Issuu

December 2023

Private Education Matters

Table Of Contents EMPLOYEES

STUDENTS

Wage & Hour

Termination

Workers' Compensation

Labor Relations

Discrimination

Reasonable Accommodations

Construction Corner

Did You Know?

Religious Discrimination

Exchange Program

Looking Ahead

LCW Best Practices Timeline

Consortium Call Of The Month

Contributors: Grace Chan Partner | San Francisco Hannah Dodge Associate | San Francisco

Brett A. Overby Associate | San Diego Victoria M. Gómez Philips Associate | Los Angeles

Connect With Us! Copyright © 2023 Requests for permission to reproduce all or part of this publication should be addressed to Cynthia Weldon, Director of Marketing and Training at 310.981.2000. Cover Photo: Attributed to pexels.com

Private Education Matters is published monthly for the benefit of the clients of Liebert Cassidy Whitmore. The information in Private Education Matters should not be acted on without professional advice. To contact us, please call 310.981.2000, 415.512.3000, 559.256.7800, 916.584.7000 or 619.481.5900 or e-mail info@lcwlegal.com.

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December 2023

employees

e g r a u w HO & Labor Commissioner Issues Updated Labor Code Section 2810.5 Notice Template. The Labor Commissioner has issued an updated Labor Code Section 2810.5 Notice to Employees, which is the notice that covered employers must provide to non-exempt employees at the time of hire that provides basic information about their employment, such as rates of pay, employer’s name, and paid sick leave benefits. The updated Notice to Employees reflects the changes to California’s paid sick leave law that take effect on January 1, 2024, and also includes a section for employers to include information regarding the existence of a federal or state emergency or disaster declaration applicable to the county or counties where the employee is to be employed that was issued within 30 days before the employee’s first day of employment and that may affect the employee’s health and safety during their employment (a requirement that takes effect on January 1, 2024 as well). Schools should make sure they are providing all non-exempt employees hired on or after January 1, 2024, at the time of hire, the updated template Labor Code Section 2810.5 Notice to Employees, and should discontinue using prior versions of the notice, as these will no longer be legally compliant as of January 1, 2024. As a reminder, Labor Code Section 2810.5 requires employers to notify employees in writing of any changes to the information set forth in the Labor Code Section 2810.5 Notice to Employees within seven (7) calendar days after the time of the change, unless one of the following applies: 1. All changes are reflected on a timely wage statement furnished in accordance with California law. 2. Notice of all changes is provided in another writing required by law within seven (7) days of the changes. Schools should make sure to provide written notice to any non-exempt employees whose paid sick leave information is changing effective January 1, 2024, consistent with this obligation, including meeting the applicable timelines.

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termination University Did Not Need To Put Reason For Termination In Letter For At-Will Employee.

and that the investigations were biased against him. This employee said Martin seemed very angry with the complainants and asked the subordinate if she was on his side about 10 times.

In 2014, California State University (CSU) hired Jorge Martin as the director of university communications at CSU Northridge’s Marketing and Communications Department.

In June 2018, CSU terminated Martin. Martin’s supervisor brought notes to the meeting and offered comments to Martin verbally. CSU’s termination letter did not specify the basis for Martin’s termination.

In March 2016, a CSU employee whom Martin supervised filed a complaint with CSU’s Equity and Diversity Department (E&D) against Martin. The complaint alleged racial discrimination, harassment, and retaliation. After conducting an investigation, E&D concluded that Martin did not violate CSU policies.

In August 2018, Martin filed a complaint against CSU alleging, among other claims, discrimination because he is a middle-aged, light-skinned, Mexican-American, heterosexual, and cisgender male.

In fall 2016, Martin supervised a temporary employee, who filed a second complaint with E&D, alleging that Martin harassed and discriminated against her based on her sexual orientation. This employee complained that Martin made a suggestive comment to a coworker and complained that Martin wanted to exclude LGBTQ related content from CSU’s weekly publication.

The trial court granted summary judgment for CSU and Martin appealed.

E&D’s second investigation found that Martin did not discriminate against or harass this second employee, however, Martin did create a hostile work environment when considering the actions taken in totality. In response, Martin was issued a Memorandum of Counseling, ordered to complete sensitivity training, and ordered to attend management coaching sessions with Human Resources.

To establish a claim of discrimination under the Fair Employment and Housing Act (FEHA), a plaintiff must show: (1) he was a member of a protected class; (2) he was qualified for the position he sought or was performing competently in the position he held; (3) he suffered an adverse employment action; and (4) some other circumstance suggests discriminatory motive. An employer may meet its initial burden in moving for summary judgment by presenting evidence that one or more elements of a prima facie case are lacking, or the employer acted for a legitimate, nondiscriminatory reason. If the employer puts forth a legitimate basis for the adverse employment action, the burden shifts to the plaintiff to present evidence showing the employer’s stated reason was a pretext for unlawful animus.

In October 2017, a third employee came forward with a complaint against Martin, alleging harassment based on inappropriate comments and retaliation for this employee participating in the second investigation. E&D found that Martin did not violate University policy with respect to the third complaint, but noted that Martin’s conduct fell below the standard reasonably expected of any employee, particularly one in a leadership position.

