UPS ORDERED TO PAY OVER $96,000 FOR TERMINATING A DISABLED EMPLOYEE

November 2011
Number 74

The Fair Employment and Housing Commission (FEHC) ordered the United Parcel Service (UPS) to pay over $96,000 in damages after finding that UPS fired Eva Linda Mason because of her disability.

In 1998, Ms. Mason began working for UPS as an Operations Management Specialist to handle customer calls and complaints on shipments. Over 75% of her time was spent on the telephone or the computer, while less than 25% of her duties required physically walking around the warehouse facility.

In June 2007, Ms. Mason aggravated a prior work-related knee injury and visited UPS’s medical clinic. The clinic doctor issued a work status report stating that Ms. Mason could return to work with some restrictions such as limited standing, walking, bending, and kneeling. Even with the restrictions, Ms. Mason continued to perform all of her normal job duties. Because Ms. Mason had work restrictions, UPS mailed Ms. Mason an “ADApacket,” the documents required in order for Ms. Mason to request a job-related accommodation. Believing that the documents did not apply to her because she had never requested an accommodation and did not need an accommodation, Ms. Mason did not respond. No one from UPS contacted Ms. Mason to discuss her work restrictions or how she was performing her work duties.

In August 2007, Ms. Mason took a workers’ compensation leave of absence to have knee surgery and to recover. She returned to work in December 2007 with some restrictions but continued to perform her normal job duties. However, for reasons that were not fully explained, UPS changed Ms. Mason’s employment status to “residual disability.” UPS had a 12-month cap on the length of time employees with short or long term disabilities could be “absent” from their regular duties, including by assignment to a different or lighter position, known as residual disability.

In April 2008, Ms. Mason went out on another workers’ compensation leave and had a second knee surgery. UPS sent Ms. Mason anotherADApacket, even though Ms. Mason had not requested an accommodation. Ms. Mason claimed that she returned the completedADApacket, but UPS contended it was never received. In May 2008, UPS sent Ms. Mason a letter informing her that her request for an accommodation had been withdrawn due to her failure to submit the necessary documentation, and Ms. Mason did not follow up with UPS.

In August 2008, UPS determined that Ms. Mason had been “absent” from her duties for more than 12 months and terminated her employment. In February 2009, UPS sent Ms. Mason anotherADApacket. Because she did not know why she had received theADApacket, had not asked for an accommodation, and had already been fired, Ms. Mason disregarded the letter. At no point did anyone from UPS call Ms. Mason to discuss her work restrictions or how she was performing her work duties.

In an action brought before the FEHC by the Department of Fair Employment and Housing (DFEH) on behalf of Ms. Mason against UPS, the FEHC determined that UPS had violated the Fair Employment and Housing Act (FEHA, Gov. Code §§ 12940 et seq.) by discriminating against Ms. Mason on the basis of disability. The evidence showed that once Ms. Mason reported her knee injury to UPS, UPS regarded her as a person with a disability that was unable to perform her regular job duties. UPS deemed Ms. Mason to be on “residual disability” and terminated her after 12 months, even though Ms. Mason was actually performing her essential job functions. The FEHC found that UPS’s invocation of the 12-month rule was a pretext for its discriminatory termination of Ms. Mason based on her disability.

The FEHC also found that UPS failed to take all reasonable steps necessary to prevent discrimination. The FEHC noted that UPS’s Americans with Disabilities Act (ADA) compliance manual focused on federal law, rather thanCalifornia’s FEHA, and that UPS needed to provide ongoing training of its managers and supervisors on FEHA.

However, the FEHC determined that UPS and Ms. Mason were mutually responsible for the breakdown in the interactive process. FEHA requires employers, in response to an employee’s request for a job-related accommodation, to engage in a timely, good faith, interactive process with the employee to determine whether effective reasonable accommodations are possible. The FEHC stated that UPS’s reliance on automated, “formulaic, boilerplate letters,” that were factually erroneous and sent at confusing times, were ineffective in engaging Ms. Mason in the interactive process. Nevertheless, Ms. Mason also failed to cooperate in the interactive process by not contacting UPS after receiving the multipleADApackets and the May 2008 letter stating that her request for an accommodation had been withdrawn.

