Court Rules That Employer May Not Thwart Strike

In the first known ruling of its kind in Oregon, Multnomah County Circuit Judge Wittmayer rejected an attempt to prevent a public employee strike at the Port of Portland. The Port filed for an emergency injunction on the morning of Wednesday, November 21 to prevent a strike by Port marine terminal security guards represented by ILWU Local 28, scheduled for Sunday, November 26. The Port invoked the court's jurisdiction under ORS 243.726 - a statute never utilized before - that allows appropriate injunctive relief where a strike creates a direct threat to public safety, health or welfare. At the emergency hearing that afternoon, the Port presented evidence of financial harm that would be caused by a strike at the marine terminals and also presented safety concerns relating to the berthing of vessels in the Columbia River. Judge Wittmayer rejected the Port's argument on all points. The Judge ruled that ORS 662 (known as the little Norris-Laguardia Act) prevented injunctions prohibiting strikes, including public employee strikes, except where unlawful activity is occurring. In addition the court ruled that there was no threat to public welfare or safety. Finally, the court ruled that whatever harm would occur was in the nature of financial inconvenience - a basis explicitly excluded from being a reason to order injunctive relief. Subsequent to the court's ruling, the parties settled the contract. Hank Kaplan, Thomas Doyle and Aruna Masih represented ILWU Local 28 in this matter, and in the negotiations.

City Not Entitled to Recoup Overpaid Pension Benefits by Self-Help

After the City of Portland discovered a 15-year-old error in its pension payment calculations for public safety members of the Fire Police Disability and Retirement Fund, the City tried to get back overpayments totaling more than $3 million, by taking it directly out of Fire and Police Pension benefits, without giving members a chance to respond or raise defenses.  BHMK Attorney Hank Kaplan brought class action litigation challenging the City’s action, based on violations of Oregon’s wage deduction statute, 652.610.  The City denied the statute applied, and contended that its action was justified by IRS requirements to preserve the tax qualified status of the pension plan.  Multnomah County Circuit Judge Henry Breithaupt, a former tax attorney, rejected the City’s contentions and on July 26, 2012 ruled that the City violated the Oregon wage deduction statutes.

Knox vs SEIU

Since the United States Supreme Court issued its decision in Knox v. SEIU, 132 S. Ct. 2277, on June 21, 2012, BHMK has received several calls asking for an explanation of the Court’s decision and its impact on public sector unions.

Knox v. SEIU in a nutshell

Knox concerns the procedures a public sector union must follow in order to raise dues or levy a special assessment after it has already completed its annual “fair share” notice procedure.   That process allows non-members to “opt-out” of paying for the union’s political and/or ideological activities, known as “non-chargeable” expenses, and challenge what is and is not a “chargeable” expense.  The Court had previously held that this “opt-out” system adequately protects the First Amendment rights of non-members.  Teachers v. Hudson, 475 US 292 (1986).

In Knox, SEIU Local 1000 (out of California) had just completed its annual Hudson notice process.  Subsequently, the union announced a 25% increase in dues and fair share.  The union explained the funds were necessary for political purposes and would not be used for any of its regular costs.  The union did not issue a new Hudson notice or give non-members, agency-fee payers any other method for objecting to increase.   The union reasoned that the expenses would be reflected in the next year’s Hudson notice.  Knox and other non-members or agency-fee payers challenged the 25% increase as a violation of their First Amendment rights.  They argued that because the increase was for purely “political” activities, they should be given a fresh opportunity to opt-out of the assessment instead of having to wait for the next year’s annual Hudson notice process. 

The Court ruled in favor of plaintiff Knox. While the result was not entirely unexpected, the majority opinion went beyond what even the plaintiffs were asking for, holding that if a public sector union seeks to increase dues or levy a special assessment mid-year for any purpose,  the union must provide non-members a separate Hudson notice and may not exact any funds from non-members without their affirmative consent.  That is, for the first time, the Supreme Court has held that the union must offer an opt-in system in order to protect non-member First Amendment rights. 

While the Court did not overrule prior precedent approving of the annual notice and opt-out approach for annual dues (Knox involved a mid-year special assessment only), the majority decision seriously calls into question the constitutionality of any “opt-out” approach, referring to it as an “anomaly” and a “remarkable boon for unions.”  The opinion also includes scathing comments about the political activities of unions and how they are not to be trusted to properly audit and report such activities to non-members. 

What Knox means for public sector unions

As a result of Knox, we need to understand that, if the proper case presents itself, the current conservative majority on the Court appears prepared to overturn the “opt-out” approach for all fees and/or to seriously limit what is a “chargeable” expense for non-members.  In the meantime, unions can continue to follow the standard notice and opt-out process for imposition of annual dues and fees.  However, if the union determines it needs to increase dues and fees and/or to impose a special assessment mid-year for any purpose, it must send out a fresh notice to non-members and can only collect funds from those non-members who affirmatively opt-in.

If you have any questions about the implications of Knox v. SEIU, please do not hesitate to contact attorneys Aruna Masih or Margaret Olney.

