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Special Alert for Employers with California-Based Employees


February 1, 2023

Jessica MacKeigan

By: Jessica L. MacKeigan

On December 27, 2022, the California Labor Commission issued new guidance regarding the state’s new pay transparency law that became effective January 1, 2023, and stands to impact employers nationwide. Under the state’s expanded Equal Pay Act (“Act”) provisions, a covered employer must:

  • Provide, upon request, an employee with the pay scale (i.e., salary or wage rate) for their current position;
  • Include a pay scale in any job posting whether posted by the employer or a third party hired by the employer to advertise the job posting; and
  • Maintain records of the job title and wage rate history for all employees for the duration of their employment and for three years after their employment ends.

See California Labor Code 432.3.

The newly issued guidance indicates the foregoing requirements apply to any employer with 15 or more employees nationwide with at least one employee located in California, whether working remotely or in-person.  It’s important to note that if an employer has more than one facility, all employees are counted, as well as out-of-state employees, for purposes of making the 15-employee calculation.

The state’s Labor Commission is authorized by the Act to assess penalties for violations ranging from $100 to $10,000. Plus, affected applicants and employees can file civil suits. It is therefore imperative that affected employers take steps to ensure compliance with these new requirements.

Consistent with the guidance, employers are recommended to update all job postings for positions that “may ever be filled in California, either in-person or remotely.” This includes nationwide postings. As well, employers need to update personnel records for their California-based employees, to ensure they have the required records and pay scale information at the ready in the event those employees request such information. An employee is considered based in California for work purposes if they work a majority of the time in California or if they have definite base of operations in California and perform some work in the state. See Ward v. United Airlines, 9 Cal.5th 732 (2020) and Oman v. Delta Air Lines, 9 Cal.5th 762 (2020) (addressing the geographic scope of analogous labor code provisions).

Clients and employers with questions about the California pay scale and record keeping requirements are urged to contact Walter Haverfield for more guidance.

Jessica MacKeigan is senior counsel at Walter Haverfield and focuses her practice on labor and employment. She can be reached at jmackeigan@walterhav.com or at 216.928.2928.

Non-teaching employees can coach too, right? The legal implications of hiring non-teaching personnel


October 31, 2018

James McWeenyThe school year is officially underway! With this new school year comes not only the work of educating students, but also, the after-school work of coaching and teaching students in extracurricular sports, clubs and activities. School districts generally employ teachers to oversee these extracurricular activities via supplemental contracts. However, as the list of extracurricular activities for students grows, districts have more frequently sought to use the services of non-teaching employees to staff coaching and similar supplemental contract positions. At first glance, this inclination to use non-teaching personnel may seem to be an efficient solution to finding coaches and advisors. Nonetheless, employment of non-teaching personnel in these positions poses complicated legal issues. Specifically, those issues are related to a school district’s obligation to comply with the cumbersome overtime requirements of federal law – namely, the Fair Labor Standards Act (FLSA). School districts, therefore, should “think twice” before quickly resorting to non-teaching employees as alternative sources of staffing for coaching and related positions.

Overall, the FLSA requires that overtime (or time-and-a-half) be paid to non-exempt employees who work more than 40 hours in a given work week. Notably, teachers are exempt from the FLSA’s overtime requirements. As a result, when school districts employ teachers as coaches or advisors (as a “supplement” to their teaching contract), the overtime provisions of the FLSA are not triggered, and no overtime is due. Rather, the teacher is paid a flat rate per a supplemental contract for the work performed.

In contrast, non-teaching employees – such as custodians, maintenance workers, cafeteria personnel, groundskeepers or assistants – are not exempt from the FLSA. Thus, the work of non-teaching personnel in coaching and other extracurricular positions could trigger the overtime requirements of the FLSA, if the employee works more than 40 hours in a week (through a combination of their regular and extracurricular duties). A school district’s FLSA obligations become all-the-more complicated based on various overtime formulas that include the blending of rates when employees work two different positions at two different rates of pay. Equally important, the remedies available for non-teaching employees under the FLSA are extensive. They include the ability of employees to collect up to three years of back wages for a school district’s violation of the FLSA.