The FEHC ordered UPS to pay over $96,000, including payments to Ms. Mason for her lost earnings and emotional distress damages, and to reinstate Ms. Mason to her former position at UPS.

This decision underscores the importance to employers of engaging in individualized discussions with employees when requests for reasonable accommodations are made. Form documents notifying an employee that his or her request for an accommodation has been received and asking for addition information, such as an authorization for release of medical records, should be followed by personal contact so that the employer and employee may discuss the employee’s specific circumstances. Employers should also ensure that their disability nondiscrimination policies incorporate the requirements ofCalifornia’s FEHA in addition to the federalADA.

If you have any questions about the impact of this decision, or about the requirements of the Fair Employment and Housing Act, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Dulcinea Grantham
Shareholder and Labor & Employment Practice Group Co-Chair
Walnut Creek Office
dgrantham@lozanosmith.com

Kimberly L. Gee
Associate
Monterey Office
kgee@lozanosmith.com

© 2011 Lozano Smith

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SIDE LETTER AGREEMENTS DO NOT AUTOMATICALLY EXPIRE UPON RATIFICATION OF A SUBSEQUENTLY NEGOTIATED CONTRACT

November 2011
Number 73

The Public Employment Relations Board (PERB) recently issued a decision clarifying the use of side letter agreements and when they expire.

In Palomar Community College District (2011) PERB Decision No. 2213-E, PERB considered the duration of a 2005 side letter agreement regarding the discipline of campus police officers in light of a 2006 amendment to the parties’ collective bargaining agreement. The 2005 side letter did not include an expiration date or any terms regarding duration. Similarly, the 2006 amendment to the agreement did not alter the discipline provisions at issue and did not contain any clauses or provisions which expressed the intent to supersede or modify the side letter, such as zipper, merger, integration, or entire agreement clauses.

PERB found no evidence that the parties intended to discontinue the 2005 side letter by amending the agreement in 2006. PERB explained, “At its most basic, a side letter is a contract between the parties.” Thus, the duration of a side letter is dictated by the provisions of the side letter itself or by the subsequent conduct of the parties. Absent a provision in the contract, an agreement between the parties, or other evidence the parties intended the side letter to expire, the term of a side letter does not automatically end upon ratification of a subsequently negotiated contract. Therefore, it is advisable for a district to consider how long a side letter is intended to be in place, and to ensure that the side letter agreement reflects that intent.

If you have any questions regarding this decision or need assistance interpreting the duration of any existing side letters, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Karen Rezendes
Shareholder
Walnut Creek Office
krezendes@lozanosmith.com

Mary Kellogg
Associate
Los Angeles Office
mkellogg@lozanosmith.com

© 2011 Lozano Smith

CONTRACTOR’S FAILURE TO OBSERVE CHANGE ORDER PROCEDURES BARS RECOVERY

November 2011
Number 72

An appellate court has issued a decision that favors local public agencies when they experience delays on construction projects. In Greg Opinski Construction, Inc. v. City of Oakdale (October 6, 2011) 199 Cal.App.4th 1107 [WL 4625304], the court held that if a contractor fails to follow contract procedures to obtain a time extension, a local public agency is entitled to liquidated damages for delay in completing a project, even if the agency caused the delay. In addition, the appellate court held that a local public agency is entitled to possess withheld retention funds once the agency deems the contractor to be in breach.

Greg Opinski Construction, Inc. entered into a contract with the City ofOakdalefor a building project. After conclusion of the work, Opinski sued the City for retention funds withheld by the City and for additional compensation Opinski alleged was owed. The City cross-complained for its own damages, including liquidated damages for delay.

