Client Update
firm victory
Partner Scott Tiedemann And Associate Chase Booth Secure Police Officer’s Termination.
A police officer asked a colleague to access a confidential law-enforcement database. The officer sought information about the vehicle of a woman the officer suspected that her ex-boyfriend was seeing. While off-duty, the officer then used that information to find the woman in another jurisdiction. The women fought. Peace officers from the other jurisdiction responded. The officer failed to inform her superiors, as required by policy, about her off-duty contact with law enforcement.
The department placed the officer on administrative leave. While on leave, the officer contacted the colleague whom she had asked to access the confidential databases. The officer attempted to align their accounts to make it appear that the access was for a legitimate police purpose. Also, while the officer was on administrative leave, she attended a church service in her police uniform in violation of the terms of her leave.
The department completed an internal investigation and issued a notice of intent to terminate. The officer appealed.
During two days of hearings before an advisory hearing officer, LCW strategically handled the evidentiary record,
highlighted the officer’s credibility issues, and outlined the department’s disciplinary standards. The department’s witnesses testified as to the officer’s pattern of deception. Among them was the colleague officer who accessed the confidential database for the subject officer. He testified that the subject officer gave inconsistent explanations for requesting the confidential database information. He also testified that the subject officer contacted him during the internal investigation to attempt to align their testimony.
The hearing officer found that the city proved multiple policy violations by a preponderance of the evidence, including misuse of confidential law-enforcement databases for personal purposes, dishonesty and lack of candor during investigations, insubordination and failure to follow lawful orders, failure to report required law-enforcement contacts, and conduct that brought discredit to the department. The decision emphasized that honesty, judgment, and compliance with policy are core requirements for peace officers and that misuse of confidential systems and evasive conduct undermined institutional integrity.
The city manager reviewed the hearing officer’s advisory decision. He agreed that the officer’s conduct struck at the heart of what it means to serve as a peace officer and that her continued employment would pose unacceptable risks to departmental integrity, operational effectiveness, and public confidence.
Retaliation
Firefighter Did Not Have To Exhaust County Remedies To Pursue Whistleblower Lawsuit.
A County firefighter with more than 20 years of service raised concerns about safety violations related to the maintenance of fire extinguishers on County fire engines. After reporting these issues to his supervisors in 2020, the Department removed him from fire prevention duties. The firefighter believed that the action was retaliation for his whistleblowing. He filed internal complaints with the County’s Office of Human Resources and the Civil Service Commission. But later withdrew his appeal after being assured that the issues would be addressed.
In 2022, the County investigated the firefighter for alleged misconduct and terminated his employment for violations of County rules. The firefighter submitted a claim under the Government Claims Act, which the County denied, and sued the County for retaliation for his whistleblower activities.
The superior court granted the County’s motion for judgment on the pleadings. The court ruled that the firefighter could not pursue his whistleblower action because he did not exhaust available administrative remedies by first appealing his termination to the Civil Service Commission. The court also denied the firefighter leave to amend.
The California Court of Appeal reversed. No exhaustion of internal administrative remedies was required because the County’s ordinances and rules did not establish a clear procedure for presenting, investigating, and resolving whistleblower retaliation claims. The Court distinguished general disciplinary appeal processes from administrative remedies for discrimination or harassment, and found that the County had no comparable remedy for whistleblower retaliation. The Court reversed the judgment and remanded the case to the superior court. The decision clarifies that if an internal administrative remedy does not specifically cover a particular claim, exhaustion of that remedy is not a prerequisite to filing suit.
PUBLIC RECORDS
City Not Required To Preserve Records Withheld As Exempt From Disclosure.
The Law Foundation of Silicon Valley, a nonprofit organization, requested public records from the City of Gilroy related to police involvement in homeless encampment cleanups. The requests included body-worn camera footage from the City’s Police Department. The City produced some records, withheld certain footage as exempt under the California Public Records Act’s (CPRA’s) law enforcement exemptions, and advised the Law Foundation that older footage had been destroyed pursuant to its standard records-retention policy.
