Make-Whole Remedy Includes "Direct and Foreseeable" Financial Losses In Addition to Back Pay

    On December 13, 2022, the National Labor Relations Board (“Board”) expanded the available remedies for unfair labor practices (ULP) based on discrimination or retaliation.  The International Brotherhood of Electrical Workers, Local 1269 (“Union”) filed a ULP against Thryv, Inc. (“Thryv”) over the imposition of layoffs without providing requested information and satisfying its bargaining obligations. In Thryv, Inc., Case 20-CA-250250, the Board held that as part of the make-whole remedy, employers must provide make-whole relief for "direct or foreseeable" monetary harms resulting from the ULP, such as reasonable search for work and interim employment expenses.  These damages must be provided in addition to, and deducted from back pay, interest must be provided and the employer must bear any adverse tax consequences from a lump sum award and report those earnings over the calendar years the wages would have been earned.  

     Thryv began the process of laying off all of its New Business Advisors in the Northern Californian Region in July of 2019 when it transferred two New Business Advisors to a different division so that they could be kept on after the layoffs. On August 21, 2019, Thryv emailed the Union stating it would lay off six New Business Advisors effective September 20. The following day, the parties agreed to meet and confer on September 11 and 12. However, on September 5 Thryv informed the Union it would inform the employees of their termination the following day, which it did.

    During the meet and confer process, the Union made multiple information requests regarding the affected employees’ accounts. The ALJ, and the Board, determined the information to be presumptively necessary, and Thryv committed an unfair labor practice by refusing to disclose it in violation of the National Labor Relations Act (“Act”). Moreover, because the Union needed the information to effectively bargain, it did not waive its rights by not presenting counter-proposals. The Board further found Thryv also violated the Act by unilaterally laying off six employees while presenting its proposal to the Union as a fait accompli, and while in the process of negotiating a new collective bargaining agreement. 

    Importantly, the Board clarified its practice of ordering relief that ensures affected employees are made whole for the consequences of an employer’s unlawful conduct. It concluded that all orders for make-whole relief going forward will expressly order the employer compensate affected employees for all direct or foreseeable pecuniary harms suffered as a result of the unfair labor practice. It clarified that all harms must be specifically calculated and requires the General Counsel to present evidence demonstrating the amount of harm, the direct or foreseeable nature of the harm, and why the harm is due to the unfair labor practice. Moreover, the employer will then have the opportunity to present evidence challenging the amount of money claimed, the direct or foreseeable nature of the harm, or argue that it would have occurred regardless of the unfair labor practice.

    The Board supported its expansion of its standard make-whole remedy by citing its broad discretionary authority to “take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of this Act.” (29 U.S.C. § 160(c).) It noted that the Board in the past has awarded relief for pecuniary harms resulting from an unfair labor practice. The Board concluded that standardizing its make-whole remedy to expressly include the direct or foreseeable pecuniary harms suffered by affected employees was necessary to better effectuate the make-whole purposes of the Act. 

    Although NLRB decisions are not binding on California public employees, PERB and the California courts give great weight to NLRB decisions as persuasive authority, as California's labor statutes are modeled after the NLRA.  This expanded definition of the remedy for employee wrongfully separated from employment also has application to disciplinary appeals where reinstated employees not only lost wages, but also suffered out of pocket medical expenses, travel expenses, tax account refiling costs, interest on credit card debt, etc.  This ruling provides important analysis of the scope of make-whole labor remedies.    

Federal Judge Permanently Enjoins California Fee-Shifting Law Against Plaintiffs Bringing Second Amendment Challenges

In a major victory for the First Amendment right to petition the courts to enforce Constitutional Rights, U.S. District Court Judge Roger Benitez permanently enjoined enforcement of California Code of Civil Procedure § 1021.11 which imposed attorney fee liability on any litigant and their lawyers who unsuccessfully challenge the Constitutionality of any California gun law.  Miller v. Bonta held the legislation was a naked attempt suppress judicial review and access to the courts.  The California law was modeled after a Texas statute restricting access to abortion.

The court applied California's objections to the Texas law equally to Section 1021.11: “‘It is cynical.’ ‘It is an abomination.’ ‘It is outrageous and objectionable.’ ‘There is no dispute that it raises serious constitutional questions.’”  Interestingly, Governor Newsome applauded the ruling despite signing the law.  “I want to thank Judge Benitez,” said Newsom. “We have been saying all along that Texas’ anti-abortion law is outrageous. Judge Benitez just confirmed it is also unconstitutional.”

