. The court is required to issue a decision within 90 days of a hearing.

David E. Mastagni, the elder lawyer’s son and law partner, said it was not uncommon for the California Supreme Court to postpone a decision until a lower court acts first in a similar case.

“It gives them a more complete record,” he said. “They want to have another fully developed factual background.”

The California Supreme Court has granted review in MAPE v. MCERA involving the Constitutionality of PEPRA

On November 22, 2016, the California Supreme Court issued an order granting review of the MCERA pension case.  The order stated:

"The petition for review is granted. Further action in this matter is deferred pending the decision of the Court of Appeal, First Appellate District, Division Four, in Alameda County Deputy Sheriff's Association et al. v. Alameda County Employees' Retirement Association et al., A141913 (see Cal. Rules of Court, rule 8.512(d)(2)) or pending further order of the court. Submission of additional briefing, pursuant to California Rules of Court, rule 8.520, is deferred pending further order of the court. Votes: Cantil-Sakauye, C.J., Werdegar, Chin, Corrigan, Liu, Cuéllar and Kruger, JJ."

Mastagni Holstedt, APC, represents Alameda County Deputy Sheriff's Association in the aforementioned appeal.  The ACDSA action has been consolidated with several similar PEPRA challenges.