The Law Foundation sued, alleging that the City violated the CPRA by, among other things, failing to preserve
records that were exempt from disclosure. The City won this issue in the trial court, the California Court of Appeal, and finally in the California Supreme Court.
The California Supreme Court framed the records retention question as: When an agency responds to a CPRA request by asserting that the requested records fall under a statutory exemption from disclosure, does the CPRA require that the agency retain the records for three years from the date the exemption is invoked? The Court answered no. The CPRA contains no express recordretention requirement tied to CPRA requests, and the Court declined to read such a duty into the law. Record retention and preservation obligations arise, if at all, from other statutes, regulations, or a public agency’s own retention policies.
City of Gilroy v. Superior Court, 2026 Cal. LEXIS 1 (Cal. Supreme Court 2026).
Romero v. County of Kern, (2025) 116 Cal. App. 5th 1189.
Retirement
No Voter Approval Needed For Charter City To Issue Pension Obligation Bonds.
The City of San Jose’s City Charter requires the City to maintain an actuarially sound retirement plan. The City chose to refinance a budget shortfall by issuing pension obligation bonds. The bonds were intended to reduce longterm costs by paying down the liability at a lower interest rate. The Howard Jarvis Taxpayers Association challenged the plan, arguing that the bonds would create new municipal debt exceeding annual revenues, and therefore, the California Constitution required the plan be approved by two-thirds of the voters.
The superior court ruled for the City, finding that the unfunded pension liability was a legally imposed obligation exempt from the constitutional debt limit. The California Court of Appeal affirmed, concluding that the bonds did not create new debt because the obligation already existed.
The California Supreme Court affirmed the judgment, holding that even if the bonds constituted a new debt, the City’s duty to fund its pension system is an obligation imposed by law rather than a voluntary one. As a result, the constitutional exception to the local debt limitation applied, and voter approval was not required. The Court emphasized that the debt limitation does not constrain the City’s choice of methods for meeting its legally mandated pension obligations.
City of San Jose v. Howard Jarvis Taxpayers, (2025) 18 Cal. 5th 1106.
Consortium Call Of The Month
Members of Liebert Cassidy Whitmore’s employment relations consortiums may speak directly to an LCW attorney free of charge regarding questions that are not related to ongoing legal matters that LCW is handling for the agency, or that do not require in-depth research, document review, or written opinions. Consortium call questions run the gamut of topics, from leaves of absence to employment applications, disciplinary concerns and more. This feature describes an interesting consortium call and how the question was answered. We will protect the confidentiality of client communications with LCW attorneys by changing or omitting details.
Answer:
Question:
Under California’s Fair Employment and Housing Act (FEHA), is a city obligated to go through the interactive process and seek reasonable accommodations for an employee’s disabled family member?
Employees may be eligible to take protected leave under the California Family Rights Act to care for an ill family member. (Gov. Code section 12945.2) But the FEHA’s interactive process-reasonable accommodation process is focused on the “individual applicant or employee” and how to adjust workplaces to allow them to perform their essential job duties. (2 Cal Code Regs section 11068(a).) Even if leave from work may be a reasonable accommodation, the leave is only reasonable if it allows the employee both time for treatment or recovery as to their own disability and to return to work. (2 Cal. Code Regs section 11068(c).) The FEHA regulations do prohibit an employer from denying benefits, harassing, or intimidating any applicant or employee because the employer disapproves generally of their association with individuals because of their disability or other protected characteristic. (2 Cal. Code Regs section 11022(a).) But nothing in the FEHA or its regulations requires an employer to conduct an interactive process or seek reasonable accommodations for an employee’s family member.
Did You Know?
Whether you are looking to impress your colleagues or just want to learn more about the law, LCW has your back! Use and share these fun legal facts about various topics in labor and employment law.
• Employers may require employees to dress appropriately and maintain a professional image, wear presentable clothes, and maintain appropriate personal hygiene. However, dress code standards should be: gender-neutral; allow protective hairstyles such as braids, locks, and twists; and accommodate religious dress and grooming practices that do not cause an undue hardship to the employer. Also, a dress code standard cannot discriminate on a protected class, nor can it be so vague that it allows the employer unrestricted discretion to decide what the dress code permits. (Gov. Code section 12947.5; Gov. Code section 12926(w); 2 Cal. Code Regs section 11019(c).)
