Newsletter

Celebrating Desert Recreation District this Park and Recreation Month

Since 1985, America has celebrated July as National Park and Recreation Month. The month, designated by the National Recreation and Park Association (NRPA), is intended to highlight the essential role local park and recreational professionals play in our communities. Every year, NRPA selects a new theme for the month, and this year’s theme is “We Rise Up for Parks and Recreation.” This July, the California JPIA is featuring one member agency that has helped its community to be stronger, more vibrant, and more resilient.

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Covering more than 1,800 square miles, the Desert Recreation District (DRD) is responsible for over 30 recreational facilities throughout the Coachella Valley, including community and fitness centers, sports fields, swimming pools, a golf course, a driving range, and 14 parks and open spaces. The district participates in the Community Wellness Hub model created by the NRPA. The Hub is a trusted gathering place that connects every community member to essential programs, services, and spaces that advance health equity, improve health outcomes, and enhance the quality of life for residents. With more than 315 employees, the DRD plays a vital role in the health and wellness of the Coachella Valley by administering over 1,000 programs, special events, and activities each year.

“The district is the regional source of premier parks in the Coachella Valley, and we work to provide barrier-free recreational opportunities that contribute to the overall wellness of the communities we serve,” said Barb Adair, Assistant General Manager of the Desert Recreation District.

The DRD is an exemplary member to showcase during Park and Recreation Month as it is both proactive and solution-oriented regarding managing risk. District staff members work closely with their California JPIA assigned Senior Risk Manager, Alex Mellor, to balance providing meaningful and accessible recreational opportunities to the community while protecting the district’s interests as much as possible. Together, District staff and Mellor have inspected parks and playgrounds to identify and mitigate hazards, assessed the risk involved with the potential acquisition of new open spaces, and revised participant waivers to reflect changes brought on by the pandemic.

“Desert Recreation District is a critical member of the Coachella Valley community,” shared Mellor. “It is relied upon to provide recreational opportunities for residents across the valley. This responsibility creates some unique and interesting risks which must be effectively managed. District staff members recognize the importance of partnering with the California JPIA to achieve the goals set by the DRD board, and the district continues to be an excellent partner in that regard.”

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Pollution Program – Pollution Coverage Explained

By Jim Thyden, Insurance Programs Manager

The California JPIA provides pollution coverage as an optional insurance program for members. The program may be of interest to members as it covers some of the pollution losses that are excluded under the liability program. Pollution program coverage includes:

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• Both first- and third-party claims for pollution conditions on-site, as well as those that migrate off-site, including:
  • Bodily injury
  • Property damage
  • Remediation on-site and off-site
  • Business interruption
  • Extra expense
  • Image restoration
  • Emergency expense costs
• Additional protection for claims from non-owned disposal sites, transportation, illicit abandonment, contracted operations, and storage tanks are also included.

Pollution incidents do not occur often, but they can be catastrophic when they do. It is important to note that the liability program aims to provide members with third-party claims of bodily injury or property damage when a sudden, unexpected event results in a pollution loss. However, the liability program is not designed to cover ongoing, continuous pollution-related losses. Instead, the pollution program is a solution to that dilemma as it covers incidents occurring on a sudden and accidental basis (new conditions) as well as losses that occur over an extended period without the member’s knowledge (pre-existing conditions). Coverage for new conditions is July 1, 2014, or when the insured joined the program, whichever is later.

It is important to understand that pollution coverage is schedule-specific, and member locations must be scheduled for coverage to apply. The program provides coverage for unintentional mistakes in reporting and is automatic when acquiring new locations. For new locations, “new conditions” coverage is provided, but carriers must review appropriate environmental reports before providing “pre-existing conditions” coverage. Limited coverage for pollution from current or former landfills may apply, but only if they have been properly scheduled.

The pollution program also has strict claim reporting requirements. Before engaging remediation or legal specialists, members must receive the insurance carrier’s consent for the expenditure. The exception is acting in an emergency after a pollution incident. Members should report claims or known incidents to the Authority immediately, or coverage may not apply. Agencies must inform the Authority of a claim or known incident within 30 days of discovery, and then report on the claim within 90 days of the incident.

