March 2018 - Issue 73

Cities and Counties: On the Front Lines of Homelessness

California JPIA 23rd Annual Risk Management Educational Forum: Capstone Award and Scholarship Opportunity

Managing the Impact of the California Medical Treatment Utilization Schedule

A Familiar Face Joins the Authority - Tim Karcz

Meet Your Carl Warren Team 

California Lawmakers Want to Ban Confidential Sexual Harassment Settlements

Bigoted Language Alone Doesn’t Support Sexual Orientation Bias Claim

Jury Verdict Upheld Against Supervisor for Emotional Distress

News: Worthy

Cities and Counties: On the Front Lines of Homelessness

By Matt Cate, Executive Director of the California State Association of Counties, and Carolyn Coleman, Executive Director of the League of California Cities

(Reprinted from the Public CEO, March 15, 2018)

Of all the problems our state and local governments are trying to solve, homelessness is among the most important and challenging. The number of homeless people in California has climbed dramatically in recent years, to about 134,000, though experts agree the actual number is probably far higher. Their lives are literally hanging in the01a CSAC LOCC Homelessness balance.

Solving homelessness is costly and complex, but the financial and societal costs are far greater if we do not tackle this issue now. In recent months we have seen a hepatitis outbreak in San Diego and destructive wildfires in Los Angeles linked to people trying to live without the sanitary and cooking facilities most of us take for granted.

To that end, the League of California Cities and the California State Association of Counties released a report last week from our joint homelessness task force. This group of local officials met for more than a year to explore the major causes and identify effective local programs. The report details state and federal resources that local governments can leverage to create a path to housing and self-sufficiency.

The report also notes that mental illness and drug abuse can cause homelessness, but housing and health care costs, job loss and other life-changing events are also factors. There is no one-size-fits-all solution, which is why effective local programs are also diverse.

With a housing voucher program in Marin County, a streamlined process to approve temporary shelters in San Jose, an outreach team in Anaheim and tiny-home communities in Yuba County and Fresno, local governments are thinking outside the box. They are finding ways to get people into shelters, into programs that address the causes of their homelessness and eventually into permanent homes.

The report finds that flexibility is a key factor. An approach that works well in an urban core may not have the same impact in a rural community. Collaboration is also crucial among cities, counties, community groups and nonprofits.

As the Legislature and Gov. Jerry Brown continue their work on homelessness and affordable housing, we urge them to take this report into account. Many local governments are finding success, but need additional resources to meet the sizable need. We also urge local governments and nonprofits to put its information and resources to use. Solutions are available, but it’s now up to all of us to implement them.

Originally posted at the California State Association of Counties.


News: Worthy

California JPIA 23rd Annual Risk Management Educational Forum: Capstone Award and Scholarship Opportunity

The California JPIA’s 23rd Annual Risk Management Educational Forum, entitled The Amazing Race to Risk Management Success, will be held at Park Hyatt Aviara in Carlsbad from September 19 – 21, 2018.01a RMEF 2018 newsletter logo

The Authority offers two programs to members as part of the Risk Management Educational Forum. 

The Capstone Award recognizes outstanding individuals at the Forum who best exemplify the practice of risk management in the public sector.  Separately, the Authority provides a limited number of Forum scholarships to assist members who would like to attend the Forum but do not have sufficient agency funds.

6th Annual California JPIA Capstone Award

The Capstone Award is presented annually by the California JPIA to an individual who best exemplifies the practice of risk management among the member agencies. 

An individual nominated for the Capstone Award is a person who could be working at any level within a member agency and ideally would be someone who:

  • Works to support traditional or enterprise risk management efforts for the member agency.
  • Develops, implements, and administers loss prevention and loss control programs to mitigate risk exposures for the member agency.
  • Coordinates support systems that serve the member's risk management goals and needs.
  • Influences others in developing quality risk management programs for the member agency.

We invite you to tell us who should be considered for the 6th annual Capstone Award by clicking here to complete the brief Capstone Award nomination form.  The success of the Capstone Award depends on you and others to identify a colleague who works tirelessly behind the scenes to promote excellence in risk management.

Submissions will be accepted through Monday, May 14, 2018.  Once a nomination is received, Authority staff will contact the nominators for more information about their nominee.

All finalists will be recognized at the Forum and receive complimentary hotel accommodations and a travel stipend.

Educational Forum Scholarship Opportunity


While there is no cost for member registration, the California JPIA is awarding a limited number of scholarships for lodging accommodation costs while attending the Forum.