• The U.S. Equal Employment Opportunity Commission (EEOC) has rescinded its non-binding enforcement guidance regarding workplace harassment. The EEOC’s action does not alter Title VII’s non-discrimination requirements.
benefits corner
How The Phase-Out Cap Works For The OBBBA’s Overtime Tax Deduction.
The One Big Beautiful Bill Act (OBBBA) created a new, federal overtime tax deduction that non-exempt employees can claim on their federal tax returns. Please see LCW’s blog post describing the OBBBA’s deduction of qualified overtime compensation here and blog post describing the IRS notices on the deduction located here
The OBBBA does not provide a deduction on all qualified overtime premiums for every non-exempt employee; it is subject to caps and limitations. Non-
Exempt employees should understand the two types of limitations on the deduction amount. First, the OBBBA caps the amount of the qualified overtime deduction at $12,500 ($25,000 for joint filers). Second, the OBBBA further limits the amount of the deduction if the nonexempt employee’s modified adjusted gross income (MAGI) is over $150,000 ($300,000 for joint filers). The deduction is phased out by $100 for every $1,000 of MAGI above $150,000 ($300,000 for joint filers).
For example, a non-exempt employee who is a single filer with a MAGI of $140,000 is subject to a deduction cap of $12,500. This means that the highest qualified overtime compensation deduction this employee can receive is $12,500.
In comparison, a non-exempt employee who is a single filer with a MAGI of $170,000 makes $20,000 more than the $150,000 MAGI threshold. $20,000 divided by $1,000 equals 20. For each set of $1,000 above the $150,000 MAGI, the deduction is lowered by $100. As a result, the deduction cap is lowered by $2,000 ($100 x 20). This employee’s deduction cap is $10,500 ($12,500 initial cap - $2,000 phase out amount). This means that the highest qualified overtime compensation deduction this employee can receive is $10,500.
Employers are not responsible for calculating or advising employees on the exact deduction cap that applies to the individual employee. It is ultimately up to the non-exempt employee (and their tax preparer) to determine the applicable cap.
Governmental Agencies Must Designate an Employee Responsible For ACA Reporting.
With the Affordable Care Act (ACA) reporting on the horizon, governmental agencies that are applicable large employers under the ACA must ensure they have designated the person who is responsible for the reporting. The Treasury Regulations require governmental agencies to prepare a written designation identifying the person who is responsible for furnishing and filing IRS Form 1094-C and Forms 1095-C on behalf of the agency. The written designation must:
• Identify and appoint the designated person as the person responsible for furnishing and filing IRS Form 1094-C and Forms 1095-C on behalf of the agency;
• Identify the category of full-time employees for which the designated person is responsible for reporting. This could be all full-time employees of the agency, or a particular job category of fulltime employees, as long as the specific employees covered by the designation can be identified.
• State the name, address, and employer identification number (EIN) of the agency;
• State the name, address, and EIN of the designated person;
• Contain language that the designated person agrees and certifies that they are appropriately designated and acknowledge responsibility for the ACA reporting on behalf of the agency, and subject to the requirements of the ACA; and
• Signed by the governmental agency and the designated person.
The agency must make the written designation before the furnishing deadline (March 2, 2026).
The written designation can be prepared as a resolution passed by an agency’s governing body, a policy, a memo, or a designation letter prepared by executive leadership (e.g., a City Manager, County Administrator, General Manager, etc.). If a third-party administrator (TPA) handles an agency’s Form 1095-C filings, the service agreement between the agency and TPA should designate the responsible person. The designation does not get submitted to the IRS, but the agency must maintain the designation under the record-retention rules of Internal Revenue Code section 6103.
IRS Increases Standard Mileage Rate To 72.5 Cents For 2026.
