ATTORNEY GENERAL ADDRESSES SCOPE OF BROWN ACT EXCEPTION FOR CLOSED SESSION DISCUSSIONS ABOUT REAL ESTATE NEGOTIATIONS

December 2011
Number 86

On December 27, 2011, the California Attorney General issued an opinion addressing what matters may be discussed in closed session under the Brown Act’s exception for real estate negotiations. (__ Ops.Cal.Atty.Gen. __ (2011, Op. No. 10-206.)) While the Attorney General opinion concluded that this exception is relatively narrow, thus potentially limiting what may be addressed in closed session, it also recognized the reality that discussion of certain topics should not be forced into open session if doing so would reveal information otherwise allowed to be kept confidential under the Brown Act. In the end, the Attorney General left the determination of whether a particular aspect of a real estate transaction may be discussed in closed session to a case-bycase analysis.

Under the Brown Act generally, a quorum of a legislative body must conduct its business in open session. There are a number of statutory exceptions that allow for closed session consideration of particular issues. One such exception provides that:

[A] legislative body of a local agency may hold a closed session with its negotiator prior to the purchase, sale, exchange, or lease of real property by or for the local agency to grant authority to its negotiator regarding the price and terms of payment for the purchase, sale, exchange, or lease

(Gov. Code §54956.8.)

Prior to going into such a closed session, the legislative body must identify “its negotiators, the real property or real properties which the negotiations may concern, and the person or persons with whom its negotiators may negotiate.” (Id.) This is ordinarily accomplished by use of the specific “safe harbor” agenda language for conference with real property negotiators as set forth in Government Code section 54954.5(b).

In her opinion, the Attorney General considered the range of topics that can be discussed in closed session under this exception. Emphasizing that the Brown Act’s closed session exceptions must be construed narrowly, the Attorney General found that a discussion under the real estate negotiations exception must be limited to paymentrelated issues, and is not “meant to authorize closed-session discussions of any and all terms of the transaction as a whole.” The Attorney General also looked to appellate court decisions for support of the notion that the real estate negotiations exception “simply cannot be read so broadly as to incorporate any and every topic that might have a bearing on a public real estate transaction.”

While the Attorney General thus avoided a broad reading of the real estate negotiations exception, the opinion also recognizes that the construction of the exception should not be so narrow as to force into open session topics that would otherwise be confidential. To do so would risk exposing the agency’s strategy for price and thus impact the potential financial return to the agency: “Among the purposes at play in this situation is the need to conserve scarce public resources through effective negotiation of real estate transactions.” The opinion goes on to state that “a closed session discussion regarding price or terms of payment must allow a public agency to consider the range of possibilities for payment that the agency might be willing to accept, including how low or how high to start the negotiations with the other party, the sequencing and strategy of offers or counteroffers, as well as various payment alternatives.” The Attorney General also recognized that information intended to assist with determining the value of a property may also be discussed in closed session, “because that information is often essential to the process of arriving at a negotiating price.”

Putting these considerations together, the Attorney General concluded that the real estate negotiations exception allows for closed session discussion of (1) the amount that the local agency is willing to pay or accept; (2) the “form, manner, and timing” of how the payment will be made; and (3) “items that are essential to arriving at the authorized price and payment terms, such that their public disclosure would be tantamount to revealing the information that the exception permits to be kept confidential.” This third category of information appears broad enough to provide public agencies with at least some flexibility when conferring with their real property negotiators in closed session.

This opinion from the Attorney General is advisory only, but provides some insight into how a court might interpret the issue. In the end, the Attorney General concluded that each case would have to be decided on its own facts. As a result, each time a public agency places discussion of a real estate matter on a closed session agenda, it should consider the circumstances carefully, with the unique facts of the particular situation taken into account.

For assistance on Brown Act issues, including regarding real estate negotiations, please contact any 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

DevonLincoln
Senior Counsel
Monterey Office
dlincoln@lozanosmith.com

© 2011 Lozano Smith

ALAMEDA COURTAGAIN UPHOLDS TIERED RATE FOR PARCEL TAX MEASURE

December 2011
Number 85

Backed by voter approval, some school districts levy parcel taxes with tiered-rate, rather than flat-rate, tax structures. Typically, tiered-rate structures have different rates for residential and non-residential use parcels, such as residential rates based on the number of housing units on each parcel, and nonresidential rates based upon the acreage of parcel. Questions have been raised about whether such structures comply with state law requiring that such taxes apply “uniformly” to all taxpayers or all property within a school district. Over the past several years, this issue has been the subject of several trial court decisions inAlamedaCounty, the latest of which was decided recently. Two of those decisions are already up on appeal, and more legal proceedings are anticipated.

