Education Matters: May 2023

Education Matters

School District Not Entitled To Recovery Of Salary Payments Made To Employee During Discipline Proceedings.

Beatrice Essah was a certificated teacher with the Los Angeles Unified School District (LAUSD). After years of unsatisfactory teaching performance, LAUSD served Essah with a Notice of Intent to Dismiss and Statement of Charges alleging five grounds for termination.

LAUSD also notified Essah it was suspending her without pay, however LAUSD did not explain why such a suspension was necessary. Education Code Section 44939 authorizes the immediate suspension of a permanent employee under limited circumstances. The governing board of a school district may also suspend an employee if they deem necessary and give notice of the suspension. Essah brought a Motion for Immediate Reversal of Suspension (MIRS) to reverse the suspension without pay and prevailed. LAUSD continued to pay Essah while her dismissal proceedings were ongoing. LAUSD ultimately prevailed in the dismissal proceedings against Essah, and sought to recover the salary payments it made to Essah during the pendency of the proceedings through a writ of administrative mandamus in the trial court.

employeediscipline new to the Firm!

The trial court ruled in favor of Essah and held that LAUSD could not recover the payments it made to Essah during the pendency of the proceedings. LAUSD appealed the trial court’s decision.

On appeal, the California Court of Appeal for the Second District affirmed the trial court’s decision. The Court of Appeal concluded LAUSD failed to show that the legislature intended school districts to be able to recover payments to dismissed employees. It stated that the legislature’s failure to expressly provide for judicial review of a MIRS order in the same manner as it did for judicial review of a final merits decision suggests that the legislature did not intend to provide for judicial review of a MIRS order. The Court of Appeal noted that while judicial review of MIRS orders might enable school districts to recoup some payments made to employees, this is a public policy issue for the legislature to address. Because the MIRS order was not reviewable, the Court of Appeal did not consider LAUSD’s arguments about the merits of the trial court’s order.

Los Angeles Unified School District v. Office of Administrative Hearings, 2023 WL 3267021 (Cal. Ct. App. May 5, 2023).

Brian Hawkinson, an Associate in our San Francisco office, provides legal expertise to public organizations concerning labor and employment matters. Prior to joining LCW, Brian worked for an Oakland based civil rights law firm where he actively participated in all stages of litigation: from screening clients, investigating claims, and filing complaints to engaging in discovery, resolving disputes with opposing counsel, and responding to dispositive motions.

first amendment

U.S. Department Of Education Releases Updated Guidance On Religious Expression In Public Schools.

On May 15, 2023, the U.S. Department of Education released updated guidance on prayer and religious expression in public schools. The guidance follows the U.S. Supreme Court decision in Kennedy vs. Bremerton, where the Supreme Court held that a public school district could not prevent a football coach from praying on the field after games because preventing the coach from engaging in prayer violated the First Amendment’s protections of free speech and the free exercise of religion.

The First Amendment prevents the government from establishing religion. It also prevents the government from interfering with an individual’s religious expression. The DOE’s updated guidance clarifies that the First Amendment does not prohibit students, teachers, or other employees from exercising their private religious expression at school.

The DOE provides schools with guidance on how to apply these constitutional principles in school contexts related to prayer:

• Prayer and Religious Exercise During Non-Instructional Time: Students may pray when they are not participating in school activities or instruction (such as recess or lunch time), subject to the same rules designed to prevent a “material disruption of the educational program that are applied to other privately initiated expressive activities.” Students may also read religious materials and engage in worship with fellow students during non-instructional time to the same extent they may engage in nonreligious activities.

• Organized Prayer Groups and Activities: Students may organize prayer groups and religious clubs and activities to the same extent students are permitted to organize other noncurricular student activity groups. Schools must provide these student groups with the same access to school facilities for assembling as is given to other noncurricular groups without discriminating based on the groups’ religious character. Schools may take reasonable steps to ensure that students are not pressured into joining these groups, and possess substantial discretion in whether to allow the use of school media for student advertising or announcements regarding noncurricular activities.