The trial court held that Martin could not establish a prima facie case of discrimination because Martin could not demonstrate that he was performing competently, or that discriminatory animus could be inferred. The trail court also concluded that even assuming that Martin could establish a prima facie case, CSU provided evidence that CSU terminated Martin for a legitimate, nondiscriminatory reason.

In May 2018, Martin spoke to a subordinate about newspaper articles published about him and the various investigations, telling the subordinate that the finding of hostile work environment was “highly questionable,”

The Court of Appeals upheld the trial court’s ruling and found that CSU had a legitimate basis for terminating Martin’s employment based on the results of the various investigations. Through these investigations,

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Further, the Court of Appeals found that Martin failed to provide evidence that the reasons CSU provided for terminating him were pretextual. Martin argued that the reason for his termination needed to be in writing; the Court of Appeals disagreed. The Court found that CSU choosing to refrain from listing the bases for termination in the letter was not an indication that CSU was terminating Martin for a pretextual reason. Rather, CSU did inform Martin of the bases for his termination in a meeting prior to giving him the letter. The Court looked at CSU’s meeting notes, which emphasized that Martin was not able to focus on his work, that his conduct negatively impacted his ability to lead his team, and that he was no longer able to exercise discretion and clear managerial judgment. The Court of Appeals upheld the trial court’s ruling and dismissed Martin’s claims. Martin v. Board of Trustees of California State University (Nov. 14, 2023) __Cal.App.5th__ [2023 Cal. App. LEXIS 871]. Note: In this case, the University was able to support termination because they had extensive documentation of performance concerns and notes of what they discussed in the termination meeting. Schools should build a record to support termination and contemporaneously document performance concerns prior to termination.

December 2023

CSU established that Martin created a hostile work environment, that Martin was counseled that his conduct fell below the standard that could be expected of an employee and supervisor, and that CSU had concerns about Martin’s ability to manage his department.

Employer Properly Excluded The Value Of Hotel Rooms From The Regular Rate Of Pay. Karen Harstein worked for Hyatt Corporation. She, and a certified class of employees who were laid off in March 2020, sued Hyatt. Among other things, they alleged that Hyatt violated the Fair Labor Standards Act (FLSA) by failing to include the value of the free hotel rooms they received each year in their regular rate of pay. The FLSA “regular rate of pay” is used to calculate the amount of overtime pay and includes many forms of remuneration. Courts liberally construe the FLSA in favor of employees and require employers to bear the burden of proving that a particular form of remuneration is not included in the FLSA regular rate of pay. The employees argued that the value of the free hotel room benefit they received should have been included in the regular rate of pay. Hyatt argued that the value of the rooms were “gifts” which could be excluded from the regular rate of pay. The trial court agreed with Hyatt. That trial court reasoned that the value of the rooms were gifts that could be excluded from the regular rate. According to the trial court, the rooms were a reward for service that was not related to hours worked, production, or efficiency. The employees appealed. The Ninth Circuit Court of Appeals found that the rooms were not gifts, but that Hyatt could still exclude their value from the FLSA regular rate of pay as “other similar payments” under the FLSA at 29 USC Section 207(e)(2) and under the FLSA regulation codified at 29 CFR Section 778.224. The Ninth Circuit determined that the “other similar payment” exception applied to the rooms because the regulation listed “[d]iscounts on employer-provided retail goods and services” as an example of an “other similar payment.” The Ninth Circuit affirmed the trial court’s grant of summary judgment as to this issue. Hartstein v. Hyatt Corp. (9th Cir. 2023) 82 F.4th 825. Note: This case establishes that if an employer temporarily lays off an employee without a return date in the normal pay period, the employer must pay all final wages immediately – not just accrued vacation or PTO.

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workers'

compensation

Workers’ Compensation Is Employee’s Exclusive Remedy Following Bike Accident On Campus.

On appeal, Jones argued that (1) Jones was leaving work, rather than arriving; (2) her means of commute were not employer-designated, and her route was not reserved for employees but also used by students and the general public; and (3) the University’s campus was large.

Rose Jones worked as the director of scholarship opportunities at the University of California, Irvine. One day, when leaving her office at the University’s science library, Jones walked her bike a short distance to the bike path, mounted her bike, and began riding toward her home. After about 10 seconds, Jones reached a trench, cordoned off with orange posts and caution tape. Upon noticing the obstacle, she swerved and attempted to brake, but fell off her bike and sustained injuries.

The Court of Appeals explained that under the “premises line rule,” an employee’s commute terminates and the course of their employment commences when the employee enters the employer’s premises. In other words, once the employee enters the premises, an injury is presumed to be compensable until the employee leaves the employer’s premises.

After the accident, Jones sued the University for negligence and premises liability, among other claims. Following discovery, the University moved for summary judgment, claiming that Jones’ injuries occurred within the course of her employment and therefore workers’ compensation was the exclusive remedy for her claim.

The Court of Appeals concluded that Jones’ injuries occurred on UCI’s campus, undisputedly owned by the University, just after she left her workstation. Under these circumstances, the premises line rule brought Jones’ injuries within the workers’ compensation scheme. The Court of Appeals was not persuaded by Jones’ arguments. The premises line rule applies whether an employee is leaving work or arriving at work, and traveling via roads that are used by the general public and nonemployees does not change the analysis. Furthermore, although the University’s campus is large, the “premises line rule” allows a sharp line of demarcation so that courts do not have to make subjective determinations as to where employment begins.