In 2010, the Alameda County Superior Court found that a tiered-rate structure complies with the meaning and intent of the “uniformity” requirement of state law. In the consolidated cases of Borikas vs. Alameda Unified School District and Berry v. Alameda Unified School District, taxpayers challenged Alameda Unified School District’s 2008 parcel tax Measure H that taxed residential parcels at $120 per year, commercial/ industrial parcels with buildings of less than 2,000 square feet at $120 per year, and commercial/industrial parcels with buildings of more than 2,000 square feet at $.15 per square foot, up to a maximum of $9,500 per year. The plaintiff taxpayers complained that the parcel tax measure violated the “uniformity” requirement of Government Code section 50079.

The court ruled in favor of the school district, finding that so long as like parcels are treated in a like way and the division of parcels into different classes has a rational basis, the requirement of uniformity and equal protection of the law is met. This ruling is now up on appeal. Lozano Smith has submitted an amicus curiae brief on behalf of CSBA in support of theAlamedaUnifiedSchool Districtand the tiered-rate tax structure.

Another parcel tax measure, Measure A, replaced Measure H upon voter approval earlier this year. It levied a parcel tax of $.32 per square feet, up to a maximum of $7,999 per year, without regard to whether the use was residential or non-residential. Owners of parcels without buildings pay a flat tax of $299 per year. Unlike its predecessor, Measure A does not distinguish between residential and non-residential use; rather, it distinguishes between parcels with buildings and parcels without buildings. Like its predecessor, Measure A also distinguishes between parcels with larger buildings and parcels with smaller buildings (due to application of the cap). Taxpayers challenged this new structure in the case of Nelco, Inc., et al. v. Alameda Unified School District.

As before, the Alameda County Superior Court upheld the division of parcels into different classifications for tax treatment, and ruled that such a tax meets the standard if it applies uniformly to all persons or properties in the same classification.

Because the appeal of the Measure H decision is still pending, we think it is likely that the taxpayers who brought the Nelco case will appeal this latest decision and move to consolidate. Thus, the trial court’s decision will not be the last word on this subject. We will continue to monitor these developments and provide updates as they occur. If there are any questions, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Jeffrey Kuhn
Shareholder
Fresno Office
jkuhn@lozanosmith.com

Daniel Maruccia
Shareholder
Sacramento Office
dmaruccia@lozanosmith.com

© 2011 Lozano Smith

THEADADOES NOT REQUIRESCHOOL DISTRICTSTO SEEK WAIVERS TO ACCOMMODATE DISABLED TEACHERS WHO LACK VALID CREDENTIALS

December 2011
Number 84

Under the Americans with Disabilities Act (ADA), employers are required to provide reasonable accommodations to disabled individuals who are qualified to perform essential job functions. The Ninth Circuit Court of Appeals recently considered the issue of job qualifications in the case of a disabled teacher who failed to maintain her teaching credential.

In Johnson v. Board of Trustees (9th Cir. 2011) ___ F.3d ___, an Idaho school district fired disabled teacher Trish Johnson after she failed to complete the professional development coursework required to maintain a valid teaching credential. Prior to her termination, Ms. Johnson appealed to the school board requesting that they seek a waiver on her behalf from theIdaho state law requiring that all teachers posses valid credentials. Ms. Johnson maintained she was unable to complete her remaining coursework due to a major depressive episode caused by her disability. Finding that Ms. Johnson had been provided five years to complete the coursework and that other appropriately credentialed teachers were available to fill her position, the school district declined to seek a waiver on her behalf.

The Ninth Circuit’s decision in this case turned on the definition of a “qualified individual” under theADAand whether the school board had a duty to seek a waiver of credentialing requirements for Ms. Johnson as a reasonable accommodation of her disability. Relying heavily on the express language contained in guidance issued by the Equal Employment Opportunity Commission (EEOC), the court found that employers are not required to accommodate disabled individuals so that they will meet the job’s qualification standards, unless the job qualification is itself discriminatory in nature or impact. In this case, Ms. Johnson did not allege or provide any evidence that the qualification requirement to maintain a valid teaching credential was discriminatory. Thus, theADAdid not require the school board to seek a waiver as a reasonable accommodation to allow Ms. Johnson to continue her employment.

