Issue 70-December 2017
By Jonathan Shull, Chief Executive Officer
With the holidays upon us and 2017 drawing to a close, it is a good time to reflect upon the past year and look forward to the next.
This past year we saw our training program surpass 34,000 training contacts with member employees. Since the beginning, the California JPIA has placed a strong emphasis on meeting the needs of its members, the training program is but one example of this emphasis. When I started working for the Authority in 1995, we offered
only two training courses – one pertaining to contractual risk transfer and the other regarding understanding the retrospective computations. In addition to web-based training, in 2017 we provided 951 classroom training sessions on 91 different topics to over 18,700 member employees.
One of the highlights of this year’s training activity was the 22nd Annual Risk Management Educational Forum held in Santa Barbara in October. Over 300 member employees and elected officials, representing 80 member agencies, participated in the event. It was a great success.
It is through the active participation and guidance of the members that the California JPIA continues to be one of the most distinguished risk-sharing pools in the state. With a delegate from each member agency sitting on the Board of Directors, members have a direct voice in shaping the policies and procedures that guide the Authority and the services it provides. Our membership has expressed the desire that we be a “risk management” organization rather than a “claims management” organization. As a result, the Authority uses a regional service delivery model that places our risk management professionals in the field, working from their homes in the regions, to better deliver services to members. This past year marked the fifth year of implementation of the regional risk manager model, and it continues to be well received by the members.
This year was the second year of the Excess Liability Program, and we were excited to launch the Excess Workers’ Compensation Program. Closely monitored by Authority staff and our assigned third party administrators, the excess programs offer members the ability to reduce their contributions to the Authority by retaining a share of each loss. We look forward to growing these programs over the next several years.
We were saddened by the departure of Executive Committee Member Carol Chen, who was termed out of office in April and the passing of Executive Committee Member Dave Spence in May, but we were pleased to have Darcy McNaboe and Mark Waronek fill the vacancies on the Executive Committee.
2018 will be the 40th anniversary of the Authority, and we look forward to an exciting year. Work continues on the potential development of a captive insurance company that will allow the Authority to be prepared for changing market and regulatory conditions. Our property insurance program will be in its third year of transition from a fully insured, group purchase program to one in which members have much greater input into its structure and the coverage provided. Finally, based upon continued favorable loss experience, we hope to see continued reductions in the Authority’s liability excess and reinsurance costs, thereby reducing the cost of coverage to members.
As the year comes to a close and the new year begins, I encourage you to enjoy this time with friends and loved ones. Be careful out there, and I thank you for your continued support of the California JPIA.
We all wish you a very happy holiday season and New Year.
CalPERS Disability Retirement Audits
In light of recent CalPERS guidance and audit activity, members are encouraged to review their internal procedures associated with disability and industrial disability retirements. The following article is authored by Francis Rogers with Liebert, Cassidy, Whitmore, and reprinted with permission.
Retirement for disability can already be a cumbersome and confusing process. The California Public Employees’ Retirement System’s (CalPERS) new and additional mandates – as set forth in its March 30, 2017 Circular Letter – raises the ante. The Letter informs all contracting public agencies of the following six requirements pertaining to the disability retirement of local safety members:
- Submission of a disability retirement application;
- An eligibility determination when a member is facing pending discipline or was terminated for cause;
- Information that must be included in a resolution or certification of delegate in support of an application for disability retirement;
- Determination of when a disability is “extended and uncertain” in duration;
- Requirement of competent medical evidence of continuous disability;
- Medical qualifications for disability retirement; and
- Disability re-evaluation procedures for members under the minimum age for service retirement.
While local agencies are likely familiar with some of the requirements described in the Letter, we highlight here those stated requirements that are likely new or little known, to local agencies.
CalPERS recently announced that it will be conducting an audit into the industrial disability retirement (IDR) process for 60 contracting agencies. It is our understanding that the scope of the audit will include requesting medical records to assess the validity of IDR claims and seek disclosure of safety officer personnel records to ensure legal compliance. In addition, CalPERS indicates it will audit to see whether members granted IDR who are younger than 50 are being re-evaluated to determine if the member is still eligible for IDR.
Duty to Provide Relevant Personnel and Medical Records
According to CalPERS “[a]n employer must forward all relevant personnel documents and medical records to CalPERS and obtain CalPERS’ determination that the member is eligible to apply for disability retirement before an employer starts the process of a disability determination for any of the following circumstances:
- Disciplinary process underway prior to the member’s separation from employment.
- The member was terminated for cause.
- The member resigned in lieu of termination.
- The member signed an agreement to waive his or her reinstatement right as part of a legal settlement (i.e., Employment Reinstatement Waiver).
- The member has been convicted of or is being investigated for a work-related felony.
CalPERS relies on Government Code sections 20128, 20221 and 20223 for the proposition that CalPERS may require a member (and its employer) to provide information it deems necessary to determine entitlement to benefits and information affecting his or her status as a member.
Evidence of Continuous Disability
A qualifying disability must be permanent or “extended and uncertain.” CalPERS indicates that extended and uncertain means the disability will last at least twelve consecutive months from the date of the application for a disability retirement. In the past, CalPERS used an unofficial six-month measurement.
CalPERS will require medical records of the member’s physical or mental incapacity to perform the duties of their position from one year before their last day of physical work to the present in order to establish a continuous disability. There must be medical evidence from the last day of physical work to the present, with no gaps in the medical treatment of more than six months.
Confirmation of a Permanent and Stationary Date for Industrial Disability Retirement
In cases of an industrial disability retirement preceded by a workers’ compensation claim wherein there is a dispute concerning the date on which the member became permanent and stationary, the employer or member must now make a “Petition for Finding of Fact” before the Workers’ Compensation Appeals Board (WCAB) in which the WCAB must certify the date on which the member’s condition became permanent and stationary. This date then becomes the effective date of the member’s retirement.
The problem will inevitably arise, however, that members who otherwise qualify for an industrial disability retirement may be denied an IDR if the member has not been found permanent and stationary by the qualified or agreed-upon medical examiner. In some cases, a member’s workers compensation case may go on for years. This means employers may find themselves providing advanced disability pension payments for much greater periods of time.