The University argued that Jones was still on the University’s premises when she sustained her injuries, and therefore was still within the scope of her employment. Jones argued that she was leaving work, rather than arriving, within an area designated The Court of Appeals affirmed the trial court’s ruling. for public use and using the means of her choice to commute across UCI’s large campus. Jones argued that Jones v. Regents of the University of California (Oct. 31, 2023) these factors supported that she was not within the __Cal.App.5th__ [2023 Cal. App. LEXIS 917]. scope of her employment. The trial court granted the University’s motion for summary judgment, concluding that Jones’ injuries occurred within the course of her employment and that she did not exercise due care at the time of the accident. Jones appealed.

Note: This case serves as an important reminder that injuries that occur as employees are leaving work can still be within the scope of their employment. Here, workers’ compensation acted as the sole remedy for this employee’s injury, reducing the overall liability to the University.

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December 2023

new to the Firm! Jacqueline “Jackie” Lee, an Associate in the Los Angeles office, provides advice and counsel on all employment law and litigation related matters.

Margarite M. B. Sullivan, an Associate in the San Diego office, provides advice and counsel in labor and employment law matters.

Duncan H. Dohmen, an Associate in the Los Angeles office, provides litigation expertise and employment law advice and counsel on all public agency related matters.

Phil N. Bui, an Associate in the San Francisco office, provides litigation expertise to our public agency clients.

Madeline Cline, an Associate in the San Francisco office, specializes in employment law, labor relations and litigation matters pertaining to public agencies and educational institutions.

Allison Ferraro, an Associate in the San Francisco office, provides employment and labor law expertise to our public agency clients.

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labor relations

Hotel Committed Unfair Labor Practice By Refusing To Rehire Union-Affiliated Former Employees. In 2009, Kava Holdings, owner of the Hotel Bel-Air, temporarily closed the Hotel for extensive renovations. As part of the temporary closure, Kava laid off all union employees. The union was the exclusive collective bargaining representative for a unit of employees that included kitchen workers, dining and room service employees, housekeepers, garage and front desk employees, gardeners, maintenance employees, and more. In July 2011, as Kava prepared to reopen the Hotel, Kava conducted a three-day job fair to fill about 306 unit positions. Kava invited its unionaffiliated former employees to apply during the first morning of the job fair and reserved the remaining two-and-a-half days for members of the public. This schedule allowed Kava to distinguish easily union-affiliated former employees from other applicants. Approximately 176 unionaffiliated former employees applied for those positions. Kava refused to hire 152 of them, even though they were qualified for the open positions and many had several prior years of positive evaluations while they worked for the Hotel. When Kava reopened the Hotel in October 2011, Kava refused to recognize the union and made various unilateral changes to the bargaining unit’s terms and conditions of employment, including wages, benefits, breaks, and paid time off. The union filed an unfair labor practice charge regarding Kava’s reopening conduct. The National Labor Relations Board (NLRB) found that Kava committed unfair labor practices by refusing to hire former employees because of their union affiliation, by refusing to recognize and bargain with the Union, and by unilaterally changing unit employees’ terms and conditions of employment, in violation of the National Labor Relations Act. The NLRB ordered various remedies, including reinstatement of former employee applicants who were affected by Kava’s discriminatory conduct. Kava petitioned the Ninth Circuit Court of Appeals for review of the NLRB’s order.

The Court stated that to allege a discriminatory refusal to hire, the NLRB must show that (1) the respondent was hiring, or had concrete plans to hire, at the time of the alleged unlawful conduct; (2) that the applicants had experience or training relevant to the announced or generally known requirements of the positions for hire, or in the alternative, that the employer has not adhered uniformly to such requirements, or that the requirements were themselves pretextual or were applied as a pretext for discrimination; and (3) that anti-union animus contributed to the decision not to hire the applicants. Here, the first two elements were not at issue, so the Court focused on the third element and found that substantial evidence supported the NLRB’s finding of anti-union animus. The Court considered the testimony of Human Resources and Kava’s hiring conduct, including job fair records revealing that Kava disfavored former-employee applicants. In a prior case with the Hotel, the NLRB had found that Kava violated its duty to bargain during the renovation closure by implementing a last, best, and final offer on severance, waiver, and release terms without first reaching a valid impasse with the union, and by bypassing the Union and dealing directly with laid-off employees. In this case, the NLRB found that Kava engaged in unlawful direct dealing by asking the laid-off employees to sign waivers of their recall rights in exchange for severance payments. Kava also engaged in unlawful conduct during the initial eight months of Kava’s closure of the hotel for renovations. The Court determined that the NLRB could reasonably infer from Kava’s past conduct, that Kava intended to prevent union-affiliated employees from comprising the majority of the Hotel’s workforce upon reopening. The Court upheld the NLRB’s decision and dismissed Kava’s petition for review. Kava Holdings, LLC v. NLRB (9th Cir. 2023) 85 F.4th 479. Note: In this case, the employer blatantly disfavored unionized employees as it rehired for the hotel reopening because it wanted a non-unionized hotel staff. This decision sends a strong message that anti-union animus can be inferred in rehiring decisions.