The strongly worded ordered stated, “[a] state law that threatens its citizens for questioning the legitimacy of its firearms regulations may be familiar to autocratic and tyrannical governments, but not American government.”  The court criticized Section 1021.11 as threatening "a lopsided, unorthodox attorney’s fee-shifting scheme which ensures the citizen cannot win and may be forced to pay for the government’s attorney’s fees.” The First Amendment protects the right to petition the courts to challenge unconstitutional infringements of other Constitutional rights.  The court noted a long line of precedent holding “the right to sue and defend in the courts is the alternative to force.” The court concluded, “[b]y deterring citizens and coercing attorneys from accessing the courts for relief from constitutionally questionable laws, § 1021.11 severely chills both First Amendment rights and Second Amendment rights.” 

The court also held the fee-shifting provision violates the Supremacy Clause of the Constitution by attempting to nullify 42 U.S.C. § 1988, a civil rights statute that is intended to encourage the protection of constitutional rights by rewarding plaintiffs who successfully challenge constitutionally defective statutes.  The statute also prohibits the government from seeking fees against the plaintiff unless the claim was “vexatious, frivolous, or brought to harass or embarrass the defendant.”  The California law seeks to reverse 1988 by holding a prevailing plaintiff is never entitled to fees and the state is always entitled to fees when it prevails, even if the claims were not frivolous. 

This ruling removes a significant impediment for law enforcement organizations to Challenge threatened legislation that would impinge a host of Second Amendment rights, including erosion of officers' self-defense rights, imposition of strict liability for the use of firearms, and firearm insurance mandates.  

First Responder’s Workers’ Comp Rights Expanded in 2023

In a decisive victory for California’s first responders, Governor Gavin Newsom signed SB 1127 on September 29, 2022. This bill makes three improvements to the California workers’ compensation system. First, SB 1127 shortens the window for employers to determine liability on claims for injuries suffered by first responders from 90 days, to 75 days. This means that employers will have less time to accept or deny a presumptive injury claim for certain illnesses including cancer, hernias, heart trouble, pneumonia, blood-borne infections, meningitis, and tuberculosis. This shortened window also applies to low back injuries arising from duty belts worn by peace officers.  

Next, SB 1127 allows firefighters and peace officers to receive up to 240 weeks of temporary disability benefits for presumptive cancer claims, rather than the 104 weeks of temporary disability available to other injured workers. This change from 104 weeks of temporary disability within five years from the date of injury to a total of 240 weeks during the entire period of the claim means that temporary disability benefits do not have to be received within five years from the date of injury. This increase in temporary disability eligibility applies to Labor Code § 3212.1 cancer claims that arise on or after January 1, 2023.

Finally, this bill increases the penalty for employers who unreasonably deny any presumptive injury claim arising under California Labor Code §§ 3212 through 3213.2 from $10,000 to a maximum of $50,000. However, SB 1127 does not define what constitutes an “unreasonable denial,” so the Workers’ Compensation Appeals Board will determine the reasonableness of a denial in the context of each case.  

On the same day, Governor Newsom also signed AB 1751, which represents another improvement in the workers’ compensation system for certain types of California’s public safety employees. This bill extends the presumption of injury for COVID-19 workplace outbreaks from January 1, 2023, to January 1, 2024; this presumption includes illness or death resulting from COVID-19 contracted during the course of employment. At the same time, AB 1751 expands the types of employees who qualify for the presumption to include active firefighting members of a fire department at: (1) the Department of State Hospitals; (2) the State Department of Developmental Services; (3) the Military Department; and (4) the Department of Veterans Affairs. Officers of a state hospital under the jurisdiction of the State Department of State hospitals and the State Department of Developmental Services are also included.   

Ultimately, SB 1127 demonstrates a public policy emphasis on quickly investigating and providing treatment for presumptive injury claims brought by California’s first responders. Expanding temporary disability benefits to 240 weeks, while limited to cancer claims, is a yet another positive shift in existing law. AB 1751 demonstrates that the state is still grappling with the effect of COVID-19 in the workplace and has now included additional types of public safety employees who qualify for the COVID-19 presumption.  

D.C. Circuit Rejects Police Union’s Challenge to Emergency Legislation Impairing the Right to Bargain over Discipline Procedures

A District of Columbia police union lost its appeal challenging a 2020 police reform measure which states "matters pertaining to the discipline of sworn law enforcement personnel shall be retained management and not be negotiable."  The new law breaks with decades of collective bargaining rights to negotiate over disciplinary procedures and due process for all represented employees.  In Fraternal Order of Police v. District of Columbia, 2022 WL 3568866, the Fraternal Order of Police, Metropolitan Police Union (“FOP”) raised Constitutional challenges alleging the Reform Act violated the Equal Protection, Bill of Attainder, Contract, and Fifth Amendment Due Process Clauses of the United States Constitution. 