Additionally, even if a district decides to staff non-teaching employees in coaching and other extracurricular positions, schools still must keep in mind the mandatory hiring process for such personnel with pupil activity permits. Ohio Revised Code 3313.53 establishes that hiring process and specifically provides that a non-licensed individual who holds a valid pupil-activity program permit may be employed only after the district offers the position to qualified, licensed employees of the district. If no qualified, licensed individual is accepted for the position, then a school district must advertise the position to any licensed individual who is qualified, but not employed by the board. Only when no such person has applied for and accepted the position is a school district able to then offer the position to non-teaching employees in and beyond the school district.

All told, a school district’s employment of non-teaching personnel in coaching and other extracurricular positions presents a host of complex legal concerns that merit the attention of legal counsel. School districts are thus encouraged to contact their attorneys to assess the legal implications and potential solutions related to the employment of non-teaching personnel as coaches or advisors.

James McWeeney is an attorney at Walter | Haverfield who focuses his practice on education law. He can be reached at jmcweeney@walterhav.comor at 216-928-2959.

Developing New Ohio C&DD Recycling and Anti-Dumping Laws


October 20, 2018

Northeast Ohio’s vibrant commercial real estate industry has not only triggered a construction boom, but has resulted in greater volumes of construction and demolition debris (CandDD) that must either be recycled or landfilled. While most of this material is sent to disposal facilities licensed under Ohio law or to recyclers that run responsible, environmentally-friendly operations, some waste finds its way to illegal dump sites. These sites often collect and then abandon large volumes of waste material, creating nuisance conditions and leaving local communities and the state to bear the cost of cleanup.

The six-acre Arco dump in East Cleveland is one such site. It is considered one of the worst illegal dump sites in the state, and it sits in the middle of a residential neighborhood. Throughout this year, the Ohio EPA and Cuyahoga County have worked to clean up the site and hold the property owner accountable. The clean-up effort could cost as much as $6 million in state funds.

Thanks to new legislation signed by Governor Kasich in July, sites like the Arco dump may become less common and their owners easier to prosecute.

Amended Senate Bill 2 (S.B. 2) gives the Director of the Ohio Environmental Protection Agency (EPA) new authority to regulate CandDD recycling in Ohio. State regulators and the CandDD industry alike welcomed the passage of the bill. The new law is designed to encourage legitimate CandDD recycling while preventing the operation of illegal dumps.

As legal counsel to the Construction and Demolition Debris Association of Ohio (CDAO), an industry group representing CandDD landfill operators, Walter | Haverfield LLP played an integral role in drafting S.B. 2. This included submitting written comments and proposed language for the bill itself. We also participated in numerous Ohio EPA working group meetings on behalf of the CDAO and many of its member facilities who are also long-time firm clients.

CandDD is material resulting from the construction or demolition of man-made structures, such as houses, buildings or roadways. It includes non-hazardous materials such as brick, concrete, stone, glass, wall coverings, plaster, drywall, wood and roofing materials. Because CandDD is generally considered to be inert and poses little threat to the environment as compared to other wastes, Ohio regulates CandDD disposal separately from municipal and household solid waste.

Before S.B. 2 was passed, Ohio EPA had authority to license and regulate CandDD disposal facilities but not CandDD recyclers, even though many disposal facility operators had begun separating valuable recyclables for resale. The existing law did not prevent unlicensed operators from illegally collecting and storing mixed CandDD under the guise of recycling.

Ohio EPA now has the authority to develop regulations for CandDD recyclers (called “processing facilities”) to ensure that they will not create a nuisance, fire hazard, health hazard, or cause or contribute to air or water pollution. The new rules will include permit and licensing programs, plus requirements for the location, design, construction, operation, and closure of CandDD processing facilities. The rules may also cover the type of materials that can be recycled, how long they can be stored, and how much can be accumulated.

Most importantly, the new rules will require recyclers to establish financial assurance in case they go bankrupt or are otherwise unable to close properly. Ohio EPA’s newly-expanded legislative authority will allow greater control and oversight of the recycling industry to prevent future Arcos and safeguard public health, safety and the environment across Ohio.

Leslie can be reached at 216-928-2927 or lwolfe@walterhav.com.

Walter | Haverfield Litigator Selected to Prominent Leadership Program


Jamie PriceJamie Price, an attorney who focuses her practice on civil, commercial and probate litigation, recently joined the Cleveland Bridge Builders class of 2019. The Mobile, Alabama native applied for the competitive 10-month program, which teaches participants how to create meaningful change around a civic issue impacting Northeast Ohio.