The purpose of the scholarships is to assist members who are otherwise unable to attend the Forum due to financial constraints at their agencies.  The Executive Committee has authorized two nights lodging at Park Hyatt Aviara during the Forum for each scholarship recipient. 

This is a competitive process and will be awarded to the most deserving applicants.  Priority will be given to those who have never attended the Forum on a scholarship.

To be eligible to receive a scholarship, an applicant must:

  • Be an employee of a member agency of the California JPIA.
  • Obtain supervisor or management approval to attend.
  • Attend the Forum in its entirety.
  • Be able to pay for any other related costs, including transportation to and from the Forum.

Please click here to complete the scholarship application.  Applications must be submitted no later than Wednesday, May 30, 2018.  Selected recipients will be notified by email on or before June 18, 2018.

For questions about the Capstone Award or the Forum scholarship program, contact Abraham Han, Administrative Analyst.


News: Worthy

Managing the Impact of the California Medical Treatment Utilization Schedule

The Authority has partnered with Optum, a pharmacy care services company, for a number of years to manage the medication usage of employees covered under the Authority’s Workers’ Compensation Program.  This has been accomplished through the use of a formulary that has helped minimize the number of employees that utilize high doses of opioids and other medications.  The State of California has now implemented a formulary intended to cover all workers’ compensation claims. Julie Black, the Authority’s consulting pharmacist with Optum, has prepared the following article to address the state’s new formulary and its potential impact on the workers’ compensation system.

On January 1, 2018, the long-awaited California Medical Treatment Utilization Schedule (MTUS) Drug Formulary became effective for pharmacy treatment of injured parties in the state of California. The California formulary is unique – deviating from other state drug formularies – as formulary requirements apply to all prescriptions provided to an injured party in California regardless of the date of injury (DOI).

While the drug formulary contains exemptions for the handling of ongoing care provided to an injured party with a DOI prior to January 1, 2018, this exemption timeframe is significantly shorter than in other states. In Texas, for example, treating physicians were provided with a regulatory prescribed time period of eighteen months to transition claimants from a medication not recommended by the Official Disability Guidelines Drug Appendix A, to a recommended medication. California requirements are significantly shorter, mandating that prescribers submit treatment plans and Requests for Authorization (RFAs) for current and continuing medication therapies with the next scheduled Progress Report or no later than April 1, 2018.

To assist you in handling the impending flood of treatment plans and RFAs as we move toward the April 1 deadline, a few notable MTUS guidelines are outlined below.

  • A submitted Progress Report should include either:
    • A plan to taper or transition the injured party to an exempt medication; or
    • Supporting documentation as to the medical necessity of the non-exempt, unlisted or compounded medication per existing MTUS guidelines
  • Once received, claims administrators should handle Progress Reports and/or RFAs in the currently prescribed timeframes and manner

Though the transition period, as defined by the Drug Formulary Rules, permits a shortened transition time for physicians, injured parties and claims administrators to discuss proper handling of ongoing therapy, it does not provide an unlimited timeframe for continuation of drugs which newly require pre-authorization. As outlined in the rule, the formulary imparts:

  • Exempt medications do not require pre-authorization, whereas non-exempt and unlisted medications do require pre-authorization
    • Pre-authorization may be waived for non-exempt or unlisted medications if they are addressed by an insurers existing utilization review (UR) processes
  • Pre-authorization is not required for certain non-exempt drugs – special or perioperative fills – in the first seven days from DOI and only under certain conditions
  • Brand-name medications for which a less expensive generic equivalent is available require pre-authorization regardless of dispense-as-written (DAW) designation or directions by prescribers
  • Compounded and physician-dispensed medications require pre-authorization

The Optum Workers’ Compensation and Auto No-fault division has created a fairly comprehensive overview of the California MTUS and its impact on pharmacy claims management. You can view a previously recorded webinar on the subject or download the presentation as a PDF at http://helioscomp.com/cl/california-mtus. You can also find more information on the California Department of Industrial Relations website at http://www.dir.ca.gov/dwc/MTUS/MTUS-Formulary.html.

If you have questions about Optum or the California Medical Treatment Utilization Schedule Drug Formulary, please contact Jeff Rush, Workers’ Compensation Program Manager.


Pro: Files

A Familiar Face Joins the Authority - Tim Karcz

The Authority is pleased to announce the appointment of Tim Karcz as Senior Risk Manager providing risk management services to members in Northern Ventura County, the central coast, and Marin County.  Tim has 15 years of experience in the risk management industry, most recently as the Director of Risk Control with Poms & Associates Risk Services. 