This decision provides a reminder that school district employers are required to accommodate disabled individuals only if they first meet the job’s qualification standards (unless the job qualification is itself discriminatory in nature or impact), including the job requirement that an existing teacher must maintain a valid teaching credential.

If you have any questions regarding this decision, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Darren Kameya
Senior Counsel and Labor & Employment Practice Group Co-Chair
Los Angeles Office
dkameya@lozanosmith.com

Mary Kellogg
Associate
Los Angeles Office
mkellogg@lozanosmith.com

© 2011 Lozano Smith

NEW CHARTER REVOCATION REGULATIONS BECOME EFFECTIVE DECEMBER 16, 2011

December 2011
Number 83

The State Board of Education (SBE) recently approved implementing regulations for Education Code section 47607, effective December 16, 2011, setting forth a detailed process for school districts and county offices of education authorizing charter schools (“Authorities”) to follow when revoking a charter. Additionally, the regulations set forth an expedited process when there is a severe and imminent threat to the health or safety of pupils and detail the appeal process for charter schools to challenge a revocation under all circumstances.

Education Code section 47607(c) permits Authorities to revoke a charter if the Authority finds, through a showing of substantial evidence, that the charter school: (1) committed a material violation of any of the conditions, standards or procedures set forth in the charter; (2) failed to meet or pursue any of the pupil outcomes identified in the charter; (3) failed to meet generally accepted accounting principles, or engage in fiscal mismanagement; or (4) violated any provision of law. However, the statute is vague regarding the revocation process, requiring the Authority to notify the charter school of any violation and give the school a reasonable opportunity to remedy the violation, but providing little other guidance.

The regulations, found at Title 5 of the California Code of Regulations sections 11960 et seq., set forth a very detailed process for such notice and the opportunity to remedy. The highlights of that process include:

(1) At least 72 hours prior to any board meeting in which an Authority will consider issuing a “Notice of Violation” of one or more specific alleged violations of Education Code section 47607(c), the Authority shall provide the charter school with notice and all relevant documents related to the proposed action.

(2) After providing the initial 72 hours notice and review by the Authority’s board, the Authority may issue a Notice of Violation along with a specific remedy period.

(3) Should it choose to respond to the Notice of Violation, the charter school shall have until the end of the remedy period to provide evidence refuting the violation or describing any remedial or proposed remedial action.

(4) At the end of the remedy period, if the Authority has substantial evidence that the charter school has failed to refute or remedy the violation, the Authority shall issue a Notice of Intent to Revoke and shall hold a public hearing concerning the revocation.

(5) No more than 30 days after the public hearing, the Authority shall issue and provide to the SBE a Final Decision revoking or declining to revoke the charter. If the Authority does issue a Final Decision within the timeframe set forth in the regulations, the Notice of Intent to Revoke is void.

Additionally, the regulations set forth a process for a charter school to appeal to the county board of education after revocation by a school district. (Cal.Code Regs., tit. 5, § 11968.5.4.) On appeal, the county board of education is tasked with determining whether the Authority’s factual findings are supported by substantial evidence or whether any procedural deficiency negatively impacted the charter school’s ability to refute or remedy the alleged violation. Furthermore, section 11968.5.5 provides a further right of appeal to the SBE within 30 calendar days based upon the record before the Authority and the county office of education.

The new regulations also provide for an expedited revocation process if there is a severe and imminent threat to pupil health or safety. (Cal.Code Regs., tit. 5, § 11968.5.3.) The regulations define “a severe and imminent threat to pupil health or safety” as that which “occurs when a charter school’s structures, systems or practices are in a condition that poses a severe and imminent threat to the health or safety of pupils while at school, and where the charter school has made no reasonable attempt to remedy the condition or no remedy exists to cure the condition” but “does not include any cosmetic or nonessential repairs or severe threats for which the school has initiated corrective action and has removed the pupils from any immediate danger.” (Cal.Code Regs., tit. 5, § 11965(e)(4) & (5).) Under those circumstances, the Authority may immediately revoke the school’s charter by approving and delivering a Notice of Revocation by Determination of a Severe and Imminent Threat to Pupil Health or Safety to the charter school’s governing body. The charter school may then appeal the revocation to the county board of education or SBE, pursuant to Education Code section 47607(f) and (g).