“I sought out Bridge Builders to gain a deeper understanding of the civic community in Cleveland and find a hands-on way to give back” said Price, who is an avid runner. “I’m proud to be a part of such a fantastic program.”

Bridge Builders includes 60 local participants in its latest class, all of whom were chosen because they demonstrated a commitment to the community, strong leadership and problem-solving skills.

Price has been highly involved in the Anti-Defamation League (ADL) for the past decade. She serves on its regional board and is a part of the ADL’s national civil rights committee. The Shaker Heights resident is also a new member of the National Council of Jewish Women and serves on the Ethics and Professionalism committee of the Cleveland Metropolitan Bar Association.

As part of the program, participants apply their skills to assist a local community organization in boosting its strategic efforts and overall effectiveness.

“I’m eager to find my place within the civic realm of Cleveland and pinpoint an organization in which I can become involved,” added Price, who was selected to the Ohio Super Lawyers 2018 Rising Stars list for business litigation. “And throughout the Bridge Builders program, I look forward to learning more about myself and others. That process will help me become a more effective leader and communicator to ultimately assist others in need.”

Retail Bankruptcies – A Landlord’s Introduction


Tenants in Bankruptcy: A Commercial Landlord’s Introduction


Patrick HrubyEvery commercial landlord should be familiar with the phrase “retail apocalypse.” It’s a phrase that refers to the recent epidemic of retail store closings, many of which were the result of those companies filing for bankruptcy. Unfortunately for landlords, store closures and other vacancies are trends that do not appear to be slowing. And it’s important that landlords are aware of their rights in bankruptcy and the potential traps involved. Here’s what commercial landlords need to remember as they navigate this dynamic landscape:

The Automatic Stay

Once a tenant files for bankruptcy, an automatic stay or injunction is invoked to protect that tenant from new or continued collection activities. It also prevents landlords from initiating an eviction, changing the locks or even demanding payment of past-due rent. A landlord’s violation of an automatic stay may allow the tenant to recover actual damages, including attorneys’ fees and, in some cases, punitive damages.

A landlord can file a motion with the bankruptcy court to seek relief from the automatic stay if certain conditions are met. Landlords should be aware that automatic stay is applicable even if the terms of the lease state that the lease is terminated upon the filing of a bankruptcy case.

Lease Assumption and Rejection

Under Section 365 of the Bankruptcy Code, a tenant has the option to assume or reject the remainder of the lease. If the tenant does not assume the lease prior to 120 days after the petition date or the date confirming a plan of reorganization, then the lease is considered rejected. The tenant then must immediately surrender the property to the landlord. That period may be extended by 90 days upon motion.

Often, the tenant will reject the lease for economic reasons. In such cases, the landlord becomes an unsecured creditor with a claim for damages for unpaid rent based upon the statutory formula in § 365. However, as a result of being a general unsecured creditor, a landlord will likely receive less than the actual amount of the rejection damages claim.

Also, the rejection of a lease does not remove a tenant from the leased premises. The landlord may need to incur additional expenses in removing the tenant through an eviction action in state court.

Fortunately, even if the tenant rejects a lease, it is liable to the landlord for rental payments that became due after the petition was filed and before the tenant rejected the lease. These and other monetary lease obligations are paid as administrative expenses, which allows the landlord to recover those amounts on a priority basis.

From the landlord’s perspective, it is clearly preferable that the tenant assumes the lease. Not only do the premises remain occupied, but the tenant must also provide assurance that they will be able to address any defaults and meet the terms of the lease. The tenant may also assign the lease, or sublet, to another tenant. This occurs when the lease has value, but the tenant does not want to continue to operate in that location. Because the Bankruptcy Code provides that anti-assignment clauses in leases are generally not enforceable in cases of bankruptcy, the tenant has a lot of leeway in determining whether to assign a lease to another party. If they choose to assign the lease, the tenant must reconcile any past debts and ensure the new tenant will be able to meet the terms of the lease.

If the lease involves premises within a shopping center, the landlord generally has more protections against assignment. In order to assign a lease in a shopping center, the tenant must demonstrate that the new tenant can fulfill the obligations of the lease, any percentage of rent due will not decline substantially, the original terms of the lease still apply, and the assumption or assignment of the lease will not disrupt any tenant mix in the shopping center.

Proof of Claim

If a landlord is owed damages by a tenant, it must file a proof of claim by a claims bar date. The landlord may not know the amount of damages to claim by this date if the tenant has not yet decided to assume or reject the lease. As a result, landlords are provided a certain amount of time to assert damages if the tenant rejects the lease. It is important that a landlord be aware of these dates and file a proof of claim in a timely fashion.