Tim’s interest in risk management began while serving as Senior Airman in the United States Air Force.  “While stationed at Edwards Air Force Base, one of my responsibilities was to sit at the end of the runway with binoculars in hand and detect04a Tim Karcz safety violations of the airplane mechanics and crew as they worked on aircraft.”  Following his stint in the Air Force, Tim earned his Bachelor of Science in Aeronautics and Minors in Business Administration and Safety Science. 

When asked what interested him about joining the California JPIA team, Tim said, “the Authority’s approach to risk management is a more enterprise-wide approach.  The days of identifying and dealing with only a portion of the risks facing organizations today are over. The need to anticipate, prevent, and mitigate risk throughout the entire organization is critical. In this current environment, those responsible for risk management often wear many hats and change them often.”

Tim enjoys spending time outdoors.  His weekends are often spent hiking and mountain biking with his wife and two children.


Pro: Files

Meet Your Carl Warren Team 

For 40 years, the Authority has partnered with Carl Warren & Company as its third-party administrator to handle liability claims. Carl Warren & Company is an industry leader in providing claims adjusting services to public entities.

05b Timothy Varon croppedAt the close of 2017, long time supervisor Richard Marque retired after almost three decades of service to the California JPIA and its members.  Adjuster Timothy Varon was promoted to the supervisor position and is continuing to service members in the Imperial, Los Angeles, Orange, San Diego, Mono, and Riverside counties in his new role.

Tim came to Carl Warren & Company after working as an adjuster with Mercury Insurance for seven years.  Prior to Mercury, Tim earned his Bachelor of Arts degree from California State University, Fullerton.  Over the past two years he has worked under the guidance of Richard, growing strong relationships with the members he serves.  Congratulations, Tim!05a%20Claudia%20Bray

Tim’s promotion from adjuster to supervisor created an opportunity to fill his position with a new adjuster.  The Authority is pleased to welcome Claudia Bray to the Carl Warren & Company/California JPIA team!  Claudia comes to us from The Auto Club, where she worked as an adjuster for ten years.  Claudia earned her Bachelor of Arts degree from California State University, Fullerton.  On the California JPIA team, Claudia will be assigned to members in the Imperial, Los Angeles, Orange, San Diego, Mono and Riverside Counties.  We are very excited to have Claudia as part of our team!


The Court Report

California Lawmakers Want to Ban Confidential Sexual Harassment Settlements

Employment law attorneys say limiting nondisclosures may result in more jury trials

(Reprinted for the Society for Human Resource Management, February 14, 2018)

California legislators are considering a number of bills to fight sexual harassment in the workplace. One such bill would ban confidential settlements of certain claims; attorneys told SHRM Online that making settlement agreements open to the public, though, could have an unintended consequence for claimants. It could result in fewer settlements with employers and more litigation.

Sen. Connie M. Leyva, D-Chino, introduced S.B. 820 to protect workers from being victimized and to ban secret settlements in cases of sexual assault, sexual harassment and sex discrimination. "As we have clearly seen over the last few months, secret settlements serve one primary purpose: to keep sexual predators away from the public eye and continuing to torment and hurt innocent victims," Leyva said in a press statement.

Prohibiting confidentiality provisions would keep claimants from being forced to stay silent about sexual assault and harassment if they want to resolve their claims, wrote Kate Gold and Philippe Lebel, attorneys with Drinker Biddle & Reath in Los Angeles, in an e-mail to SHRM Online. "While that goal is obviously valid and important, prohibitions on confidentiality agreements could have some drawbacks that will not necessarily benefit claimants in these types of lawsuits."

Protracted Litigation

"I think we will see a lot more jury trials with this type of law in place," said Michael Studenka, an attorney with Newmeyer & Dillion in Newport Beach, Calif. A confidentiality agreement does a lot of things. In a case that is not clear cut—for example, where there are some favorable and some unfavorable facts for an employer using a confidentiality agreement—the employer might make a business decision to settle the case quickly and avoid attorney fees and a long litigation process, he explained.

Employers may lose one incentive to settle sexual harassment cases if they have no prospect of keeping any allegations against them and their employees confidential, Gold and Lebel said. True, settling can still help them avoid prolonged litigation.

However, "often, the publicly filed complaint does not contain the embarrassing or most sordid details of the conduct that later surfaces [in a trial] once discovery has been conducted." During the discovery process in litigation, opposing sides ask each other questions and request documents and other information that may be used as evidence.  

The proposed law may also decrease the amount of money an employer or an alleged harasser will pay to settle the claim, they said.