Duty to Re-Evaluate Disability Retirees
The Circular Letter also requires that a contracting agency conducts regular re-evaluations of determinations for disability retirees who are under voluntary service retirement age. The purpose “is to verify whether the recipient remains physically or mentally disabled from the position which they disability retired for the condition(s) that they were approved for.” CalPERS recommends gathering the following information:
- Is the retiree currently employed?
- What type of work is he/she doing? Is he/she working within his/her work restrictions?
- Obtain a duty statement and physical requirements of the job for comparison.
- When an independent medical examination is deemed necessary, submit these documents for the examiner’s review.
- Is the retiree currently being treated for his/her disability?
- If so, obtain a list of his/her treating physician(s) and contact information, and request his/her medical records since retirement.
- If the retiree is not currently being treated or the medical records received from the treating physician do not substantiate a continuous disability, the member should be evaluated by an Independent Medical Examiner.
- If indicated, consider surveillance.
To support requiring re-evaluation, CalPERS relies on Government Code section 21192, which gives authority to the employer from whose employment a person was retired to require any recipient of a disability retirement allowance under the minimum age for voluntary retirement for service applicable to members of his or her class to undergo a medical examination.
How This Affects Your Agency
A. Disclosure of Peace Officer Personnel Records
CalPERS has and will continue to demand the disclosure of peace officer personnel records to determine a member’s eligibility for disability retirement in the event the officer was terminated or discipline is pending. But Penal Code section 832.7 establishes that peace officer personnel records (or information obtained therefrom) are confidential and may not be disclosed in any criminal or civil proceeding without the peace officer’s written consent or a Pitchess motion: the discovery procedure required to access peace officer personnel records. (See People v. Superior Court (Johnson) (2015) 61 Cal.4th 696 [California Supreme Court held that even prosecutors must comply with the Pitchess procedures if they seek information from confidential peace officer personnel records]). Thus, there is a potential conflict between CalPERS’ right to these records under the Government Code and the prescribed discovery procedures required under Pitchess.
Agencies should avoid unilaterally disclosing peace officer records without first notifying the officer concerning the request and obtaining his or her consent/waiver in writing. If the officer decides not to provide consent to disclosure, the agency should consult with legal counsel.
B. Disclosure of Medical Records
Confidentiality of Medical Information Act
Under California’s Confidentiality of Medical Information Act (CMIA), an employer is generally prohibited from using, disclosing, or knowingly permitting its employees or agents to use or disclose medical information pertaining to an employee unless the employer first obtains written authorization from the employee. There are several important exceptions to the requirement for written authorization. For example, medical information may be used in a lawsuit, arbitration, grievance, or other claim or challenge to which the employer and employee are parties and in which the employee has placed in issue his or her medical history, mental or physical condition, or treatment. In addition, medical information may be used exclusively for purposes of administering and maintaining employee benefit plans, including healthcare plans and plans providing short-term and long-term disability income, and workers’ compensation. Accordingly, when an employee applies for disability retirement and CalPERS is administering disability benefits for the employee, an authorization may not be required under the CMIA. Nonetheless, agencies should obtain consent with a written waiver and authorization for release of the medical records.
Health Insurance Portability and Accountability Act (HIPAA)
HIPAA’s privacy rule applies to covered entities: health plans, health care clearinghouses or health care providers conducting certain health care transactions electronically. Also affected by HIPAA are hybrid entities whose business activities include both covered and non-covered functions and health plan sponsors.
CalPERS maintains that member consent and a HIPAA release are not required because it is not a covered agency. However, agencies should be careful not to unilaterally disclose medical records to CalPERS without first notifying the employee and obtaining written consent.
C. Duty to Re-Evaluate Retirees
CalPERS will require all contracting agencies to periodically re-evaluate retirees under the voluntary service retirement age of 50 years old. CalPERS justifies this new requirement based on the combination of Government Code sections 21192 and 20221. Section 21192 gives authority to the board or governing body of the employer from whose employment a person was retired to require any recipient of a disability retirement allowance under the minimum age for voluntary retirement for service applicable to members of his or her class to undergo a medical examination. Section 20221 provides that each employer must provide CalPERS with any information concerning any member that CalPERS requires in the administration of the System.
If an agency chooses not to re-evaluate, CalPERS has other recourse available: it can re-evaluate a retiree on its own under Government Code sections 20128 and 20223.
Although CalPERS asks agencies to re-evaluate disability retirees, neither CalPERS nor the Government Code requires the employer to hire back the retiree if he/she is found to no longer qualify for a disability retirement.
The issues presented here are not exhaustive so please consult with legal counsel as to the appropriate response to CalPERS’ circular letter and any pending or future related audit.
A Look Back: 2017 Academies
By: Michelle Aguayo, Training Coordinator
The California JPIA successfully held six training academies in 2017. Each were multi-day training seminars, held in a hotel setting away from the office, and presented essential theories and techniques that provide pragmatic solutions to solving every-day problems. Attendees learned a variety of ways to apply these skills which will enable them to meet the daily demands of their agency while exhibiting ethical standards among employees and citizens.
The year kicked off with the Parks and Recreation Academy in February in Indian Wells. Attendees gained insight into best risk management practices in parks and recreation, contracts and joint use agreements, playground safety and defending their agency against playground litigation, aquatic centers, grant writing, and creating emergency plans. One of the twenty-two members that attended, Steve Lawson, Parks & Recreation Manager at the City of Temple City commented, “Great job! Very informative!” Another attendee, Art Sotelo, City of San Marcos, shared, “I really enjoyed everything about the entire program. I definitely learned a lot.” The next Parks and Recreation Academy is scheduled for February 6 – 8, 2018 at the La Bellasera Hotel in Paso Robles and registration is currently open on the Authority’s myJPIA website.