The trial court ruled in favor of the City on its claim for liquidated damages because Opinski had failed to follow the contract procedures for seeking a time extension. Opinski argued on appeal that a 1963 Supreme Court case, Peter Kiewit Sons’Co.v. Pasadena City Junior College District (1963) 59 Cal.2d 241, required a different result. In reliance on Civil Code section 1511, which describes when a delay in performing a contract may be excused, Peter Kiewit held that an owner is not entitled to liquidated damages when the lateness was caused by the owner’s conduct, even if the contractor failed to follow contractually-required procedures for time extensions. Opinski contended that any delays were caused by the City.

However, the appellate court noted that the legislature amended Civil Code section 1511 in 1965 in response to the Peter Kiewit decision, and that the amended statute made it possible for the parties to agree contractually to specific time extension procedures. The appellate court recognized that the contractual provisions to which Opinski agreed were intended “to allocate to the contractor the risk of delay costs – even for delays beyond the contractor’s control – unless the contractor follows the required procedures for notifying the owner of its intent to claim a right to an extension.”

Opinski had also alleged that it submitted change orders to which the City never responded, but the appellate court concluded (in an unpublished portion of the opinion) that even if Opinski’s allegations were true, those change orders were not submitted within 30 days of when the need for each change order arose, as required by the contract. Thus, the Opinski decision upholds the right of a public agency to require a contractor to comply with the claims procedures set forth in the contract between the parties.

The appellate decision also addressed access to retention funds. Public Contract Code section 22300 gives contractors the option of requiring that retention be held in escrow, and Opinski had exercised this option. The trial court had awarded pre-judgment interest to the City on the retention funds held in escrow. Opinski argued on appeal that the City had “dominion and control” of the withheld funds, and because the City could have withdrawn the funds and collected interest to address what the City contended was Opinski’s breach of contract, the City should not be entitled to pre-judgment interest. In response, the City argued that it did not have the ability to withdraw the funds until it won at trial.

The appellate court’s analysis focused on the ambiguous language of the escrow agreement required by Public Contract Code section 22300. Some paragraphs supported Opinski’s interpretation, and some supported the City’s. The appellate court ultimately ruled that the escrow agreement’s language “presupposes that the owner has a right to possession of the retention when the owner deems the contractor to be in breach. The purpose of withholding retention would be undermined if this were not the case. . . .” The appellate court therefore ruled that Opinski did not have to pay pre-judgment interest, because the City had a right to possess the funds prior to final judgment.

This ruling actually favors local public agencies. The appellate court clarified that an agency may now take possession of retention funds held in escrow once the agency “deems the contractor to be in breach” and such breach causes the agency to incur damages. This right may give a public works owner an additional remedy during financial closeout of projects that involve disputes with the contractor.

The parties still have time to appeal this decision to the California Supreme Court. LOZANO SMITH will provide updates on the Opinski case if further developments occur. LOZANO SMITH can provide clients with form construction agreements and documents, which include language that protects the owner on these issues. If you have any questions about this recent decision or construction issues generally, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Harold Freiman
Shareholder
Walnut Creek Office
hfreiman@lozanosmith.com

Arne Sandberg
Senior Counsel
Walnut Creek Office
asandberg@lozanosmith.com

© 2011 Lozano Smith

OPEN ENROLLMENT ACT – ROMERO BILL LIST OF 1,000 SCHOOLS RELEASED FOR PURPOSES OF 2012-2013 TRANSFERS

November 2011
Number 71

On November 1, 2011, the California Department of Education (CDE) released its list of 1,000 open enrollment schools from which students may transfer under the Open Enrollment Act (Romero Bill) for the 2012-2013 school year. While the Romero Bill intended to identify 1,000 “low performing” schools based on the Academic Performance Index (API), once again, the list includes many schools with exceptionally high API scores. As reported in Client News Brief Number 54, October 2011, last month Governor Brown vetoed Assembly Bill 47, which sought to remedy and reduce the number of schools with high API scores listed as “low performing,” as well as make other changes regarding how the list is calculated.