Portland High School Teachers Awarded $1.5 Million for District's Unreasonable Increase in Teacher Workload

Attorney Margaret Olney ensured that Portland Public School District would not be able to unilaterally increase high school teacher workloads without paying a penalty. The District unilaterally changed their workload from one based on a “5 of 7” schedule. The contract between the Portland Association of Teachers and the District required the District to maintain workload at levels “generally comparable” to those previously in existence (with a few limited exceptions). The arbitrator found that the unilateral implementation increased teacher/student loads by approximately 20%, an “excessive” amount that cannot be attributed solely to staffing cuts. In addition, teachers had to spend significant time developing new lesson plans adapted to the block schedule.

The arbitrator ordered the District to pay approximately $1.5 million to affected teachers as compensation for the increased workload. The arbitrator ruled that the District could return to the 5 of 7 schedule or, if it chose to stay at the 6 of 8 schedule, engage with the Association about how to devise a schedule that does not violate the contract. This means keeping teaching loads below 180 students!

Firefighter Wins Cancer Case

Attorney Nelson Hall won an important victory for firefighters in a work-related testicular cancer case. Hall proved to the Workers' Compensation Board that the insurance company had failed to rebut the presumption that the firefighter’s testicular cancer resulted from his employment as a firefighter. This is the first in a string of cancer cases that Hall is pursuing on behalf of the firefighters. For further information, see http://www.iaff.org/12News/071312Oregon.htm.

Sizemore PAC Lawsuit Dismissed

After the 2008 election, Oregonians for Honest Elections, a Sizemore political action committee, filed suit against OEA, SEIU, AFT and several other union-affiliated organizations. OHE claimed that OEA et al violated the Oregon Corrupt Practices Act by publishing documents that stated Sizemore was a convicted racketeer. OHE argued that the statement was false and caused Measure 64 to be defeated at the ballot. BHMK attorneys Greg Hartman, Mike Morris, and Christine Moore represent the majority of defendants. Defendants filed a motion pursuant to ORS 31.150 to strike the claims against them, arguing that it was a meritless case aimed at chilling free speech. After extensive briefing, multiple court hearings, and two proceedings before the Oregon Supreme Court, on March 18, 2011, the trial court granted the motion and struck all claims against defendants.

Failure to Reinstate After Leave - Burden on Employer and Allowable Reasons Strictly Limited

The Ninth Circuit has held that an employer that fails to reinstate bears burden to prove refusal justified. Moreover, an employer can only sustain that burden based upon the limited reasons provided under statute and rule. The court has remanded the case to the District Court to retry the family leave causes of action. Thomas Doyle represents the plaintiff in this matter.

No Just Cause for Discipline: Arbitrator Awards Reinstatement with Back-pay

BHMK attorney Christine Moore represented a union member who was terminated from her employment as a School Office Specialist by the school district. Ms. Moore successfully arbitrated the grievance. The arbitrator found that the district failed to implement progressive discipline and did not have just cause to terminate the member’s employment. The arbitrator awarded reinstatement with back-pay, a major win for the member.

Change In Working Condition, Not Refusal to Bargain, Begins ULP Timeline

The employer implemented and then fully executed a plan to redistribute work resulting in members from 2 different bargaining units doing the same work at different rates of pay. After the parties commenced negotiations on a new collective bargaining agreement, the association made a demand to bargain the change. The employer refused and the association filed a ULP. ERB dismissed the complaint finding the association failed to file within 180 days of occurrence. ERB refused to address the question of whether occurrence means the occurrence of the event or the discovery of the event by the union because ERB concluded the complaint was not timely under either test.
On appeal, the Court of Appeals held the occurrence test is triggered by a unilateral change in a mandatory condition instead of the refusal to bargain the change. Because the parties were in contract negotiations, the unilateral change was a per se violation of the duty to bargain in good faith which triggers the 180 day clock. On the discovery test, the Court did not determine whether the knowledge of members of the association could be imputed to the association itself. Instead, the Court found the association, exercising reasonable diligence, should have discovered a new work plan after the plan’s implementation. Therefore, the Court found the association’s complaint was not timely under either test.

Court of Appeals Gets It Wrong and Finds Loss of Right to Arbitration Not "Materially Adverse Action"

In an unusual case against Portland State University, the Oregon Court of Appeals has allowed a collective bargaining agreement to waive grievance arbitration if the employee chooses to pursue administrative or civil action. In this case, PSU refused to process a discrimination grievance where the grievant had filed a complaint with the EEOC. PSU cited a Resort to Other Procedures (ROP) clause in the contract that permitted PSU to withdraw from the grievance process when the grievant filed a complaint with an administrative or judicial body. The association brought a (1)(g) complaint against PSU alleging failure to adhere to the grievance process language. ERB found the ROP clause unenforceable because it sanctioned discrimination against an employee who complained of discrimination. On appeal, the Court of Appeals found ERB had not applied the correct definition of “materially adverse action” because a reasonable employee would not be dissuaded from bringing a complaint merely because PSU withdrew from the grievance process. The Court’s analysis was premised on the recent Supreme Court opinion in 14 Penn Plaza in which the Court distinguished between statutory remedies for discrimination and contractual remedies for discrimination. Because the ROP clause affected only the grievant’s contractual remedies, the grievant’s statutory remedies remained unfettered. Therefore, the Court remanded the case to ERB to apply the proper definition of “materially adverse action” to the grievant’s statutory rights as defined by 14 Penn Plaza. The dissenting opinion argued Title VII forbids discrimination against any employee who has opposed discrimination in the workplace and the ROP discriminates against such an employee by removing a bargained-for right to seek redress under the union grievance procedure only from those employees who bring complaints in an administrative or judicial body.