As rumors that large retailers and smaller companies are on the brink of bankruptcy continue to swirl, it is clear that the “retail apocalypse” is not ending soon. Commercial landlords would therefore be well served to gain a thorough understanding of their rights and restrictions when dealing with a tenant in bankruptcy. Doing so will allow them to recover the money they are rightfully owed and avoid having legal action taken against them.

Patrick Hruby is an attorney in Walter | Haverfield’s Corporate Transactions group. His practice also extends into the Litigation Services group. He can be reached at phruby@walterhav.com or at 216-619-7878.

Pinecrest Aims High


“Serving as legal counsel for the Pinecrest development was extremely rewarding,” said Kevin Murphy, a partner at Walter | Haverfield. Murphy’s comments about the Cleveland area’s newest mixed-use district appeared in Properties magazine.

Free Speech Rights & Public Meetings: How One Man’s Case Got the Attention of the U.S. Supreme Court


Sara FagnilliIt’s a U.S. Supreme Court decision that city and county council members should know. Walter | Haverfield’s Sara Fagnilli explains how the case pitted First Amendment free speech rights against the right of a local legislative body to control its meetings in Ohio Township News.

Appeals Court Holds Private Property Owner Cannot Obtain Injunction to Stop Eminent Domain Lawsuit


Ben ChojnackiMuch of eminent domain litigation focuses on disputes over property valuation. Generally, these disputes are resolved by the parties submitting expert testimony regarding valuation, followed by a jury deciding what constitutes “just compensation” for property taken and, if necessary, any residual damage to the private property not needed for the public project.

Recently, however, the 11th District Court of Appeals published an opinion in a case where a private property owner took a different approach to challenging valuation.

In Lawnfield Properties v. City of Mentor, the City of Mentor needed to “take” a portion of land owned by Lawnfield Properties for a road widening project. The City secured an appraisal of Lawnfield’s land and provided it to Lawnfield along with a “good faith offer” to acquire Lawnfield’s land. Lawnfield rejected the City’s offer, taking the position that the City’s offer failed to compensate them for residual damage to their property. Specifically, Lawnfield argued that the City’s offer failed to compensate them for the relocation of a sign, the loss of parking spaces in a parking lot, the loss of a curb cut, and a temporary loss of the outdoor patio and swimming pool.

After Lawnfield rejected the City’s offer, the City filed a lawsuit in Lake County Probate Court to appropriate the property. Lawnfield responded by filing a lawsuit in Lake County Common Pleas Court. Lawnfield wanted the court to issue an injunction prohibiting the City from litigating the appropriation case until the City obtained an amended appraisal that accounted for the residual damage to Lawnfield’s property. Lawnfield also sued the City under a theory that it was acting in bad faith by failing to provide a good faith offer that accounted for the residual damage to the property.

The City asked the Common Pleas Court to dismiss Lawnfield’s case. The City argued that Lawnfield’s injunction action was merely a challenge to the city’s valuation method, not grounds for a separate injunction action. With respect to the bad faith action, the City argued that its appraiser determined that there was no damage to the residue of Lawnfield’s property, and as such, the City could not have acted in bad faith.

The trial court granted the City’s motion to dismiss. Lawnfield appealed the case to the Court of Appeals. Then, the 11th District affirmed the trial court’s decision, finding that probate courts have jurisdiction over challenges to the methodology used in determining the amount of compensation payable to a private property owner in an eminent domain action.

Lawnfield is significant because it makes clear that, although there are procedural and substantive defenses available in eminent domain actions, a challenge to an appropriating authority’s valuation methodology ultimately must be decided by a jury in the probate court.

Walter | Haverfield represents both appropriating agencies and private property owners in eminent domain litigation. If you need assistance with appropriating private property for a public project, or if your private property is being taken for a public project, the attorneys in Walter | Haverfield’s public law group are available to offer assistance.

Ben Chojnacki is an attorney with Walter | Haverfield’s public law group.  He can be reached at bchojnacki@walterhav.com or at 216-619-7850.

Last Call for Alcohol? How the City Can Take Action Against Problem Liquor Permit Holders


“Last Call for Alcohol?  How the City Can Take Action Against Problem Liquor Permit Holders” was written by Susan M. Bungard and published In the Cleveland Bar Journal in May of 2005.

