“Health Insurance Marketplace” Notifications: Here we go!

School districts have begun to receive notifications from the “Health

Insurance Marketplace” alerting the district’s “Benefits Manager” that some

employees have obtained their insurance on the health insurance exchange

(healthcare.gov) and are eligible for “advance payment of premium tax

credit” (APTC) or “cost-sharing reductions” (CRS). While these terms are

worded slightly differently, we have been discussing them as “credits and

premium assistance” in our presentations regarding PPACA for years. We

have referred to these notifications as “section 1411 certifications,” because

they come from §1411 of the Affordable Care Act. For short, we will call

them “notifications” in this email update.

A few clients have been uncertain about whether this is an official

government communication. We believe it is. The Marketplace has

indicated that it will be sending these notifications out in batches, so if you

have not yet received one, you should be on the lookout for yours in the

next few months. On the next page, we have included a screen shot of the

first page of the letter so that you can be sure to identify the official notice if

or when you receive it.

Marketplace Verification and Applicability to PPACA Tax

Penalties. Essentially, the notification means some of your employees have

indeed purchased insurance on the Marketplace (which we’ve often called

“the exchange”) and are eligible for government assistance toward their

premiums. These notifications are part of a multi-step verification process

which will be used by the federal DHHS and IRS to do the following: (1)

confirm the eligibility of your employees for government assistance on the

Marketplace, and (2) assess whether your district will owe a penalty for

failing to offer insurance or offering unaffordable insurance to that

employee.

If you are a “large employer” who has stayed informed regarding your

PPACA obligations, this should start to sound familiar. As you have heard

many times by now, school districts subject to PPACA’s insurance offer

requirements because of their “large employer” status can be penalized on a

per-employee basis for any employee who meets the following criteria:

1. Is a “full time” employee under the PPACA regulations;

2. Receives no offer or an “unaffordable” offer from the district;

3. Declines the district’s offer and enrolls in coverage from the

Marketplace; and

4. Obtains credits or premium assistance (the form calls these APTC or

CRS) from the Marketplace.

Not until each of those things are met will the district be potentially

subjected to a tax penalty for that particular individual. That’s where this

notification comes in. Section 1411 of PPACA requires the government to

notify you if your current or former employee could subject you to one of

those penalties. If you have received one of these notifications, they likely

state at least one and possibly all 3 of the following things near the top:

This person [your employee] reported that he or she:

 didn’t have an offer of health care coverage from [the district];

 did have an offer of health care coverage, but it wasn’t

affordable or didn’t provide minimum value; or

 was in a waiting period and unable to enroll in health care

coverage.

As you can see, those assertions made by your employee or former

employee start to hint at the government’s analysis of your potential tax

penalty liability under PPACA. In fact, the notification goes on to say that

“This is only a notification that [the district] may have to pay an employer

shared responsibility payment,” aka, a tax penalty. The notification amounts

to the government indicating that the particular employee has done at least

part of what’s required to subject your district to penalty, assuming your

district is a “large employer” and assuming the employee might meet the

other requirements (such as being a “full time” employee).

Appeals Process. Alongside this multi-step verification process is a

multi-step “appeals” process. This is discussed in the notification, as well,

under the “What can I do next?” and “What are my appeal rights?” sections.

As we think of it, this is your first bite at the apple toward avoiding potential

tax penalties if you do not believe you should be penalized for that particular

employee. According to PPACA, you will have another chance to appeal their

penalty determinations later, but we recommend taking this appeals process

seriously and putting all of your applicable arguments into the appeal. For

example, if you offered “affordable” insurance to that employee, then you

should appeal the notification to start making your case with the

government.

Click here for appeal form and here the explanation of the appeal

process that can also be found on healthcare.gov. As you will see, the

appeal form has 4 basic sections, and most districts will ignore section 2.

Section 1 is the employer information, and section 4 is for your signature.

