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Westside Observer Newspaper
April 2018 at www.WestsideObserver.com
When City Employees Violate Laws, Taxpayers Saddled
$70 Million in Taxpayer Funds Up in Smoke
by Patrick Monette-Shaw
Taxpayers funded $70 million in settlement costs for 330 lawsuits filed by city employees against the City during the past 11 years who asserted other employees, supervisors, and managers had been behaving badly.
The City claims it has no records of whether the named Defendants found to have engaged in wrongful behavior ever paid civil penalties.
Taxpayers can’t be happy seeing their taxes go up in smoke for entirely preventable behavior involving clearly illegal prohibited personnel practices.
Why should taxpayers pick up the tab for employees behaving badly?
There currently are another 82 unresolved lawsuits pending — and probably more that will come taxpayers’ way — that haven’t been settled yet, with additional costs to come.
Couldn’t that $70 million have been better spent fixing potholes, providing universal pre-school and childcare expenses, preventing the dumping our elderly and disabled who need skilled nursing care into out-of-county facilities, fixing MUNI, or building more affordable housing?
This article does not include 485 prohibited personnel practice unlitigated claims that have cost taxpayers an additional $935,901 paid through March 8, 2017 that may have increased before December 22, 2017, pushing total costs closer to $71 million.
The term “prohibited personnel practices” refers to behavior banned by existing federal, state, and local laws as unlawful — things such as sexual harassment and sexual discrimination, sexual orientation discrimination, racial discrimination and harassment, age discrimination, disability discrimination, wrongful termination, and other illegal practices.
Whether or not you care about the 330 City employees whose careers were upended because they were forced into suing the City, you may care about what City services went unfunded due to the $70 million in lawsuit costs.
While researching data for my February 2018 article “San Francisco’s #MeToo Sexual Harassment Scandal” in the Westside Observer about sexual harassment and sexual discrimination lawsuits filed by City employees, it became clear costs of the larger set of prohibited practice lawsuits needed to be revisited. This is the fourth article in a series.
When the Observer published my article in February, data presented were incomplete because the City Attorney’s Office hadn’t fully responded for over 60 days to a December 22 records request (and still hadn’t completely responded as of March 18). In February the Observer reported that sexual harassment and sexual discrimination lawsuit settlements and unlitigated claims, plus wrongful termination lawsuits, had cost taxpayers $27.5 million.
Additional records received after that article was published increased total costs for these three categories $2.6 million higher, to $30.1 million.
Public-sector employees behaving badly get away with engaging in prohibited behavior against their co-workers believing that their employer — through the San Francisco City Attorney’s Office — will pick up the costs to defend them and pay the settlements to aggrieved employees who are harmed. It’s somewhat hilarious City employees harbor the belief their employer, the City — and by extension, taxpayers — will pick up the tab for their having behaved badly violating existing laws. As a condition of employment with the City, shouldn’t they be required to comply with existing anti-discrimination laws? It’s not as if these behaving-badly City employees are entitled to break these laws expecting the City to pick up paying the legal costs and settlement payments to Plaintiffs.
Rising Costs of These Lawsuits
Back on April 16, 2013 the San Francisco Examiner carried an article by Chris Roberts reporting $11 million had been awarded to City employees in 103 prohibited personnel practice lawsuits. Dr. Derek Kerr — who was wrongfully terminated from Laguna Honda Hospital for having filed several whistleblower reports — uncovered the underlying data through a public records request to the City Attorney, which I performed a secondary data analysis of. Kerr evolved from being a whistleblower into being an investigative reporter for the Observer.
Roberts had, however inadvertently, under-reported the awards and lawsuit costs involved, which were actually $12.1 million.
In May 2013, the Westside Observer published my initial article, “High Costs of City Attorney’s Advice” — that focused on retaliation and bullying of City employees — in which I reported that San Francisco had actually spent at least $12.1 million over a six-year period between January 1, 2007 and October 24, 2012 to resolve 105 prohibited personnel practice lawsuits filed by City employees against San Francisco in settlement costs plus City Attorney time and expenses.
Following up to obtain fuller data, the number of cases dropped by two, to 103 lawsuits, but additional data reveal the $12.1 million had grown to $18.6 million, even before issuing a first upd ate to the initial article.
Revisting the issue three years later in July 2016, the Westside Observer published the first update, “Bullying Costs Soar to $41.6 Million,” revealing that by May 29, 2016 costs had ballooned to $41.6 million.
Then in a second update in April 2017, the Observer published “Slouching Toward Whistleblower Protections,” those costs increased from $41.6 million to $58.2 million.
In this third update that you are now reading — the fourth article in this series — Table 1 below shows that in the short eight-month period between March and December 2017, costs jumped by another $11.8 million — from $58.2 million to now $70 million.
Table 1: Upward “Creep” in Costs of Prohibited Personnel Practice Lawsuits
As Table 1 shows, the $57.9 million in increased costs between October 24, 2012 and December 22, 2017 (from $12.1 million to $70 million) represents a staggering 478.5% change increase in costs taxpayers have been saddled with. The City Attorney still has not provided complete data on City Attorney time and expenses for four of the lawsuits already concluded, so the $70 million in total costs will eventually increase.