We note that revoking a charter petition can be a complicated, long and expensive process. If you have any questions regarding the new revocation regulations or charter school issues 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

Megan Macy
Shareholder
Sacramento Office
mmacy@lozanosmith.com

© 2011 Lozano Smith

NEW LAW ALLOWSSCHOOL DISTRICTSTO OFFER CAREER TECHNICAL EDUCATION COURSES THAT COUNT TOWARDS HIGH SCHOOL GRADUATION

December 2011
Number 82

Beginning with the 2012-13 school year, school districts may elect to offer career technical education (CTE) courses as an alternative to the high school graduation visual or performing arts or foreign language course requirements. Under the new law, schools that do not currently offer CTE courses are not required to implement new CTE programs.

Assembly Bill (AB) 1330 amends Education Code section 51225.3 to allow CTE courses to serve as an alternative to the performing arts or foreign language courses that are currently required for high school graduation. AB 1330 specifies that in order to qualify, a CTE course must be part of a district-operated CTE program that is aligned with model curriculum standards and framework adopted by the State Board of Education. This can include CTE courses offered through a regional occupational center, or programs operated by a county superintendent of schools or pursuant to a joint powers agreement.

The governing board of a school district electing to offer CTE courses under AB 1330 must, at a regularly scheduled board meeting, provide parents, teachers, students and the public with notice of its intent to offer these courses to fulfill graduation requirements and discuss the impact that offering these courses will have on the availability of courses that meet California State University (CSU) and University of California (UC) admission requirements. The governing board must also discuss the distinction, if any, between the district’s graduation requirements and CSU and UC admission requirements and whether or not the offered CTE courses will satisfy CSU and UC admissions requirements.

AB 1330 also amends Education Code section 48980 by requiring that participating school districts include the following information in their annual notice to parents: (1) information about their district’s high school graduation requirements and how each requirement satisfies, or does not satisfy, subject matter requirements for admission to the CSU and the UC; and (2) a complete list of the CTE courses offered by their district that satisfy CSU and UC admission requirements, and which of the specific college admission requirements these courses satisfy.

The California Department of Education will be tracking AB 1330’s impact on foreign language and performing arts studies, and the law is currently due to sunset based on the occurrence of certain contingencies. Our firm will be tracking any proposed legislation impacting this new law.

For any questions about AB 1330 or career technical education in general, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

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

Mary Gates
Paralegal
Monterey Office
mgates@lozanosmith.com

© 2011 Lozano Smith

 

COMMITTEE FORMED TO REVIEW EMPLOYEE HEALTH BENEFITS NOT SUBJECT TO OPEN MEETING PROVISIONS OF THE BROWN ACT

December 2011
Number 81

In a recent decision, a California court of appeal affirmed that a joint labor/ management committee formed for the purpose of reviewing the district’s health benefits program is not a legislative body subject to the open meeting provisions of the Ralph M. Brown Act (Brown Act). The case was decided under Government Code section 3549.1 subdivision (a), which is a part of the Education Employment Relations Act (EERA) and provides that any meetings and negotiations between a public school employer and a recognized or certified employee organization are exempt from the open meeting provisions of the Brown Act.

In Californians Aware, et al. v. Joint Labor/Management Benefits Committee, et al, (November 10, 2011) ___ Cal.App.4th ___ [2011 WL 5921366], theLos Angeles Community College District (District) and its six bargaining units developed the Joint Labor/Management Benefits Committee (JLMBC). The JLMBC was developed pursuant to a Master Benefits Agreement that was entered into by the District and the six unions.

The JLMBC was developed to review the District’s Health Benefits Program and recommend group benefit plans. Specifically, the JLMBC was tasked with filtering out changes that were to be brought to the negotiating table by reaching agreement regarding health benefits among both labor and management members of the JLMBC before submitting proposed changes to the District Board of Trustees. Accordingly, the JLMBC played a role in the collective bargaining process with respect to a mandatory subject of bargaining.