• School Employees: Teachers, administrators, and other school employees may not encourage or discourage private prayer or other religious activity. School employees may engage in private prayer during the workday where they are not acting in their official capacity and where their prayer does not result in coercing or persuading students to join in the prayer. For example, teachers may pray before school, during school breaks, or at lunch.

• Moment of Silence: If a school practices “moments of silence” or has other quiet periods during the day, students may choose to pray silently or not to pray during these periods, and teachers cannot require or encourage students to pray, or discourage them from praying during these periods.

• Accommodations: Schools must accommodate prayer and religious exercise during instructional time to the same degree that students may engage in nonreligious private expression during that time. For example, students may bow their heads and pray to themselves before taking a test.

• Student Assemblies and Noncurricular Events/ Graduations: During student assemblies and noncurricular events, student speakers must not be selected on a basis that either favors or disfavors religious perspectives. Additionally, school officials may not mandate or organize prayer at graduation, or select graduation speakers in a manner that favors religious speech. Graduation speakers should be selected on the basis of a content-neutral and even-handed criteria. Schools may make appropriate, neutral disclaimers to clarify that speech (whether religious or nonreligious) is the speaker’s and not the school’s speech.

• Baccalaureate Ceremonies: Schools may not mandate or organize religious baccalaureate ceremonies. However, if a school makes its facilities and other services available to other private groups, it must make those facilities and services available on the same terms to the organizers of privately sponsored religious baccalaureate ceremonies. Schools may disclaim official sponsorship or approval of events held by private groups in a manner that neither favors nor disfavors groups that engage in religious speech.

The DOE also provides schools with guidance on how to address religious expression other than prayer in the public school context:

• Religious Literature: Students have a right to distribute religious literature to their peers on the same terms as they are permitted to distribute other literature that is unrelated to school curriculum. Schools may impose the same reasonable time, place or manner restrictions on distributing religious literature; however schools may not target religious literature for more permissive or more restrictive regulation.

• Teaching about Religion: Schools may not provide religious instruction, but they may teach students about religions and promote religious liberty and respect for religious views. For example, schools may allow student choirs to perform music inspired by religious themes as part of schoolsponsored events, provided that the music is not performed as a religious exercise or used to promote or favor religion generally.

• Student Dress Codes and Policies: Schools may adopt policies related to dress and uniforms to the extent they are consistent with constitutional protections. However, schools may not specifically

target religious attire for prohibition or regulation. Students may wear clothing that display religious messages to the same extent they are permitted to display nonreligious messages.

• Religious Expression in Class Assignments and Homework: Students may express their religious beliefs in their homework, artwork, and other written and oral assignments, and should be free from discrimination based on the religious perspective of their submissions. For example, if an assignment involves writing a poem, and a student submits a poem in the form of a prayer, the teacher should judge the poem on the basis of academic standards and neither penalize nor reward the poem based on the religious perspective.

• Excusals for Religious Activities: Schools have the discretion to allow students to attend off-campus religious instruction as long as the school does not encourage or discourage in such instruction. Schools may also excuse students from class to remove a burden on their religious exercise, such as prayer or fasting, at least where doing so would not impose a material burden on other students. Schools may need to make a religious accommodation for students who wish to engage in religious activities.

Public schools may also be subject to other requirements under Federal and State laws relevant to prayer and religious expression. For example, the Equal Access Act is designed to ensure that student religious activities are given the same access to federally funded public school facilities as are secular activities. Under the Equal Access Act, a public secondary school receiving federal funds that creates a “limited open forum” may not refuse student religious groups access to that forum. The Equal Access Act also requires public secondary schools receiving federal funds to allow student religious groups to use school media –such as the school’s newspaper and bulletin board – to announce their meetings on the same terms as other noncurricular related school groups are allowed to use school media. Schools may, however, use appropriate neutral disclaimers of the school’s sponsorship or approval of noncurricular groups and events.

& Facilities

Lease-Leaseback Arrangements Financed Through Bonds And Not The Builder Are Not Subject To A Validation Action.

The Fresno Unified School District (the District) has been entangled in litigation concerning its lease-leaseback construction arrangement for a new middle school for over ten years. Plaintiff Stephen Davis, a taxpayer that lives in the District, originally brought this action in November 2012, asserting that the lease-leaseback construction arrangement the District engaged in was invalid.