This case raises several difficult questions: Isn't the dissent correct, the denial of contractual right (arbitration) based upon the exercise of Title VII or 659A rights a retaliation in violation of Title VII or 659A? If so, what jurisdiction does ERB have to determine a Title VII or 659A violation? Shouldn't the ROP clause be challenged in Circuit Court, rather than attacking it under an arbitrarily standard through ERB? Does this now extend the reach of the Supreme Court's Penn Plaza decision to PECBA governed CBA's? Even without answering these questions, it is clear that Oregon public employee unions should review their contracts and make a decision as to the continued efficacy of this type of ROP clause.

Health Care Reform Provision Invalidated

In an widely expected decision, Virginia Federal District Court Judge Henry Hudson found the minimum essential coverage provision of the Affordable Care Act (ACA) unconstitutional. According to the court, Congress exceeded its authority to regulate commerce and to protect public welfare. In order to get this conclusion, the court had to rely upon cases issued in the 1930's during the waning attacks on the New Deal. Notably, the Judge did not enjoin the implementation of this Act since this provision does not go into effect until 2013. In addition, and perhaps more importantly, the judge's opinion does not extend to a vast majority of the ACA, including the employer and Exchange mandates. Ultimately, it is expected that this case will be considered with several other cases that our wending their way through the courts of appeals. Ultimately, the U.S. Supreme Court will be asked to resolve what are likely to be conflicting Circuits. A cautionary note -- in the three District Court opinions that have been issued in these challenges, the judge's have resolved these issues based upon political appointment. (Judge Hudson is a George W. Bush appointee.) The continuing conservative majority in the U.S. Supreme Court does not bode well for this portion of the ACA.

ERB Reviews Confidential Employee Criteria - IBEW, Local Union No. 659 v. City of Canyonville, 23 PECBR 962 (2010).

The International Brotherhood of Electric Workers filed a unit clarification petition with the ERB, requesting that it determine whether a bookkeeper and a deputy city recorder were confidential employees and thereby excluded from the bargaining unit. ORS 243.650(19)(excluding confidential employees from PECBA and collective bargaining agreement). The ERB applies a three-part test for determining confidential employee status:
(1) Does the employee provide assistance to a person who formulates, determines, and effectuates management policies in the area of collective bargaining?
(2) Does the assistance relate to collective bargaining negotiations and administration of a collective bargaining agreement, and
(3) Is it reasonably necessary for the employee to be designated as confidential to provide protection against the possibility of premature disclosure of management collective bargaining policies, proposals and strategies?
Because the small unit was newly formed, the ERB had to consider anticipated duties related to collective bargaining, rather than a prior history.
The ERB concluded that the Deputy city recorder was a confidential employee because she assists the City council and the City administrator, who will deal with management policies in the area of collective bargaining. She compiles and prepares confidential information for the council and takes minutes at meetings and executive sessions. The ERB determined however that the bookkeeper was not a confidential employee. While her position met the first two-parts of the test, the ERB invoked its policy of rejecting “undue proliferation of confidential employee status based on the convenience of the employer.” Thus, the ERB held that it was not reasonably necessary for two employees of the small unit to be designated as confidential.
The IBEW also sought clarification as to whether the bargaining unit included temporary employees but the ERB did not consider that issue because it determined it was an attempt to expand the unit, and therefore, not appropriate for review.

Christine Moore represents public employee unions in representation and unit clarification matters.

ERB Finds Public Records Law Trumps CBA Records Expungement Requirement

IAF Local 890 filed a ULP after the Klamath County Fire District refused to implement an arbitrator’s award ordering the District to purge its files of a discipline in compliance with the CBA. The District argued it was prohibited from purging the files by the Public Records Law (ORS 392.410 – 505 and ORS 357.895). The case presented an apparent conflict between the Public Records Law and the PECBA. The Board held the District did not commit a ULP because, while the PECBA favors the use and implementation of arbitration awards, such awards may not be implemented if they are contrary to public law. The majority found ORS 357.895 prohibits the state’s archivist from granting permission to a government entity to destroy records before the proscribed timelines. The majority found the parties are prohibited from contracting around the District’s statutorily imposed requirement to maintain records. Therefore, the District did not violate ORS 243.672(1)(g).
Notably, the Board did not address any possible violations of ORS 243.672(1)(e) or (f) after finding the parties did not argue violations these sections at hearing or in brief.