The court acknowledged a “tension” between the open meeting requirements of the Brown Act and the closed-door collective bargaining provisions of the EERA. The court reviewed the requirements of the Brown Act, including that all “legislative bodies” of a local agency must hold open public meetings. (Gov. Code § 54953(a).) The court noted that “legislative body” is defined under the Brown Act as a commission, committee, board, or other body of a local agency. (Gov. Code § 54952.) The court further recognized that, under the EERA, “[A]ny meeting and negotiating discussion between a public school employer and a recognized or certified employee organization” is exempted from Brown Act requirements. (Gov. Code § 3549.1.) The court concluded that the tension is resolved by the explicit language of Government Code section 3549.1 exempting bargaining committees from negotiating in public.

In reaching its conclusion, the court agreed with a formal opinion issued by the California Attorney General on this same issue that concluded that the JLMBC was created as part of, and for the purpose of, furthering the collective bargaining agreement process under the EERA and as such is not subject to open meeting provisions of the Brown Act.

This decision is a reminder that properly formed bargaining committees are not legislative bodies and therefore are not required to comply with the Brown Act.

If you have any questions about this decision, or about labor negotiations or the Brown Act in general, 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

Andrea Epps
Associate
Los Angeles Office
aepps@lozanosmith.com

© 2011 Lozano Smith

 

AB 1344: NEW LAW SETS LIMITS ON LOCAL AGENCY EMPLOYMENT CONTRACTS

December 2011
Number 80

Governor Jerry Brown recently signed into law Assembly Bill (AB) 1344, one of a series of “Bellbills” introduced during the last legislative session in response to public outrage triggered by the City ofBellcorruption and compensation scandals.

AB 1344 adds and amends various sections of the Elections Code and the Government Code, placing new restrictions on executive employment contracts for “local agencies.” The bill also makes certain changes to the Brown Act designed to promote greater transparency and ethics in local governance.

AB 1344 defines a local agency to include a “school district” and any “other public agency” and further defines “local agency executive” to mean a chief executive officer or department head not represented by an employee organization. Accordingly, school districts and other local educational agencies (LEAs) are subject to the following provisions of the new law, which becomes effective January 1, 2012:

Employment Contract Restrictions. AB 1344 prohibits the governing board of an LEA from executing or renewing any contract for a superintendent or other department head not subject to collective bargaining that includes either: an automatic renewal provision increasing the level of compensation beyond a cost-of-living adjustment set by the California Consumer Price Index, or a cash settlement that exceeds 18 months of the salary and benefits currently allowed under law.

If an LEA governing board enters into or renews a contract with a local agency executive providing for: (1) paid leave for the official pending an investigation, or (2) funds for the legal criminal defense of the official, then the contract must include a provision that such sums will be reimbursed by the official to the local public agency if the official is convicted of a crime involving abuse of office. In addition, every contract entered into between the local agency and an executive after January 1, 2012, must also contain a provision that any cash settlement related to the official’s termination will be reimbursed by the official to the local public agency if the official is convicted of a crime involving abuse of office. If the public agency provides such payments absent a contractual obligation, the official must still reimburse the public agency if he or she is convicted of abuse of office. The terms “abuse of office or position” are defined to include, but are not limited to, waste, fraud, and violation of the law under color of authority.

Brown Act Amendments. AB 1344 amends certain provisions of California’s open meeting laws (“the Brown Act”) to prohibit school districts from calling a special meeting to consider the salary, salary schedule, or “compensation paid in the form of fringe benefits” to a local agency executive. Consequently, after January 1, 2012, any action to approve or renew the contract of a local agency executive must be taken at a regular board meeting and cannot be approved at a special meeting of the board. However, this provision does not prohibit a local agency’s governing board from calling a special meeting to discuss the agency’s budget.

AB 1344 also requires a local agency to post a notice of any regular board meeting on the agency’s website, if it has one, at least 72 hours prior to the meeting, and to post a notice of a special board meeting on its website at least 24 hours prior to the meeting.

As noted above, the new law takes effect on January 1, 2012. It does not apply retroactively, and it only applies to contracts that are renewed or created after January 1, 2012.