What's Former Mayor Ed Lee Got to Do With It?
Part of former Mayor Ed Lee’s enduring legacy will be his lack of leadership — and failure — to reduce the number, and associated costs, of lawsuits against the City during his watch over City Hall. In fact, during Lee’s watch the number of lawsuits and costs soared.
Figure 1 illustrates the number of cases, and associated costs for cases that were concluded (“settled”) across three major reporting periods, whether Plaintiffs in each concluded case received settlement awards.
Of interest, in each of the three reporting periods, the data shown involved when the lawsuits were concluded, not the dates when the cases were initially filed in court.
Figure 1: Costs of Lawsuits Concluded During Three Reporting Periods
Of note, the middle two reporting periods totaling 5.2 years shown in Figure 1 (10/25/12 to 12/22/17) involved lawsuits concluded during Mayor Lee’s tenure as mayor. That period accounts for $51.4 million (73.5%) of the $70 million in total costs. (As a reminder there’s a difference between when cases are filed and when they are concluded).
Although the $18.6 millio n in lawsuits concluded in first reporting period (1/1/07 to 1024/12) was far lower, it should be noted that during the 5.8-year period, Lee was mayor for 1.8 years of that period, so a comparison across the three reporting periods would be somewhat unfair to Lee.
Also of note, Figure 1 illustrates the $38.4 million in City attorney time and expenses represents 54.8% of the $70 million, while the $31.6 million paid to Plaintiffs — between CAO and BoS awards — represents just 45.2% of total costs, suggesting perhaps that the City Attorney is over-litigating, and driving costs up.
Because the data in Figure 1 doesn’t correlate to the dates when the lawsuits were initially filed, a closer look is in order.
It’s unfortunate that data provided by the City Attorney’s office didn’t include all dates that the lawsuits were initially filed. Nearly 13% of the 330 cases concluded to date didn’t list the dates the lawsuits were filed. How can the City Attorney not know those dates?
Table 2: Lawsuit Filing Dates by Reporting Period in Figure 1
Ignoring for a moment the 42 unknown dates when lawsuits were filed shown in Table 2, it’s notable that 158 (48%) of the 330 lawsuits concluded to date were filed after Lee became mayor. Add in the 82 lawsuits still pending, and fully 57% of the 412 cases were filed after Lee became mayor.
Clearly, during Lee’s watch as mayor the number of prohibited personnel practice lawsuits increased considerably during his tenure.
Digging into the data further, it is clear the data shows that while there was just a modest increase in the settlements paid to Plaintiffs before and after Lee became mayor, there are significant differences between the before-and-after Board of Supervisors awards, and the City Attorney time and expenses.
Table 3: Costs of Concluded Cases Before-and-After Ed Lee Became Mayor
The total costs of all prohibited personnel practice lawsuits more than doubled — from $22.6 million to $47.5 million — during Lee’s tenure, a 110% increase in the 5.2-year period after he became mayor, suggesting he did little to reign in increasing violations of existing laws.
And with 82 cases still pending that were filed during Lee’s tenure, the total costs are expected to increase, possibly at significant additional cost to taxpayers.
Types of Prohibited Personnel Practice Lawsuits
As Table 4 below shows, the top six types of cases of the 330 lawsuits concluded (“settled”) to date — Wrongful Termination, Racial Discrimination, “Other Actions,” Disability Discrimination, Sexual Discrimination, and Sexual Harassment — sorted by total costs in descending order (highlighted in yellow) include:
Table 4: The Top-Six Prohibited Personnel Actions and Associated Costs (Descending Sort on Total Costs)
Table 4 also illustrates that 52 of the 82 pending cases are in the top-six types of lawsuit categories, which will push total lawsuits for these six categories to 302 (73.3%) of the 412 lawsuits and will push total costs even higher.
As the Observer reported in “San Francisco’s #MeToo Sexual Harassment Scandal” in February, at least 61.8% of the sexual harassment and sexual discrimination lawsuits specifically alleged in Court legal briefs that they experienced retaliation. And of the Wrongful Termination lawsuits, 50% of the Plaintiffs also alleged they experienced retaliation.
The cases not highlighted in yellow in Table 4 above are equally concerning. How can these behaving-badly employees not know that disability discrimination, age discrimination, racial harassment, sexual orientation discrimination and harassment, and the other types of cases are prohibited by law?
What Table 4 does not illustrate is that many City employees who have endured harassment, bullying, and discrimination on-the-job may not have the resources — both financial and emotional — to file lawsuits against the City. How many more of them are there? And had they filed lawsuits, how much more would that have cost the City and cost taxpayers?
Do Taxpayers Have Any Recourse?
If California’s legislature and the U.S. Congress can adopt regulations that those found to have engaged in sexual harassment should have to pay the settlements and costs of legal proceedings out of their own pockets, San Franciscans should demand that San Francisco’s Board of Supervisors do so, too, for every City employee found to have engaged in sexual harassment.
After all, this is not an issue that requires a meet-and-confer session with the City’s labor union partners. As a condition of employment with the City, employees must be told that in order to keep their City jobs, they are required to comply with existing anti-discrimination laws, and if they don’t or won’t — they’re out, with no “bargaining” with labor unions required!