In his dissent, Chair Gamson argued the arbitrator’s award did not violate the Public Records Law because the statute only requires a government entity to preserve documentation of investigations of disciplinary matters as distinguished from the discipline itself. The award ordered the removal only of documentation of a discipline.

Follow Us On Twitter

We are now posting our blog updates on Twitter. Simply follow @BHMKLaw on Twitter and you will get regular updates on labor and employment law developments both locally and nationally. We will also provide updates about recent developments on cases within the firm.

City of Portland Violates Existing Conditions Clause

In late 2009, the Portland Police Chief attempted to change well-established policies related to flex time for Police Commanding Officers union. The City refused to negotiate the changes. Hank Kaplan, representing the union, brought a grievance against the employer for violation of past practice and existing conditions language in the union contract. The City asserted that the practice was not approved by the elected officials, and that a prior settlement had waived the union’s right to file a grievance. The Arbitrator ruled that the prior settlement did not waive a grievance, and then sustained the union’s grievance. The employer was ordered to rescind the change and reinstate the past practice.

ERB Reviews Supervisory Exclusion Two Member Card Check Unit

The Laborers’ International Union of North America, Professional Law Enforcement Officers Assoc, Aurora sought to certify a bargaining unit without an election composed of two professional law enforcement officers. The City of Aurora requested exclusion of one of the officers because he allegedly performed substantial supervisory and managerial duties.
The ERB concluded that the officer was not a supervisory or managerial employee, and therefore, he was part of the bargaining unit. The officer did not have any supervisory authority as described in ORS 243.650(23), such as hiring, transferring, or suspending other employees. While he acted as the reserve program coordinator, the reserve consists of volunteers, not “other employees” under ORS 243.650(23).
The ERB also concluded that while the officer performed some limited, administrative work, he did not conduct substantial managerial duties. He had a sufficient continuity of interest with the other unit member in that they both had patrol and law enforcement duties. Therefore, it constituted an appropriate bargaining unit.

Christine Moore represents public employee unions in representation and unit clarification matters.

PERS Board Reversed on Variable Account Administrative Expenses

Today the Oregon Court of Appeals reversed the Oregon PERS Board on its decisions to charge the PERS Variable Account for administrative expenses in years of account loss. This will result in almost two-million dollars being returned to PERS members. This case arose in 2001 and 2002 when the PERS Variable Account suffered losses due to the equity market downturn. Normally, Variable Account administrative expenses are charged against Variable Account interest in the same way that the PERS Regular Account earnings are charged for Regular Account administrative expenses. However, when the Variable Account had no earnings in 2001 and 2002, PERS charged those expenses against its principle. This was different than what PERS agreed it was obligated to do for the Regular Account. For that account, in non-interest years, employers are charged for administrative expenses. PERS argued that the statutes allowed it to treat the Variable Account differently and charge against its "negative interest". The Court "readily" rejected this "negative interest" argument and held that the Variable Account was entitled to be treated on the same basis as the Regular Account when allocating administrative expenses.

Tom Doyle represented the Petitioner in the administrative hearing and on appeal.

Arbitrator Orders County to Make OPSRP Employer Supplemental Contributions

Arbitrator Janet Gaunt has found in favor the Multnomah County Corrections Deputies Association on a retirement contribution grievance. At issue was whether the County was obligated to make a 6% supplemental contribution for employees hired under the Oregon PERS OSPRP plan. OSPRP is the new plan created by the 2003 legislature to replace PERS as the retirement plan for new hires. Under OSPRP, employers can voluntarily contribute between 1% and 6% percent of employee salary to an employee's Individual Account Program account. This additional employer contribution allows the employer to supplement the meager retirement benefits available to new hires under OSPRP. The County had agreed in 2004 to make this 6% contribution. However, in subsequent years it failed to do so. When a grievance was filed, it argued it never meant to agree to make that contribution and did not understand the contract language. Arbitrator Gaunt held that even if there was a unilateral mistake by the County, such a mistake is no defense. In the face of clear and unambiguous contract language, the County could not alter that language through arbitration.

BHMK Attorney Tom Doyle represented the union in the arbitration of this matter and BHMK attorney Hank Kaplan represented the union in the bargaining of this contract.

Arbitratrator Upholds Union Jurisdiction Grievance

Woodworkers Lodge 246 represents Weyerhaeuser Timber employees in the Springfield and Cottage Grove areas. Prior to 2000 these were two distinct timber areas and distinct crews of Company employees worked those areas. At that time, the Company proposed to consolidate the two areas into a single unit with the primary camp being located at the Springfield site. The union agreed, but specified there would be no change in the union members' rights to log the timber in the Cottage Grove area. Over the years, the Company ceased using its employees to log the Cottage Grove area and instead used contractors. However, the Company still met its contractual production obligations and thus there was no contract breach at the time. However, the contract also provided for simultaneous furlough of contractor and Company employees so that the Company could not use contractors in a timber area if Company employees were in a layoff status. In 2009, the Company furloughed Springfield employees but continued to work contractors in the Cottage Grove area. A grievance was filed. The Company responded that the Cottage Grove woods were no longer included in the Springfield area. Arbitrator Thomas Levak held that the although there had been no logging by Company employees in the Cottage Grove area for many years, the parties never bargained to change the original consolidation agreement. As a result, the Company violated the contract by laying off Company employees while continuing to work contractors in the Cottage Grove woods.