While the master program provides coverage for scheduled underground storage tanks, it does not offer financial assurance as required by the State of California. However, for those members wishing to meet the state obligation through risk transfer of insurance, the Authority offers an optional program for Financial Guarantee for Underground Storage Tanks.

If you have questions about the pollution program, please contact Insurance Programs Manager Jim Thyden.

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Understanding and Managing Valley Fever

By Tim Karcz, Senior Risk Manager

With summer approaching, California JPIA members should be aware of their potential exposure to valley fever, a respiratory condition caused by a microscopic fungus known as Coccidioides immitis. This fungus lives in the top two to twelve inches of soil in many parts of the state, with the highest rates of exposure being in the Central Valley and the Central Coast. Workers may inhale fungal spores when contaminated soil is disturbed by digging, grading, vehicle operations on dirt roads, or high winds. Many people who are exposed do not develop symptoms. Others experience flu-like symptoms (fever, headaches, aches in the upper body and legs) that usually go away on their own after a few weeks. Workers experiencing symptoms lasting more than a week should seek medical attention.

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Valley fever can be managed and prevented through a formal respiratory protection program, in conjunction with taking the following steps to reduce worker exposure in areas with high incidence rates:

1. Minimize the area of soil disturbed.
2. Use water, appropriate soil stabilizers, or re-vegetation to minimize airborne dust.
3. Stabilize all spoils piles by tarping or other methods.
4. Clean tools, equipment, and vehicles before transporting offsite.
5. Provide air-conditioned cabs for vehicles that generate heavy dust and ensure workers keep windows and vents closed.
6. Suspend work during heavy winds.
7. If workers’ clothing is likely to be heavily contaminated with dust, provide coveralls, changing rooms, and showers where possible.

Encourage workers to report valley fever symptoms promptly to a supervisor and to follow agency procedures for reporting a work-related injury.

The California JPIA’s Respiratory Protection Training program offers information on valley fever, available at https://www.cjpia.org/risk-management/training. Additional resources can be found from the Centers for Disease Control and Prevention (CDC): https://www.cdc.gov/fungal/diseases/coccidioidomycosis/.

For more information, contact your regional risk manager.

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California JPIA Celebrates the 15th Anniversary of Insurance Programs Manager Jim Thyden

“Jim has been a respected presence in the risk management field for three decades,” said Chief Executive Officer Jon Shull. “In addition to professional experience ranging from local government to a national multi-line insurance carrier, he has shared his passion for public entity risk management as a past president of the Public Agency Risk Managers Association and as a member of the Orange County chapter of the Risk Management Society.”

Thyden, who joined the California JPIA in 2007 from the City of Costa Mesa, manages the Authority’s property and commercial insurance programs and services, placement of excess and reinsurance, and evidence of coverage documents. His responsibilities involve collaborating with a team of brokers, carriers, third-party administrators, and California JPIA staff members to place insurance premiums of over $20 million for multiple insured programs. These programs include liability, workers’ compensation, property, pollution, and cyber coverages. Thyden also consults with the Authority’s more than 120 pool members on a broad spectrum of insurance and risk management issues.

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“If a member has a claim or needs assistance with insurance programs such as property, cyber, pollution, or special events, I am here to help,” said Thyden.

Prior to his service as a risk management/human resources analyst for the City of Costa Mesa, Thyden was an account manager for Ward North America and a key account coordinator for Safeco Insurance. He holds a Bachelor of Arts in small business administration and management from California State University, San Bernardino. He is certified in Risk Management for Public Entities by the Public Agency Risk Managers Association (PARMA), an association dedicated to the professional development of California public agency risk managers and other municipal staff who support risk management in their organizations.

Thyden, president of PARMA from 2013-14, previously served the organization as an at-large director and vice president. This past spring, in a session at the PARMA Annual Conference in Anaheim, he and other industry experts presented “Evolution of Risk Management.” The session was a leadership-level discussion that reviewed how the last two years have proved challenging for public entity risk managers, including the pandemic, civil unrest, the continued impact of climate change, and social inflation.