Section 3 is where you will need to apply the rules of PPACA and the

information you know about the employee for whom you received the

notification. The introduction to section 3 states as follows:

Tell us why you’re appealing the Marketplace determination of

this employee’s eligibility for help with the costs of Marketplace

coverage....

An individual may qualify for help with the costs of Marketplace

coverage if the coverage that’s offered by the employer doesn’t

meet minimum value requirements or isn’t affordable with

respect to the employee.

Use the space below to explain why this employee shouldn’t

have been eligible for advance payments of the premium tax

credit and cost-sharing reductions (if applicable). Use extra

paper, if necessary. If you’re including documents to support

your request, send us copies. Keep all original documents.

The appeal is asking you to tell the government why this person is not

eligible for their assistance on the Marketplace. However, what they’re

actually asking you to do is assist them in fact-checking your employee’s

insurance application on the Marketplace and more importantly, instructing

you to provide the reasons you should not be penalized, including supporting

documentation.

Individualized Appeals. Because of the nature of the PPACA tax

penalties, you will need to appeal or not appeal each notification on a very

individualized basis. While some appeals may look alike, they each require a

careful analysis of the employment data for the individual employee, such as

which offer they received and how many hours they worked. This is why we

have recommended for many years that you should be tracking and

centralizing all of the hours for all your employees, especially each non-

certificated employee (including subs, community coaches, and bus drivers).

Even though some of those employees will never subject you to penalty, you

may receive notifications for them.

Take, for example, a substitute teacher who only subbed for the

district a few times each month. It is very unlikely that the employee could

ever attain “full time” status under the PPACA regulations during the

applicable time period (must work 30 hours per week on average).

Assuming the sub never attained “full time” status, he or she cannot subject

the district to a penalty. However, that person may still be eligible for an

APTC or CSR on the Marketplace, so you will still receive a notification if they

apply on the Marketplace and list you as an employer. The fact of the

matter is, in most cases you may have no idea whether that person is

otherwise eligible for government assistance, which is what the appeal form

asks you to verify. But you do know the employee cannot subject you to

penalty. Are you better to err on the side of providing more information and

tell the IRS that you’re unsure of their exchange eligibility but the employee

is not a “full time” employee? This question remains unclear, but for now,

we think you should discuss it with your legal counsel and err on the side of

caution.

Contents of the Appeal. Assuming you do decide to appeal, you will

need to determine how to word your position on the form, which does not

provide appeal response options. You will also need to determine whether

you want to include documentation, and you must include a copy of the

notification you received with your appeal. Appeals must be filed within 90

days. Remember, what you send to the IRS now will help you in the future,

but it could also limit your options later if you are not careful in how you

structure your response.

Over the long run, we believe each district will get to a point where

you shouldn’t need to involve legal counsel for each appeal. For now, we

recommend discussing your appeal options with your legal counsel. If you

have received one of these notifications or if you have questions about the

appeal process, you should consult with your school district’s attorney or call

Karen, Steve, or Bobby.

Public Record Request for Public Employee Salary Data

The American Civil Liberties Union of Nebraska is conducting what they

describe as a “statewide survey about sex education courses as well as

district policies relating to pregnant and parenting students.” The

organization has send a lengthy public records request asking for a laundry

list of documents related to sex education; school policies and practices

related to pregnant and parenting students; and agencies to whom schools

refer pregnant and parenting students. The ACLU letter concludes by stating

that “[a]s you might know, Nebraska open records requests must be

provided within four (4) days of receipt of this letter, but we are willing to

give you fourteen (14) days to provide these materials.”

Response Within Four Business Days.   We have reviewed ACLU

Nebraska’s letter and have consulted with the Nebraska Attorney General’s

Office about it. We are advising KSB clients that this is a valid public records

request which requires a response. However, we do NOT believe that the

ACLU has the power to unilaterally change the statutory timeline in the

Nebraska Public Records Act. Therefore, every school that received this

request today will have to respond no later than Monday, July 11.

