Lynberg & Wakins Lynberg & Wakins
Volume IV, Issue 2      

Newsletter Fall 2011


California Employment Law

Using Training Cost Reimbursement Agreements to Recoup Training Costs from Departing Employees

At a time when private employers are facing continuing economic difficulties and public employers are contending with sustained budget cuts, employers of all types are seeking ways to ensure that their investment in the hiring of new employees pays off. One of the most frustrating situations faced by employers occurs when an organization invests significantly in training newly hired employees, only to have them leave after a short period of time.

According to a decision by the Ninth Circuit Court of Appeals, one approach employers can potentially take in this regard is the use of “Employee Training Cost Reimbursement Agreements,” in which newly-hired employees that require substantial training sign an agreement in which they accept responsibility for reimbursement of training costs if they voluntarily leave the employer within a certain time period. In Gordon v. City of Oakland, before beginning her officer training at the Oakland Police Academy, the plaintiff signed an agreement stating that if she voluntarily left her position before completing five years of service with the City, she would be required to repay a pro-rata share of her $8,000 training costs, with the percentage due dropping by 20% after each completed year of service. After concluding her training and completing less than two years of service with the City, the plaintiff volunta rily left her employment. The City paid the plaintiff her final paycheck, but withheld payment for unused vacation, and demanded repayment of the balance of the training costs from her.

The plaintiff paid the $6,400 in training cost reimbursement to the City, and then filed suit, claiming that the reimbursement policy violated the federal Fair Labor Standards Act as well as various other state laws. However, the trial court dismissed her case, and she then filed an appeal before the Ninth Circuit challenging that decision.

On appeal, the plaintiff claimed that by forcing her to repay her training costs, the City was in effect requiring her to pay a “kickback” that brought her actual wages below the federally mandated minimum wage. However, the court rejected that argument, and determined instead that the City’s reimbursement policy was more akin to a valid “loan” voluntarily entered into between the plaintiff and the City for the cost of the plaintiff’s training. In upholding the City’s training cost reimbursement policy, the court highlighted the importance of the fact that despite the amount owed by the plaintiff, the City did not withhold her final paycheck, which would have violated the Fair Labor Standards Act.

PRACTICAL TIP: The Ninth Circuit’s decision in Gordon illustrates the importance of two key issues. First, employee training cost reimbursement agreements can be used in certain circumstances to recoup training costs, so long as the employee is not paid less than the minimum wage for any given workweek, even with the amount of the reimbursement taken into account. Second, and most importantly, the legality of reimbursement policies such as this turns on how the employer seeks repayment. In light of the court’s decision in this case, the safest way to implement and collect repayment under a policy such as this is to pay all wages actually owed to the employee, and then seek repayment separately through either a demand, a collection agency, and/or court action.

*Gordon v. City of Oakland, 627 F.3d 1092 (9th Cir. 2010).


Federal Labor Law

New Notice Posting Requirement for Employers

Beginning January 31, 2012, the National Labor Relations Board will require all employers to post a notice advising employees of their rights under the National Labor Relations Act. The 11x17 inch notice should be posted in a conspicuous place with other employment notices.

While there are no penalties for failure to post the notice, an unfair labor practice charge could be levied against an employer who knowingly and willingly fails to post.

For more information, visit the NLRB website.



Federal Education Law

United States Department of Education Proposes Changes to Individuals with Disabilities Education Act Regulations

The United Stated Department of Education recently unveiled proposed changes to the federal regulations that govern the Individuals with Disabilities Education Act (“IDEA”), which governs how states and other public agencies provide special education and related services to students with disabilities.

While the changes themselves are rather technical, they do have the potential to impact both parents and school districts. Under current IDEA regulations, school districts are not required to specifically inform parents of most of their confidentiality rights and protections under the IDEA and the Family Educational Rights and Privacy Act (“FERPA”) when seeking services under the IDEA. The first proposed change to the IDEA regulations would require school districts to inform parents of their confidentiality rights under the IDEA and FERPA, as well as provide them with an opportunity to withdraw their consent to the disclosure of confidential student information.

The second change proposed by the Department relates to the consent and notice given to parents before a school district accesses benefits to pay for services. Under the current regulations, school districts must obtain advance consent from parents each and every time the district accesses public or insurance benefits to pay for services. In response to concerns from school districts that this process was extremely labor intensive and thus unnecessarily drove up the expense of providing services, the Department of Education has proposed a change to the IDEA regulations which would allow school districts to provide written notice to parents that either their public benefits or insurance benefits were being accessed to provide services to their children, rather than going through the process of obtaining prior consent each time benefits were accessed.

The full text of the proposed changes are available here. The proposed changes are open to public comment until December 12, 2011. To visit regulations.gov and submit comments during this period, click here.



California School Law

California School District Found Liable for Setting Up Private Drug Sting Operation

Recently, a jury awarded a $1,000,000 judgment against a Southern California school district for using a student as a decoy in a self-initiated drug sting operation. The officials at the school did not notify the police or the student’s parents prior to initiating its actions. The jury found the school district liable for negligent supervision, negligence per se for violating the criminal statute and for intentional infliction of emotional distress.