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Professor Can Pursue Title VII Discrimination Case Based On Denial To Teach Summer Classes.

N. Sugumaran Narayanan began teaching at Midwestern State University (MSU) in 2017 as an assistant professor. In 2016, Narayanan sued MSU for denial of a promotion based on retaliation and race, color, and national origin. This suit was settled out of court. In 2017, Narayanan began experiencing stress-related health issues including anxiety and hypertension. Narayanan requested and was granted leave to tend to these health-related issues. Once he recovered, Narayanan requested to teach summer classes for the summer 2018 session, but he was denied the opportunity. In September 2018, Narayanan requested a two-year unpaid leave of absence to begin in Spring 2019. MSU denied the request due to the hardship it would impose on the Political Science Department, which was shortstaffed at the time. Narayanan took extended leave despite the denial. In November 2018, Narayanan requested expedited advanced funding for travel to Kuala Lumpur, Malaysia, to present a paper at a conference in December 2018. During this trip, Narayanan was diagnosed with cervical spondylotic myelopathy. In January 2019, just before the start of the spring semester, Narayanan submitted a twopage disability form from his doctor in Malaysia saying that he could not fly and gave a time frame of at least six months before Narayanan could resume his job duties due to the new diagnosis. MSU granted the leave and Narayanan subsequently exhausted all paid and unpaid leave. In January 2019, Narayanan filed another complaint with the Equal Employment Opportunity Commission (EEOC) based on retaliation for filing his 2016 suit and continued discrimination based on race, color, and national origin. In August 2019, Narayanan emailed MSU’s disability office requesting additional leave related to his diagnosis, which rendered him unable to fly to MSU from Malaysia

December 2023

discrimination for at least another 6-12 months. MSU responded with an accommodation plan, which offered Narayanan a chair in the classroom, ergonomic office furniture, and limits on extended travel. Narayanan responded that the accommodations were not sufficient. Simultaneously, MSU repeatedly asked Narayanan to sign his contract for the following school year, and Narayanan stated he would sign once the accommodation plan was finalized. MSU viewed Narayanan’s failure to return his contract and failure to report to campus to teach classes as breaches of duties justifying termination. MSU denied Narayanan’s requests for two additional semesters of leave, citing undue hardship and offering the same accommodations again. Narayanan did not offer any accommodation alternatives and did not report to teach his fall classes. MSU informed Narayanan that it was recommending his tenure be revoked for failure to disclose outside employment and neglect of professional duties for failing to meet assigned classes for the 2019 Fall Semester. Following a hearing, Narayanan was terminated. Narayanan filed various charges for retaliation, discrimination, and failure to accommodate under both the Americans with Disabilities Act (ADA) and Title VII. The trial court granted MSU’s motion for summary judgment and Narayanan appealed. The Court of Appeals first considered Narayanan’s ADA claims. The Court of Appeals found that MSU offered accommodations of a chair, ergonomic office furniture, and limits on extended travel. While Narayanan told MSU the accommodations were insufficient and requested additional leave, he did not respond to the second offer of the same accommodations. Narayanan also did not show that the offered accommodations were insufficient, and he did not offer any reasonable alternatives. MSU argued that the indefinite leave request was an undue hardship, and the Court agreed. The Court of Appeals affirmed the trial court’s findings on the failure to accommodate claims.

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The Court of Appeals then considered Narayanan’s Title VII discrimination and retaliation claims. The trial court held that Narayanan did not show he suffered an adverse employment action because the failure to grant his desired summer teaching assignments did not rise to the level of an “ultimate employment decision.” The Court of Appeals disagreed with the trial court. Earlier this year, the Court of Appeals made clear that Title VII required a broader reading than the “ultimate employment decision” line of cases. The trial court also did not consider Narayanan’s lost income from the denial to teach summer classes. The Court of Appeals remanded the Title VII claim back to the trial court. Narayanan v. Midwestern State Univ. (5th Cir. 2023) 2023 U.S. App. LEXIS 26997. Note: This case took place in the Fifth Circuit Court of Appeals. The Ninth Circuit Court of Appeals, which California is part of, has explicitly held that Title VII claims can be brought even if the alleged discrimination does not involve an ultimate employment decision. (Ray v. Henderson (9th Cir. 2000) 217 F.3d 1234.) Therefore, decisions such as denying teaching summer classes can be grounds for a discrimination claim.

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students

Hospital Can Deny Service Dog Accommodation Due To Patient And Employee Safety Concerns. In fall of 2020, Mia Bennett, a nursing student at the University of Michigan-Flint completed a clinical rotation at Hurley Medical Center. Before beginning her rotation, Bennett requested that her service dog, Pistol, be permitted to accompany her on her rotation, and the hospital agreed. Pistol assists Bennett with her panic disorder, a condition that causes her to have intermittent panic attacks. Bennett also takes medication as needed for her panic attacks, and Pistol is trained to recognize Bennett’s symptoms before the panic attack begins so she can take her medication. Bennett does not recognize the signs of a panic attack on her own. On the first day that Pistol was at the hospital, one staff member and one patient reported experiencing allergic reactions. The hospital revoked Bennett’s ability to have Pistol with her at all times in the hospital because Pistol had caused allergic reactions and the individuals with dog allergies were present on the only two floors that Bennett could work for her clinical rotation. Relocating patient and staff members away from Bennett’s floor would be unworkable and directly compromise patient care. For example, relocating nurses was difficult because nurses are union members and their collective bargaining agreements impose additional requirements when adjusting schedules. Relocating staff more generally would also be onerous because the hospital was short-staffed during the COVID-19 pandemic. Additionally, because certain nurses assigned to floors can perform medical care that nurses assigned to other floors cannot, moving certain nurses to a different floor could impact patient care.

