Recent Developments in Labor and Employment Law

1. Recent Developments in Labor and Employment Law Michigan Association of School Personnel Administrators November 30 , 2017 Kevin S. Harty (231) 421-8880

2. Caution • These slides reflect general legal standards for the related presentation and are not intended as legal advice for specific situations • Future legal developments may affect these topics • This document may not be reproduced or redistributed, in whole or in part, without the express written permission of Thrun Law Firm, P.C.

3. Section 164h of the State School Aid Act • Districts/ISDs cannot enter into collective bargaining agreements after October 1, 2017 that: • establish racial or religious preferences for employees; • automatically deduct union dues; • conflict with federal or state transparency laws • include a method of compensation that does not comply with RSC Section 1250. Violation is a 5% state aid penalty

4. Section 164h: Is It Enforceable? • Governor did not veto Section 164h • However, he stated that in providing “direction to departments in implementing appropriations” some provisions are “considered unenforceable,” specifically noting Section 164h.

5. RSC Section 1250: Merit Pay • Became effective in 2010 • Requires a “method of compensation” (for teachers and administrators) that: • includes “job performance and job accomplishments” • as a “significant factor” in determining • “compensation” and • “additional compensation”

6. Merit Pay: Prohibited Subject • Section 15(3)(o) of PERA prohibits bargaining over: • decisions about the development, content, standards, procedures ,adoption and implementation of the method of compensation required under RSC Section 1250; • decisions about how an employee performance evaluation is used to determine performance-based compensation; • decisions concerning the performance based compensation of an individual employee; and • the “impact of those decisions on an individual employee or the bargaining unit.”

7. Merit Pay: Tenure Act • Under Article 1, Section 4 of the Teachers’ Tenure Act, a “demotion” does not include “. . . the discontinuance or reduction of performance-based compensation paid pursuant to section 1250 of the revised school code . . ..”

8. Section 160 of theState School Aid Act Mandates that a district or ISD requesting a waiver from the requirements of RSC Section 1284b (prohibiting student instruction from beginning until after Labor Day) conduct a joint public hearing in the district/ISD with MDE before the waiver is granted.

9. Public Act 152:Medical Benefit Plan Costs • Choice of hard caps or 80-20 is a permissive subject of bargaining • But MERC has ruled that the allocation among groups of the employees’ share of medical benefit plan costs is a mandatory subject of bargaining. Shelby Twp, 28 MPER ¶ 21 (2014), aff’d by Court of Appeals in 2015. Michigan Supreme Court affirmed on 11/1/2017. • Here, default to 80-20 was permitted at compliance deadline • MERC: “. . . the fact that one unit may benefit more than another with respect to a particular issue does not preclude good faith bargaining.”

10. PA 152 and PERA: Grand Traverse Cty ___MPER ¶ ___ (2017) • County agreed in CBA to pay 94% of health care costs (after effective date of PA 152), then switched to 80-20 option to comply with PA 152 during the term of the contract • Employee cost share was substantially increased and County also made new high deductible plan available • CBA did not reference PA 152 compliance but specified that the employer would pay 94% of the premium • County unsuccessfully maintained that it could modify the contract terms in order to implement PA 152

11. MERC and PA 152:Grand Traverse Cty MERC: • County made unlawful mid-term modification of CBA • While a public employer is not obligated to bargain over the selection of PA 152 compliance option, it must bargain about the amount that specific employee groups pay • Compliance with PA 152 does not excuse non-compliance with PERA (i.e. make sure that CBA aligns with compliance option chosen)

12. PA 152: Medical Benefit Plan Coverage Year • “. . . means the 12-month period after the effective date of the contractual or self-insured medical coverage plan that a public employer provides to its employees or public officials.” MCL 15.562(g) • Annual costs under PA 152 are measured with reference to medical benefit plan coverage years • Changes in inception date for a medical benefit plan year may have implications for PA 152 compliance on hard caps if employer contributions are also adjusted on the transition date

13. 2018 PA 152 Hard Caps • State Treasurer indicates 2018 hard cap increase is 3.4% over 2017: • Single: $6,560.52 ($546.71/mo.) • Two: $13,720.07 ($1,143.33/mo.) • Family: $17,892.36 ($1,491.03/mo)