The facts of this case date back even further, to 2001, when voters approved a bond that authorized the District to sell bonds to raise money for general purposes. The District raised approximately $108 million in funds through the sale of these bonds. In 2012, the District entered into an agreement with Harris Construction (Contractor) for the construction of a new middle school on the District’s property. The District and the Contractor structured the agreement as a lease-leaseback arrangement.

A lease-leaseback arrangement is an arrangement where the landowner, here the District, leases its land to a contractor for a negligible amount ($1). The contractor then constructs the building on the land and then leases the building back to the District. At the end of the lease, the building and the land vests in the District. Typically, this permits the District to obtain costly improvements without entering into a debt obligation that requires voter approval. It shifts the financing of the project to the builder and permits the District to make lease payments rather than debt payments. However, in this particular situation, the District already raised the funds through the sale of bonds, so it did not finance the project by or through the Contractor.

Plaintiff asserted that the lease-leaseback arrangement was invalid because it avoided the state’s debt restrictions and the competitive bidding process typically required of public construction. Plaintiff sought an order to require the Contractor to pay back the money it had received under the lease arrangement. The trial court found for the District and Contractor. The Plaintiff appealed and the Court of Appeal reversed and remanded the case. The trial court

then found that the lawsuit was moot because construction was completed and the lease expired. Plaintiff again appealed and the Court of Appeal again reversed. The main issue in the second appeal was whether the lawsuit was moot when the leases terminated. One of the causes of action the Plaintiff originally brought against the District was through a reverse validation action in which he asserted the lease-leaseback arrangement was not a valid contract. A reverse validation action becomes moot when the contract at issue has been fully performed. The Court of Appeal determined the validation statutes were inapplicable due to a lack of a statutory basis to support a reverse validation claim. The Supreme Court then considered the District’s appeal of this conclusion.

The California Supreme Court granted review to address a narrow question from the second appeal: “Is a lease-leaseback arrangement in which construction is financed through bond proceeds rather than by or through the builder a ‘contract’ within the meaning of Government Code Section 53511?” The Court held that it was not, thereby affirming the Court of Appeals decision and remanding it for further proceedings.

This question is significant because if the leaseleaseback arrangement were a contract within the meaning of Government Code Section 53511, it would be subject to a validation action. A validation action permits a public agency to obtain a judgment upholding its handling of an agency matter. Typically, an agency “validates” its action by doing nothing. Under the Code of Civil Procedure, an interested person has 60 days to bring a reverse validation action. Thus, once the tolling of the 60 days occurs, the action is validated and immune from attack. This immunity occurs even if the action was not legally valid. Significantly, if this arrangement were subject to a validation action, it would be the Plaintiff’s exclusive remedy because it would preclude recovery on his other theories.

The District argued that the lease-leaseback arrangement was valid because it fell within the definition of a contract under Government Code Section 53511 and was subject to the validation statutes. The Court disagreed with this assertion. The Court opined that the Legislature did not intend any and all contracts that a local agency may enter into to be subject to validation. It further stated that the definition of contract

that are subject to validation under Government Code Section 53511 only includes contracts that somehow relate to government indebtedness. Here the lease-leaseback arrangement at issue was funded by the sale of general obligation bonds that preceded the leaseleaseback arrangement. In other words, the District did not go into debt or finance this project through the lease-leaseback arrangement because it had sold bonds to fund it. Therefore, “the lease-leaseback arrangement was not a contract on which the debt financing of the project directly depended” so it is not a contract as defined in Section 53511.

Significantly, the Court did not determine whether a lease-leaseback arrangement would otherwise fall within the scope of Government Code Section 53511. Yet, it did hint that in the event an arrangement shifts the financing of the public project to another entity, it “has some features that might be cited in support” of it being considered a contract under 53511.

Here, the Court analyzed a very narrow issue, and held that public contracts that are not “inextricably bound up with indebtedness” are not subject to reverse validation actions under Government Code Section 53511. The Court’s decision also permits Plaintiff to proceed with a taxpayer action. Accordingly, the District’s litigation saga will likely continue.

Davis v. Fresno Unified School District (April 27, 2023, Opinion No. S266344).