California Assemblymember Kevin McCarty (D – Sacramento) introduced AB 1750 on January 3, 2018 to require the State Senate and State Assembly seek reimbursement for any sexual harassment settlements paid by California’s Legislature when there is clear evidence of wrongdoing by a legislator.
The U.S. House of Representatives passed a bill on February 6, 2018 requiring members of Congress to pay sexual harassment settlements out of their own pockets.
It’s time taxpayers demand that not only should City employees found guilty of sexual harassment and sexual discrimination have to pay the settlement awards and legal costs themselves, employees found to have violated all of the other prohibited personnel practice categories should also have to pay those costs themselves, too.
Taxpayers shouldn’t be stuck paying $70 million (or $71 million, including unlitigated claims) for the actions of employees behaving badly. Taxpayers could have saved at least $23.5 million from 89 sexual harassment, sexual discrimination, and racial discrimination lawsuits alone, were City employees required to pay the settlements and legal costs themselves.
San Francisco taxpayers should contact Assemblymember David Chiu, State Senator Scott Wiener, Assemblymember Kevin McCarty, and other state legislators indicating your support for AB 1750, and ask each of them where they stand on this Assembly bill. Taxpayers should also contact members of San Francisco’s Board of Supervisors demanding that the Board must pass similar legislation regarding behaving-badly City employees.
And it shouldn’t be limited just to sexual harassment and sexual discrimination lawsuits. City Hall needs to get serious about making these behaving-badly City employees pay for their misbehavior for everything from sexual harassment, to age discrimination, racial discrimination, wrongful termination — and everything else in-between — out of their own pockets! That will be the quickest and most effective way to stop this behavior dead in its tracks.
* * * * * *
I will revisit this topic in a future update, providing updated data on the number of lawsuits that alleged “retaliation” against City employees, and by researching data on how many of the lawsuits had involved wrongful termination that the City Attorney had miscategorized as other types of lawsuits.
As the saying goes, watch this space.
Monette-Shaw is a columnist for San Francisco’s Westside Observer newspaper, and a member of the California First Amendment Coalition (FAC) and the ACLU. He operates stopLHHdownsize.com. Contact him at firstname.lastname@example.org.
After this article was completed, the City Attorney’s Office finally responded on March 21 about the four outstanding lawsuits I had uncovered that the City Attorney had never provided data on. It took 90 days for the CAO to fully respond to my December 22 records request, which it should have done within 14 days.
Astoundingly, the CAO claimed March 21 that of the four lawsuits I had inquired about on March 13:
“Of the four matters that you asked about, we only have two of the four on [sic: “in”] our system. There was no sign of the other two.”
That’s it? “No sign” of lawsuit records in the City Attorney’s Office database? How pathetic is that, and how many other lawsuits did the CAO bury records of under the guise of “no sign of”?
Over the years of placing records requests, I couldn’t help noticing sloppy recordkeeping by the CAO’s office. The CAO’s data is riddled with multiple types of errors, including a significant number of lawsuits with:
Two City departments claim they have no records of whether the named Defendants found to have engaged in wrongful, discriminatory behavior were required to pay, or ever paid, civil penalties out-of-pocket provided for in various federal, state, and local laws.
On March 27, the City Attorney’s Office (CAO) responded to a records request placed the day before, indicating the CAO does not maintain data on the amounts of “civil penalities” assessed against, or paid by, Defendants found guilty. The City Attorney lamely claimed:
“Our office has no responsive records to your request and we are not aware of another department that might have responsive information.”
Then, the City’s Department of Human Resources (DHR) responded on March 29 to a records request placed on March 28 asking for information about the civil penalties, comically pointing me back to the City Attorney’s Office that had already indicated it had no “responsive records.”
“After conducting a reasonable and diligent search, DHR found no records responsive to your request. Responsive records may be available by request from the City Attorney.”
I don’t believe for a minute that both the City Attorney’s Office and DHR don’t know whether the Defendants were ever required to pay civil penalties. And does this mean that none of those guilty Defendants were ever assessed, or had to pay, civil penalties?
Although the Superior Court posts most of the legal briefs filed in each lawsuit on the Court’s web site, it does not post the “abstracts of judgment” on-line.
Abstracts of judgment are written summaries of a Court judgment that states how much money the losing Defendant owes to the person who won the lawsuit, the rate of interest to be paid on the judgment amount, court costs, and any specific orders that the losing defendant must obey. Problem is, the Superior Court charges $25 for each abstract of judgment.
Obtaining the abstract of judgment for each of the 330 lawsuits described in this article would cost $8,250. Alternatively, the 90 lawsuits involving just sexual harassment, sexual discrimination, and wrongful termination would cost $2,250 for the abstracts of judgment. Either way, the costs are beyond the means of this author, and it’s not clear whether the abstracts itemize the amount of civil penalties assessed against the Defendants.
The Timeline of Increasing Costs Across This Series of Articles
(Note: Bar charts with Mayor Lee’s photo used since May 2016, long before his sudden death in December 2017)