The Leadership Academy was held in March 2017 in Paso Robles with twenty-six members attending from fifteen different agencies. It was a unique opportunity for senior management-level staff to assess and explore their personal behavioral preferences and how those may affect their relationships with employees. This academy covered additional topics such as organizational risk management, public service ethics, conflict resolution, and trust-strategic thinking-and innovation. The next Leadership Academy will be held at the Hyatt Regency in Westlake Village from March 6 – 8, 2018.
The Human Resources Academy, held in April 2017 in Westlake Village, had a total of twenty-one members attending from sixteen agencies. The attendees, who were responsible for human resources and employee relations at their agencies, explored lessons learned from recent employment practices claims and case law, employment policies and procedures, creating valuable documentation, workplace investigations, effective performance measurement and management tools, leadership skills, and the executive director/city manager and human resources relationship. “The information I took away from the 3-day Human Resource Academy was invaluable. In the areas that were covered, it filled in the gaps in which I felt I was somewhat deficient. I would highly recommend the academy for anyone who works in Human Resources,” expressed Leslie May, Human Resources Specialist, City of Needles. The next Human Resources Academy will be held at the La Bellasera Hotel in Paso Robles.
The Newly Elected Officials Academy is specifically geared toward those officials recently elected within the last two years prior to the academy dates. In 2017, this academy was held May 22 – 23 at the Surf & Sand Resort in Laguna Beach. Sixteen elected officials attended from fifteen agencies and heard seven speakers present topics on the fundamentals of local government, finance basics, polishing the professional image, the council member’s role, an overview of the California JPIA, a practical guide to immunities and defenses available to public agencies and media relations, and the council/board member’s role. Invitations for the next academy, held June 4 – 5, 2018 in Laguna Beach, will be directly sent to those elected from November 2016 through April 2018 sometime in early May.
The Public Works Academy, held in June 2017 in Indian Wells, emphasized best practices needed to effectively manage public works risk exposures. The twenty-five members that attended from fifteen agencies were immersed in a collaborative learning environment with the speakers engaging them throughout the three days. One of the members that attended, Chase Buckelew, Field Services Manager, City of Monrovia excitedly expressed, “I wanted to share with you how GREAT the Public Works Academy was for my colleague and me. The speakers, content and delivery of information was phenomenal as well as the level of support and resources CJPIA provides to its members. I look forward to the next training class that I can attend, and I’ll be sure to send my staff as well to build a team that is well informed and educated in all things municipal work. Please share my thanks and gratitude to all who participated in developing these courses as they serve as a foundation for us to build upon!” The next Public Works Academy is scheduled for June 19 – 21, 2018 at the La Bellasera Hotel in Paso Robles.
Every Fall, the Authority offers its Management Academy, which is designed for the entry-level manager and supervisor. This academy, recently held in Paso Robles in September, encouraged attendees to explore their role as a manager/supervisor with a variety of topics and exercises. One of the highlights of this academy is John Perry’s Job-Person-Environment-Assessment that is personalized to each attendee’s pre-academy questionnaire. Gloria Thomas, Housing Rehab Supervisor, City of Hawaiian Gardens and one of the twenty-three attendees commented, “I was very impressed with all the information that was distributed to the participants. This includes initial information that was emailed before the academy; the agenda and all the information that was included on the “general information page” were extremely useful! The venue was excellent, the speakers were really good, and all the information that was presented was useful and practical. You did an amazing job coordinating the academy! Thanks for such a great experience!” The next Management Academy will be held October 22 -25, 2018 in Carlsbad.
Two additional academies will be held in 2018. The Risk Management Academy, scheduled for January 23 – 25 in Carlsbad, is the Authority’s newest academy designed specifically for the person at each agency that has day-to-day risk management responsibility. The Executive Academy, geared for city managers and agency executives, will be held April 11 – 13 in Santa Barbara.
Pepper Spray Policy
By Abraham Han, Administrative Analyst
The Authority has recently created a new “Pepper Spray” policy template to assist members with the development of a policy for guiding all non-law enforcement agency employees on the possession and use of Oleoresin Capscium (OC), more commonly referred to as “pepper spray.”
While there are no requirements to obtain a license or permit to purchase or carry pepper spray, it is recommended that members have an established program and policy allowing key staff to utilize pepper spray and to be trained, certified, and recertified on a regular basis.
The policy template covers topics such as pepper spray usage restrictions, authorization, storage, reporting, inspection, replacement, decontamination, training, and education. The template also includes references to the applicable sections of the California Penal Code.
Only designated employees, who have successfully completed pepper spray training, should be authorized to carry and use pepper spray in the course of their employment.
The “Pepper Spray” policy template is available in the “Policy Templates” section of the Authority’s Resources and Documents library on cjpia.org.
For questions regarding the “Pepper Spray” policy template, please contact your assigned Risk Manager.
End-of-Year Legislative Update
By Abraham Han, Administrative Analyst
As the California State Legislature prepares to reconvene in January 2018, the Authority would like to remind members of key bills that will once again be considered during the 2018 legislative session.
AB 221 (Gray). Workers’ compensation: liability for payment.
Summary: Current law requires an employer to provide all medical services reasonably required to cure or relieve the injured worker from the effects of the injury. This bill would provide that for claims of occupational disease or cumulative injury, the employee and the employer would have no liability for payment for medical treatment unless one or more of certain conditions are satisfied, including, among others, that the treatment was authorized by the employer. The Authority will continue to monitor this bill to determine if a position other than neutral is appropriate.
AB 241 (Dababneh). Personal information: privacy: state and local agency breach.
Summary: Current law requires a person or business, if it was the source of a data security breach, to offer to provide appropriate identity theft prevention and mitigation services at no cost to the person whose information was or may have been breached if the breach exposed or may have exposed the person’s social security number, driver’s license number, or California identification card number. This bill also would require a state or local agency, if it was the source of the breach, to offer to provide appropriate identity theft prevention and mitigation services at no cost to a person whose information was or may have been breached if the breach exposed or may have exposed the person’s social security number, driver’s license number, or California identification number. There are concerns over a lack of specificity regarding appropriate remedial services. Additional remedial services as set out in this bill could lead to new costs for public employers attempting to comply with the bill.
AB 748 (Ting). Peace officers: video and audio recordings: disclosure.