Contractors Are Responsible For The Means And Methods They Use For A Construction Project.

The California Court of Appeal recently held that Public Contract Code Section 1104, which prohibits public agencies from shifting responsibility for design errors to a contractor through a construction contract, does not apply to situations where a public entity gives a contractor flexibility to determine the means and methods it uses for a construction project.

Los Angeles Unified School District (District) entered into a contract with Suffolk Construction Company, Inc. (Suffolk) to construct a new K-8 school in downtown Los Angeles. Suffolk, through its subcontractors, began work on the project by pouring concrete for the footings. The concrete footings began to crack shortly thereafter. The District then directed Suffolk to perform mock pours to test possible alterations that would avoid the cracking problem. The cracking concrete and the resulting test pours led to months of delay to the project. In response, Suffolk sought an extension request, $3.3 million in additional costs, and eventually filed a lawsuit against the District.

Suffolk filed an action against the District alleging breach of contract and implied contractual indemnity, and sought declaratory relief. The District argued Suffolk’s damages were a result of Suffolk’s and its subcontractors’ own conduct. The main question was whether the District approved the concrete mix and was therefore responsible, or if Suffolk was responsible because it chose the original concrete mix. At trial, the court gave the jury an instruction based on Public

Contract Code Section 1104, which prohibits public agencies from requiring contractors to assume responsibility for the completeness and accuracy of public works plans and specifications. Accordingly, the jury found in favor of Suffolk because the instruction implied that the contractor could not be responsible for accurate plans.

The District appealed, asserting that Suffolk failed to competently perform its work and that the court erred when it gave the jury instruction regarding Public Contract Code Section 1104. The Court of Appeal agreed with the District and found that the jury instruction was erroneous and prejudicial. The Court specifically noted that the Legislature enacted Section 1104 because of a trend of public entities shifting plan liability from architects to general contractors. The Court found that Section 1104 is only applicable where a public entity attempts, through contractual language, to require a bidder to assume responsibility for the completeness and accuracy of plans and specifications. Here, there was no contractual shifting of liability, only an assertion by Suffolk that the District breached its implied warranty of correctness of plans and specifications.

The main takeaway from this case is the Court’s distinction between a contract that illegally shifts liability for design errors and a situation where a public entity gives a contractor flexibility to determine the best means and methods to complete a project, such as choosing a concrete mix for the owner’s approval. Project owners can still not shift design liability to contractor, but may hold the contractor responsible for their chosen means and methods of construction.

Suffolk Construction Company, Inc. v. Los Angeles Unified School District (March 30, 2023; 2d Div. No. B285400).

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Any and all public employees, including entry-level employees, general and lead workers, supervisors and managers. This workshop is also encouraged for any level of employee who is new to the public sector or who would benefit from a refresher workshop.

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firm victories

LCW Partner Jennifer Rosner And Associate Jack Begley Convince Superior Court To Uphold Police Officer’s Termination.

A city terminated a police officer for repeatedly accessing confidential law enforcement information data to obtain personal information for friends. The officer claimed that the information was public, so it was permissible for him to pass the information to his friends. This was false, and the officer had to verify each time he signed in to the database that the information he was retrieving was for a legitimate law enforcement purpose.

After the city terminated the officer’s employment, the officer asked the superior court to review the city’s decision. The officer also claimed that the city failed to give him both the proper notice of investigation and the investigation materials that the city had relied upon as required by the Public Safety Officer’s Procedural Bill of Rights Act (POBR).

LCW was able to show that the officer received sufficient notice of investigation and all the investigation materials that the city relied upon. LCW convinced the judge that city had sufficient cause to terminate the officer’s employment and that the penalty of termination was within the city’s discretion.

LCW Partner Adrianna Guzman And Associate Anni Safarloo Win Dismissal Of Time-Barred UPC Regarding Paid Release Time.

A union had asked a city employer, with one day’s notice, for paid release for several employees to attend an informal conference on an unfair practice charge (UPC) at the Public Employment Relations Board (PERB). The city granted the paid release time, but only to the designated employee representative to attend the informal conference, as required by the Meyers-MiliasBrown Act (MMBA). The city allowed the remaining employees to use their own paid leave to cover the time off.