The Public Records Act states that if the entire request cannot with

reasonable good faith efforts be fulfilled within four business days “due to

the significant difficulty or the extensiveness of the request,” you can

instead communicate back to the requester. That communication should

include a written explanation of why, including the earliest practicable date

for fulfilling the request, an estimate of the expected cost of any copies, and

an opportunity for the requester to modify or prioritize the items within the

request.

Cornhusker Plaza P: (402) 804-8000

301 S. 13 th St., Suite 210 F: (402) 804-8002

Lincoln, NE 68508 KSBSchoolLaw.com

Fees for Gathering and Copying These Documents.  As we read

the ACLU’s requests, we believe it is highly likely that you will have to reach

out to every teacher in the district to ascertain whether they teach any unit

it will take your staff more than four hours to search, identify, redact or copy

these documents, you can charge for that staff time. NEB. REV. STAT. § 84-

712(3)(c). Alternatively, if you decide to pay a third party (an independent

contractor or even your educational service unit) to search your computer or

paper files and gather these documents, you can charge for all of that

additional expense. You may also charge a fee for your actual costs (e.g.

copying, printing, computer analysis) in responding. You are, however,

prohibited from charging the requester for the cost of your attorney

reviewing the public records response.  

Deposit.  You may request a deposit prior to producing the records if

you reasonably calculate that the total fee (including copying, staff, and

contractor costs) for providing the records would exceed $50.00. Mr. Fox

will then have 10 days either to narrow the scope of his request or to

provide you with the requested deposit.

If you would like assistance in preparing a response to Mr. Fox or if

you have questions about the public records statutes in general, you should

consult with your school district’s attorney or call Karen, Steve, or Bobby.

Minorities & Success

Once again Nebraska school districts are reporting that they have received

telephone calls, letters, and e-mail solicitations from a company called Minorities &

Success. The communications are designed to look as if they are from some

agency of the federal government. The e-mails refer to “School District Affirmative

Action Plan Update & EOE Requirements Reference #101.354.” Other school

districts have received phone calls “confirming” a conference call with the

superintendent regarding the Federal Contract Compliance Manual or "Executive

Order 11246". In other communications the company claims to be enforcing "a new

mandate for schools" This company’s aggressive sales techniques include making

claims that they have previously conducted business with your school and are just

calling to renew a contract. However, the truth is your district never contracted

with this company. They imply if not outright say that you are violating affirmative

action laws by not contracting with them. This simply is not true. Minorities &

Success only supplies a high-pressure sales pitch that misstates and misrepresents

the law. This company makes direct and indirect misrepresentations of fact and law

in an attempt to make easy money from unsuspecting schools.

Do not be fooled if your school is contacted by Minorities and Success. A few

years ago we went so far as to file a complaint against this company with the

Nebraska Attorney General’s office. If this company continues to contact your

school district or if you have any questions or concerns about how to respond,

contact your school attorney or Karen, Steve, or Bobby.

Public Record Request for Public Employee Salary Data

Many school districts have received an e-mail from Daniel Fox

(daniel.fox3377@gmail.com) asking them to send “copies of public records

of individual salary data for all public school employees (with a focus on

teachers and administrators) for as many years as are available between

1995-2016.” Mr. Fox says that he is seeking this information on behalf of

Dr. Joseph Price at Brigham Young University, who he says is doing a study

on the gender gap in teacher pay.

We have reviewed Mr. Fox’s e-mail and have consulted with the

Nebraska Attorney General’s Office about it. We are advising KSB clients

that this is a valid public records request which requires a response. Every

school that received this request will have to do four things promptly:

1) Ascertain which records (in any format) are subject to disclosure in

response to this request;

2) Calculate how much it will cost to fulfill the request – this includes

all the costs that we’ve detailed below;

3) Determine how long it will take you to fulfill the request; and

4) Respond back to Mr. Fox by this Thursday, June 9 (if you got this

request on Friday and your school will be open for business every

day this week). You will either need to provide the documents or

communicate the costs and timeline for your eventual response.