Summary: The California Public Records Act requires that public records be available to the public for inspection and made promptly available to any person. Current law makes records of investigations conducted by any state or local police agency exempt from these requirements. This bill would require that an agency release any video or audio recording promptly unless there is an articulable factual basis why disclosure would substantially impede an active investigation. Furthermore, this bill specifies that an agency may not withhold recordings under this section for a period of time exceeding 90 days. The bill’s text, as currently written, undermines a local agency’s authority in determining the balance between the public interest of withholding and the public interest of disclosure.
AB 913 (Gray). Construction-related accessibility claims: extremely high-frequency litigants.
Summary: This bill would authorize a court to enter a prefiling order prohibiting an extremely high-frequency litigant, as defined, from filing any new litigation in the courts of this state without first obtaining leave of the presiding justice or presiding judge of the court where the litigation is proposed to be filed. The bill would require the clerk of the court to provide the Judicial Council with a copy of all prefiling orders, and would require the Judicial Council to maintain and annually disseminate a record of extremely high-frequency litigants subject to those prefiling orders, as specified.
AB 1295 (Chu). Workers’ compensation: aggregate disability payments.
Summary: Current law requires every employer to establish a utilization review process, as described, and establishes an independent medical review process to resolve disputes over a utilization review decision, as specified. Current law requires that aggregate disability payments for a single injury occurring on or after certain dates be limited, as provided. This bill would require that if a denial of treatment requested by a treating physician is subsequently overturned by independent medical review or by the Workers’ Compensation Appeals Board, any temporary disability paid or owing from the date of the denial until the treatment is authorized would not be included in the calculation of the aggregate disability payment.
AB 1548 (Fong). Occupational safety and health: penalties.
Summary: Current law requires any civil or administrative penalty assessed pursuant to the California Occupational Safety and Health Act of 1973 against a school district, county board of education, county superintendent of schools, charter school, community college district, California State University, University of California, or joint powers agency performing education functions to be deposited with the Workplace Health and Safety Revolving Fund. Current law authorizes these entities to apply for a refund of the civil penalties assessed against them if specified conditions are met. This bill would expand the application of this section to public entities, defined as a city, county, city and county, district, public authority, public agency, and any other political subdivision.
AB 1603 (Ridley-Thomas). Meyers-Milias-Brown Act: local public agencies.
Summary: Under the Meyers-Milias-Brown Act (MMBA) employees of local public agencies have the right to form, join, and participate in the activities of employee organizations of their own choosing for the purpose of representation on all matters of employer-employee relations. The MMBA authorizes a local public agency to adopt reasonable rules and regulations after consultation in good faith with representatives of a recognized employee organization or organizations for the administration of employer-employee relations under the act. This bill would revise the definition of “public employee” for the purpose of the Meyers-Milias-Brown Act to also include persons jointly employed by a public agency and any other employer at specified clinics and hospitals.
SB 467 (Wilk). Civil actions: appearance by electronic means.
Summary: Current law regulates the procedure of civil actions and permits a party who has provided notice to appear by telephone at specified conferences, hearings, and proceedings, in a general civil case, defined as all civil cases except probate, guardianship, conservatorship, juvenile, and family law proceedings. This bill would permit a party who has provided notice to appear by electronic means that provide remote access to a conference, hearing, or proceeding in all civil cases, as specified.
SB 524 (Vidak). Employment: violations: good faith defense.
Summary: Under current law, an employer may face administrative sanctions, civil fines and penalties, and criminal penalties for violations of employment statutes or regulations. This bill would permit a person to raise as an affirmative defense that, at the time of an alleged violation of statute or regulation in a judicial or administrative proceeding, the person was acting in good faith, had sought, relied upon, and confirmed for a published opinion letter or enforcement policy of the division, and had provided true and correct information to the division in seeking the opinion letter or enforcement policy.
SB 617 (Bradford). Workers’ compensation: providers.
Summary: Current law makes an employer liable only for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment. Current law also requires that apportionment of permanent disability be based on causation and requires a physician who prepares a report addressing the issue of permanent disability due to a claimed industrial injury to address in that report the issue of causation of the permanent disability. This bill would require that heredity and genetics be excluded as bases of causation for purpose of determining the apportionment of permanent disability. The Authority will continue to monitor this bill to determine if a position other than neutral is appropriate.
SB 632 (Monning). Civil discovery: depositions.
Summary: This bill would require that, in any civil action for injury or illness that results in mesothelioma, a deposition examination of the witness by counsel other than the witness’ counsel of record be limited to seven hours of total testimony if a licensed physician attests in a declaration that the deponent suffers from mesothelioma and is either (1) over 70 years of age and his or her health is such that a deposition of more than seven hours will prejudice the deponent’s well-being, or (2) without regard to age of the deponent, the deponent’s mesothelioma raises substantial medical doubt of the survival of the deponent beyond six months. Under this bill, the above stipulations would be in place regardless of the complexity of a case.
SB 772 (Leyva). Occupational safety and health: regulations.
Summary: Current law exempts a standard or amendment to any standard adopted by the Occupational Safety and Health Standards Board that is substantially the same as a federal standard from specified provisions of the existing Administrative Procedure Act, including a requirement that a state agency proposing to adopt, amend, or repeal a major regulation, as defined, on or after November 1, 2013, prepare a standardized regulatory impact analysis in the manner prescribed by the Department of Finance. This bill would seek to eliminate regulatory impact analysis, including a cost/benefit analysis, when creating new occupational safety and health standards and regulations.
The Authority will continue to monitor these bills and others as needed.
If you have any questions, please contact Abraham Han, Administrative Analyst.
The Court Report
C.A. Affirms $1.9 Million FEHA Attorney Fee Award
Issues in Single-Plaintiff Case Not Novel, but Panel Says Other Factors Militated in Favor of Doubling Lodestar Amount; Judge Linfield’s Apparent Presumption of 2.0 Multiplier Not Embraced
(Reprinted from the Metropolitan News-Enterprise, December 5, 2017)
The Court of Appeal for this district has affirmed a $1.9 million attorney fee award in the case of a parking control officer who prevailed in her retaliation action against the City of Beverly Hills, with the justices in Div. Three holding that a doubling of the lodestar figure was, under the circumstances, appropriate.