14. Public School Employees Retirement Act • Certification of total and permanent disability by an IMA (Independent Medical Advisor) is a prerequisite for the granting of a non-duty disability retirement pension under Section 86 of the Public School Employees Retirement Act • This is so even if the IMA does not personally examine the claimant and despite evidence of disability that the claimant may have based on the opinion of his/her own treating physicians Escott v Pub Sch Employee’s Retirement Bd, ____ Mich App ___; 2017 Mich App LEXIS 1165 (July 18, 2017)

15. PERA: Grievances Over Prohibited Subjects • Pursuit of grievance arbitration over a prohibited subject of bargaining “. . . constitutes an effort to unlawfully enforce contract provisions or other agreements that have been made unenforceable by . . . PERA and is a breach of the duty to bargain.” • Dispute here involved teacher layoff/recall, but MERC has applied same rule in teacher discipline matters. • “. . . if the parties do bargain over prohibited subjects and reach an agreement on those subjects, that agreement is unenforceable.” Michigan Ed Ass’n, 30 MPER ¶ 62 (2017)

16. RSC Section1248:Teacher Layoff and Recall • Tenure teacher with HE evaluation was laid off and not recalled to positions for which she was certified and qualified. District filled these vacancies with new hires. • “ all policies regarding personnel decisions when conducting a recall . . . or in hiring after a staffing or program reduction, must be conducted on: (1) the basis of the performance evaluation system the school district developed in compliance with Section 1249, and (2) other specific factors listed in Section 1248.” • “. . . the statutory mandate anticipates that talented and more effective teachers will be recalled or hired, while ineffective teachers will not.”

17. Teacher Layoff and Recall • “A school district must consider the relative effectiveness ratings of candidates for open teaching positions, whether as part of a recall or a new hire after a staffing or program reduction.” • “Nothing in the language of Section 1248 suggests that a teacher’s effectiveness evaluation in teaching one subject requires that teacher’s recall or rehire to teach a different subject.” • “…to interpret Section 1248 as requiring a school district to recall or rehire a teacher to a specific positon, for which she may be qualified but has not been proven effective, is contrary to the purpose of the 2011 Legislative Amendments.” Southfield Ed Ass’n v Southfield Pub Schs, ____ Mich App ____ ; 2017 Mich App LEXIS 1105 (July 11, 2017)

18. Teacher Layoff and Recall:Due Process • Court of Appeals in Southfield Ed Ass’n found that amended Tenure Act did not confer any constitutional property right in the context of layoff/recall, particularly given the repeal of the three year recall window for tenure teachers in 2011. • “A layoff because of a necessary reduction in personnel is not a discharge or demotion.” • “With respect to layoffs, it has long been established under Michigan law that a tenured teacher is not given any protection of his or her employment from a bona fide reduction in personnel.”

19. Teacher Layoff and Recall: Implementation Considerations • Must have well designed Section 1248 policy • Must accurately implement policy and be able to articulate and justify implementation • Must have reliable and accurate evaluations under Section 1249 to use as basis for applying Section 1248 policy • remember that evaluations can be litigated when they are used (as they must be) in connection with teacher layoffs • Must be able to demonstrate that reduction is bona fide

20. State Tenure Commission: Hill v Potterville Pub Schs • Teacher dragged severely cognitively impaired student by ankles for 38 feet • STC upheld discharge, finding: (1) student was exposed to obvious risk of injury; (2) violation of student’s right to be treated with respect and kindness; and (3) student was “robbed” of the “degree of dignity to which she was entitled.” • Use of unreasonable force analysis does not depend upon teacher’s motives or intention; focus is upon teacher’s actions

21. Tenure Commission: Insubordination “. . . a willful refusal to comply with a clear, reasonable, and fairly applied administrative directive or board policy by someone who knows about the directive and fully understands it.” • professional ethics codes, regulations, plans, etc. cannot form the basis of insubordination unless they are “clearly incorporated in a board policy or administrative directive that is known to and fully understood by the teacher.” • must show that the teacher “. . . fully understood the policy he/she has violated, and nevertheless willfully disobeyed it.” Hill v Potterville Pub Schs (STC 16-4)

22. FMLA: Interference • Managerial employee was terminated while on FMLA leave • She claimed that her termination constituted FMLA interference • Unlawful FMLA “interference” occurs if a FMLA-covered employer takes an adverse action against an FMLA-eligible employee based in whole or in part on the fact that the employee took FMLA-protected leave. • but the mere fact that an adverse employment action is taken while an employee is on FMLA leave does not alone demonstrate interference Mullendorev City of Belding, 872 F3d322 (CA 6, 2017)

23. FMLA Interference: Mullendore v City of Belding • There is no “interference” under FMLA “…if the employer has a legitimate reason unrelated to the exercise of FMLA rights for engaging in the challenged conduct.” • “An employee may be lawfully dismissed, preventing him from exercising his statutory rights to FMLA leave or reinstatement , but only if the dismissal would have occurred regardless of the employee’s request for or the taking of FMLA leave.”