BHMK Attorney Tom Doyle represented the union in this successful arbitration.

Medical Marijuana Use Not Subject to Accommodation Requirement

Despite the fact that Oregon law allows for the use of medical marijuana, Oregon employers do not have to accommodate an employee’s use of medical marijuana. In Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries, an employer discharged a forklift operator because he used marijuana for a medical problem and the employee sued under Oregon’s disability and discrimination laws. The employee held a registry identification card under the Oregon Medical Marijuana Act. That Act allows a person to engage in the medical use of marijuana if a physician states that the person has a debilitating medical condition for which marijuana may mitigate the symptoms or effects of that condition. The Oregon Supreme Court decided that the federal Controlled Substance Law, which illegalizes the use of marijuana, preempts the Oregon law. Consequently, the Court stated that the employee was using illegal drugs and did not qualify for protection under Oregon’s disability and discrimination laws.

New Law for Breastfeeding Mothers in the Workplace

With the passage of the Federal Health Care Reform comes a major step forward for the rights of nursing mothers in the workplace. Thanks to the efforts of Oregon Senator Jeff Merkley and the United States Breastfeeding Committee, it is now Federal Law that employers provide nursing mothers an unpaid 30 minute break every four hours for expressing breast milk. In addition, the employer must provide a private location and it cannot be a bathroom stall. In effect, this is a nationalization of the Oregon law that went into effect over a year ago. However, it goes even further than the Oregon law. It applies to all employers and has a limited defense of undue hardship available only to small, i.e. less than 50 employee, employers. This law is notable also for its extension of the current Fair Labor Standards Act (FLSA) beyond overtime into mandating break time. This is a first. Until now, mandatory breaks had been the province of State laws. Although figuring out enforcement via the FLSA for denied breaks will present some growing pains for both DOL and private litigants, this law presents a significant step forward for working women throughout the country.

BHMK Tom Doyle advises on family medical leave and workplace wage and hour issues.

Oregon Supreme Court Reiterates IP 43 Holding

In a comparatively long running Ballot Title case, the Oregon Supreme Court once again referred the Title for IP 43 back to the Attorney General for revision. This is the second decision on this proposed initiative petition. At issue in the prior decision and the subsequent objections was whether the Title accurately reflects the subject matter of IP43. IP 43 is an attack on recent attempts by the Oregon legislature to preserve the integrity of the signature gathering process for ballot measures. For instance, the legislature has implemented registration requirements for signature gatherers which prevent convicted forgers from collecting signatures. Under current law, signatures unlawfully collected by a convicted forger could not be included in the signature verification process. Under IP 43, the flood gates would be opened up to allow chief petitioners to use those unlawfully obtained signatures. The Court has now stated in two separate opinions that the voters must be informed of that aspect of IP 43.

Tom Doyle represented the party challenging the Attorney General's Certified Ballot Title. BHMK attorneys Aruna Masih and Tom Doyle have an active election law practice that includes Ballot Title comments, petitions for review, and procedural and substantive litigation.

ERB Certifies Part and Full-Time Community College Bargaining Unit

The faculty at Klamath Community College will soon be bargaining for a contract that will provide them desperately needed stability and benefits. Klamath Community College Faculty Association petitioned the Employment Relations Board seeking certification of a bargaining unit composed of both full and part-time faculty. The College opposed inclusion of all part-time faculty. The Board issued an order in favor of the Association and designated the bargaining unit as the Association requested.

BHMK attorney Christine Moore represented the Klamath Community College Faculty Association

Management Rights Clause Does Not Allow Contract Violations

Arbitrator Marvin Shurke ruled in favor of the ATU Local 757 recently on a case relating to the scope of a management right clause. The facts were as follows: After a change in management, the employer implemented a "no-fault" attendance policy which assigned points for absences and tardiness, (whether excused or unexcused), and which provided progressive discipline for various accumulations of points. The Union grieved the change. The employer asserted it had the right to set attendance policies under the very broad management rights section of the collective bargaining agreement.

Attorney Hank Kaplan represented the union, and argued that management has no fundamental right to make unilateral changes to the contract, and that the new policy affected union members' rights under several sections of the contract, including the just cause discipline and the union leave provisions of the contract.

The Arbitrator held that the new policy violated the contract. He ordered the employer to restore the status quo, to refrain from changes to the attendance policy for the duration of the contract, to rescind all imposed or threatened discipline under the new policy and restore lost pay, to write the union's chief steward a letter of apology, and to pay all of the Arbitrator's fees and expenses.