December 2023

reasonable accommodations The hospital also expressed concerns about exposing patients to dogs who are immunocompromised or unconscious. The floor on which Bennett was placed had most of the hospital’s patients with kidney disease, many of whom were immunocompromised. The hospital researched other options that would not cause a direct threat and would not require a fundamental alteration of the hospital’s policies. The hospital concluded that it could crate Pistol and allow Bennett to take necessary breaks in order to be with Pistol. Bennett declined this accommodation and finished her clinical rotation without Pistol and without experiencing any panic attacks. Bennett filed suit under Title II of the Americans with Disabilities Act (ADA) alleging disability discrimination and failure to accommodate. To establish a prima facie case of discrimination under the ADA, a plaintiff must show that: (1) she has a disability; (2) she is otherwise qualified; and (3) she was being excluded from participation in, denied the benefits of, or subjected to discrimination under the program because of her disability. Bennett argued that the hospital intentionally discriminated against her when it prevented Pistol from accompanying her on rotation. The Court of Appeals disagreed. The Court said the hospital provided clear evidence that the decision was motivated by staff and patient complaints of allergic reactions, which were all related to Pistol rather than Bennett’s panic disorder. One hospital staff member involved in the decision process did not know what specific medical condition Bennett had. The Court therefore dismissed Bennett’s disability discrimination claim. For Bennett’s failure to accommodate claim, the trial court concluded that Pistol posed a direct threat to the health and safety of employees and patients in the hospital, and that the hospital conducted a sufficiently individualized

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inquiry to make this assessment. Bennett argued that the hospital made this conclusion on speculation rather than actual risks. Bennett also argued that the hospital could have taken reasonable steps to separate Pistol from allergic patients and staff. The Court of Appeals disagreed with Bennett. The Court noted that Bennett could not have been moved to a different floor because there were only two floors that offered the nursing rotation for Bennett’s program. The Court also concluded that there were employees on both of the two floors that had allergies. The hospital provided proof that it did not screen patients for dog allergies, and unless the hospital implemented an entirely new allergy screening policy, the hospital would not know which patients would be at risk of a reaction. Even if the hospital could determine who had a dog allergy, the hospital presented evidence that moving patients to different floors could be burdensome. The hospital floors had staff and services available to treat specific medical needs. The hospital also provided sufficient evidence that moving staff to different floors was difficult. In sum, the Court of Appeals found ample evidence that the hospital reasonably considered Bennett’s accommodation and that Pistol posed a direct threat to the health and safety of patients. The Court of Appeals upheld the trial court’s grant of summary judgment to the hospital. Bennett v. Hurley Med. Ctr. (6th Cir. 2023) 86 F.4th 314. Note: While the unique operations of a hospital are distinguishable from a school, this case illustrates the types of factors employers, including schools, must consider before denying a service dog accommodation. An allergy or fear of dogs alone is typically not enough to justify denial of a service dog accommodation.

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December 2023

religious

discrimination

Public School District Policy Excluding Parochial School Students From Extracurricular Activities Offends Students’ Freedom Of Religion. In the State College Area School District (District), homeschooled and charter-school students living within the District are permitted to participate in more than 100 extracurricular opportunities, including athletics programs offered by the District. Students at parochial schools, on the other hand, are not permitted to participate in these activities. Religious Rights Foundation of Pennsylvania (RRFP) is a non-profit located in Centre County, Pennsylvania. A group of parents, who are members of RRFP, have children who attend parochial schools in the District. The parents and RRFP filed suit against the District, alleging violations to the Free Exercise Clause of the First Amendment and the Equal Protection Clause of the Fourteenth Amendment. The plaintiffs sought an injunction that would require the District to permit students to participate in the activities. In response, the District filed a motion to dismiss the case. Under the Free Exercise Clause, Congress is prohibited from making any law prohibiting the free exercise of religion. This right is incorporated against the states through the Fourteenth Amendment. Here, the District argued that its actions did not impose any burden on the plaintiffs’ religious rights. They argued that the plaintiffs could exercise their religious beliefs as they pleased, and their exercises would be unaffected by the District’s actions.

The Court disagreed. The Court reasoned that denying a benefit solely on account of religious identity imposes a penalty on the free exercise of religion because a person is faced with choosing between their faith and a government benefit. Furthermore, the Court found that enrolling a child in a parochial school to receive a religious education is a form of religiously motivated conduct protected by the Free Exercise Clause, and the Free Exercise Clause strictly prohibits any government regulation of religious beliefs. When the students were denied participation in the District’s programs, the Superintendent said the reasoning was because (1) the District had ample, and sometimes excess, participation for sports teams, so there is no reason to expand offering the activities to parochial schools; and (2) allowing private school students would take opportunities away from District students. The Court found this reasoning problematic because homeschooled and charter-schooled students participating in District activities would likewise undermine these goals. The Court found that the District’s justifications for its exemptions did not survive the Court’s scrutiny because the District denied the benefit on the basis of religious exercise. The Court denied the District’s motions to dismiss. Religious Rights Found. of PA v. State Coll. Area Sch. Dist. (M.D.Pa. Dec. 1, 2023) 2023 U.S.Dist.LEXIS 214653. Note: This case reinforces the idea that denying a government benefit solely on account of religious identity can impose penalties on the free exercise of religion. Similar cases have come to the United States Supreme Court in the past and LCW will monitor this case for future developments.