Thyden has played an instrumental role in developing the California JPIA’s cyber liability program, which supports members facing cyber incidents. The program offers access to computer forensics firms, business interruption loss coverage, digital data recovery resources, and network extortion expenses.

“As the need to manage cyber risk has progressed, the Authority has increased its efforts to encourage members to prepare themselves,” he said. “For example, our website has a self-assessment tool that can help members identify and remediate deficiencies. We also offer a website through which members can monitor their cyber risk management as well as access training and templates.”

According to Thyden, the California JPIA’s approach to cyber risk is a key differentiator from other municipal insurance pools. “The Authority is a risk management-based organization. While many pools focus on providing coverage and paying for claims, the Authority offers training programs that educate our members about what is happening in the cyber world relative to public entities and provides actionable steps to prevent a cyber attack. We not only help members recover from losses but also help members prevent losses.”

As part of the Authority’s larger leadership team, Thyden demonstrates a member-driven focus on proactively reducing claims through education and relationship-building.

“The thing I like best about working at the Authority is that the work means something,” said Thyden. “That means a lot, knowing that your work is valued and will be shared with people whom it can help.”

Congratulations, Jim, on your 15th anniversary!

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Third Circuit Court Highlights Free Speech Protections for Public Employees in Context of Discipline for Violation of COVID-19 Face Covering Policy

By Nate J. Kowalski, Partner; Irma Rodríguez Moisa, Partner; Angela M. Powell, Partner; and Eric Gamboa, Associate, Atkinson, Andelson, Loya, Ruud & Romo

Originally published on July 11, 2022. Reprinted with permission from Atkinson, Andelson, Loya, Ruud & Romo.

On June 29, 2022, the Third Circuit Court of Appeals (“Court”) issued a decision providing guidance on how constitutional free speech protections interact with workplace rules, which regulate employee speech on social movements. (Amalgamated Transit Union Local 85 v. Port Authority of Allegheny County (3d Cir. 2022), _F.4th _, 2022 WL 2336480.) The Court agreed that a public employer should be enjoined from enforcing a policy that banned employees from wearing face masks bearing social protest messages. The decision demonstrates that courts are willing to carefully scrutinize public employers’ prior workplace conditions and history of disruptions when assessing an employer’s justification for restricting workplace speech. Given the overlap in constitutional standards for public employers in California, the case is highly instructive guidance on an evergreen constitutional issue.

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Background
The Port Authority of Allegheny County (“Port Authority”) is a municipal bus and light-rail operator. Due to the COVID-19 global pandemic, the Port Authority required uniformed personnel to wear face masks at work. The Port Authority decided to (1) implement a policy that banned employees from wearing face makes [sic] that displayed social protest messages, and (2) discipline employees for violating said policy by wearing masks that expressed support for various social movements, such as “Black Lives Matter”. Disciplined employees filed a lawsuit alleging that the Port Authority violated their First Amendment rights. The employees sought a preliminary injunction to (a) rescind the Port Authority’s discipline against employees who wore Black Lives Matter face masks, and (b) prevent the Port Authority from enforcing its policy. The district court granted the plaintiffs’ motion for a preliminary injunction, based in part on a finding that they were likely to succeed on the merits of their constitutional claim. The Port Authority appealed the ruling to the Third Circuit Court of Appeals. 

Third Circuit Court’s Decision
As an initial matter, it is noteworthy to highlight the procedural posture in which this case arose. As the Court considered whether preliminary injunctive relief was warranted, the case does not involve a final decision regarding whether the Port Authority violated public employees’ First Amendment rights with respect to enforcement of its face mask policy. Instead, the Court considered whether the four elements for preliminary injunctive relief had been met, including whether the Port Authority had demonstrated a reasonable probability of success on the merits, i.e. that its policy was constitutional. 