Under the Romero Bill, school districts must provide notice to students attending a school on the list of the right to apply for a transfer to a different school with a higher API score. Pursuant to the regulations under the Open Enrollment Act, because the list was not released before the start of the school year, school districts of residence with a school on the list must provide notice to parents and guardians of each student enrolled in the school “no later than 14 calendar days after the Open Enrollment List is posted on the CDE’s Web site.” (Cal.Code Regs., tit. 5, § 4702(a).) As noted above, the Open Enrollment List was posted on the CDE’s website on November 1 and, as a result, notice must be provided by Tuesday, November 15, 2011.

If you have any questions, would like to request LOZANO SMITH’S model Romero Bill Notice, or assistance with the development of standards for acceptance and rejection of Romero Bill transfer applications, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Thomas Manniello
Shareholder & Student Practice Group Co-Chair
Monterey Office
tmanniello@lozanosmith.com

Sloan Simmons
Shareholder & Student Practice Group Co-Chair
Sacramento Office
ssimmons@lozanosmith.com

© 2011 Lozano Smith

COURT OF APPEAL RULES THAT PROP 39 REQUIRES ALL SPACE BE CONSIDERED IN MAKING A FACILITIES OFFER TO ACHARTERSCHOOL

November 2011
Number 70

A California appellate court has issued a far-reaching decision regarding a school district’s obligation to provide “reasonably equivalent” facilities to a charter school under Proposition 39 (Ed. Code § 47614; “Prop 39”). Prop 39, enacted as a voter initiative in 2000, requires school districts to share their facilities with charter schools, and requires that the facilities offered by a district be reasonably equivalent to the district’s facilities.

In Bullis Charter School v. Los Altos School District, et al., (October 27, 2011) __ Cal.App.__ [2011 WL 5103065] the Sixth Appellate District held that Los Altos School District failed to consider and accurately measure the amount of space available to District schools when it made its determination of how much space to offer to the Bullis Charter School for the 2009-2010 school year. The decision will likely have a substantial impact on how districts evaluate their offers of facilities to charter schools, and will doubtless make the task of complying with Proposition 39 even more challenging for school districts.

Bullis Charter Schoolwas granted a charter by the Santa Clara County Office of Education in 2003. TheCharterSchoolhas been housed since its creation in facilities provided by the District under Prop 39. According to theCharterSchool, the District’s facilities offer for 2009-2010 significantly understated the size of comparable District facilities (“comparison schools” under Prop 39) and overstated the size of the facilities offered to theCharterSchool. In the lawsuit it filed challenging the District’s facilities offer as insufficient, the Charter School alleged that because the District failed to accurately assess the size of the comparison schools’ facilities and the Charter School’s facility, the site provided to the Charter School was less than half the size of the comparison schools’ sites.

Prop 39 and its implementing regulations set forth a process for a school district to evaluate the size of teaching space, specialized teaching space, and non-teaching space at comparison schools, and then require that the district provide a requesting charter school with space reasonably equivalent to the average facilities available at the comparison schools. According to theCharterSchool, the District manipulated the information it used in making the determination of what space it would offer, so as to minimize its obligation to provide space.

The District conceded that in calculating how much space to offer the CharterSchool, it had only calculated the square footage of certain spaces at the comparison schools and excluded large portions of those schools’ sites, including landscaping, walkways, child care centers, and other facilities. According to the appellate court, the District contended that “in the case of non-classroom facilities, it need only consider those that are common to each of the schools in the comparison group”, meaning that if a particular kind of non-teaching facility, like a tennis court, was present at some but not all of the comparison schools, that facility was not included in the calculations of what facilities were “reasonably equivalent”. The court disagreed with this approach, concluding that a school district “must take an objective look” at all of the non-teaching space available at its comparison group schools.