The union filed an unfair practice charge, alleging that the city violated the MMBA by denying paid release time to all the employees who attended the informal conference. LCW argued on the city’s behalf that: 1) the UPC was not filed within six months after the union knew of the city’s paid release time decision; and 2) the MMBA only allows the designated representative to have paid release time in connection with PERB proceedings.

The union filed an amended UPC, alleging that the non-payment of the release time occurred within the six-month limitations period. LCW convinced the PERB agent to dismiss the charge as untimely because the six-month limitations period began at the earlier time when the city communicated it would only grant paid release time to the designated representative. The PERB agent did not address LCW’s argument regarding the “one designated representative” limit on paid release time for PERB proceedings as stated in Government Code Section 3505.3.

LCW Partner Jesse Maddox, Associates Nathan Jackson And Lars Reed Defeat Police Officer’s Untimely Request For Arbitration.

In 2021, the city terminated a police officer for cause. Per the Memorandum of Understanding between the city and the police union, the officer had 20 work days to request arbitration. The officer’s attorney and the city confirmed the exact deadline for the officer to request arbitration. The officer informed his attorney of his desire to seek arbitration, but neither of them informed the city until a month after the agreed upon deadline. The city proceeded to deny the officer’s untimely request to arbitrate.

The terminated police officer then filed a lawsuit seeking to be relieved from his attorney’s negligence and to force the city to arbitrate. LCW successfully defended the city against this lawsuit at the trial court level, at the earliest opportunity, by prevailing on a demurrer without a leave to amend.

The terminated police officer then appealed, arguing that he was entitled to statutory relief from forfeiture, and the city was obligated to submit to arbitration. LCW successfully argued before the California Court of Appeal that the statute the police officer had cited was inapplicable. The Court of Appeal agreed and affirmed the judgment for the city.

LCW Partner Geoff Sheldon And Associate Alex Wong Win Dismissal Of Police Officer’s Disability Discrimination Claims.

A probationary police officer sued for disability discrimination, retaliation, and failure to accommodate. The case arose after the officer was injured while responding to a call for service. The officer’s doctor initially prescribed work restrictions that included, among other things, no standing, walking, or sitting more than 20 cumulative minutes per hour, and no lifting more than five pounds. The officer also needed to lay down a minimum of 20 minutes per hour. If those

accommodations could not be provided, he was deemed temporarily totally disabled. The city granted his requests for temporary total disability leave. The officer filed a worker’s compensation claim as well.

Later, the city discovered that the officer was quite physically active even while “temporarily totally disabled,” and the city reported this information to its third-party administrator. An investigation conducted by the third-party administrator included sub rosa video which showed that the officer was carrying several heavy items, lifting and carrying tables, walking without using crutches, entering and exiting vehicles without hesitation, providing support for a person above his shoulders so that person could reach a basketball rim, and even scaling a fence four separate times to hang a sign.

The officer was eventually cleared to return to modified work with no contact with the public. The city determined that it could not accommodate the restriction of no contact with the public and advised the officer. The officer then returned to his doctor for reevaluation and was cleared for work as a police officer without any restrictions.

The chief released the officer from probation after reviewing the evidence of suspected worker’s compensation fraud. The officer responded by filing the claims noted above in the California Superior Court.

The court granted the city’s motion for summary judgment on all counts. First, with respect to disability discrimination and retaliation, the court found that the city had a legitimate business reason for releasing the officer from probation. Second, because the officer’s claims of discrimination and retaliation failed, his claims for failure to prevent discrimination and retaliation also failed.

Finally, the court found that the city appropriately accommodated the officer through a good faith interactive process. The city initially granted the officer paid temporary disability leave, and later reviewed available desk assignments for positions that complied with his work restrictions. Because an employer has no affirmative duty to create a new position to accommodate a disabled employee, the court dismissed this claim as well.

Jaqueline

Abigail

Juliana

Probationary Employee Was Properly Released Despite His Protected Union Activity But Board Member’s Comments Constituted Interference.