Although some victims may want to publicly disclose their grievances, other victims may want to settle quickly and confidentially, avoiding any public exposure of personal matters, Studenka noted.

The proposed law does allow the accuser to opt for a confidential settlement, but if she or he chooses to go public instead, there could be an unanticipated backlash of negative publicity or disclosed facts that the claimant would prefer to keep private, Gold and Lebel said.

Not having a confidentiality agreement can benefit the employer at times; the employer may publicly discuss the allegations, and deny them, give alternative versions of the events or otherwise cast into doubt the veracity of the accuser's account.

What's Next

It appears likely that S.B. 820 will pass in some form, Gold and Lebel said. Nationally, there is a growing public desire for greater regulation and resources to tackle harassment in the workplace, and legislators seem to be feeling the pressure to take action. In addition to California, legislators in several other states, including New Jersey, New York and Pennsylvania, have introduced similar bills designed to limit confidentiality in sexual harassment settlements and to take a tougher stance on harassment. 

"There has definitely been a sea change, and I'm glad to see people talking about the issue and bringing it into the open," Studenka said. "A positive that will come from this is that the victims will know that they have a voice."

HR's Role

The increased awareness about harassment in the workplace could lead to a spike in harassment claims, Gold and Lebel noted. Therefore, employers should evaluate their policies and training practices to ensure that their workforce is well-informed about how to raise concerns. 

"As always, employers should take all inquiries about potential harassment seriously," they said. HR professionals should be trained on how to properly investigate and resolve complaints.  

It is likely too soon for employers to start making changes to their agreements, they added. "However, given the likelihood that S.B. 820 and similar legislation in other states will pass, employers should follow these bills carefully."


The Court Report

Bigoted Language Alone Doesn’t Support Sexual Orientation Bias Claim

(Reprinted from the Society for Human Resource Management, February 23, 2018)

Even if a county executive officer made derogatory comments about homosexuals, a former county employee showed no link between the comments and her termination, and so was not entitled to a trial on her claim of sexual orientation discrimination, the California Court of Appeal ruled.

The plaintiff worked as an analyst for Santa Barbara County. In 2003, she revealed publicly that she was a lesbian. The county projected a budget shortfall for the fiscal year 2009-10 of nearly $11 million, and, in September 2009, the plaintiff was one of 35 employees laid off. She sued the county for wrongful termination, alleging, among other claims, that she was terminated because of her sexual orientation in violation of the California Fair Employment and Housing Act (FEHA). The trial court dismissed her claims before trial, and she appealed.

The plaintiff alleged that, in conversations between 1998 and 2001, County Executive Officer Michael Brown said his son and his son's friends used the term "fag" to describe homosexuals and Brown said it was "a common term to describe homosexuals." The appellate court noted that while such language is inappropriate, "FEHA is not a 'civility code' and bigoted language alone does not support a FEHA case."

The court went on to note that FEHA prohibits discrimination that causes an employer to discharge a person from employment. "It does not purport to outlaw discriminatory thoughts, beliefs or stray remarks that are unconnected to employment decision-making."

The county claimed that Brown did not know the plaintiff's sexual orientation and that his "stray remarks" were not directed at her. The plaintiff admitted that she did not know if Brown knew she was a lesbian when he made his remarks from 1998 to 2001. She said that his remarks were not directed at or about her. 

In addition, the remarks were allegedly made at least eight years before she was laid off—making the comments too remote to serve as causation evidence.

Furthermore, the appeals court said, even if the plaintiff made a showing of discrimination, the county presented a nondiscriminatory reason for her layoff—the budget shortfall that led to the 35 layoffs. She presented no evidence of the sexual orientation of those who were laid off and not laid off.

In short, the court found that the plaintiff failed to show that sexual orientation discrimination was directed against her and affirmed the lower court's dismissal of her claim.

Terris v. County of Santa Barbara, Calif. Ct. App., No. B268849 (Feb. 16, 2018).

Professional Pointer: In ruling on the plaintiff's discrimination claim, the court here found no connection between alleged bigoted language and an employment decision. It is important to remember, however, that bigoted language, even if not linked to any employment action, can serve as the basis of a harassment claim. To succeed on such a claim, the plaintiff must show that the language, alone or combined with other conduct, was so severe or pervasive as to create a hostile work environment.


The Court Report

Jury Verdict Upheld Against Supervisor for Emotional Distress

(Reprinted from the Society for Human Resource Management website, March 2, 2018)

A California appeals court ruled that there was enough evidence to support a jury's award of more than $67,000 in damages to a former California Department of Parks and Recreation (DPR) employee who sued her supervisor.