The rest of this update explains these steps.

Requested Documents and Analysis. Schools almost certainly

have records containing the items listed in Mr. Fox’s request, which was the

“year, name, job title, salary information, education, experience, and

gender” of each of its staff members for the last 21 years. At a minimum,

Mr. Fox would like any documents containing the “year, name, salary, and

job title” of teachers and administrators. As we read this request in light of

the Public Records Act, we recommend that you analyze your individual

teacher and administrator contracts, along with spreadsheets, payroll

records, or other documents which contain this information in order to

determine what you must disclose. Gaining an understanding of the

documents which may be responsive to this request, even if you do not

locate all of them immediately, will allow you to estimate the costs discussed

below.

Form of the Documents.  Schools are not required to produce or

prepare any records “in a new or different form or format modified from that

of the original public record.” If your district maintains this information

electronically (say, in your payroll software or on a spreadsheet) it should be

fairly straightforward to generate a report that includes this information and

nothing else. However, if the district only has paper records for some of

these years, the district will need to review the records to ascertain which

must be disclosed, redacted, or withheld.

Response Within Four Business Days.   Schools must respond to

this request within four business days. That does not mean you have to

gather these documents by then. The Public Records Act states that if the

entire request cannot with reasonable good faith efforts be fulfilled within

four business days “due to the significant difficulty or the extensiveness of

the request,” you can instead communicate back to the requester. That

communication should include a written explanation of why, including the

earliest practicable date for fulfilling the request, an estimate of the

expected cost of any copies, and an opportunity for the requester to modify

or prioritize the items within the request.

Fees for Gathering and Copying These Documents.  If it will take

your staff more than four hours to search, identify, redact or copy these

documents, you can charge for that staff time. NEB. REV. STAT. § 84-712(3)(c).

Alternatively, if you decide to pay a third party (an independent contractor

or even your educational service unit) to search your computer or paper files

and gather these documents, you can charge for all of that additional

expense. You may also charge a fee for your actual costs (e.g. copying,

printing, computer analysis) in responding. You are, however, prohibited

from charging the requester for the cost of your attorney reviewing the

public records response.  

Deposit.  You may request a deposit prior to producing the records if

you reasonably calculate that the total fee (including copying, staff, and

contractor costs) for providing the records would exceed $50.00. Mr. Fox

will then have 10 days either to narrow the scope of his request or to

provide you with the requested deposit.

If you would like assistance in preparing a response to Mr. Fox or if

you have questions about the public records statutes in general, you should

consult with your school district’s attorney or call Karen, Steve, or Bobby.

Transgender Students and Gender Identity Update: You know what they say about opinions, everybody has one...

It’s been 10 days since the federal Department of Education and

Department of Justice (DOE/DOJ) issued their joint “significant guidance” on

issues relating to transgender students and other gender identity

considerations. Candidly, we have been debating almost daily whether to

send an update on the “guidance.” Our hesitation comes from one simple

fact: this is not new. School boards and administrators who have been

following these issues closely know that the DOE/DOJ position has been

clear for years. While the “new” guidance intensifies speculation over

whether these agencies would strip a “noncomplying” district of its federal

funding, the agencies’ core interpretation of the law remains the same.

They believe, under laws like Title IX, that students’ gender identity dictates

the facilities the students use and the activities in which the students

participate.

The uncompromising nature of the “guidance” has added political fuel

to the debate nationally and here in Nebraska, sparking a wide variety of

responses on all sides of these issues. While the federal agency position has

not changed, you’ve seen the headlines popping up in response to the

“guidance.” Several states and government officials, including Governor

Pete Ricketts and Nebraska AG Doug Peterson, have opined on the

“guidance,” saying that it is “ill-conceived” and is a “misrepresentation of the

current law.” North Carolina and the DOJ recently sued each other over

North Carolina’s new “bathroom law,” which limits bathroom usage to each

individual’s biological sex as listed on the individual’s birth certificate. Last

week, an Indiana Congressman introduced a bill which would protect any

“State, or local government of a State” which elected to “enforce a policy

regarding the use of sex-segregated bathrooms...or locker rooms.” In sum,

officials who disagree with the DOE/DOJ likewise believe the law is clear:

school boards can (and according to some officials, should) limit things like

facility use and activity participation to students’ biological sex.