Lawyers for the woman, suing under the Fair Employment and Housing Act (“FEHA”), persuaded a jury that she was deserving of $1 million in compensatory damages, which was not challenged on appeal.
Justice Luis Lavin wrote the unpublished opinion, filed Friday. It affirms an order by Los Angeles Superior Court Judge Michael P. Linfield in setting fees, as authorized by the FEHA, but distances itself from his one-liner that there should “normally” be a 2.0 multiplier where a plaintiff in a lawsuit pursuant that act wins at trial.
Linfield determined the fees after a jury on June 4, 2015, found the city had retaliated against plaintiff Elisa Lopez, then 38. After serving a probationary period as a supervisor, she was not appointed to a permanent spot, she contended, because of complaints she made against her own supervisor, Gregory Routt.
Offended by Website
Routt maintained a website, illegalaliennewsupdate.com, which Lopez found abusive because it opposed unlawful entries into the United States and her father was an undocumented alien.
“I told him I thought the website was offensive and anti-Mexican,” she testified. “He just blew me off and chuckled about it.”
Several city employees testified that Lopez, as a probationary supervisor, manifested difficulty in working with those she supervised. Jurors nonetheless rejected the city’s explanation of nondiscriminatory reasons for the plaintiff not being promoted.
While finding in her favor on the retaliation claim, they found against her on her claims of harassment and race/national origin discrimination, spurning the argument to them by lawyer William W. Bloch that the city had “stereotyped her as a gang member from the barrio.”
$2.5 Million Sought
The lawyers sought an award of $2,533,167.00 based on a lodestar (the number of hours times the hourly rate) of $1,266,583.50, enhanced by a multiplier of 2.0. Linfield reckoned the lodestar at $1,030,747.50 after making various deductions.
(He shaved the 1,574.9 hours claimed by Bloch based on some of the work he did being what an attorney-fee expert for the city denominated “junior level tasks,” crediting the lawyer with 1,259.0 hours. Linfield explained: “Prior to my appointment to the Court, this judge was a sole practitioner; the Court understands that a sole practitioner must often do all of the tasks required of an entire law practice—whether the tasks be those of a secretary, paralegal, junior associate or partner. However, this creates a problem in determining a reasonable lodestar.” He opted to reduce the recognized number of hours rather than adjusting the per-hour fee or assigning different rates to different tasks.)
In applying a multiplier, Linfield looked to the factors enumerated in the California Supreme Court’s 2001 opinion in Ketchum v. Moses: “(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award.”
|Los Angeles Superior Court Judge Michael Linfield’s calculation of lodestar.|
Utilizing those factors, Linfield declared:
“The issues addressed in this FEHA action were not particularly novel. Nonetheless, the case presented difficult issues of fact that required extensive motion practice and a one-week jury trial. This has given the Court ample time to see evidence of counsels’ skill in representing their client. The Court was particularly impressed with attorney Bloch’s trial skills. The Court finds that at least three of the four criteria listed in Ketchum for the application of a multiplier exist in the present case….
“The court is also aware that plaintiff’s counsel began work on this case more than four years ago and has both fronted costs and worked without compensation for that length of time….
“The Court finds that, considering all of the circumstances of this case, a multiplier of 2.0 is appropriate.”
Portion Not Doubled
Doubling $1,030,747.50 would have produced a fee of $2,061,495. However, Linfield subtracted $116,200.00—resulting in an award of $1,945,295—explaining:
“[D]uring oral argument, defense counsel correctly noted that, while the work that was done prior to the jury’s verdict on June 3, 2015 was clearly contingent, once plaintiff received a verdict in her favor, plaintiff’s counsel was virtually guaranteed attorneys’ fees under FEHA. The court agrees with defense counsel that the work done after June 3, 2015 should not be subject to a multiplier.”
Linfield observed that plaintiffs in FEHA cases win only about half the time; a plaintiff’s lawyer gets nothing if the client loses; and there has to be an incentive to pursue the case. He remarked:
“The above analysis would lead to the conclusion that if a plaintiff wins her FEHA case that goes to trial, plaintiff’s counsel should normally receive a 2.0 multiplier to compensate counsel ‘for contingent risk.’ ”
Argument on Appeal
The latter remark drew criticism from the city, construing it as a declaration by Linfield of a presumption of a multiplier of two where the plaintiff wins in an employment discrimination/retaliation case. The city argued on appeal:
“Starting from that default position misconstrues the law, relieves the party seeking fees of her burden of proof, and inappropriately puts a thumb on the scale in favor of counsel’s request to double an already sizeable fee award.
“The court’s one-sentence statement in its 20‑page ruling has been taken out of context by the City. In the very next section of its ruling, the court expressly found that ‘at least three of the four criteria listed in Ketchum for the application of a multiplier exist in the present case.’ That is, those non-contingency factors—for example, difficult issues of fact, and the skill displayed in presenting them—also weighed in favor of applying a multiplier. Indeed, the court expressly found “that, considering all of the circumstances of this case, a multiplier of 2.0 is appropriate.’ (Emphasis added.) It is apparent from the face of the court’s order that in exercising its discretion, the court properly considered relevant factors notwithstanding its comment about contingency risk.
“In any event, it was not inappropriate for the court to consider contingency risk as one relevant factor. Indeed, contingency risk is one of the most common fee enhancers.”
While the city took issue with Linfield’s application of the Ketchum factors, Lavin said that “[e]ven if the court’s reasoning may be internally inconsistent and legally flawed, a matter open to debate,” there was no abuse of discretion because the right result was reached.
The case is Lopez v. City of Beverly Hills, B268451.
Attorneys on appeal were Lisa Perrochet and Shane H. McKenzie of Horvitz & Levy, along with Donald L. Samuels and Julie W. O’Dell of Bryan Cave, for the city, and Bloch teamed with Joseph S. Klapach of Klapach & Klapach, for Lopez.