On December 29, 2025, the IRS announced that the standard mileage rate for vehicles driven for business purposes will increase to 72.5 cents per mile effective January 1, 2026. This is 2.5 cents greater than the 2025 rate. The standard mileage rate applies to fully-electric and hybrid vehicles, as well as gasoline and dieselpowered vehicles. Please see IRS Notice 2026-10 for more information.
Reminder: New PEMHCA Minimum For 2026 Is $162.
If your agency contributes the Public Employees' Medical and Hospital Care Act (PEMHCA) minimum for your group health plans, the new PEMHCA minimum contribution amount is $162 per month, effective January 1, 2026. This is $4.00 more than the PEMHCA minimum contribution for 2025.
Benefits Compliance Question
Question:
Can a City provide council members who opt out of an offer of health insurance with cash in lieu?
Answer:
Likely no. The biggest concern with cash in lieu is that it will push a council member’s compensation beyond the maximum compensation allowable by law. Government Code section 36516 authorizes a city to provide its council members with maximum compensation of between $950 and $3,200 per month, depending upon the size of the city’s population. While there is an exception to the compensation limit under Government Code section 36516(d) for retirement, health, welfare, and federal social security benefits, the exception does not apply to cash in lieu. There may also be other cafeteria plan restrictions on offering council members cash in lieu.
new to the Firm!
Andrew Dorado joins LCW as Senior Counsel, bringing extensive experience in employee benefits, fiduciary compliance, and advising public and nonprofit organizations on complex regulatory and employment-related issues.
Corrigan Lewis is a new Associate whose practice focuses on complex litigation, civil rights, and disability law. She brings experience in state and federal courts, advising and litigating on behalf of individuals with disabilities, and supporting compliance with state and federal civil rights laws.
LCW BENEFITS BEST PRACTICES TIMELINE
Each month, LCW presents a monthly benefits timeline of best practices.
February: Premium Perks
• Prepare for the Monday, March 2, 2026, deadline to furnish Form 1095-C to employees. Retain a record of your agency furnishing the forms to employees. See LCW’s Special Bulletin regarding an optional exception where employers may skip furnishing Form 1095-C and the complexities with using the exception. Also, ensure that vendors who conduct filings are doing so correctly, as the agency will ultimately be responsible for errors.
• Prepare for the Tuesday, March 31, 2026, deadline to e-file Forms 1094-C and 1095-C. Retain a record of the forms and proof of the e-filing. To the extent a vendor performs these filings on behalf of the agency, the agency should secure copies of the filings from the vendor. In the event of a potential future assessment, the agency will need to see the details of exactly what was filed.
• If the agency would like an automatic 30-day extension to file Forms 1094-C and 1095-C, the agency must submit Form 8809 on or before the due date of the returns.
Labor Relations
Certification Program
Developing Positive Partnerships and Leadership Excellence for Labor Relations Professionals
The use of this official seal confirms that this Activity has met HR Certification Institute’s® (HRCI®) criteria for recertification credit pre-approval.
2026 VIRTUAL CLASSES
All seven workshops include both traditional training and interactive simulations to develop skills helpful to labor relations professionals.
LCW 2026 Pre-Conference 21 January COSTING LABOR CONTRACTS
*In-Person event: San Francisco
12 & 19 February NUTS & BOLTS OF NEGOTIATIONS
12 & 19 March RULES OF ENGAGEMENT
16 & 23 April BARGAINING OVER BENEFITS
07 & 14 May PERB ACADEMY
04 & 11 June TRENDS & TOPICS AT THE TABLE
Interested?
Start Earning Your Certificate at: https://cvent.me/qWm1W9
16 & 23 July COMMUNICATION COUNTS!
13 & 20 August RULES OF ENGAGEMENT
17 & 24 September NUTS & BOLTS OF NEGOTIATIONS
15 & 22 October PERB ACADEMY
03 & 10 December BARGAINING OVER BENEFITS
*Each class consists of two dates/parts. Participation in both dates/parts is required for certification.
*Participants in the LRCP program have a three-year timeframe to complete all seven classes.
Liebert Cassidy Whitmore