As we look at this from the perspective of advising our clients, the only

thing which is clear is that there are no clear answers or solutions, despite

professed certainty from both sides. The two positions are clear, but the

ramifications that would stem for following either sides’ advice are not. For

that and other reasons, we have long believed that a very good option for a

school board is to gather information, analyze issues in the context of each

school district’s unique circumstances, and proceed slowly by handling

requests on a case-by- case basis under existing policy and law. With each

conflicting “guidance” letter, Office of Civil Rights investigation, and federal

lawsuit, we believe this position is reaffirmed and strengthened.

With that said, we similarly believe that school boards possess the

authority to address these issues formally if they feel compelled to do so. A

board could enact a policy in line with the DOE/DOJ preference that

students’ gender identity resolves all questions and that the word “gender”

should be added to the district’s nondiscrimination policies. On the other

extreme, a board could enact a policy stating that questions regarding

accommodations, student records, facility use, and activity participation are

governed by the biological sex on the student’s birth certificate. While a

board can elect to implement a policy from either extreme, we challenge

board members and administrators to discuss whether they should.

The other choices fall on a spectrum between those two positions,

including our preferred approach discussed above. If the basis for the

DOE/DOJ position is that Title IX’s “sex discrimination” prohibitions already

include a student’s “gender,” then we see no legal requirement for a new

policy either way. Instead, a board can elect to handle requests from

students on a case-by- case basis and wait to see how the law in this area

develops before enacting sweeping policy declarations. Our support for this

position is pretty simple: we think it is the best way to stay out of court and

out of the newspaper. In our experience, schools do way more to protect

and educate students of all kinds than politicians understand.

As school attorneys, our job is to provide legal advice and assist

boards with the legal ramifications of their choices. We feel strongly that

this is a decision to be made at the board level after careful consideration.

We should not dictate your approach any more than the government officials

weighing in on either side. No matter what your board chooses to do, it

should come after careful consideration of all issues, legal, practical, and

political.

If you have questions or concerns about your board’s options, we

recommend that you consult with your school district’s attorney or call

Karen, Steve, or Bobby.

NOTE for KSB policy service subscribers: We outlined our

perspective on the main legal issues and possible board approaches in our

Policy Updates Memorandum. We addressed issues like requests to change

records, NSAA activity participation, and facility use. Take a look at that

section of the Memo, and please feel free to give any of us a call to discuss

it.

New FLSA Overtime Regulations

The long-anticipated changes to the Fair Labor Standards Act (FLSA)

regulations were released today. If you need help falling asleep tonight, you

can access all 508 pages of the final rule here.

The FLSA has always required that employees treated as exempt from

the overtime rules: (1) be paid on a minimum weekly amount, (2) on a

salary basis, and (3) perform exempt duties. The regulations (thankfully!)

did not make changes to the duties tests for executive, administrative and

professional employees. These are the primary classifications of exempt

employees used by schools. However, as promised, the weekly salary

minimum did increase. Here are the highlights:

 Weekly salary minimum raised from $455/week ($23,660/year) to

$913/week ($47,476/year). Note that the regulations specifically

exclude teachers, administrators, and some other certificate holders

from the minimum salary requirement. Many schools have asked if

this will require an increase to the district’s base salary for teaching

staff. The short answer for the vast majority of schools is “no.” For

the most part, the new rules will apply to non-teaching employees that

schools have treated as exempt in the past (e.g. head custodian,

transportation director, head secretary, etc.) In order to avoid the

recordkeeping and overtime requirements for exempt employees for

any particular workweek, the employee must receive at least $913 per

week in gross wages.