24. Title 7: Sexual Orientation • Hively v Ivy Tech Comm College, 853 F3d 339 (CA 7, 2017) • “. . . discrimination on the basis of sexual orientation is a form of sex discrimination.” • Observes that Title 7 prohibition of “sex” discrimination, adopted in 1964, has since been interpreted to include claims of: • sexual harassment • same-sex harassment • discrimination based on actuarial assumptions about longevity • failure to conform to gender stereotypes

25. Title 7: Sexual Orientation • Hively Court explained that “the line between a gender nonconformity claim and one based on sexual orientation . . . does not exist at all.” • A “job decision based on the fact that the complainant – woman or man - dresses differently, speaks differently, or dates or marries a same–sex partner, is a reaction purely and simply based on sex” and is prohibited by Title 7 • Court also based outcome on an “associational” theory. Essence of this claim is that the plaintiff would not have been discriminated against except for the protected characteristic of one with whom he/she associates.

26. US Attorney General: October 4, 2017 “Although federal law, including Title VII, provides various protections to transgender individuals, Title VII does not prohibit discrimination on gender identity per se.”

27. Title 7: Retaliation • CBA placed grievance in abeyance if employee filed an EEO claim • Court found that this was unlawful retaliation under Title 7 • Union was also liable for negotiating retaliatory contract provision • Court observed that the scope of the anti-retaliation provision in Title 7 is broader than the substantive non-discrimination prohibition Watford v. Jefferson Co Pub Schs, 870 F3d 448 (CA 6, 2017)

28. Americans With Disabilities Act • Customer service rep had excessive absences due to depression and anxiety • She requested accommodations in form of flexible start time , breaks every two hours , and unpaid leave • Court finds that “regular attendance” was an “essential job function” based on attendance policy and testimony of supervisor that employee absence diminished customer service and disrupted operations when other employees had to fill in Williams v AT &T Mobility Services, 847 F3d 384 (CA 6, 2017)

29. ADA: Leaves of Absence • “ this court has held that additional leave is an objectively unreasonable accommodation where an employee has already received significant amounts of leave and has demonstrated ‘no clear prospects for recovery’.” • “…a physician’s estimate of a return date does not necessarily indicate a clear prospect for recovery, especially where an employee has repeatedly taken leaves of unspecified duration and has not demonstrated that additional leave will remedy her condition.” Williams v AT&T Mobility Services, 847 F3d 384 (CA 6, 2017)

30. ADA: Leaves of Absence • EEOC Guidance “ Employer-Provided Leave and the Americans with Disabilities Act “ ( May 9, 2016) regards leave as a reasonable accommodation when it enables an employee to return to work following the period of leave. • But compare: “not working is not a means to perform the job’s essential functions”… an extended leave of absence does not give a disabled individual the means to work; it excuses his not working.” Severson v. Heartland Woodcraft Inc., ___ F3d ___ (CA 7, 2017)

31. ADA: Reasonable Accommodation • Asst. principal had knee replacement and was given medical restriction prohibiting her from “being in the vicinity of unruly students”. • School district granted her leave but declined to reassign her to another position because all of the positions required interaction with students or being in their vicinity • Court found that student management was an essential job function and that the plaintiff was ignoring the “logical consequences” of her restriction Brown v. Milwaukee Bd. of Sch. Dirs., 855 F3d 818 (CA 7, 2017)

32. ADA/ Section 504: Interference • Sp ed teacher received an unsatisfactory evaluation based, in part, on her teaching methods. She was laid off based on that performance rating. • She asserted that she was engaged in protected activity under Section 504 when she refused to alter her teaching methods • Court ruled that the law protects the assertion of rights on behalf of students, not the selection of teaching methods. Frankesv Peoria Sch Dist, 872 F3d 545 (CA 7, 2017)