By March 2020 the COVID-19 pandemic began to overwhelm hospitals nationwide. One hospital within the Alameda Health System (AHS), Highland Hospital, quickly experienced a shortage of personal protective equipment (PPE). A supervisor at Highland Hospital began to worry that supplies of PPE would be exhausted and directed nurses to wear cloth gowns when tending to non-COVID-19 patients instead of the fluid-resistant gowns normally worn.

Many of the nurses, who are represented by the Service Employees International Union, Local 1021 (SEIU) felt uncomfortable about this change. Saber Alaoui was a probationary nurse in March 2020. During one of his shifts, Alaoui cut holes in a garbage bag and wore it as a makeshift fluid-resistant gown over his cloth gown.

Labor

At some point, an SEIU employee representative approached Alaoui and asked if he would share the picture of himself wearing the modefied garbage bag. Alaoui agreed because SEIU was advocating about PPE issues, and seeking to improve access to isolation gowns. SEIU representatives put a version of Alaoui’s picture on Facebook, Instagram, and Twitter.

The post gained traction online and an article appeared in a local newspaper. Part of a Board of Trustees meeting focused on AHS’s response to the pandemic. The Board discussed media reports of the nurse who wore a garbage bag as PPE. A Board member asked the AHS CEO if staff were being denied necessary PPE, and the CEO responded that they were not. The Board member then asked, “for the purpose of political theater, have you required staff to wear garbage bags?” The CEO responded, “no,” and said that he happened to be visiting Highland Hospital when the nurse reported wearing a garbage bag. The CEO characterized the incident as an “unfortunate episode” and said that isolation gowns were available later in the day. The Board member responded, “that kind of political theater is not acceptable [in] a time of

crisis and we need to keep our heads level and . . . our eyes on the . . . real problem.”

Shortly thereafter, Alaoui’s supervisors began discussing whether to release Alaoui from probation for performance reasons. Alaoui had failed to administer medication as required by the patient’s treatment plan, and had improperly pulled medications for more than one patient at the same time. When counseled about these mistakes, Alaoui was recalcitrant and argumentative. AHS released Alaoui from his probationary employment.

SEIU filed an unfair practice charge (UPC) with the Public Employee Relations Board (PERB) against AHS, alleging that both Alaoui’s release and the Board member’s statement were improper interference with protected union activity under the MeyersMilias Brown Act (MMBA) the state law that governs local public agency labor relations.

To establish a prima facie interference case, a charging party must show that an employer’s conduct tends to or does result in some harm to protected union and/or employee rights. A charging party need not

relations

prove an employer acted because of an unlawful motive. If the union establishes a prima facie case, the burden shifts to the employer. The degree of harm triggers the weight of the employer’s burden. If the harm is “inherently destructive” of protected rights, the employer must show that the interference resulted from circumstances beyond its control, and that no alternative course of action was available. For conduct that is not inherently destructive, the employer must show that it narrowly tailored its conduct based on an important operational necessity.

PERB found that Alaoui’s release from probation was for legitimate business reasons, namely, poor performance, and was not inherently destructive.

PERB found that the photo of Alaoui wearing the garbage bag gown was protected activity because it drew attention to employee safety concerns. Releasing Alaoui from probation shortly afterwards tended to harm protected rights. But, PERB held that the harm caused by releasing Alaoui from probation shortly after the protected activity was outweighed by AHS’s right to release an employee from probation for serious work performance issues. PERB dismissed this part of the charge.

PERB next examined the claim of interference based on the Board member’s statement that “political theater is not acceptable.”

In an interference case involving employer speech, PERB looks at the circumstances to determine if an employee or union representative had an objective reason to feel that the employer’s communication coerces, restrains, or otherwise interferes with protected rights. Generally, an employer has a safe harbor from an interference violation if it expresses its views, arguments, or opinions on employment matters, unless its expression contains a threat of reprisal or force, or a promise of benefit. This safe harbor for employer speech does not apply, however, “to … urging employees to participate or refrain from participation in protected conduct, statements that disparage the collective bargaining process itself, implied threats, brinkmanship, or deliberate exaggerations.”