The Court began by noting the black letter constitutional standard, that “speech by government employees receives less protection than speech by members of the public.”  (ATU v. Port Authority, supra, 2022 WL 2336480 at *3.) The Court cited the multi-factor Pickering test for evaluating whether government employee speech qualifies for constitutional protection, which would render a government employer liable for taking action to chill or curb. (See Pickering v. Board of Education (1968) 391 U.S. 563.) Specifically, two threshold requirements must be met: (1) employees must speak as “citizens” rather than pursuant to their official duties; and (2) employee speech involves matters of public concern. The Court found that the public employees met each of these initial factors, as commenting on social issues was not part of their job duties and employees’ masks related to matters of political or social concern to the community. The employees and Union’s injunction only addressed “Black Lives Matter” insignia, yet the Court noted in dicta that “Thin Blue Line” and anti-mask mandate messages were also matters of public concern.

The Court then proceeded to apply a balancing test of interests. Under constitutional case law precedent, the balancing test differs based on whether the government’s conduct constitutes a prior restraint on speech or an after-the-fact restraint. The Court observed that the Port Authority’s actions involved both types, as the policy banned future conduct (social protest messages on face masks) and imposed discipline on employees for violating policy after the fact, such that both balancing tests needed to be considered.

To evaluate the constitutionality of the Port Authority’s discipline action, the Court applied the after-the-fact restraints on speech balancing test: (1) the interest of the employee, as a citizen, in commenting upon matters of public concern, against (2) the interest of the State in promoting the efficiency of the public services it performs. The Port Authority’s proffered justification for its disciplinary decisions was disruption to services, particularly from the “disruptive potential of racial discord.” The Court determined that the Port Authority failed to demonstrate any adequate disruption or reasonable risk of disruption to its operations in relation to employees’ use of Black Lives Matter masks. In evaluating the latter claim, the Court cited the Port Authority’s prior conduct and history:  

“The record shows a lone employee complaint, three race-related incidents among Port Authority employees within the past fifteen years, wholly unrelated to and predating the mask rules, and electronic messages among employees expressing differing opinions about the Black Lives Matter movement. Moreover, Port Authority itself supported the Black Lives Matter movement after the July policy was in place, previously supported African-American Heritage celebrations, and consistently allowed employees to wear political buttons and hats in violation of its uniform policy, all without precipitating the disruption it contends the Employees’ masks are likely to cause.”  (ATU v. Port Authority, supra, 2022 WL 2336480 at *4.)

For prior restraints on speech, the Court had to apply a far more stringent standard. The Port Authority was required to show that “the necessary impact on the actual operation” of the government agency outweighs public employees’ interests in commenting on matters of public concern. (Ibid.)  To make this showing, the Port Authority had to demonstrate that it identified “real, not merely conjectural” harms, and that its actions (i.e. face mask policy banning social messages) as applied addresses those harms in a “direct and material way.” (Id.) The Court concluded that the Port Authority’s prior-restraint ban on social protest messages for face masks did not satisfy this heightened test, as it was both over and under-inclusive. The policy was deemed overboard because it swept in a wide array of political and social issue speech that “Port Authority employees have long engaged without causing disruption.” The ban was also under-inclusive because the Port Authority had no policy prohibiting political speech in other ways such as written communication, and the Port Authority’s pre-existing ban on wearing political-type buttons on uniforms was largely unenforced. Given this, the Port Authority’s prior restraint was deemed not narrowly tailored.

The Court found that the other factors for preliminary injunctive relief had also been met, i.e. whether irreparable harm would result in the absence of a court order, potential harm to the Port Authority, and the public interest. Consequently, the Court affirmed the district court’s decision.

Significance
This case should serve as a cautionary tale for public employers in California, concerning prior restraints on social protest speech. At present, individuals in California and throughout the country continue to engage in protests and social movements on a variety of subjects, across the political spectrum. These enduring and occasionally conflicting statements can pose complex challenges for public employers, who seek to avoid confrontations between co-workers and creating an inflammatory workplace. The Third Circuit’s Port Authority decision illustrates the dangers for public employers who fail to take thoughtful, nuanced action in seeking to regulate the free speech of their workers on various social issues.