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exchange programs 14

School Not Liable For Host Family Actions Due To Lack Of Relationship Between School And Host Family. The Heights is a private, independent day school for boys in third through twelfth grade. Plaintiffs, the Gomez family, are citizens and residents of Spain. In April 2012, nine-yearold C.G. traveled to the United States to participate in an exchange program at the Heights. The Heights arranged for C.G. to stay with a host, Theodore Nealson Smart, while in the program. While living with Smart, C.G. slept in the same room as Smart’s youngest son, who abused C.G. C.G. suffered physical and lasting psychological injuries as a result. Smart was criminally prosecuted and then acquitted of all charges after a jury trial. In December 2022, Plaintiffs filed a suit against Smart and the Heights. The case against the School alleges claims of negligence based on the theory that the Heights was the school sponsoring the program and bears legal responsibility for C.G.’s injuries. To establish a claim of negligence the plaintiff must show: (1) the defendant owed the plaintiff a duty; (2) the defendant breached that duty; (3) the plaintiff suffered an injury; and (4) the breach proximately caused the injury. The family argued that the School owed a duty to them through Smart, as the employee, agent, and servant of the Heights. The School argued that it did not owe a duty of care to the Plaintiffs. The Court determined that no such duty existed. C.G. came to the United States as part of an exchange program at the Heights, and the Heights arranged for C.G. to stay with Smart. However, the family did not state when, how, where, and under what conditions such an arrangement was made. For example, the family’s complaint did not describe whether Smart was a paid employee, an independent contractor, or a volunteer. The complaint did not describe whether Smart was required to follow the Height’s directives, or whether the Heights had the ability to control how Smart executed his duties as a host. The family also argued that the Heights stood in loco parentis for the students and that the Heights assumed a primary role in the protection of C.G. The Court concluded that the family did not show facts in their complaint that supported these allegations. The Court concluded that while the Heights arranged for C.G. to live with Smart while in the exchange program, there are no other facts about the relationship between Smart and the School. Gomez v. Heights Sch. (D.Md. Nov. 1, 2023) 2023 U.S.Dist.LEXIS 195728. Note: This case was dismissed due to insufficient pleadings and lack of relationship between the host placement and the school. However, schools should be aware that host families can be a source of significant liability for schools, especially if schools do not properly screen or vet the host families.

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December 2023

looking ahead... New Laws In Effect January 1, 2024.

The start of the new year brings with it new legislation. Here are some key laws that take effect January 1, 2024 that schools should be aware of: • SB 616 - This amendment to California’s paid sick leave law, raises the amount of paid sick leave and carryover of that leave in each year of employment. The “full amount of leave” will be five days or 40 hours, instead of the current three days or 24 hours. • SB 848 - Employees will be entitled to “Reproductive Loss Leave.” Eligible employees are entitled to five days of unpaid leave following a reproductive loss event, which includes miscarriage, failed surrogacy, stillbirth, unsuccessful assisted reproduction, or failed adoption. • AB 2188 - This law prohibits discrimination against an employee on the basis of that employee’s off-the-job marijuana use. Employers must ensure their employment-related drug tests do not screen for non-psychoactive cannabis metabolites. For a full list of the new laws that went into effect this year, please see LCW’s legislative update.

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construction corner LCW represents and advises private schools and colleges in various business, construction, and facilities matters, including all aspects of construction projects from contract drafting and negotiations to course of construction issues. Through this Construction Corner, LCW will be giving private schools and colleges monthly helpful tips on a variety of topics applicable to campus construction projects. LCW attorneys are available should you have any questions or need assistance with any construction projects no matter what phase you may be in currently.