PERB first decided that the actions the Board member described as “political theater,” in context, were protected activities because the statement occurred amidst union and employee actions around safety and PPE shortages. But, PERB further held that an employee listening to

the statements could reasonably infer a threat because a reasonable employee would understand “not acceptable” to mean “prohibited.” PERB concluded that the Board member’s comments that “that kind of political theater is not acceptable” constituted interference in violation of the MMBA.

Note:

This case illustrates how careful management must be with any communications that relate in any way to protected activity. On the other hand, PERB does respect an employer’s ability to release low-performing employees even if they have engaged in protected activity, so long as that release is based on operational necessity.

SEIU v. Alameda Health System, PERB Dec. No. 2856-M 3/23/23.

benefits Corner

Texas Federal Court Ends Enforcement Of ACA’s Preventative Care Requirements.

By: Stephanie J. Lowe

Six individuals and two businesses filed a lawsuit against the federal government challenging the legality of the Affordable Care Act’s (ACA) preventative care mandates. The ACA requires private health insurance companies cover preventative care services with no cost sharing (meaning at no additional payment beyond the premium).

Each plaintiff objected to the preventative care mandate for religious or personal reasons, or both. Specifically, plaintiffs want the option to purchase health insurance that excludes preventative care coverage for preexposure prophylaxis (PrEP) drugs for HIV prevention, contraception, the HPV vaccine, and screenings and behavioral counseling for STDs and drug use. They claimed they do not require such preventative care and that it violates their religious beliefs to provide such insurance coverage because it makes them “complicit in facilitating homosexual behavior, drug use, and sexual activity outside of marriage between one man and one woman.”

Previously at issue in this lawsuit was the ACA’s delegation to the U.S. Preventative Services Task Force (PSTF) to determine what types of preventative care services health plans must cover. The U.S. District Court for the Northern District of Texas determined that the PSTF’s recommendations violated the Appointments Clause of the U.S. Constitution because the Task Force members were not appointed through a Presidential nomination with consent by the Senate. Therefore, the Court ruled that any actions taken based on PSTF’s recommendations were vacated.

In the Court’s most recent ruling on March 30, 2023, it determined that the PrEP coverage mandate violates the Religious Freedom Restoration Act (RFRA). The RFRA generally prohibits the government from substantially burdening an individual’s exercise of religion. The Court determined that the PrEP coverage mandate substantially burdens the plaintiffs’ religious exercise due to their belief that purchasing PrEP drugs makes them complicit in behaviors condemned by the Bible. The Court agreed with plaintiffs’ argument that the ACA forces them to choose between purchasing health insurance that violates their religious beliefs and foregoing conventional health insurance altogether. The Court did not find that the federal government had a compelling government interest to require the coverage or that the PrEP coverage mandate was the least restrictive means of furthering the government’s interest.

As a result of the decisions, the Court declared any governmental action taken to implement or enforce PSTF’s recommendations for preventative care was unlawful. Therefore, the plaintiffs were not required to obtain or provide coverage with preventative care services. Since the Court found more specifically that the PrEP coverage mandate violates the RFRA, individuals and employers are not required to obtain or provide PrEP coverage as a type of preventative care.

Should this decision be applied by other district courts, courts of appeal, or nationwide, the broader implication of this lawsuit is that preventative care coverage without cost sharing will become an option and not a requirement. Health insurance plans and employers will have the discretion to determine what preventative services, if any, will be covered and whether they will charge additional amounts for the coverage.

Braidwood Mgmt. Inc. v. Becerra, 2023 WL 2703229 (N.D. Tex. 2023).

Health Flexible Spending Accounts Can Cover Certain Nutrition, Wellness, And General Health Expenses.

The IRS recently issued FAQs providing information about what costs for nutrition, wellness, and general health qualify as medical expenses that can be paid for or reimbursed under a health flexible spending account (FSA), health savings account (HSA), or health reimbursement account (HRA). Internal Revenue Code section 213 generally allows a tax deduction for medical expenses. Medical expenses are also allowed to be paid for or reimbursed tax-free by a health FSA, HSA, or HRA. Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body. Medical expenses do not include costs for services that are merely beneficial to general health.