Notably, the Court took into account the employer’s own conduct (e.g., failing to enforce a similar ban involving political messages on buttons; and demonstrating support for social issues such as Black Lives Matter) to conclude that said history undermined the employer’s position regarding the anticipated disruption that it sought to avoid. The Court suggested that, given the difficulties in a prior restraint on protected speech, employers may need to rely on after-the-fact restraints as a more feasible manner of controlling speech.  

While this out-of-state case provides strong persuasive guidance for California public employers, they should note certain differences between the Third Circuit and the Ninth Circuit. The Third Circuit in this case highlighted the importance of articulating the grounds for measures that restrict employee speech. The Port Authority cited the avoidance of disruption caused by employee-to-employee tension via racial discord. However, the Ninth Circuit recognizes various grounds for assessing disruption to public services including whether the statement: (i) impairs discipline by superiors, (ii) impairs harmony among co-workers, (iii) has a detrimental impact on close working relationships for which personal loyalty and confidence are necessary, and/or (iv) impedes the performance of the speaker’s duties or interferes with the regular operation of the enterprise. (See Moser v. Las Vegas Metropolitan Police Department (9th Cir. 2021) 984 F.3d 900, 908.) 

Lastly, as noted above, the procedural posture of this case impacted the final outcome, in which a government employer was enjoined on First Amendment free speech grounds. In the context of the preliminary injunction issue, the Court only determined that the Port Authority was unlikely to prevail on the merits. The unique procedural posture of this case worked in favor of the employees since, in the usual context (that is, a direct challenge of the conduct outside the preliminary injunction standard), the employer would have been granted some deferential treatment in its prediction of workplace disruption. (Moser, supra, at p. 909.) 

Employers with questions about free speech restraints and in need of assistance should contact the authors or their usual counsel for guidance. 

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. The applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.

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U.S. Supreme Court Issues Two Decisions Impacting Local Sign Regulations and Flag Policies

Lawful or Landmine? Court Rules on First Amendment Snares

By Scott C. Smith, Partner; and Matthew Richardson, Partner, Best Best & Krieger LLP

Originally published on May 17, 2022. Reprinted with permission from Best Best & Krieger LLP.

Municipalities throughout the country regulate signs and set policy for flag-flying on public property. Done right, these are lawful functions of local government; done wrong, they can be First Amendment landmines. Two recent U.S. Supreme Court decisions refine the map to navigate this landscape.

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Shurtleff v. City of Boston (Flags)
Shurtleff v. City of Boston involved a dispute over Boston’s denial of a request to fly a religious flag outside City Hall. Boston had allowed private groups to hold flag-raising ceremonies outside City Hall during which groups could replace the city flag with a flag of that group’s choosing. From 2005 to 2017, Boston approved the raising of approximately 50 unique flags at 284 ceremonies.

The case began after the director of an organization called “Camp Constitution” asked to fly the “Christian flag”—which, according to Court documents, displayed a red cross on a blue field against a white background—during an event that would commemorate the “civil and social contributions of the Christian community.” City staff denied the request, citing concerns that flying a religious flag at City Hall would violate the Establishment Clause and that the City had no precedent for flying such a flag. Camp Constitution sued, claiming that Boston’s denial violated the First Amendment’s Free Speech Clause. The District Court sided with Boston, holding that flying private groups’ flags on City Hall property constituted “government speech” under the First Amendment, which allowed Boston to refuse the flag request. The First Circuit affirmed.

The Supreme Court reversed, holding that the flag raisings in question amounted to private—not government—speech due to Boston’s “lack of meaningful involvement in the selection of flags or the crafting of their messages.” In support of this holding, the Court observed that Boston had no written policy or internal guidance regarding which flags non-municipal groups could fly and what message those flags might communicate. Instead, Boston had a “come one, come all” attitude toward private groups’ flags; the city had never denied a private group’s flag request before this case. Upon classifying the flag raisings as private speech, the Court concluded that Boston’s refusal to let Camp Constitution fly its flag violated the Free Speech Clause of the First Amendment.