Joseph Klapach commented yesterday:
“We applaud the Court of Appeal’s decision to affirm the trial court’s award of nearly $2 million in attorneys’ fees to Ms. Lopez. After Ms. Lopez complained about the harassment she had experienced at the hands of her male supervisor, the City of Beverly Hills retaliated against her by demoting her and denying her a promotion to a job for which she was the most qualified.
“Outraged by the City’s egregious misconduct, a jury awarded Ms. Lopez $1 million in damages. The Court of Appeal’s decision affirms Ms. Lopez’s right to recover the substantial attorneys’ fees that she was forced to incur in order to vindicate her legal rights. By fully compensating Ms. Lopez for the attorneys’ fees that she incurred, this opinion ensures that the victims of unlawful retaliation will have an opportunity to be heard, and that there will be capable, experienced attorneys like Mr. Bloch standing ready to take up their cause.”
Copyright 2017, Metropolitan News Company
Prevailing Wage Compliance: What Cities Should Do to Avoid Penalties Under SB 96
(Reprinted from Western City Magazine, December 2017)
In 2014, SB 854 (Chapter 28, Statutes of 2014) created a new system for oversight of prevailing wage compliance by the California Department of Industrial Relations (DIR). It required contractors and subcontractors to register with the DIR in order to bid or contract for public works projects and to submit payroll records directly to the DIR through a new online portal. SB 854 also required cities and other local agencies to notify the DIR online within five days after award of a public works contract.
Now prevailing wage laws have changed again, suddenly and without much notice. SB 96 (Chapter 28, Statutes of 2017) was signed into law on June 27, 2017, as a budget trailer bill and became effective immediately. SB 96 refines and expands SB 854’s requirements and adds significant penalties for local agencies that fail to comply with prevailing wage requirements. Because prevailing wage requirements apply to all public works contracts over $1,000,1 these new requirements will apply to the vast majority of municipal public works projects.2
SB 96 Requirements and Penalties
SB 96 is a complex bill that amended and repealed dozens of statutes, but in terms of prevailing wage compliance, your city should be aware of the following key changes enacted by SB 96:
• The subcontractor list form submitted by bidders for public works contracts must now include the DIR registration number for each listed subcontractor;3
• Cities now have up to 30 days, instead of five days, to notify the DIR following award of a public works contract;4
• Cities that fail to comply with certain prevailing wage requirements are subject to penalties up to $10,000 and potential loss of state funding for a year;5 and
• Construction contracts under $25,000 and maintenance contracts under $15,000 are now exempt from some prevailing wage requirements, including DIR registration and DIR notification of award.6
Subcontractor List Requirements
What Cities Should Know. The Public Contract Code requires bidders to submit a list of every subcontractor that will perform work in excess of one half of 1 percent of the contract price7. SB 96 requires that the subcontractor list form now include the DIR registration number for each listed subcontractor. An inadvertent error in listing a subcontractor’s DIR number will not be grounds for a bid protest or for rejecting the bid as nonresponsive if the contractor provides the correct number within 24 hours following the bid opening.8
What Cities Should Do. Ensure that the city’s subcontractor list form and its instructions to bidders require the DIR registration number for each listed subcontractor. Adopt internal procedures to check subcontractor DIR numbers immediately after bids are opened and to notify the apparent low bidder(s) that an inadvertent error in a DIR number may be subject to a bid protest if it is not corrected within 24 hours.
Notifying the DIR of Awarded Contract
What Cities Should Know About the DIR Notification Deadline. SB 854 introduced a new requirement that cities and other local agencies notify the DIR within five days of award of a public works contract by completing the DIR’s PWC-100 form online at https://www.dir.ca.gov/pwc100ext/. Under SB 96, cities now have up to 30 days, instead of five days, to notify the DIR following award of a contract subject to DIR oversight — at least in theory. However, the notification of award must be provided no later “than the first day in which a contractor has workers employed upon the public work.”9 That means if work begins 10 days after a contract is awarded, a city must notify the DIR of the contract award no later than 10 days after the award. The city cannot wait the full 30 days.
What Cities Should Know About Subcontractor Information. SB 96 also requires that the awarding agency’s notification of award include a list of all subcontractors and the DIR registration numbers for the contractor and its subcontractors.10 This can be a problem for public works projects that are not subject to bidding requirements and therefore do not require a subcontractor list form pursuant to California Public Contract Code Section 4104.
What Cities Should Know About Withholding Final Payment for 30 Days After DIR Notification. Under SB 96 a city must now withhold final payment due to a contractor until at least 30 days following submission of all of the information required for award notification, including subcontractor information. This new requirement is most likely to affect very small projects that are completed in less than a month.
What Cities Should Do. To avoid penalties, a city’s internal procedures should require submitting the DIR notification as soon as possible following award of contract — ideally by the next business day. For prevailing wage projects that are not publicly bid, prior to award the contractor must be required to provide the name and DIR registration number for each subcontractor that will perform work under the contract. The DIR registration numbers should be confirmed on the DIR website at https://efiling.dir.ca.gov/PWCR/Search before awarding the contract.
New Penalties for Noncompliance
What Cities Should Know. The Labor Code already includes penalties for contractors that fail to comply with prevailing wage requirements. SB 96 added penalties that apply to cities and other awarding agencies that fail to comply with certain prevailing wage requirements. Cities may be subject to penalties of $100 per day (up to $10,000 total) for:
• Failure to comply with the DIR award notification requirements;11 or
• Permitting an unregistered contractor or subcontractor to work on a project.12
In addition, if a city is determined to have “willfully” violated these requirements for two or more projects within a 12-month period, it may lose eligibility for state funding or financial assistance for one year.13
What Cities Should Do. A city’s internal procedures should be updated to ensure compliance with DIR notification and registration requirements for contractors and subcontractors. In addition to confirming DIR registration at bid time, a city should ensure that the contractors and subcontractors maintain current DIR registration during the course of the project, and the city should confirm each registration on the DIR website before issuing final payment. Staff should be trained to understand and follow internal procedures to ensure consistent compliance with current prevailing wage requirements.