 The new regulations are effective December 1, 2016. This will

provide schools with some time prior to the new salary minimum going

into effect.

 The weekly salary minimum for exempt employees will be raised

every three years. This is different than the proposed regulations,

which considered raising the weekly salary minimum every year. This

outcome is better for schools which most often contract on a yearly

basis with classified staff members who may be exempt. The

increases will become effective on the first day of the applicable year,

with the first automatic update taking effect on January 1, 2020. The

Department must publish the updated rates at least 150 days before

they go into effect. This means you’ll be considering your options

again prior to finalizing 2019-2020 contracts.

The Department of Labor (DOL) also issued a guidance document for

“State and Local Governments” which describes the regulatory changes and

the methods available to those entities for complying with the new rule. You

can access that document here, but in sum, it lays out generally the options

we’ve been discussing with KSB clients for several months now. Here is the

DOL’s list of options for schools and other local governments to comply with

the new rules:

 Raise salaries: to the new minimum threshold;

 Pay overtime above a salary: this is the fluctuating

workweek/variable wage rate method we’ve discussed at presentations

and with many clients;

 Evaluate and realign employee workload; and

 Utilize compensatory time off (aka, “comp time”).

Generally, boards and administrators fall into two camps. Some have

elected to set up employment agreements for the entire 2016-17 school

year in light of these new rules, either increasing salaries or converting

employees to hourly earners entitled to overtime beginning right away.

Others will wait to make changes until the December 1, 2016 deadline is

closer and may make contract revisions effective for that date. In either

case, we recommend that administrators and boards begin or continue

discussions regarding these new rules. Some of the strategies for

compliance may require changes to employment agreements, policies, and

handbooks, so keep those things in mind as you work on implementing

these new rules for your district.

If you have questions or concerns about your board’s options, we

recommend that you consult with your school district’s attorney or call

Karen, Steve, or Bobby.

April Showers Bring May…….. POLICIES!?!

Although Nebraska school administrators are busy counting down the days

until the end of the 2015-16 school year, you should also start thinking

about what you need to do over the summer. This year, changes in laws

and regulations on both the state and federal level will require schools to

make some significant policy changes. Here are examples of some of the

changes for the 2016-17 school year:

1) How the district will respond to requests for accommodation from

transgender students (necessitated by NSAA policy);

2) District review and control of staff social media accounts (necessitated

by LB 821);

3) Student Self-management of Asthma, Diabetes and Anaphylaxis

(necessitated by LB 1086);

4) Option Enrollment (necessitated by changes made by LB 1066);

5) Hazing and Initiations (necessitated by LB 710); and

6) Service Animals (recommended based on new regulatory guidance by

the Department of Justice and related case developments).

KSB Policy Service and Policy Update Subscribers KSB is currently

working on policy updates related to these and other policy issues. If you

are a subscriber to either the full policy service or the policy updates, you

will receive the updates via e-mail on May 20, 2016. You should plan to

meet as an administrative team to review at least the policy changes we

have outlined above before building principals go on summer break. KSB

will then be holding our policy service webinar on June 1, 2016. We will

share our thoughts and answer your questions during the webinar so that

you can have all of the information you might need to facilitate board

discussion of these policies at the regular June board meeting.

If you have questions or concerns about policies or your board’s policy

options, we recommend that you consult with your school district’s attorney

or call Karen, Steve, or Bobby.

(Another?!) Transgender Update

There have been a few significant developments since our last update on this

topic. Let’s cover them briefly, and then talk about practical next steps:

NSAA Policy Update. By now, you’ve all heard that the NSAA Board’s

gender participation policy will remain in effect after the district-initiated

proposals failed this month. Here’s the policy. This will now be policy for

NSAA activity eligibility indefinitely, and by design it will require some

decisions by your board.