If you need assistance reviewing your standard contract language to ensure compliance with AB 1344, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

David J. Wolfe
Shareholder and Local Government Practice Group Co-Chair
Fresno Office
dwolfe@lozanosmith.com

Claudia P. Weaver
Associate
Monterey Office
cweaver@lozanosmith.com

Louis T. Lozano
Shareholder
Monterey Office
llozano@lozanosmith.com

© 2011 Lozano Smith

THREE NEW BILLS SUPPORT EMPLOYEE RIGHTS

December 2011
Number 79

This fall, Governor Brown signed three bills affecting employee rights. First, the Wage Theft Prevention Act of 2011, enacted by Assembly Bill (AB) 469, imposes new penalties on employers for failing to pay the minimum wage. Second, AB 592 makes it unlawful for an employer to refuse to grant an eligible employee’s request for pregnancy or family leave. Third, Senate Bill (SB) 459 imposes civil penalties for the improper classification of an employee as an independent contractor.

Wage Theft Prevention Act of 2011 (AB 469). ExistingCalifornia law provides for criminal and civil penalties for an employer’s violation of minimum wage laws. AB 469 enacts the Wage Theft Prevention Act of 2011, which strengthens penalties against employers for failing to pay the minimum wage and imposes new recordkeeping requirements on employers. For example, AB 469 adds the potential penalty of restitution of wages to an employee who is paid less than minimum wage. The bill extends the time for the Division of Labor Standards Enforcement to bring an action for violation of minimum wage laws to three years from the date the penalty or fee became final. AB 469 also creates potential criminal liability by making it a misdemeanor for an employer that has violated the minimum wage law to willfully fail to pay a court judgment or Labor Commission final order for wages due.

No denial of an eligible employee’s right to take pregnancy or family leave (AB 592). Under California law, certain employees are eligible to take up to 12 weeks of unpaid, benefit-protected leave from their employment to bond with a child or care for a family member with a serious health condition, or when the employee is suffering from a serious health condition which makes him or her unable to perform the functions of the job. A female employee disabled by pregnancy, childbirth, or related medical conditions may also be eligible for up to four months of unpaid leave or a reasonable accommodation.

AB 592 now makes it unlawful for an employer to interfere with or deny an employee’s exercise of these rights. This means that an employer cannot refuse an eligible employee’s request for family or pregnancy leave, nor can it refuse to provide reasonable accommodation for a female employee for a medical condition related to pregnancy or childbirth. As federal law already prohibits such interference, this change bringsCalifornia’s laws in line with federal standards for family and pregnancy leave.

Civil penalties for an employer’s willful misclassification of individuals as independent contractors (SB 459). SB 459 attempts to combat the problem of employers incorrectly classifying employees as independent contractors by prohibiting willful misclassifications. A willful misclassification occurs when an employer voluntarily and knowingly misclassifies an individual as an independent contractor for the purpose of avoiding “employee” status. An employer found by the Labor and Workforce Development Agency to have violated this rule may be subject to a civil penalty between $5,000 and $25,000, and may be ordered to display a notice on its website or place of business stating that the employer has violated the law by willfully misclassifying employees. SB 459 also prohibits an employer from charging an independent contractor a fee, or making any deductions from an independent contractor’s compensation, when such fee or deduction would violate the law if the independent contractor had been properly classified as an employee.

If you have any questions about this legislation, 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

Rachel Gardunio
Associate
Walnut Creek Office
rgardunio@lozanosmith.com

© 2011 Lozano Smith

 

CONTRACTED MAINTENANCE WORK IS SUBJECT TO PREVAILING WAGE LAW

December 2011
Number 78

A recently published opinion from the First Appellate District of California entitled Reliable Tree Experts v. Baker (Caltrans) (October 7, 2011) ___ Cal.App.4th ___ [2000 WL 35918591] affirmed the trial court ruling that a one-time contract for pruning and removal of diseased trees along state highways was performed as “maintenance work” and was therefore subject to prevailing wage laws.

Caltrans advertised for bids to prune and remove diseased trees at various specified locations along state highways. In a written checklist distributed at a pre-bid/preconstruction conference, Caltrans noted the project would require payment of not less than the prevailing wage rates to all workmen employed in the execution of the contract.

After going through the bidding process, the contract was awarded to Reliable Tree Experts (“Reliable”). Reliable’s work on the project lasted approximately nine months and included one-time work to prune and/or remove diseased trees along state highways, but did not involve ongoing maintenance of the trees. Caltrans has a continuing obligation to maintain the rights-of-way along state highways, and periodically awards contracts to Reliable and other contractors for general maintenance.