Immediate Impact – The Janus Effect in the Workplace


Max RiekerThe Supreme Court’s June 27, 2018 Janus v. AFSCME decision may prove to be the most significant labor law case in half a century. The 5-4 case outlaws mandatory “fair share” fees for public employees who refuse membership in unions.

Early post-Janus analysis indicates that the ruling is having a severe financial impact on public sector labor unions in the 22 states – including Ohio. Prior to this case, the law had permitted the imposition of involuntary agency fee deductions from workers’ payroll.

In July, several state governments stopped collecting tens of millions of dollars in agency fees. For example, the state of New York did not collect between $9 and $10 million in fair share fees on behalf of public unions in that state. This does not even include fees formerly collected by county, local or school governmental entities.

The union membership rate has been falling in the private sector for decades, but has been holding steady at about 35% in the public sector for the past 35 years. Now that the public sector unions are seeing the early effects of dropping revenue and, likely, a drop in membership, they will have to reconsider their priorities and how they do business in order to adapt to these new realities.

The three largest public sector unions are the National Education Association at 3 million members; the American Federation of Teachers at 1.6 million members; and the American Federation of State, County, and Municipal Employees at 1.3 million members. According to the Department of Labor, these three unions collectively spent $119.8 million on “political activities” in 2017. This is a comparatively large sum in light of the $153.9 million these three unions collectively spent on representing their membership and organizing.

As a result of these financial pressures, skirmishes are beginning to crop up among Ohio’s 3,200 public sector bargaining units, and administrators should be prepared to address: (1) questions about how union members are permitted to withdraw membership, (2) whether the union’s withdrawal policy is lawful, and (3) what employers are permitted to say to their employees about withdrawal from the union.

Public employers must familiarize themselves with any withdrawal provisions contained in collective bargaining agreements. Recent cases have held that contractual “window periods” and union membership withdrawal requirements done via certified mail are lawful. More stringent requirements should be carefully analyzed by counsel to determine whether the requirements are arbitrary, discriminatory, misleading, ambiguous, or otherwise impermissibly restrictive. For instance, one recent case held that a withdrawal provision was impermissibly restrictive when it required a resigning union member to appear in person at the union hall with a valid photo ID and declare his intent to withdraw in writing.

Now more than ever, dissatisfied union members are turning to their own employers for help and advice when trying to get out of their union. While Ohio’s State Employment Relations Board has not yet squarely addressed which sorts of communications employers are permitted to have with their employees on the issue of withdrawal, employers should work closely with counsel. Together, they should formulate plans for communication with employees that are permissible within the bounds of the Ohio Public Employee Collective Bargaining Act. Public sector unions are already putting shots across employers’ bow on this topic. Backed into a corner, Ohio unions have already issued blanket written threats of filing unfair labor practice charges against public employers related to communications with employees.

Most importantly, employers should consciously take steps to:

  • Protect their employees from unlawful pressure exerted on them to remain in the union, and
  • Work with labor counsel to form solid proposals that bring collective bargaining agreements in line with current law and address the needs of the employer.

Public employers should work proactively through these considerations before they become potential problems.

Max Rieker is an attorney at Walter |Haverfield who focuses his practice on labor and employment law. He can be reached at mrieker@walterhav.com or at 216-928-2972.

Walter | Haverfield Attorneys Admitted to New York Federal Court


Mark Fusco

Rina Russo

Mark Fusco and Rina Russo, both Walter | Haverfield attorneys, were recently granted permanent admission to the Federal District Court for the Northern District of New York.

The admission comes after a firm client requested that Walter | Haverfield defend a complex employment matter. The client has significant presence in New York, and the matter involves alleged violations of federal employment law.
Fusco, a partner in the firm’s Litigation group, has extensive experience leading litigation teams and first-chaired jury trials. He has also argued key pretrial motions and managed commercial class action litigation. Recently, Fusco expanded his practice to represent school boards and other educational entities in business disputes.

Russo, an associate in the firm’s Labor and Employment group, focuses her practice on negotiating collective bargaining agreements and allegations of discrimination and harassment. She works with private and public sector employers in matters involving failure to accommodate, wage/hour violations and enforcement of restrictive covenants before federal and state courts as well as administrative agencies.

Fusco and Russo are the only two Walter | Haverfield attorneys admitted to the Federal District Court for the Northern District of New York.