Many of the FAQs explain that a cost can be paid or reimbursed by a health FSA, HSA, or HRA when it treats a disease. The following costs are considered medical expenses that may be paid or reimbursed on a non-taxable basis:

• Drug and alcohol treatment programs because the programs treat a disease (substance use disorder and alcohol use disorder).

• Smoking cessation program because it treats a disease (tobacco use disorder).

• Therapy that is treatment for a disease, such as therapy to treat a diagnosed mental illness.

• Nutritional counseling and weight loss programs if they treat a specific disease diagnosed by a physician, such as obesity or diabetes.

• Gym membership only if it was purchased for the sole purpose of affecting a structure or function of the body, such as physical therapy to treat an injury, or the sole purpose of treating a specific disease.

• Food or beverages purchased for weight loss or other health reasons, but only if it does not satisfy normal nutritional needs, alleviates or treats an illness, and a physician substantiates the need.

• Over-the-counter drugs and menstrual care products.

The FAQs specify that marital counseling and exercise for the improvement of general health cannot be reimbursed by a health FSA, HSA, or HRA.

For more information, see the IRS FAQs: https://www. irs.gov/individuals/frequently-asked-questions-aboutmedical-expenses-related-to-nutrition-wellness-andgeneral-health

ACA Compliance Question: Counting Hours Of Service For Full-Time Status.

Question: Do paid leave hours count as “hours of service” when an employer is determining whether an employee qualifies for full-time status for Affordable Care Act purposes?

Answer: Yes, paid leave hours count as “hours of service.” An “hour of service” is defined as “each hour for which an employee is paid, or entitled to payment, for the performance of duties for the employer, and each hour for which an employee is paid, or entitled to payment by the employer for a period of time during which no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence.” 26 C.F.R. § 54.4980H-1(a)(24).

LCW BENEFITS BEST PRACTICES TIMELINE

Each month, LCW presents a monthly benefits timeline of best practices. This timeline is intended to apply to agencies that are applicable large employers for Affordable Care Act purposes.

May

• Consider whether the agency wants to revise its Section 125 cafeteria plan document. Prepare for any changes to ensure their timely adoption by December 31, before the next calendar year.

Did You Know?

• The California Education and Labor Codes require that prior to employing a minor under age 18 in California, an employer must obtain a work permit issued by the minor’s school. The process for obtaining a work permit is as follows: After a minor receives an offer of employment, the minor obtains a “Statement of Intent to Employ a Minor and Request for a Work Permit – Certificate of Age” (California Department of Education (CDE) Form B1-1) from their school. The form contains sections for the minor, their parent/guardian, the prospective employer, and the school to complete. After the minor returns the form to their school, if all requirements are satisfied, the school will issue the minor a work permit (CDE Form B1-4). The Labor Code requires employers to retain a minor employee’s work permit until the beginning of the fourth year after the work permit was issued.

• On May 18, 2023, Superintendent of Public Instruction Tony Thurmond announced that the California State Board of Education approved $750 million in community schools implementation grants. This approval marks the largest single investment in community schools in the nation, and is designed to transform educational outcomes for students through an approach that brings an array of services to public school sites.

• Effective January 1, 2023, SB 523 amended FEHA to include “reproductive health decision making” as a protected category. “Reproductive health decision making” includes, but is not limited to, “a decision to use or access a particular drug, device, product, or medical service for reproductive health.”

Consortium Call Of The Month

If you would like to receive more information about our Consortium services or would like to join, please contact Kathy King at kking@lcwlegal.com.

This consortium question was answered by Alysha Stein-Manes, a Partner in our Los Angeles office. She can be reached at asteinmanes@lcwlegal.com.

Answer:

Question:

When an internal employee accepts an interim assignment, do they retain their rights to the previous position? Does a community college district have the right to fill the permanent position that the internal employee “left” behind?

Whenever a permanent employee is placed into an interim position (pursuant to Title 5, section 53021, which limits interim appointments to no more than two years, while recruitment for a vacancy is taking place), the permanent employee has bumping rights back to their permanent position. Therefore, if the District were to place someone else in the permanent employee’s position, it would have to be on a temporary basis. The temporary appointments would only last until vacancy is filled and the permanent employee returns to their permanent position.

Liebert Cassidy Whitmore