Because this was a one-time project, Reliable argued that the tree felling, removal and heavy pruning required by the contract did not require payment of prevailing wages. The court disagreed, finding that maintenance work is within the general definition of public works. The court further held that tree maintenance includes removal and pruning because such work is a routine, recurring and usual activity for Caltrans. The court opined when determining whether work is “routine, recurring and usual,” the focus must be on the work, not the terms of an individual contract.

While this case does not significantly impact the application of existing law, it does clarify the applicability of prevailing wage laws.

If you have any questions about this case or how it may relate to your local agency operations, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Jenell Van Bindsbergen
Associate
Fresno Office
jvanbindsbergen@lozanosmith.com

Judy K. Bailey
Senior Paralegal
Fresno Office
jbailey@lozanosmith.com

David J. Wolfe
Shareholder and Local Government Practice Group Co-Chair
Fresno Office
dwolfe@lozanosmith.com

© 2011 Lozano Smith

 

CALIFORNIASUPREME COURT HOLDS THAT COUNTY MAY BE BOUND BY IMPLIED CONTRACTUAL TERMS REGARDING RETIREE HEALTH BENEFITS

December 2011
Number 77

In Retired Employees Association of Orange County v. County of Orange (November 21, 2011) __ Cal.4th __ [2011 WL 5829598], the California Supreme Court concluded that a county may form a contract with implied terms obligating the county to provide certain health benefits to retired employees. However, the Supreme Court cautioned that a “clear basis in the contract or convincing extrinsic evidence” must be shown before a court will find that such implied contractual obligations exist.

In 1966, theCountyofOrange(County) began offering group medical insurance to retired employees. Premiums for active and retired employees were calculated separately. In 1985, County began combining active and retired employees into a single unified pool for purposes of calculating premiums. Pooling lowers the cost of premiums for retirees, who are on average older and more expensive to insure than active employees. In 2007, due to financial concerns, County passed a resolution splitting the pool of active and retired employees, effective January 1, 2008.

In 2007, the Retired Employees Association of Orange County, Inc. (REAOC) filed a lawsuit in federal court seeking a court order prohibiting County from splitting the pool. While REAOC conceded that there was no express agreement regarding the unified pool, REAOC alleged that the County’s longstanding practice of pooling active and retired employees, along with County’s representations to employees regarding the unified pool, created an implied contractual right to a continuation of the unified pool for all employees who retired before January 1, 2008.

The district court found for County, holding that it could be liable only for obligations explicitly assumed by board resolution. REAOC appealed to the Ninth Circuit, and the Ninth Circuit asked the California Supreme Court to decide, as a matter ofCalifornialaw, whether “aCaliforniacounty and its employees can form an implied contract that confers vested rights to health benefits on retired county employees.”

The Supreme Court found that there are certain circumstances in which a county may be bound by terms implied into an existing contract. In response to REAOC’s contention that its members’ entitlement to the lower premium costs associated with a unified pool was a form of deferred compensation, the Supreme Court noted that matters regarding county employee compensation must be addressed in an ordinance or resolution passed by the board. However, the Supreme Court held that additional contractual terms, such as a term conferring a vested right to health benefits on retired employees, may be implied from the language or circumstances accompanying the ordinance or resolution.

While the Supreme Court was not asked to decide the merits of REAOC’s claim, it emphasized that courts should “proceed cautiously” in identifying implied contractual obligations, and that “as with any contractual obligations that would bind one party for a period extending far beyond the term of the contract for employment, implied rights to vested benefits should not be inferred without a clear basis in the contract or convincing extrinsic evidence.”

The Supreme Court returned the matter to the Ninth Circuit for determination of the remaining issues in the case. We will keep you updated as to any significant developments as this case continues to work its way through the courts. In the meantime, we recommend that you consult legal counsel if you are considering changes to the structure of your retiree benefits.

If you have questions about the implications of this decision on your district, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by: 

Thomas Manniello
Shareholder
Monterey Office
tmanniello@lozanosmith.com

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

© 2011 Lozano Smith

 

HEALTH INSURANCE POLICIES WILL BE REQUIRED TO COVER SOME AUTISM BEHAVIORAL THERAPY

December 2011
Number 76

A bill signed by Governor Brown this fall will requires insurance companies to provide health insurance coverage for behavioral therapy for children with autism. The bill, Senate Bill (SB) 946, is effective from July 1, 2012 through July 1, 2014. While the bill may help school districts provide cost-effective behavioral services for students with pervasive development disorder or autism, it has some limitations, as discussed below.