Like in California, D.C. unions derive their bargaining rights from statute. D.C.’s Comprehensive Merit Personnel Act (“CMPA”) authorizes the Metropolitan Police Department to unionize and engage in collective bargaining. The CMPA provides “[a]ll matters shall be deemed negotiable,” except for rights reserved to management, including the right to “suspend, demote, discharge, or take other disciplinary action against employees for cause.” The CMPA gives management full discretion over disciplinary actions of officers, but allows for negotiations over the procedures for adjudicating such actions.

Metropolitan Police Department’s 2017 collective bargaining agreement (“2017 Agreement”) contained provisions on disciplinary procedures. Article 12 specified these provisions “shall be incorporated” into successor agreements unless modified by either a joint labor-management committee or an arbitration panel. Two months before the 2017 Agreement expired, the D.C. Council passed emergency legislation providing for police reform (“Reform Act”) in reaction to the death of George Floyd. Section 116 of the Reform Act temporarily amends the CMPA to eliminate the right of police unions to bargaining over disciplinary procedure. The amendment applies to “any collective bargaining agreement entered into with the [FOP] after September 30, 2020."

The FOP sued to enjoin enforcement of Section 116. The District Court dismissed the suit for failure to state a claim, and the D.C. Court of Appeal affirmed.

Equal Protection Challenge

The FOP first raised an equal protection challenge. The Equal Protection Clause provides, “[n]o State shall… deny to any person within its jurisdiction the equal protection of the laws.” U.S. Const. amend. XIV. The FOP argued Section 116 violates equal protection because it irrationally discriminates between police officers and similarly situated government employees.

The court held a statute that covers some occupations but not others, if it neither burdens fundamental rights nor makes suspect classifications such as race, does not violate equal protection if the distinction is rationally related to a legitimate state interest. The court noted under rational basis review, classifications have a strong presumption of validity. The challenging party has the burden of negating every conceivable basis that might support the classification.

The court found the FOP did not meet that burden because the D.C. Council could rationally have concluded increasing management control furthers a legitimate interest in improving police accountability. It further noted the legislature’s lack of findings supporting its choice was not dispositive because the legislature’s actual motive in passing a statute is irrelevant. What matters is whether there are “plausible reasons to conclude that statutory classification furthers legitimate government interest.” That standard was met here. The court noted that the distinction between police officers and prison guards or protective services could rationally be supported by the belief that police are a more pressign concern because they deal directly with the public. 

Importantly, the rational basis standard applied by the court would not apply to a statute affecting a particular group’s fundamental right, such as the right to self-defense.

Bill of Attainder Challenge

The FOP next claimed Section 116 constitutes a bill of attainder. The Bill of Attainder Clause prohibits the passage of bills of attainder, which are laws that inflict punishment upon an identifiable group of people without the protections of a trial. U.S. Const. art. I, § 9, cl. 3. The FOP argued the amendment is a bill of attainder because it singles out “sworn law enforcement officers” for negative treatment, and mentions the FOP by name. The court disagreed.

To determine whether an alleged bill of attainder imposes punishment, the court analyzed whether 1) the challenged statute falls within the historical understanding of legislative punishment; 2) the statute reasonably furthers nonpunitive legislative purposes; and 3) the legislative record shows an intent to punish. The court found Section 116 does not fit within a historical meaning of legislative punishment, since bills of attainder were traditionally used to sentence specific individuals to death. Further, it found Section 116 was not so disproportionate to the stated goal of enhancing police accountability that it constituted punishment. Finally, the court rejected the FOP’s argument the record showed an intent to punish, since there was no “unmistakable evidence of punitive intent."

The court noted the amendment still left in place significant “protective measures” for officers, such as the right not to be “fired, demoted, or suspended without cause.” Further, Section 116 “lasts only temporarily.” Significantly, the court rejected the FOP’s argument that no real emergency existed, deferring to the Council’s determination that emergency legislation following the death of George Floyd was justified.

Contracts Clause Challenge

The FOP further argued Section 116 violates the Contract Clause, which provides “[n]o state shall… pass any… Law impairing the Obligation of Contracts.” U.S. Const. art. I, § 10, cl. 1. It applies only to laws with retrospective, and not prospective, effect. The court concluded there was no violation, since Section 116 has only a prospective effect because it applies to agreements created only after the FOP’s 2017 Agreement expired.

The court rejected the FOP’s argument that Article 12 of the 2017 Agreement prohibited the Council from enacting new rules governing future bargaining over successor agreements. The court noted that the Contracts Clause only applies to laws with retrospective, not prospective effect.  It noted a retrospective law violates the Contracts Clause only where it “substantially impair[s] existing contract rights.” The court stated that the FOP was really arguing that law impaired rights under the expired agreement based on a clause stating that the existing disciplinary procedure “shall be incorporated into any successor” agreement unless changed through a prescribed process.