James v. Clackamas County

Clackamas County Circuit Court Judge Eve Miller issued an opinion at a bench trial relating to retiree benefits. The case was brought on behalf of Neil James, a retired Clackamas County command officer. At the time of Mr. James' retirement, he had been promised continuation of retiree benefits at the same level and at no cost until age 65. The County lived up to that obligation for several years but then decided to curtail benefits and merge the fund with another fund for the peace officers. At the same time, the County began to require substantially increased contributions from the command officer retirees. This merged fund, began to grow substantially to the point that it now has an operating surplus of close to $1,000,000.00. Nonetheless, the County continued to curtail benefits despite its contractual obligation to the contrary. The court found that the initial reduction in benefits and requirement of payment of increased premiums was a breach of retirees' contracts since there were adequate funds available to pay for those benefits. Bennett Hartman attorney Thomas Doyle currently represents the Plaintiff in this action.

Ninth Circuit Retirement Benefits Victory

The Ninth Circuit Court of Appeals issued an opinion this week in favor of retirees of Simpson Paper. Tom Doyle represented these retirees in claims for unpaid health benefit premiums. The facts were fairly simple. Simpson Paper agreed in a collective bargaining agreement to provide health care for early retirees until they turned age 65. After several years of providing this benefit, the company ceased all payments. According to the company, the retireees did not have a "vested" benefit because the agreement said the benefit could be changed "subject to negotiation with the union." Although the Company did not negotiate with the union, the Company argued that since the benefit could be changed, it was variable, and as a result it could not "vest" and was entirely unenforceable. The District court agreed. The panel of the Ninth Circuit initially affirmed the District court and held that not only was there no vested right to benefits, the lack of such a vested right prevented the Courts from even having jurisdiction over the case. In response, our firm petitioned for rehearing en banc, i.e. by the entire Court. In support of the Petition, several allied groups filed supporting "friend of the court" briefs - AARP and California Employment Lawyers Association. However, before the entire Ninth Circuit could consider the Petition, the panel itself requested additional briefing. Now, in a stunning reversal, the Panel of the Ninth Circuit has withdrawn its prior opinion and reversed its own prior opinion on this case. As a result the Court withdrew an opinion that had substantially limited Federal Court jurisdiction in ERISA cases. Under this new opinion, it is clear that union retirees have a right to assert claims in Federal Court regarding breaches of collectively bargained entitlement to health benefits. Moreover, this opinion remanded the matter to the District Court for a jury trial on the issue of whether the Company "negotiated" with the union prior to making the changes. This is a major win for unionized employees and retirees throughout much of the country.

Sizemore Jailed !!!

Judge Janice Wilson found Bill Sizemore in contempt of court today and remanded him into the custody of the Multnomah County jail.  The Oregon Education Association and the American Federation of Teachers filed the contempt action against Sizemore for violating the court's injunction in a RICO case. It was their contention  that Mr. Sizemore established a sham charitable foundation, which received the majority of its “donations” from Loren Parks and a Dick Wendt organization.  

Judge Wilson agreed. In a highly unusual move, the Judge read her forty-two page opinion from the bench for almost three hours. In part, she stated that Sizemore used the charity to fund his political activity and as a personal “piggy bank,” as well as to illicitly “facilitate fundraising because of tax deductibility and to permit his supporters to shield their personal support of Mr. Sizemore and his activities from public scrutiny.”  She also extended the injunction for another five years.

Mr. Sizemore will remain in custody until he files full and complete tax reporting documents for 2006 and 2007 for his charitable foundation. BHMK Attorneys Greg Hartman, Christine Moore and Mike Morris represented the unions in this matter.

Americans with Disabilities Act Given New Life

In a remarkable demonstration of the value of political action (i.e. a Democratic Congress), the Congress and President have enacted a revitalization of the Americans with Disabilities Act. These amendments reverse the all-out assault that has been waged by the Federal Court's on the ADA for a decade and a half. The highlights include:

1. Broadening the scope of what is considered a disability by lowering the level of impairment required;

2.  Specifying that impairments in remission may still be considered disabilities;

3.  Rejecting consideration of ameliorative measures in determining if someone has a disability;

4. Prohibiting discrimination based upon an actual or perceived "impairment," regardless as to whether that impairment would limit a major life activity.

This act specifically overrules two of the most damaging U.S. Supreme Court cases, Sutton v. United Airlines and Toyota Motor Manufacturing v. Williams. As a result, Federal protections for those with disabilities will be expanded.

Police Lieutenant Termination Overturned

An 18-year veteran Portland Police Lieutenant was terminated after shooting a suspect driving a stolen vehicle, on the grounds of poor performance and violation of the Police Bureau’s policies regarding shooting at moving vehicles.  The union grieved the termination sanction.  Hank Kaplan represented the grievant in a week-long hearing attended by the City’s Mayor and the top police brass.  The arbitrator accepted the Union’s arguments that the City had failed to prove a violation of its shooting policy; but sustained the poor performance finding.  The termination was reduced to a 30-day suspension, the grievant was reinstated to his position as a police Lieutenant, and was awarded lost pay and benefits.  