Four Things To Consider When Presented With An AIA Contract. By: Victoria M. Gómez Philips When undertaking a construction project, it is important for owners to have a contract that provides them with protection and aligns with both California construction laws and the Education Code. More times than not, the architect or contractor will offer American Institute of Architects template documents, generally known as AIA Documents or AIA Contracts, for execution. Although AIA intends for these templates to simplify the construction agreement process, failure to thoroughly review and modify the AIA Contract to align with your specific project may create problems in the event of a dispute or cause the project to become noncompliant with California laws. School and college project owners should, for example, take the following into consideration prior to executing an AIA Contract: • California Education Code Section 33193 outlines a contractor’s obligations to install physical barriers to ensure student safety. Alternatively, the contractor may conduct background checks pursuant to Education Code Section 33192. The standard AIA Documents do not address these issues. The owner should request that provisions addressing student safety are added to the AIA Contract. • Owners may enter into an AIA Contract with an architect and subsequently enter into a separate agreement with the contractor. When entering into the architect agreement, owners should dictate what they expect from the architect during construction. When entering into the construction agreement, any obligations expected from the architect outlined in the construction agreement should align with the original agreement with the architect. If the two agreements do not align, this may cause confusion as to which party is responsible for certain tasks, which may cause disputes or delay the project. • The AIA Contract should clearly outline the contract sum, how that contract sum is calculated, any retainage, and the payment process. The contract sum may be a flat rate or based on the cost of the work. The AIA Contract should clearly reflect whether the contractor should submit payment applications to the Architect for the Architect’s certification or whether the owner plans to skip that step. Owners should ensure that its obligation to make progress payments is limited to undisputed completed work and materials purchased and delivered, as evidenced by a properly supported and timely submitted payment application. • It is imperative that the documents that make up the “Contract Documents” are specifically, fully, and accurately identified in the AIA Contract, including the date, version, title and author, and attached to the AIA Contract. This will ensure all parties are on the same page and will help resolve disputes if all documents are clearly identified and incorporated into the AIA Contract. When presented with AIA Documents, a school or college should consult with legal counsel to identify the contract modifications needed to ensure the school’s or college’s interests are protected.

• Los Angeles • San Francisco • Fresno • San Diego • Sacramento •

• Los Angeles Freelance Worker Protections Ordinance: The Los Angeles City Council passed the Freelance Worker Protections Ordinance, which took effect on July 1, 2023, and establishes protections for freelance workers within the City of Los Angeles. The Ordinance applies to nonprofit and for-profit entities regularly engaged in business or commercial activity, and defines a “freelance worker” as “an individual natural person, or an entity whose legal and beneficial interests are held entirely and whose work is performed entirely by no more than one individual natural person, hired or engaged as a bona fide independent contractor to perform services for a Hiring Entity in exchange for compensation.” The Ordinance sets forth requirements for the relationship between an entity and a freelance worker for services of at least $600, including certain obligations for written contracts, timely payment, and record retention. It also prohibits retaliation against freelance workers for exercising their rights, permits freelance workers to file a civil lawsuit or administrative complaint if they believe their rights under the Ordinance were violated, and sets forth damages and remedies for violations. More information can be found here: Freelance Worker Protections Ordinance Summary and Freelance Worker Protections Ordinance. • California’s minimum wage will increase to $16 per hour for all employers on January 1, 2024. Some cities and counties in California have local minimum wages that are higher than the state rate. The change in minimum wage also affects the minimum salary an exempt employee must earn to meet one part of the overtime exemption test. Under the new state minimum wage, the minimum salary for exempt employees is $66,560. This amount is different for teachers. Please contact LCW with any questions on minimum salary requirements for exempt employees. • The IRS recently updated the process for requesting copies of exempt organization documents. If schools are looking for information on publicly available data on electronically filed Forms 990 and exemption application or determination letters, they should use the Tax Exempt Organization Search (TEOS) tool on IRS.gov. If a copy of these documents is not available on IRS.gov, schools can complete and submit a Form 4506-A to request a copy of the organization’s Form 990s, or a Form 4506-B to request a copy of the organization’s exemption applications or determination letters.

• www.lcwlegal.com •

December 2023

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lcw best timeline DECEMBER THROUGH JANUARY Issue Performance Evaluations • We recommend that performance evaluations be conducted on at least an annual basis, and that they be completed before the decision to continue employment for the following school year is made. Schools that do not conduct regular performance reviews have difficulty and often incur legal liability terminating problem employees - especially when there is a lack of notice regarding problems. Consider using Performance Improvement Plans but remember it is important to do the necessary follow up and follow through on any support the School has agreed to provide in the Performance Improvement Plan. Compensation Committee Review of Compensation before issuing employee contracts • The Board is obligated to ensure fair and reasonable compensation of the Head of School and others. The Board should appoint a compensation committee that will be tasked with providing for independent review and approval of compensation. The committee must be composed of individuals without a conflict of interest. Review employee health and other benefit packages, and determine whether any changes in benefit plans are needed. If lease ends at the end of the school year, review lease terms in order to negotiate new terms or have adequate time to locate new space for upcoming school year.

Review tuition rates and fees relative to economic and demographic data for the School’s target market to determine whether to change the rates. Review student financial aid policies. Review, revise, and update enrollment/tuition agreements based on changes to the law and best practice recommendations. File all tax forms in a timely manner: Forms 990, 990EZ • Form 990: Tax-exempt organizations must file a Form 990 if the annual gross receipts are more than $200,000, or the total assets are more than $500,000. • Form 990-EZ: Tax-exempt organizations whose annual gross receipts are less than $200,000, and total assets are less than $500,000 can file either form 990 or 990-EZ. • A School below college level affiliated with a church or operated by a religious order is exempt from filing Form 990 series forms. (See IRS Regulations Section 1.6033-2(g)(1)(vii)). • The 990 series forms are due every year by the 15th day of the 5th month after the close of your tax year. For example, if your tax year ended on December 31, the e-Postcard is due May 15 of the following year. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. • The School should make its IRS form 990 available in the business office for inspection.