Federal Court Litigation Update. In our most recent update on this topic,

we covered the then-current federal court decisions in which a court held

that a school could limit the use of its restrooms based on biological sex.

The student in that case, G.G. v. Gloucester Cnty. Sch. Bd., No. 15-54

(E.D.Va. Sept. 17, 2015), appealed the district court decision to the United

States Court of Appeals for the Fourth Circuit. Yesterday the Court of

Appeals issued an opinion, found here, which reversed the initial court

ruling.

The Fourth Circuit concluded that the district court “did not accord

appropriate deference to the relevant Department of Education

[interpretation of its own] regulations.” G.G. v. Gloucester Cnty. Sch. Bd.,

No. 15-2056 (4th Cir Apr. 19, 2016). Translation: courts should listen to the

DOE/OCR interpretation of their own regulations. In rendering its decision,

the Fourth Circuit did not outright decide that G.G. should be permitted to

use the restroom facility consistent with his gender identity. Rather, they

sent the case back to the district court to determine whether G.G.’s claims

are valid under this more deferential approach.

OCR Enforcement Action Update. There have also been several OCR

investigations and enforcement actions to date regarding gender identity,

facility use, and activity participation. One Illinois district debated

withdrawing a settlement agreement with OCR, which would have left the

OCR with the choice of filing a compliance lawsuit against the district. We

had been tracking that case closely, but in December that district decided

instead to continue its settlement with OCR rather than engage in litigation

over the gender identity issues. To date, OCR has successfully “settled”

these cases by asking districts to do things like provide facility use and

activity participation for students based on gender identity.

What do these updates mean? These updates make one thing obvious:

the law in this area remains unsettled, even as the enforcement position of

the federal agencies remains perfectly clear. The newest opinion in the G.G.

case from the Fourth Circuit is a big win for groups like OCR and the ACLU

which have been arguing that Title IX and other laws protect individuals on

the basis of their gender identity. It represents the first major court decision

endorsing the OCR’s position regarding protections for transgender students.

What are the next steps for Nebraska boards of education? The NSAA

Board’s gender participation policy requires local school boards to decide

how they will handle activity participation requests from transgender

students. Now that we know the NSAA policy will remain in effect

indefinitely, we will be providing our KSB policy service and policy update

subscribers with a series of policy options for addressing activity

participation. However, the new G.G. case further complicates the questions

not addressed in the NSAA policy, such as facility use, student records, and

others.

To date, we have advised our clients to tread lightly on those other issues

and handle situations on a case-by- case basis. We still firmly believe that a

very prudent decision for boards is to move forward slowly and avoid making

sweeping decisions which could subject the district to litigation no matter

what policy they put in place. We think districts with updated sex

discrimination policies are entitled to wait for further developments in the

law. As we’ve said from the beginning, the law is changing quickly in this

area as evidenced by G.G. However, at a minimum school boards will need

to address activity participation via policy or directives to administration.

Should your board elect to address issues like facility use at the same time,

we want to make options available, and we plan to do so for KSB policy

subscribers in the coming weeks.

One other note about the G.G. case to consider when discussing this at the

board level: Many patrons in the G.G. case addressed the board when it was

considering how to form policy around the issues of gender identity.

Generally, that district’s patrons opposed allowing transgender students to

use the bathroom facility consistent with their gender identity. The board

ultimately decided to adopt a policy which said students must use the

facilities consistent with their sex at birth. To our surprise, the Fourth Circuit

judges quoted the most unkind comments made by patrons to imply that the

board had improper motivations in setting its policy.

The question of transgender rights is going to be the subject of discussions

in a lot of settings in the months to come, including your board meetings. As

board members and administrators, you do have the right to form your own

personal opinions and you have First Amendment rights to free expression.

However, as school attorneys we believe that our job in defending your

board’s policy decisions could be more difficult if administrators and board

members make a lot of sweeping public pronouncements about this issue.