PERS Required to Live-Up to Estimate for Retirement Benefits

On July 16, 2008, a Marion County Circuit Court jury unanimously found the PERS Board liable for over $200,000 in damages for negligent misrepresentations made to a PERS member in the case of Kay Bell v. Public Employees Retirement Board (Marion County Case No. 07C11097).  BHMK attorney Aruna Masih represented the PERS member at trial.

The case was allowed to proceed to trial by Marion County Circuit Court Judge Claudia Burton, who, at summary judgment, found that the PERS Board owes a special duty of care to PERS members to protect them from economic loss by not supplying them false information or by not making a material misrepresentation to them.  In this case, PERS had provided the PERS member, a school teacher and counselor, incorrect information on annual statements and estimates over a period of many years.  The PERS member resigned her position and retired in reliance on that incorrect information.  Only months after the PERS member retired did PERS ever reveal that the information it had provided her was inaccurate by over $1,100 per month.  Of course, by this point, the PERS member’s former position had already been filled, and she had lost the seniority she had accrued.

The jury unanimously found that the teacher reasonably relied on the false information provided by PERS and that she suffered loss of salary and benefits as a result of giving up her job in reliance on the false information provided by PERS.  The case will likely be appealed by the PERS Board which would give the Oregon appellate courts the opportunity to decide whether PERS does owe a special duty of care to PERS members to provide them accurate information for purposes of their financial planning.

Teacher Who Serves as Part-Time Athletic Director Loses FDAB Protections

The Oregon Court of Appeals today rejected an appeal by a terminated Athletic Director at the Riverdale School District. The decision in Edwards v. Riverdale School District appears to limit the rights of teachers who serve as Athletic Directors for public school districts. Apparently, Mr. Edwards served as a teacher for several years and then received a "promotion" to Athletic Director at 3/4 time. His remaining 1/4 of time was continuing as a teacher. Subsequently, he was terminated by the District. The District treated him as a probationary administrator because he had not served three years in that position. As a result, they summarily terminated him without the procedures that are required for non-probationary terminations under the Fair Dismissal Statute. Edwards took the position that he was not an administrator, therefore still a teacher, and protected by the Fair Dismissal statute as it applies to contract teachers -- which he had been prior to being "promoted." The Fair Dismissal Appeals Board (FDAB) agreed with Edwards. However, the Court of Appeals reversed and found that Athletic Directors are, in fact, administrators.

This decision illustrates the fact that a teacher who agrees to be an administrator, as long as its over half of their work, loses the statutory protections of the FDAB statute. They only regain those protections following three more years of probation.

Oregon Court of Appeals Affirms BOLI Mandate of Medical Marijuana Accomodation

In the case of Emerald Steel Fabricators v. BOLI, the Oregon Court of Appeals affirmed the Oregon Bureau of Labor and Industries' requirement that employers accommodate medical marijuana use. Employee was a participant in the Oregon medical marijuana program who was hired as a temporary drill press operator. Employee did not tell his employer that he was a medical marijuana program participant upon being offered the temporary position because he was afraid that Employer would not hire him if they were aware of his marijuana use. Employer’s policy was to have employees work on a temporary basis for three months and then evaluate the employee as to whether they should be offered a permanent position. Employee never used the prescription marijuana while working and Employer never suspected that Employee was using drugs. Employee informed his supervisor that he was participating in the medical marijuana program when he planned to move his residence and needed to know if he was going to be given a permanent position with Employer. Employee’s supervisor spoke with the owner about hiring Employee and ultimately decided that they did not need to hire Employee on a permanent basis.

decision was subsequently reversed by the Oregon Supreme Court, the Employer attempted to Employee filed a complaint with the Bureau of Labor and Industries (BOLI) claiming that the Employer had engaged in unlawful employment practices. BOLI charged the employer with a violation of Oregon disability laws. The Employer asserted several affirmative defenses to the charges. Subsequently, the Oregon Court of Appeals decided a similar case. In Washburn v. Columbia Forest Products, the Court of Appeals held that a plaintiff (a medical marijuana user) was disabled despite the existence of alternative mitigating measures (to medical marijuana use) and that accommodation was necessary. Upon the release of the Washburn decision, Employer’s counsel did not produce any evidence in support of the affirmative defenses. However, after the Washburn decision, Employer reraised in its appeal the affirmative defenses. On appeal, the court rejected these defenses.

There are a few notable aspects to this case. First, it appears that BOLI is giving full effect to the Court of Appeals' Washburn decision as to accommodation of medical marijuana. That case was reversed on other grounds, and therefore the court of appeals decision stands on the un-reviewed aspects of the decision. Thus, employers must accommodate a disabled individuals medical marijuana use. While not permitting on the job use, the applicability of zero-tolerance policies to registered users is clearly in doubt. Second, the effective dismissal of this appeal on preservation issues underlines the importance of careful preservation of affirmative defenses in the administrative context.

Supreme Court Supports Retaliation Claims

On May 27, 2008, the United States Supreme Court decided two important employment cases. Both cases presented the issue as to whether a statute prohibiting discrimination also encompasses a claim for retaliation without expressly stating so in the statute. The Court answered in the affirmative in both cases.