The jury had found the supervisor liable for intentional infliction of emotional distress (IIED) while finding DPR not liable on harassment, discrimination and retaliation claims.

In December 2009, the supervisor hired the plaintiff as a staff services analyst (SSA) for DPR's Ocotillo Wells Off-Highway Motor Vehicle Recreation District (OWD). The plaintiff directly reported to the supervisor from the date she was hired until she went on medical leave on Sept. 28, 2011.

The plaintiff claimed that the supervisor asked employees overly personal questions, gave them unsolicited personal advice, and often discussed sex and sexual orientation.

When the plaintiff told the supervisor that she would be adding her domestic partner as a beneficiary of her health insurance, the supervisor allegedly replied: "So, you really like boobs better?"

Furthermore, on Sept. 27, 2011, the supervisor discussed with a nonsupervisory employee how she might more effectively manage the plaintiff. During that discussion, the supervisor allegedly disclosed information from the plaintiff's personnel file that she didn't pass the probationary employment period in a previous job. At the time of the discussion, the plaintiff was standing outside the supervisor's office, heard the supervisor discussing her personnel file with the nonsupervisory employee, and saw her personnel file open on the desk. The plaintiff became sick and threw up. She then went to her office, wrote an e-mail to a higher-ranking manager about the incident, and told the supervisor she was leaving work.

The plaintiff went on medical leave the following day and never returned to work at OWD.

In October 2011, she filed a formal discrimination complaint with DPR's Human Rights Office (HRO), alleging discrimination, harassment and retaliation. HRO interviewed many employees, completing its investigation of the complaint in May 2012.

In late December 2012, DPR notified the supervisor that she was going to be fired, and, in January 2013, the supervisor retired in lieu of termination.

Meanwhile, in August 2012, the plaintiff accepted an SSA position at DPR's Monterey location. On Oct. 17, 2012, she filed a complaint in superior court against DPR for discrimination and harassment based on sex and sexual orientation and retaliation in violation of the Fair Employment and Housing Act (FEHA) and against the supervisor personally for intentional infliction of emotional distress, among other claims. The jury returned verdicts in favor of DPR on the FEHA causes of action but against the supervisor on the IIED claim and several other claims. The jury awarded the plaintiff $19,200 for past economic damages and $19,200 for past noneconomic losses and $28,800 in punitive damages. The supervisor appealed.

Substantial Evidence to Support IIED Verdict Against the Supervisor

The supervisor claimed there was insufficient evidence to support the jury's finding that she was liable on the IIED claim, but the appellate court disagreed and affirmed the lower court's judgment.

The court noted that the jury was properly instructed that, to establish IIED, a plaintiff must show:

  • That the defendant's conduct was outrageous.
  • That the defendant intended to cause the plaintiff emotional distress or that he or she acted with "reckless disregard" of the probability that the plaintiff would suffer emotional distress.
  • That the plaintiff suffered severe emotional distress.
  • That the defendant's conduct was a substantial factor in causing the plaintiff's severe emotional distress.

The jury was also properly instructed on the definition of "outrageous conduct," the court said. That instruction provided that, "Outrageous conduct is conduct so extreme that it goes beyond all possible bounds of decency. Conduct is outrageous if a reasonable person would regard the conduct as intolerable in a civilized community. Outrageous conduct does not include trivialities such as indignities, annoyances, hurt feelings, or bad manners that a reasonable person is expected to endure."

The court then concluded that there was substantial evidence to support the jury's verdict finding the supervisor liable on the IIED cause of action. There was evidence showing that the plaintiff was outside the supervisor's office when she discussed with a nonsupervisory employee that the plaintiff had failed her probation at a prior job. Immediately after overhearing that conversation, the plaintiff became ill, threw up and left work for the day, then went on medical leave the following day.

In addition, there was trial testimony that while at a Sacramento hotel on a DPR business trip, the supervisor "flashed" her breasts in the presence of the plaintiff and others. The plaintiff also testified about other comments the supervisor had made about her sexual orientation and style of hair and clothing.

The jury could reasonably find that the supervisor's conduct was outrageous and supported a finding against her on the IIED cause of action, the court concluded.          

Hurley v. California Department of Parks and Recreation, Calif. Ct. App., No. D070098 (Feb. 21, 2018).

Professional Pointer: The employer in this case was found not liable on the discrimination, harassment, and retaliation claims filed against it, while a supervisor was found individually liable for intentional infliction of emotional distress and ordered to pay damages. The fact that, following a thorough investigation, the employer fired the supervisor certainly helped the employer defend the claims brought against it.