The Court advised that Boston was free to change its policies to “make clear that it wished to speak for itself by raising flags.” Tellingly, the Court cited approvingly the flag policy adopted by San Jose, California. The Court liked that the San Jose policy includes language stating that San Jose’s “flagpoles are not intended to serve as a forum for free-expression by the public” and limited its approval of flags flown to those that constitute “an expression of the City’s official sentiments.” The Court’s quasi-endorsement of San Jose’s policy strongly suggests that local flag policies with these features would qualify as government speech allowing a city to permit or reject flying of a flag consistent with the policies.

City of Austin, Texas v. Reagan National Advertising of Austin (Signs)
This decision involved the Supreme Court’s revisiting of its holding in Reed v. Town of Gilbert, Arizona. As a recap: in Reed, the Court struck down portions of the Gilbert, Arizona sign code that subjected ideological, political and directional signs to different rules with respect to size, location and length of display time. The Court characterized this regulatory scheme as “content-based” on its face because it subjected signs to different rules depending upon the message conveyed—whether ideological, political, or directional. Under the Court’s First Amendment precedents, content-based restrictions are subject to “strict scrutiny” and are “presumptively unconstitutional … [unless] the government proves they are narrowly tailored to serve a compelling government interest.” In Reed, Gilbert failed to meet this standard.

The Court’s decision in City of Austin, Texas v. Reagan National Advertising of Austin centered on provisions in Austin’s sign code that allowed on-premises signs—but not off-premises signs—to be digitized. The Court characterized off-premises signs as those that “advertise things that are not located on the same premises as the sign, as well as signs that direct people to offsite locations.” The plaintiff, who owned billboards throughout Austin, argued that the sign code’s separate rules for off-premises and on-premises signs violated the Free Speech Clause of the First Amendment. The District Court sided with Austin, finding that the on/off premises distinction giving wider latitude to on-site advertising was content-neutral under Reed. The distinction did not impose greater restrictions for political messages, religious messages, or any other subject matter, but only required city decision-makers, property owners, advertisers and the public to determine whether the subject matter is located on the same property as the sign. The Fifth Circuit reversed, holding that the [sic] “the fact that a government official has to read a sign’s message to determine the sign’s purpose is enough to render a regulation content based and subject to strict scrutiny.” Taken to its extreme, this holding would require that a code allowing on-premises advertising allow any advertising message (i.e., not just business identification) on that premises.

The Supreme Court reversed the Fifth Circuit’s decision, reasoning that content-based restrictions subject to heightened scrutiny are those that “discriminate based on the topic discussed or the idea or message expressed.” Austin’s on/off-premises sign standards did none of these things; they were simply “location based and content-agnostic” standards that “did not single out specific subject matter for differential treatment.” Accordingly, the Court held that the on/off-premises sign standards were content neutral and subject to “intermediate scrutiny”—a standard of review that requires Austin to show that its on/off-premises sign distinction is “narrowly tailored to serve a significant government interest.” This decision aligns the Court’s guidance more closely with Justice Kagan’s concurring opinion in Reed, where the purpose of the sign (e.g., litter prevention or to show that “George Washington Slept Here”) could serve to justify some disparate messaging opportunities in the absence of any official message suppression. Justice Kagan had reasoned—and the Court now held—that in these cases, intermediate scrutiny is appropriate. Justice Kagan thought Gilbert’s ordinance failed both tests, noting that it did not pass “strict scrutiny, or intermediate scrutiny, or even the laugh test.” The Court sent the case back to the lower court to determine whether Austin’s code could satisfy this requirement.

Next Steps and Takeaways
In light of the decision in Shurtleff v. City of Boston, municipalities desiring to exercise discretion regarding the flags flown (and not flown) by private groups on public property should enact local policies that, among other things, identify the flags that groups can and cannot fly and what those flags communicate (e.g., the city’s official sentiments).

In light of the decision in City of Austin v. Reagan National Advertising of Austin, municipalities should consider revisiting their sign codes to ensure that any distinctions between on-premises and off-premises signs are “location based and content-agnostic” and do not single out specific subject matter for different treatment.

Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.

 

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