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Westside Observer Newspaper
March 2019 at www.WestsideObserver.com
$90.7 Million and Counting …
Lawsuit Settlement Costs Continue to Soar
by Patrick Monette-Shaw
It’s been observed elsewhere that keeping a bully on staff is the equivalent of burning a big pile of money in the back of your building.
By extension, keeping bully’s employed in San Francisco City government is like throwing $90.7 million — and growing — of taxpayer funds down the toilet. Will there ever be a taxpayer revolt in San Francisco?
Clearly, the costs of settlements awarded, and the costs of City Attorney time and expenses involved in fighting lawsuits filed by City employees that have now reached $90.7 million, is just the tip of the iceberg in the total costs of workplace bullying. It’s nearly impossible to estimate the financial costs associated with employees’ lost productivity, lower morale, increased absenteeism, and costs associated with employee turnover, recruitment, and attrition.
City managers and our elected officials cannot afford to ignore the high cost of bullying, nor should taxpayers. After all, in the 11-year period between January 1, 2007 and December 14, 2018 there have been at least 461 lawsuits filed by City employees for violations of various prohibited personnel practices. To date, 359 cases have been concluded and 102 remain pending.
The term “prohibited personnel practices” refers to behavior banned by existing federal, state, and local laws as unlawful — unwanted behavior like sexual harassment and sexual discrimination, sexual orientation discrimination, racial discrimination and harassment, age discrimination, disability discrimination, wrongful termination, and other illegal practices.
It’s worth repeating that it’s clear from those 461 lawsuits that you can only push employees so far before they fight back, a concept apparently completely lost on our Mayor, San Francisco’s Department of Human Resources, department heads, senior managers in every City department, and the City Attorney’s Office.
This On-Going Series of Articles
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. The $11 million Mr. Roberts initially reported was subsequently confirmed to be even higher, at a minimum of at least $12.1 million, due in large measure to under-reporting by the City Attorney’s Office of actual settlement amounts.
In May 2013, the Westside Observer kindly published my initial article, “High Costs of City Attorney’s Advice” on the costs of retaliation and bullying of City employees.
Following up to obtain fuller data prior to issuing my first update in July 2016, additional data revealed the $12.1 million had grown to $18.6 million, by finally adding in the City Attorney’s time and expenses trying to stop the lawsuits.
Three years later I published a first update in July 2016, reporting that Dr. Derek Kerr — the former Senior Physician Specialist at Laguna Honda Hospital for over 20 years wrongfully terminated for his exposé of the raid of the hospital’s patient gift fund spent on staff perks instead — had uncovered the underlying data through a public records request to the City Attorney in October 2012, which I performed a secondary data analysis of.
By the time of my first update (July 2016), the City’s costs had grown to $41.6 million through May 29, 2016. By the second update (April 2017), total costs grew again to $58.2 million through March 8, 2017. By the third update (April 2018), costs had risen to $70 million through December 22, 2017. In this fifth article — the fourth update — costs climbed by another $20.7 million in the one-year period between December 23, 2017 and December 14, 2018 to a total of $90.7 million since 2007 — a whopping 649.6 percent change increase since the $12.1 million was reported in May 2013.
The source of the data are public records from the City Attorney’s Office, the Board of Supervisors, San Francisco’s Department of Human Resources, and other Boards and commissions authorized to settle and approve lawsuits on behalf of the City.
Current Update of Lawsuits
After placing a records request on December 13, 2018 to learn how many lawsuits may have been settled in the one-year period between December 23, 2017 and December 14, 2018, the City Attorney’s Office took 41 calendar days in which to respond with corrected information on February 4, after initially providing clearly flawed and incorrect data on December 31, 2018.
It was shocking learning on February 4 an additional 38 lawsuits had been concluded at an increased cost of $20.7 million in the one-year period over the $70 million Westside Observer last reported in March 2018. That’s the largest one-year increase since first beginning writing this series of articles.
A good chunk of the $20.7 million one-year increase involved a class-action lawsuit filed by Muni drivers against the SFMTA on July 16, 2012 alleging violations of Compensation law, in which the drivers were awarded an $8 million settlement. But that doesn’t include the lawsuits’ total costs.
Figure 1: Cumulative Costs of Lawsuits Filed by City Employees
Figure 1 shows the significance of the total costs, split almost evenly between City attorney time and expenses ($47.4 million) vs. settlement awards authorized by the City attorney’s Office, the Board of Supervisors, and other City boards and commissions authorized to settle lawsuits on behalf of the City ($43.3 million).
San Francisco Examiner reporter Joe Fitzgerald Rodriguez initially reported on December 25, 2016 that the drivers were likely to earn that award because the MTA had failed to properly pay drivers overtime in violation of the California Labor Code and San Francisco’s Minimum Wage Ordinance. Drivers were required to clock in at one bus yard, and then travel — unpaid — to a second bus yard to pick up buses they were assigned to drive.