33. School Employee Liability: Michigan Supreme Court • Student athlete was participating in cross country practice and was struck by vehicle after coach directed team to cross an intersection when “do not walk” signal was illuminated. • Michigan Supreme Court ruled (4-3) that to prove “proximate cause” plaintiffs must establish both “factual causation” (i.e. the defendant’s conduct in fact caused the harm to the plaintiff; and “legal causation” (requiring a determination of whether it was foreseeable that the defendant’s conduct could result in harm to the plaintiff). Ray v Swager, ____ Mich _____ 2017 Mich App LEXIS 1555 (July 31, 2017)

34. First Amendment: Mayhew v Town of Smyrna • Employee had responsibility of overseeing water sample testing for a municipality, including monitoring all recording and reporting requirements for regulatory purposes. • Employee complained to supervision that: (1) a co-employee was allegedly altering collection and results of water sampling; and (2) that municipality did not follow its own hiring/promotion policies. • Employee was terminated and filed a First Amendment retaliation claim.

35. Employee Speech: First Amendment • Sixth Circuit concluded that the reporting of another employee’s misconduct was not protected by the First Amendment because that action fell within the plaintiff’s “ordinary job responsibilities.” • However, the plaintiff’s communications regarding the municipality’s failure to follow its policies for hiring and promotion were found to be “matters of public concern” within the protection of the First Amendment. Mayhew v Town of Smyrna 856 F3d 456 (CA 6, 2017)

36. First Amendment: Balancing Public Employer and Public Employee Rights • During an internal law enforcement investigation regarding drug use in a correctional facility, union officials circulated a memorandum informing staff of their Weingarten rights in the context of investigatory interviews and “strongly” recommending that employees interviewed during the investigation inform union officials of the content of those interviews. • One of the union officials was later terminated for unrelated misconduct and the other resigned during the course of a separate investigation. Both then brought First Amendment retaliation claims.

37. Sixth Circuit: First Amendment • Pickering balancing test is used to “determine if the employee’s free speech interests outweigh the efficiency interests of the government as an employer.” • Sixth Circuit ruled that a public employer need not show actual disruption of the public agency to prevail under the Pickering test, but must be able to “reasonably predict” that the employee speech would cause disruption • Union/employee communication was not protected by the First Amendment because it encouraged employees to impede the investigation by violating confidentiality essential to the conduct of the investigation Gillis v Miller, 845 F3d 677 (CA 6, 2017)

38. Employment: Procedural Due Process • Tenured professor was removed from position as department chair after an investigation surrounding alleged misconduct, including hostility, volatility, and disrespectful behavior. However, his employment as a faculty member was not otherwise altered. • He contended that his rights to procedural due process were violated because he was not given a hearing prior to removal from the department chair position and because college administrators made public comments impugning his reputation with affording him a “name–clearing” hearing. Crosby v Univ of Kentucky, 863 F3d 545 (CA 6, 2017)

39. Due Process:Property Interests Sixth Circuit ruled: • A constitutional “property” interest can stem from a state statute, a formal contract, or an implied contract. • “. . . rules and understandings, promulgated and fostered by state officials can form the foundation of a protected property interest.” • If there is a “property” interest, then “procedural due process” rights (notice of charges, hearing, etc.) attach as a condition to impairing the property interest.

40. Due Process: Liberty Interests • A constitutional “liberty” interest attaches to a person’s “ reputation, good name, honor and integrity.” • If there is a liberty interest, the individual is entitled to a “name-clearing” hearing. • A “liberty” interest is impaired when a public official: • voluntarily makes false public stigmatizing statements in conjunction with an employee’s termination; and • the statements do not concern merely poor job performance or incompetence but instead must impose “. . . a moral stigma such as immorality or dishonesty” that would seriously damage the employee’s standing in her community of foreclose her ability to secure other employment opportunities.

41. Special Education Programs: Personnel • 2016 Public Act 429 repealed Section 1766 of the Revised School Code which placed certain obligations upon constituent school districts to hire ISD personnel impacted by the discontinuation of special education programs and services. • 2017 Public Act 159 repealed Sections 1742 and 1743 of the Revised School Code which created corresponding obligations upon ISDs with respect to displaced constituent district and state agency special education personnel.