The court also held that school districts must consider overall site size in determining whether an offer of facilities is reasonably equivalent. On an acres-per-student basis, the site offered to theCharterSchoolwas about 75% of the size of the five comparison group sites, and the court determined that the District was required to consider this factor in determining whether its facilities offer was appropriate.

The court further critiqued the District’s methods for calculating how much space was being occupied by theCharterSchool. According to the court’s opinion, the District’s facilities offer significantly overstated the amount of space being offered to theCharterSchool. In addition, when calculating how much space theCharterSchoolhad at its disposal, the District included a soccer field, even though theCharterSchoolwas only entitled to use that field 40% of the time, and a multipurpose room that was constructed by theCharterSchool, not provided by the District. The court concluded that the District’s calculations of the Charter School’s space should have been reduced to reflect the fact that use of the soccer field was shared, and that it was inappropriate for the District to include facilities it did not own (such as the multipurpose room) in its determination of how much space the Charter School was entitled to receive.

This opinion is novel in that the court of appeals closely reviewed the evidence and performed its own calculations, using the same data on which the District had relied, to determine that the District’s offer was inadequate under Prop 39. Thus, for the first time in a published decision, an appellate court has examined the Prop 39 regulations line by line and applied those regulations to the available facts. At the same time, the decision is noteworthy for its broad holding that, “In making its facilities offer, the school district must make a good faith effort to consider and accurately measure all of the facilities of the comparison group schools and accurately describe the facilities offered to the charter school.”

The decision also comes just as school districts are receiving requests for facilities for the 2012-2013 school year, which were due on November 1, 2011. Complying with Prop 39 has always posed challenges for school districts. The creation of a charter school does not necessarily leave adequate facilities space available in the school district from which the charter school’s students are drawn, and therefore many school districts struggle to meet their obligations to furnish appropriate facilities. However, the decision in this case makes clear that efforts to read Prop 39 in ways that minimize a district’s obligations can backfire. In response to this decision, many school districts will be forced to examine how they have been measuring their obligations to provide facilities and perhaps change certain practices.

The time for the District to file an appeal of this decision has not yet expired. If there are further developments in this case, we will issue updates. In the meantime, if you have questions about the implications of this decision or your district’s Prop 39 obligations generally, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Edward Sklar
Shareholder and Charter School Practice Group Co-Chair
Walnut Creek Office
esklar@lozanosmith.com

Devon B. Lincoln
Senior Counsel and Charter School Practice Group Co-Chair
Monterey Office
dlincoln@lozanosmith.com

© 2011 Lozano Smith

ACLU ISSUES REPORT AND RECOMMENDATIONS REGARDING SCHOOLS’ POLICIES AND PRACTICES PERTAINING TO STUDENT CELL PHONES

November 2011
Number 69

The American Civil Liberties Union (ACLU) has released a report regarding schools’ practices and policies relating to student cell phones. The report, Hello! Students Have a Right to Privacy in their Cell Phones, discusses student cell phone possession, use, search and seizure, confiscation, and discipline policy trends inCaliforniaand around the nation. The report contains the ACLU’s summary of the underlying legal principles at issue and the ACLU’s recommended policies in this area intended to help schools avoid violations of student privacy rights.

For several years, Lozano Smith has provided training and handbooks for school districts and school administrators relating to student cell phones. Attorneys in our Student Practice Group are knowledgeable in the applicable statutes, case law and legal principles affecting student cell phone policies and practices and have experience drafting and reviewing cell phone policies. If you have any questions about the laws governing student cell phone regulation, search and seizure, confiscation, or discipline, or are interested in trainings on these subjects, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Thomas Manniello
Shareholder & Student Practice Group Co-Chair
Monterey Office
tmanniello@lozanosmith.com

Sloan Simmons
Shareholder & Student Practice Group Co-Chair
Sacramento Office
ssimmons@lozanosmith.com

© 2011 Lozano Smith