Although the MTA Board approved the $8 million settlement on January 3, 2017, the CAO took its sweet time and didn’t officially close the drivers’ lawsuit until February 28, 2018. And more shockingly, when the CAO finally reported the closure of the lawsuit, the CAO revealed it had its spent $746,970 in City Attorney time and an additional $1,884,989 in City Attorney expenses for a total of $2.6 million in addition to the $8 million settlement approved by MTA’s Board.
This single lawsuit cost the City and its taxpayers a total of $10.6 million — half of the $20.7 million one-year increase — because MUNI felt it didn’t need to follow California’s Labor Code!
Of the 359 lawsuits concluded to date, only two were filed in Court during Breed’s watch as mayor after Lee died on December 12, 2017. By contrast, of the 102 lawsuits still pending as of December 15, 2018, 61 of them were filed before Lee died and 41 of them were filed during Breed’s term as mayor.
The Top-Seven Lawsuit Categories
The City Attorney’s Office has 32 separate categories of prohibited personnel practices. As in past year, wrongful termination and racial discrimination lawsuits filed by City employees against the City have accounted for the lion’s share of settlements awards and CAO time and expenses.
Table 1: Top-Seven Categories of Prohibited Personnel Practice Lawsuits — January 1, 2007 – December 14, 2018
Table 1 illustrates, in part:
Table 2 (at the end of this article) lists all of the 32 categories of prohibited personnel practice lawsuit costs.
Other oddities in the new one-year data include:
In addition to the oddities noted above, there are other problems with the data.
Misclassification of Lawsuit Categories Obfuscates Data
As noted in previous articles in this series, we may never know exactly how many wrongful termination or racial discrimination lawsuits cases have actually been brought by San Francisco city employees. That’s because of the way they are classified by the City Attorney’s Office, which appears to use a different nomenclature to categorize cases than the Courts do.
Could the San Francisco City Attorney’s Office deliberately be misclassifying various lawsuits into other categories to fudge the actual number of prohibited personnel lawsuits in each category?
San Francisco Taxpayer's Lost Opportunity
The Board of Supervisors just created a lost opportunity for San Francisco taxpayers.
On December 13, 2018 both the U.S. Senate and House of Representatives passed legislation unanimously in both chambers to reform how sexual harassment lawsuits are handled on Capitol Hill — including holding lawmakers liable for paying for sexual harassment and retaliation settlements out of their own pockets, rather than the former practice of having U.S. taxpayers foot the bill.
During hearings on amending the City’s existing sexual harassment prevention training Ordinance to cover all forms of harassment against City employees, I urged the Board of Supes to pass legislation similar to the U.S. Senate and House of Representatives by requiring City employee-defendants found guilty of harassment in a court of law to have to pay settlement costs out of their own pockets. It would be the surest and fastest way to stop the harassment if the perps knew they’d have to pay the settlements themselves, and the behavior would stop almost instantly.
The Board of Supervisors turned a cold shoulder and failed to consider and introduce amendments to require defendants to pay settlements themselves.
As long as the City — by way of taxpayers — have to pick up the costs, there is no incentive for the wrongdoers to stop harassing and bullying other City employees, because there are no meaningful consequences to their own wallets!
If taxpayers really want to be let off the hook in paying for the sexual harassment settlements, they should demand that the Board of Supervisors require the offenders to pay the costs out of their own pockets. Taxpayers could have already saved $11 million in the 35 sexual discrimination and sexual harassment lawsuits settled to date.
It’s clear from the $70 million to now at least $90.7 million in settlement awards and City Attorney time and expenses in employees’ legitimate lawsuits that bullying, and abuse does not involve a boss or supervisor berating employees for merely taking too many coffee breaks. Several of those lawsuits named department heads — at the Department of Public Health (twice), Laguna Honda Hospital, the City Attorney’s Office, and the Police Department, among others — as defendants in the respective lawsuits.
Bullying and verbal abuse is rampant and tolerated in City government because of the “tone” set at the top. There are a lot of mid-level City managers who spout their MBA degrees and who believe they are entitled to browbeat and bully their subordinates because abusing employees will advance their managerial careers. It’s the culture at the top that needs to change.
City employees don’t need somebody to better define what is meant by “bullying and verbal abuse.” They know it, can smell it a mile away, and have seen it because it happens way too often and happens in almost every City department!
As Chris Roberts noted in his April 2013 Examiner article, statewide legislation to make workplace bullying illegal had no sponsors, and the legislation was never introduced. And it hasn’t been introduced since 2013. Just ask Melania Trump how her “Be Best” campaign is going to battle on-line bullying of children. Probably not much better.
If the U.S. Congress can pass legislation requiring offenders to pick up the costs, San Francisco should be able to, too.
Burning $90.7 million — and counting — of taxpayer funds in San Franciscans back yards is unconscionable. How long will the problem continue to be ignored at City Hall?
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 email@example.com.
Table 2: Costs of 32 Categories of Prohibited Personnel Practice Lawsuits — January 1, 2007 – December 14, 2018
Note that Table 2 illustrates 359 of the lawsuits brought by City employees have concluded as of December 14, 2018 and 102 lawsuits remain pending.
Retrospective of Series’ Articles Cover Artwork — 2013–2019