The autism insurance bill will serve as a stopgap until the federal health care reform law, the Patient Protection and Affordable Care Act (ACA), becomes fully effective in 2014.  SB 946 requires insurance companies to provide behavioral therapy, but its requirements cannot be greater than those of the ACA. We anticipate that the ACA will require coverage of autism services, though the exact requirements and conditions have not yet been established.

SB 946 adds several provisions to the Health and Safety Code, further clarifying when insurance companies and health care services plans must provide behavioral therapy for persons with autism. Under these provisions, a physician, surgeon or psychologist may prescribe behavioral heath treatment for a person with autism. “Behavioral health treatment” includes professional services and treatment plans, including applied behavior analysis and other evidence-based behavior intervention programs which develop or restore the functioning of an individual with autism.

The treatment must be provided by a qualified autism service provider, a qualified autism service professional supervised and employed by the qualified autism service provider, or a qualified autism service paraprofessional supervised and employed by a qualified autism service provider. “Qualified autism service provider” includes several types of professionals who work with students with autism, such as, board certified behavior analysts, physicians, occupational therapists, school psychologists, speechlanguage pathologists, and audiologists.

SB 946 includes a number of limitations that will affect its usefulness to school districts. First, the treatment plan for autism services may not be used for purposes of providing respite, day care, or educational services, or to reimburse a parent for participating in the treatment program. Additionally, the law expressly does not affect school districts’ obligations to provide students with a free, appropriate public education (FAPE) under special education law. Finally, school districts may not require parents to access private insurance for special education services. Thus, school districts will not be able to rely upon SB 946 to provide insurance funding for services that the district is already obligated to provide.

Nonetheless, SB 946 may be useful to school districts in some situations. For example, if parents seek more autism services than the district believes the student needs to receive a FAPE, then the parents may be able to obtain such services through their health insurance, rather than engaging in a legal dispute with the district.

If you have any questions regarding SB 946, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Daniel Osher
Shareholder and Special Education Practice Group Co-Chair
Monterey Office
dosher@lozanosmith.com

Aimee Perry
Associate
Sacramento Office
aperry@lozanosmith.com

© 2011 Lozano Smith

 

STATE BOARD OF EDUCATION ADOPTS NEW REGULATIONS REGARDING CHARTER SCHOOL RENEWALS

December 2011
Number 75

The State Board of Education (SBE) has adopted new regulations which add substantial detail to the procedure for renewing charter school petitions. These new regulations – which include a procedure for the automatic renewal of charters – took effect on November 23, 2011. The more noteworthy of the new regulations are reviewed below.

Automatic Renewal of Charters

The newly-adopted regulations allow for the automatic renewal of a charter school petition, if a school district fails to make written factual findings to support a denial within 60 days of the district’s receipt of a petition. (Cal.Code Regs., tit. 5, § 11966.4 (c).)

Due to this provision, school districts will need to pay increased attention to the 60-day deadline. The term of a charter school renewal is five years, a considerable amount of time to allow a charter school to operate if its petition should not have been renewed.

Signature Requirement Inapplicable to Charter Renewal Petitions

Petitions to initially establish a charter school require a threshold number of parents’ or teachers’ signatures. The new regulations provide that the signature requirement is not applicable to a petition for renewal. (Cal.Code Regs., tit. 5, § 11967.5 (d).)

Review of Charter Renewal Petitions

The new regulations specifically state that when reviewing a charter renewal petition, chartering authorities may look to the charter school’s past performance and plans for future improvements. (Cal.Code Regs., tit. 5, § 11966.4 (b)(1).)

A charter school must now provide documentation with its petition for renewal showing that it has satisfied at least one of the academic performance criteria specified in Education Code section 47607, subdivision (b). (Cal.Code Regs., tit. 5, § 11966.4 (a)(1).)

If you have any questions about these new regulations and how to apply them to your school district’s review of charter renewal petitions, 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

Jonathan Dale
Associate
Monterey Office
jdale@lozanosmith.com

© 2011 Lozano Smith