• Los Angeles • San Francisco • Fresno • San Diego • Sacramento •

December 2023

practices Each month, LCW presents a monthly timeline of best practices for private and independent schools. The timeline runs from the fall semester through the end of summer break. LCW encourages schools to use the timeline as a guideline throughout the school year. Other required Tax Forms common to businesses who have employees include Forms 940, 941, 1099, W-2, 5500 Annual review of finances (if fiscal year ends January 1st) • The School’s financial results should be reviewed annually by person(s) independent of the School’s financial processes (including initiating and recording transactions and physical custody of School assets). For schools not required to have an audit, this can be accomplished by a trustee with the requisite financial skills to conduct such a review. • The School should have within its financial statements a letter from the School’s independent accountants outlining the audit work performed and a summary of results.

audit committee may not be a member of the finance committee and members of the finance committee shall constitute less than one-half of the membership of the audit committee. It is recommended that these restrictions on makeup of the Audit Committee be expressly written into the Bylaws.

JANUARY/FEBRUARY Review and revise/update annual employment contracts. Conduct audits of current and vacant positions to determine whether positions are correctly designated as exempt/non-exempt under federal and state laws.

FEBRUARY- EARLY MARCH • Schools should consider following the California Nonprofit Integrity Act when conducting audits, which Issue enrollment/tuition agreements for the following include formation of an audit committee: school year. Although the Act expressly exempts educational Review field trip forms and agreements for any spring/ institutions from the requirement of having an audit summer field trips. committee, inclusion of such a committee reflects a “best practice” that is consistent with the legal trend Tax documents must be filed if School conducts raffles: toward such compliance. The audit committee is responsible for recommending the retention and • Schools must require winners of prizes to complete a termination of an independent auditor and may Form W-9 for all prizes $600 and above. The School negotiate the independent auditor’s compensation. must also complete Form W-2G and provide it to the If an organization chooses to utilize an audit recipient at the event. The School should provide committee, the committee,which must be appointed the recipient of the prize copies B, C, and 2 of Form by the Board, should not include any members of W-2G; the School retains the rest of the copies. The the staff, including the president or chief executive School must then submit Copy A of Form W2-G and officer and the treasurer or chief financial officer. Form 1096 to the IRS by February 28th of the year If the corporation has a finance committee, it must after the raffle prize is awarded. be separate from the audit committee. Members of the finance committee may serve on the audit committee; however, the chairperson of the • www.lcwlegal.com •

Planning for Spring Fundraising Event. Summer Program: • Consider whether summer program will be offered by the school and if so, identify the nature of the program and anticipated staffing and other requirements. • Review, revise, and update summer program enrollment agreements based on changes to the law and best practice recommendations.

MARCH- END OF APRIL The budget for next school year should be approved by the Board. Issue contracts to existing staff for the next school year. Issue letters to current staff who the School is not inviting to come back the following year. Assess vacancies in relation to enrollment. Post job announcements and conduct recruiting. • Resumes should be carefully screened to ensure that applicant has necessary core skills and criminal background and credit checks should be done, along with multiple reference checks. Summer Program • Advise staff of summer program and opportunity to apply to work in the summer, and that hiring decisions will be made after final enrollment numbers are determined at the end of May. • Distribute information on summer program to parents and set deadline for registration by end of April. • Enter into Facilities Use Agreement for Summer Program, if not operating summer program. Transportation Agreements: • Assess transportation needs for summer/next year. • Update/renew relevant contracts.

• Los Angeles • San Francisco • Fresno • San Diego • Sacramento •

Members of Liebert Cassidy Whitmore’s consortiums are able to speak directly to an LCW attorney free of charge to answer direct questions not requiring in-depth research, document review, written opinions or ongoing legal matters. Consortium calls run the full gamut of topics, from leaves of absence to employment applications, student concerns to disability accommodations, construction and facilities issues and more. Each month, we will feature a Consortium Call of the Month in our newsletter, describing an interesting call and how the issue was resolved. All identifiable details will be changed or omitted.

Question:

A Head of School reached out to an LCW attorney, asking whether the School could have a staff member attend an overnight trip. The staff member is a non-exempt employee and is a parent, but the staff member’s child is not attending the trip. The School advised the staff member that she could not go on the trip because it would cost the School a significant amount of money in overtime. The staff member asked if she could volunteer for the trip instead.

Answer: The attorney advised that in general, current non-exempt employees cannot volunteer to perform services similar to their normal job duties for the School. However, an employee may donate services to the school as a volunteer if the donated services are not the usual services that the employee performs as part of his or her job. For example, secretarial, clerical, and bookstore employees may volunteer at a sporting event as an usher or in a box office selling tickets to the extent the tasks performed are not the same as or similar to the services the employees are employed to perform. Here, if this employee would be asked to be a chaperone as part of her regular job duties, this exception would not apply and the employee cannot volunteer her time. The attorney advised that there is also a separate exception specific to parent volunteers. Typically, the Department of Labor will not assert a Fair Labor Standards Act violation against a parent who volunteers at the School that the parent’s child attends when the parent volunteers in activities directly affecting the child’s education. Thus, a parent who works as an instructional aide for the school may be able to volunteer as an instructional aide in her child’s classroom as long as the volunteer work is done without expectation of compensation and without pressure or coercion. In this situation, since the employee’s child was not attending the trip, this exception would not apply and the employee cannot volunteer her time. • www.lcwlegal.com •

December 2023

Consortium Call Of The Month

Liebert Cassidy Whitmore