In the case, a twelve year-old student with a history of discipline problems notified a school official that another student tried to sell him drugs. The school official consulted with other school employees and concocted a sting operation to obtain evidence of the alleged dealer selling drugs. The reporting student was asked to act as a decoy. At no times was the police or the student’s parents contacted.

The officials had the decoy student buy drugs from the suspected dealer with a marked bill while a school aide hid and observed the transaction. The sting was attempted twice during the day and on both events the dealer noticed the aide and did not provide any drugs. Nevertheless, shortly after the failed attempts the student decoy independently approached the dealer and purchased the drugs. The decoy quickly turned over the marijuana to the school officials. When the school officials attempted to detain the suspected drug dealer he ran away.

The school district police was alerted thereafter. However, when investigators learned that a student had been used as a decoy, they turned the case over to the city’s police department. On the way home from school that day, the student told his mother what had happened. The next day, the parents went to school and confronted the school officials. Within a week of the incident the school officials involved had been transferred off campus. A lawsuit was filed by the student’s guardian shortly thereafter. The suspected dealer was not charged with a crime because the evidence against him was obtained illegally.

In the civil trial against the District, the student's guardian sued the District and the individual school officials. The Plaintiff alleged negligent supervision, negligence per se and intention infliction of emotional distress. Plaintiff argued that the school owed a duty to the minor to not put him in danger. A school administrator testified that school officials are never allowed to use students in a drug buy plan.

Counsel for the Defendants argued that the school had to act quickly to apprehend the suspected drug dealer and get the drugs off campus and as such there was no time to contact the minor's parents before involving him in the operation. However, Plaintiff’s mother testified that she was home daily and easily reachable and would not have authorized her son's involvement in the sting. With regard to damages, Plaintiff claimed that he was ostracized by his classmates which led him to fail most of his coursework. Plaintiff also alleged that he was threatened because of his involvement in the drug sting and feared physical assaults. An expert for Plaintiff testified that the minor was diagnosed with post-traumatic stress disorder and underwent 30 to 35 counseling sessions. Defense counsel argued that the minor was a poor student and had discipline problems before the incident.

Defendants presented testimony and evidence that the minor did not have post-traumatic stress disorder but instead suffered from "severe anxiety."

After a full day of deliberation, the jury returned with a judgment for the Plaintiff in the amount of $1,015,250. The jury found the defendants were liable for negligent supervision and negligence per se, and had acted recklessly and outrageously, and awarded the plaintiff $500,000 for past non-economic loss, $500,000 for future non-economic loss, $15,000 for future tutoring, and $250 for past tutoring, for a total of $1,015,250.

PRACTICAL TIP: Where school officials suspect a student of being involved in criminal activity, they should immediately contact the city’s police department or at the very least the school district police. Prior to contacting the police, the officials should not undertake any police-like investigations, arrests, or searches. Such actions may later prove detrimental to any criminal prosecution of the suspect and may result in civil liability for the school district.


Federal Civil Rights Law

Ninth Circuit Court of Appeals Issues Divided Ruling Determining That Officers Used Excessive Force in Depoloying Tasers

In a consolidated case, the United States Court of Appeals for the Ninth Circuit reheard two cases that were previously considered by panels of the Ninth Circuit, which addressed the issue of whether the use of TASER guns in certain situations constitutes excessive force.

In the first case, a pregnant woman who had picked up her son from school was stopped by a police officer for speeding in a school zone and refused to sign the citation form. The woman resisted arrest and refused to get out of her car when instructed to do so. Further, she stiffened her body and clutched her steering wheel to frustrate the officers’ efforts to remove her from her car. In response, officers deployed a TASER gun in “drive-stun” mode, three times.

The second case involved a woman who had telephoned the police requesting assistance in a domestic assault. When the police arrived they became involved in an altercation with the alleged attacker, the woman’s husband. The woman attempted to defuse the situation by coming between the officers and her husband and trying to escort everyone out of the house so as to not wake up her children. In response, the police shot her with a TASER gun in “dart” mode.

As an initial matter, the Court addressed the use of the TASER gun in the “drive-stun” mode versus the “dart” mode. The Court indicated that the use of the gun in either of its alternative modes is not dispositive of whether its use was excessive force. Rather, the Court held that the issue is the reasonableness of the force employed by use of a TASER gun in the factual context of the altercation. With regard to the actual use of the TASER guns, the Court held that police officers are allowed to utilize the weapon where an individual poses an immediate threat to the safety of the officer or is attempting to evade arrest by flight. Even in these instances, the Court refused to employ a bright-line test, and stated that the facts of each case would determine whether a reasonable use involves the TASER being utilized in “drive-stun” or “dart” mode.

Chief Judge Kozinksi dissented and concurred in part. In sum, Judge Kozinski underlined the importance for police to bring an unruly situation under control where individuals breach the “covenant of cooperation” with police. Judge Kozinski indicated that the police “have a number of tools at their disposal” to defuse a chaotic and potentially harmful scene and while "traditional tools" such as choke-holds and pepper-spray can be "distasteful” and “malignant,” the use of the TASER “is a safe alternative."

To read the full text of the Ninth Circuit's decision in Mattos v. Aragano and Brooks v. Seattle, click here.


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