Whether an impairment is “substantial” depends on the parties’ reasonable expectations. The court found the FOP could not have reasonably expected to insulate itself from changes to bargaining after the 2017 Agreement had expired.

Significantly, the court left unanswered whether a statute could be passed to impair existing bargaining agreement procedures involving discipline, such as binding arbitration.

Fifth Amendment Due Process Clause Challenge

Finally, the FOP claimed Section 116 violates the Due Process Clause of the Fifth Amendment, which provides, “[n]o person shall… be deprived of life, liberty, or property without due process of law.” U.S. Const. amend. V. The FOP challenged the amendment as violating substantive due process for “grave unfairness.” The court rejected this argument, finding Section 116 is not gravely unfair because it implicates no fundamental rights, imposes no punishment, and had only a “modest prospective effect” on past contracts.

Appellate Court Clarifies Meaning of "Sustained" Under SB 1421 to Trigger CPRA Release

Prior to January 2019, access to peace officer records was only permitted through a Pitchess motion. Then Senate Bill No. 1421 amended Penal Code sections 832.7 and 832.8 to require disclosure of certain serious misconduct records under the California Public Records Act ("CPRA"), if they have been sustained after opportunity to appeal.  The legislation did not address circumstances wherein an officer resigns prior to the completion of an investigation.  Effective January 1, 2021, Senate Bill 16 expanded the definitions of serious misconduct, and also required the disclosure of such records if the officer resigns prior to the completion of the investigation. 

The recent decision in Wyatt v., Kern High School addressed the novel issue of whether sustained findings of misconduct must he disclosed where the sustained findings were issued after the officer resigned, thus denying him an opportunity to appeal the findings.  

Kern High School District (KHSD) police officer Jerald Wyatt left the department while an internal affairs investigation was pending.  Subsequently in 2017, Wyatt discovered sustained findings for misuse of CLETS and dishonesty had been placed in his personnel file without notice or an opportunity to contest the findings.  In 2019, KHSD received several CPRA record requests from various news agencies and others seeking personnel records of KHSD officers pertaining to:

    (1) the discharge of a firearm at a person by an officer; 

    (2) the use of force by an officer resulting in death or great bodily injury;

    (3) sustained findings an officer engaged in sexual assault involving a member of the public; and

    (4) sustained findings of dishonesty-related misconduct by an officer.

Wyatt was notified that KHSD intended to disclose his sustained findings in response to the CPRA requests. Officer Wyatt filed suit to restrain KHSD from disclosing the records.  He asserted the records were not "sustained" within the meaning of Penal Code section 832.8(b) because he was never notified of the findings or afforded an “opportunity for an administrative appeal pursuant to Sections 3304 and 3304.5 of the Government Code.” KHSD argued that Officer Wyatt was not entitled to notice and appeal rights under the POBR once he resigned.  As such his opportunity for appeal was exhausted and the records could be disclosed.  The Superior Court ultimately sided with the officer and prohibited KHSD from releasing his records.  An appeal was filed.

The appellate court focused on whether the department's sustained findings met the definition in Penal Code section 832.8(b), which would trigger a disclosure. SB 1421 provides: "'Sustained' means a final determination by an investigating agency, commission, board, hearing officer, or arbitrator, as applicable, following an investigation and opportunity for an administrative appeal pursuant to Sections 3304 and 3304.5 of the Government Code, that the actions of the peace officer or custodial officer were found to violate law or department policy."

The appellate court noted that the Legislature failed to address this circumstance and that it was equally plausible that the Legislature intended for such sustained records to be disclosed or that the officers' privacy interests should prevail given that he was not afforded due process.  Refusing to speculate over the Legislative intent, the court found the records were not subject to disclosure under SB 1421.  In short, the officer was not provided an opportunity to appeal the findings so they could not be sustained within the meaning of SB 1421.  Thus, the records were not subject to disclosure at the time of the request in 2019.

The court expressly declined to issue an opinion as to whether or not the records would be disclosable pursuant to a request submitted after December 31, 2021, when SB 16 took effect.  SB 16 added Penal Code section 832.7(b)(3), which states, in part: "Records that shall be released pursuant to this subdivision also include records relating to an incident specified in paragraph (1) in which the peace officer or custodial officer resigned before the law enforcement agency or oversight agency concluded its investigation into the alleged incident."

As the court declined to opine beyond the issues appealed, open issues remain regarding resignations during pending investigations of serious misconduct.  SB 16 addresses circumstances wherein an officer resigned prior to the conclusion of an investigation, but seems to assume the investigation won't be concluded.  However SB 2 mandates completion of allegations of serious misconduct, effective January 1, 2023.  The statutes do not clearly address the situation wherein an officer transfers to another agency while an investigation of serious misconduct is ongoing, but later determined to be not sustained.   The not sustained finding and resignation trigger conflicting requirements.