New Exemptions for Small Contracts
What Cities Should Know. Some good news for cities: public works contracts of $25,000 or less for construction, alteration, demolition, installation or repair work and contracts of $15,000 or less for maintenance work are now exempt from:
• DIR registration requirements for contractors or subcontractors performing the work;14
• Requirements for electronic submission of monthly payroll records to the DIR;15 and
• Requirements for DIR notification following award of the contract.16
However, for contracts over $1,000, contractors or subcontractors are still required to pay prevailing wages and otherwise comply with work hours and overtime requirements. In addition, contractors and subcontractors working on these small projects must still maintain certified payroll records for at least three years following completion of the work.17
What Cities Should Do. Cities should consider revising contract templates and internal procedures for public works contracts under $25,000 to reflect both the new limited exemptions and the continuing prevailing wage payment and payroll record requirements.
As noted, SB 96 is a complex bill. Each city should consult its legal counsel for guidance in complying with current prevailing wage requirements under SB 96, including:
• Developing internal procedures and controls;
• Revising contract templates; and
• Training staff to ensure consistent compliance.
Cities that have not yet implemented procedures or protocols for prevailing wage compliance should do so as soon as possible to avoid the penalties that may be imposed under SB 96.
Photo credit: Falcatraz (construction workers)
Silica – A Primer for Risk Managers
By Dick Monod de Froideville, MPA
Retired Cal/OSHA Industrial Hygienist/Safety Engineer
Employer obligations under Cal/OSHA’s new Respirable Crystalline Silica standard commenced on June 23, 2017. Cal/OSHA began enforcing those obligations on September 23, 2017. Member agencies are encouraged to determine if any employees are exposed to silica, and if so, take steps to comply with the new standard.
The health risks associated with exposure to dust containing crystalline silica are well documented. In 1700, Dr. Bernardino Ramazzini, considered the founder of occupational medicine, identified evidence of silicosis in stone cutters. In the early 1900s, granite cutters in Vermont recognized the connection between the dust they were inhaling and the resulting fatal illnesses. By the 1930s they had successfully bargained for the installation of ventilation equipment in their work sheds.
Unfortunately, workers in other industries and parts of the country were still at risk. In the early 1930s, the Gauley Bridge tunnel project became the site of one of the worst industrial disasters in U.S. history. Hundreds of workers died from silicosis while building the tunnel and another 1,500 were reported to have contracted the disease within two years of working on the project. This disaster prompted a Congressional call to action. The federal government responded and in 1938 the Secretary of Labor, Francis Perkins, held a National Silicosis Conference and initiated a campaign to “Stop Silicosis”.
Health, safety and risk managers now are left pondering this simple math question: “do I pay now or pay later?” particularly since a) any violation of the current code would likely be considered “Serious” with a price tag ranging from about $18,000 to a maximum of $25,000. Should the inspection result in any repeat citations regarding the same issue, the sum total could easily reach $124,000 and that is excluding any abatement or workers’ compensation costs.
Silica has many commercial and industrial applications that are not readily identified as containing any silica. Crystalline silica is a common mineral found in many naturally occurring materials and used in many industrial products and at construction sites. Materials like sand, concrete, stone and mortar contain crystalline silica. Crystalline silica is also used to make products such as glass, pottery, ceramics, bricks, concrete and artificial stone. Industrial sand used in certain operations, such as foundry work and hydraulic fracturing (fracking), is also a source of crystalline silica exposure. The problem with this material is that it is often overlooked as regular “dust” and therefore not given the needed gravity to be considered a serious hazard.
The seriousness of this “hazard” is twofold; one is its prevalence as the base or filler for virtually any hard surface structural and finishing material; and two, its particle size for these materials. Inhaling very small (“respirable” means deep lung penetration) crystalline silica particles (less than 5 micrometers), causes multiple diseases, including silicosis, an incurable lung disease that can lead to disability and death. In fact, there is also strong scientific evidence showing that exposure to respirable crystalline silica can increase a person’s risk of developing lung cancer. The World Health Organization’s International Agency for Research on Cancer – the leading international voice on cancer causation – and the National Institutes of Health’s National Toxicology Program have conducted extensive reviews of the scientific literature and have designated crystalline silica as a known human carcinogen.
Estimates are that 2.3 million workers are exposed to crystalline silica on the job. To be clear, simply being near sand or other silica-containing materials is not hazardous. The hazard exists when specific activities create respirable dust that is released into the air and into the worker’s breathing zone. Respirable crystalline silica is generated by high-energy operations like cutting, sawing, grinding, drilling and crushing stone, rock, concrete, brick, block and mortar; or when using industrial sand. Activities such as abrasive blasting with sand; sawing brick or concrete; sanding or drilling into concrete walls; grinding mortar; manufacturing brick, concrete blocks, or ceramic products; and cutting or crushing stone generates respirable dust. In other words, most of the activities building maintenance trades that maintain, repair, and renovate most public buildings, roads, bridges and utilities.
Silica then is a significant occupational hazard, and by extension, a risk to the organization. So, what in the new Cal/OSHA Silica Standard 1532.3 should a risk manager understand and implement? First, managers need to know that this safety order allows for options in the manner that the organization responds to this hazard. In short, the code requires that the employer perform an initial determination and then use engineering controls and work practices as the primary way to keep exposures at or below the Permissible Exposure Limit (PEL).
- Engineering controls include wetting down work operations or using local exhaust ventilation (such as vacuums) to keep silica-containing dust out of the air and out of workers’ lungs. Another control method that may work well is enclosing an operation (“process isolation”).
- Examples of work practices to control silica exposures include wetting down dust before sweeping it up or using the water flow rate recommended by the manufacturer for a tool with water controls.
- Respirators are only allowed when engineering and work practice controls cannot maintain exposures at or below the PEL.
Alternatively, the code also includes Table 1; listing common construction tasks along with exposure control methods and work practices that work well for those tasks and can be used to comply with the requirements of the standard; but only if, the work duration does not exceed the time limitations set in that table. Although deceptively simple to follow and before opting to use this table as a means of compliance, careful consideration should be given to the amount of tracking (record keeping of employee and duration of activity) that will be needed to prove compliance.