In Gomez-Perez v. Potter, a postal clerk sued the United States postal Service for retaliation based on the fact that she had filed an age discrimination complaint against the employer. The employee asserted her claim under the Age Discrimination in Employment Act (ADEA). The ADEA creates a cause of action for employees of private employers to sue their employer for retaliation. The ADEA, however, does not expressly create such a right for federal employees. The Court relied on the rationale of prior decisions to decide that the text of the ADEA prohibiting ‘discrimination based on age’ includes retaliation. The Court reasoned that retaliation is a form of discrimination because the employee is being subjected to differential treatment based on the nature of the complaint.

In CBOCS v. Humphries, an African-American manager of a Cracker Barrel restaurant sued his employer for retaliation based on the fact that he had complained about discrimination against other African-American managers. The employee asserted his claim under Section 1981 (a federal statute passed during post-Civil War Reconstruction granting freedom of contract to African Americans). Similar to the ADEA, Section 1981 does not explicitly prohibit retaliation based on claims of discrimination. Again, the Court relied on the rationale of prior decisions and the similarity of Section 1981 to other statues to hold that Section 1981 includes a prohibition against retaliation.

The most certain impact of these two cases on employees is the allowance of retaliation claims for federal employees. Whereas private employees have always enjoyed retaliation claims for age discrimination under the ADEA, it is now certain that federal employees will have the same rights.

However, the less certain impact of these cases is whether the analysis of the Court, reading retaliation claims into language generally prohibiting discrimination, will be applicable to other statutes. If so, retaliation claims may be made available in all instances of prohibited discrimination unless it is expressly provided otherwise in the statute. This is important because retaliation claims are often easier to prove than discrimination for employees. For this reason, retaliation claims represent a large number of employment claims.

Further decisions and interpretation of these decisions will determine whether the scope of employees’ retaliation claims will expand. For the immediate future, these cases create an ADEA retaliation claim for federal employees and indicate the Court’s support of discrimination-related retaliation claims in general.

Court of Appeals Allows Discovery in Licensing Cases

The Oregon Court of Appeals reversed the Oregon State Board of Nursing (OSBN) in the case of Shank v. OSBN. BHMK Attorney Tom Doyle represented the nurse in the matter at hearing and on appeal. The basis for the reversal and remand back to the OSBN was that the it had unlawfully prohibited its own investigator from answering questions on cross-examination. these questions related to the Board's own investigation into the Nurse's alleged misconduct. Remarkably, during the hearing the Board took the position that it would not tell the Nurse who it spoke with as part of its investigation and what they said. According to the Board, the Nurse was entitled to no more information than any other member of the public, even though it was her license that was at stake. The Court of Appeals rejected this star-chamber version of due process. This case not only opens the door to a fairer process for nurses, but will apply to many professionals who are subject to the contested case process.

BHMK is the only law firm in Oregon to have an entire practice group that specializes in representing individuals in licensing matters. The attorneys at BHMK have represented literally hundreds of nurses, teachers, paramedics, police officers, physicians assistants and other professionals who are licensed by the agencies of the States of Oregon and Washington. If you have received notice of a complaint or pending investigation, call us before you meet with the investigator.

ERB Finds Union Representative Had Apparent Authority

The Oregon Employment Relations Board (ERB) issued a decision finding that the union committed an unfair labor practice by repudiating a side agreement that the union president had entered into. The union defended the case by arguing that the President did not have actual authority to enter into the agreement, but rather had to obtain the approval of the Union Executive Board. ERB agreed that there was no actual authority, but ruled against the Union in any case. The ERB found that, from the perspective of the management representatives, the President had apparent authority and therefore it was unlawful to repudiate the deal.

This case is a cautionary tale. Frequently, the limits of a representative's authority are not clear. It is important that representatives have a clear understanding of what authority they have to bind the union. Once that is clear, then the best practice is for business agents or union leaders to explicitly notify the other side ahead of time if ratification of the "deal" will be necessary. Absent such a notification, there is a potential that the union will be held to the agreement, without the approval of the real decision makers.

Judge Finds Sizemore in Contempt

The teachers' unions have won another battle in their attempt to ensure that Bill Sizemore abides by Oregon law. In 2003, as a result of litigation headed by BMHK on behalf of the Oregon Education Association, the Multnomah County Circuit Court entered an injunction against Bill Sizemore for his participation in racketeering, including funneling money through non-profit organizations for political purposes, thereby giving donors charitable deductions for their political donations in violation of the law.Despite the injunction, Sizemore continued to flout the law by creating another non-profit organization through which he funneled political money. He also solicited funds for a political action committee in direct violation of the injunction. The teachers' unions requested that the Court hold Sizemore in contempt of the law. On May 27, Judge Wilson recognized Sizemore's flagrant defiance of the injunction and ordered that he pay restitution totaling over $30,000 to the teachers' unions, as well as attorney fees to BHMK.