Proving exposures less than the PEL has always been required by Title 8 CCR 5155(e)(1) and would be a typical secondary citation if not done in the case of Silica. Additionally, the ability to scientifically quantify and verify actual exposures to be less than the PEL is the best defense to the question “how do you know my client was not over-exposed?”. Yes, worker exposures to silica at the new PEL and action level can be reliably measured using existing sampling and analytical methods. Moreover, to improve reliability of silica measurements, employers must ensure that their silica samples are analyzed by laboratories that meet the qualifications and use methods specified in Appendix A of the standard. For reference see the “OSHA Technical Manual” at https://www.osha.gov/dts/osta/otm/otm_toc.html
Now that the reasons for and the basics of the new Silica Standard have been spotlighted, employers must currently comply. In fact, for all operations in general industry and maritime, other than hydraulic fracturing operations in the oil and gas industry:
- Employers are required to comply with all obligations of the standard, with the exception of the action level trigger for medical surveillance, by June 23, 2018.
- Employers are required to offer medical examinations to employees exposed above the PEL for 30 or more days a year beginning on June 23, 2018.
- Employers are required to offer medical examinations to employees exposed at or above the action level for 30 or more days a year beginning on June 23, 2020.
For hydraulic fracturing operations in the oil and gas industry:
- Employers are required to comply with all obligations of the standard, except for engineering controls and the action level trigger for medical surveillance, by June 23, 2018.
- Employers are required to comply with requirements for engineering controls to limit exposures to the new PEL by June 23, 2021. From June 23, 2018 through June 23, 2021, employers can continue to have employees wear respirators if their exposures exceed the PEL.
- Employers are required to offer medical examinations to employees exposed above the PEL for 30 or more days beginning on June 23, 2018.
- Employers are required to offer medical examinations to employees exposed at or above the action level for 30 or more days a year beginning on June 23, 2020.
Risk managers and those responsible for safety compliance within their agency should be aware of the overlapping and related safety orders that are equally as important and enforceable in addressing and meeting the Silica Standard. Keep in mind that compliance words and directives such as “engineering controls”, “respiratory protection”, and some of the activities listed in Table 1 found in this code, specifically invoke compliance to these related orders.
Please be aware that exposure to silica is addressed as part of the Authority’s Respiratory Protection instructor-led training. If you have any questions, please contact your agency’s assigned regional Risk Manager.
Additionally, members are encouraged to revisit the safety orders listed in the Cal/OSHA Policy and Procedures Manual regarding silica inspections:
- 5141, 5143, 5144, 5155, 5194 for other hazardous substances used besides the section 1530.1 dust exposure.
- 5145. Media for Allaying Dusts, Fumes, Mists, Vapors, and Gases
- 5152. Ventilation and Personal Protective Equipment Requirements for Grinding, Polishing, and Buffing Operations
- 1513 Housekeeping construction
- 1522. Body Protection.
- 1530 Construction – General Requirements of Mechanical Ventilation Systems (including handling of collected material)
- 1538 Rock Drilling Operations
- 3204 Access to Employee Exposure and Medical Records.
- 3301 Use of Compressed Air or Gases.
- 3367 Change Rooms
- 3368 Consumption of Food and Beverages.
by Jim Thyden, Insured Programs Manager
All members of the Authority have some level of cyber risk exposures. The Authority’s Cyber Liability Program provides both first- and third-party coverage for members who have incidents involving security breach response, cyber-extortion threats, digital asset restoration costs, privacy regulatory claims, business income loss, dependent business income loss, privacy liability, network security liability, and multimedia liability.
But with all the coverages, the best solution is preventing the loss in the first place. Educating and training staff is crucial in the fight against cyber criminals. The Authority’s Cyber Liability Program reinsurer, Brit Global Specialty, suggests the following steps to strengthen your agency’s workplace cybersecurity.
Three Steps to Ensure Workplace Cybersecurity is Everyone’s Business
A chain is only as strong as its weakest link. You’ve heard that before, I’m sure. Well, it’s true for chains and it’s true for your organization’s cybersecurity program.
Here are three steps for making cybersecurity everyone’s business in the workplace.
- Start at the top – To create a strong cybersecurity culture, you need leadership buy-in. Leadership must recognize cybersecurity as an identified risk and properly address it through dedicated human and budgetary resources. Cybersecurity risks and best practices should be discussed at regular management meetings. Cybersecurity is no longer an IT issue, it’s a “boardroom” issue.
- Create a cybersecurity culture – Creating a cybersecurity culture includes promoting awareness and making cybersecurity part of the everyday conversation. Companies shouldn’t just perform the annual training and then shelve cybersecurity issues until next year’s training. Rather, continually bring cybersecurity to the top of everyone’s mind throughout the year.Cyber threats and vulnerabilities affect your employees’ everyday duties and it is important to create awareness. Create a culture of awareness through regular training, awareness posters in common areas and integrating cybersecurity into the employee review process.
Additionally, don’t treat cybersecurity as an afterthought, start creating the culture during the new hire process. Delegate awareness to a department, put someone in charge and don’t let anyone pass the buck when it comes to cybersecurity awareness.
- Training – Training is a must. “Formal” training should be done at least annually with updates, reminders and notices sent weekly or bi-weekly. The training should be continuous and broken up into bite-size chunks dedicated to specific topics. Ransomware, phishing, password health, access controls and mobile devices should all be addressed.Training can take many forms: online, in the classroom, and interactive exercises, individually or part of a group. Mix it up and keep it interesting. Make it fun by rewarding employees for being an essential part of the culture. By implementing regular cybersecurity training, you are addressing one of the major risks of a cyber incident – human error.
Cybersecurity tools and software only go so far. Creating a culture of cybersecurity awareness with everyone in your organization is essential to help prevent harmful cyber-attacks.
For questions about cybersecurity or the Authority’s Cyber Liability Program, contact Jim Thyden, Insurance Programs Manager.
< Back to Full Issue Print Article