We would prefer that board members and administrators keep their own

counsel and refrain from making provocative statements about the issue of

transgender student rights, even as parents, patrons, and others may have

very strong viewpoints on either side of this issue. We certainly believe

personal convictions can and should drive policy in your community;

however, on this particular issue we believe your district will be in the best

position to defend its policy actions if the discussion of these issues is

focused on the legal questions.

If you have questions or concerns about these or any related issues or are

interested in your board’s policy options, we recommend that you consult

with your school district’s attorney or call Karen, Steve, or Bobby.

You Might Get Away With Forgetting Your Spouse's Birthday, but you MUST Remember the Significance of April 15 th !

We all have important dates like birthdays and anniversaries that we

know we must remember. If you are a school administrator in the state

of Nebraska, April 15th is one of those dates. This is the deadline by

which school administrators must decide whether they want to proceed

with the non-renewal or termination of a certificated employee’s contract.

Under the Nebraska laws governing teacher employment, teachers’

contracts are automatically renewed unless the teacher receives notice

on or before April 15th that the board will consider non-renewing,

terminating, or amending the teacher’s contract. This deadline applies to

any action on a teacher’s contract, including reductions in force. In

Bentley v. School District No. 25 of Custer County, 255 Neb. 404, 586

N.W. 2d 306 (1998), the Nebraska Supreme Court held that delivery of a

non-renewal notice on April 16th was not sufficient statutory notice to a

teacher, and constituted no notice at all.

If you have any reservations about whether to continue a teacher’s

employment contract, you should contact your school district’s attorney

promptly. Your school attorney will want to review the employee's file

and assist in preparing the proper notice documents if you decide to

proceed with a possible termination or nonrenewal.

Question: Is the April 15th deadline a mutual obligation on both

teachers and boards of education?

Answer: Yes! The Professional Practices Committee and the

Nebraska Commissioner of Education have determined that teachers are

contractually obligated for the following school year after April 15th

unless: (1) the teacher has submitted a resignation prior to that date or

(2) the board, through policy or provision in its negotiated agreement,

has agreed to release teachers through a later date.

If you have questions, we recommend that you consult with your

school district’s attorney or call Karen, Steve or Bobby.

Meeting the February 8th Negotiations Deadline

The Industrial Relations Act requires the board and teachers

association to submit to mandatory mediation or factfinding as ordered by

the Commission of Industrial Relations if the board and association have not

reached agreement by February 8 th , unless the parties mutually agree in

writing to forgo them.

Failure to Conclude Negotiations by February 8 th . If the parties

have not reached agreement by February 8 th , they must engage in fact

finding and mediation with a “resolution officer” if one of them files a petition

with the Commission of Industrial Relations requesting it. However, they are

not required to engage in the resolution officer process if both agree in

writing to forego it. We recommend that you consult with your school

district’s attorney before February 8 th if it appears that you will not be able to

settle negotiations. Depending upon the unresolved issues you may have

with your local association, there may be reasons to file or forego filing a

petition to begin the resolution process.

Fact Finding Process. The fact finding process can be a complex

endeavor compressed into a very short period of time. The “resolution

officer” will be in charge of the process. Among other things, he or she will:

1. determine whether the issues are ready for adjudication;

2. identify the terms and conditions of employment that were in

dispute and negotiated in good faith but not resolved;

3. choose the offer that he/she believes was the most reasonable

final offer on each issue in dispute; and

4. issue a decision and recommendations by March 25 th .

Time Flies. Time flies, especially from February 8 th through March

25 th . The board and association have slightly more than 6 weeks to

assemble their records and data, perform a comparability study (this is not

required, but it is advisable), present the information and arguments, and

give the resolution officer enough time to review it and issue a decision and

recommendations.

Conclude Fact Finding by March 25 th . The resolution officer must

conclude the fact finding process and issue a decision and recommendations

by March 25 th or within 25 days after the certification of state aid for the

contract year in question, whichever occurs later. In recent years, given the

contentious discussions surrounding school funding, certification of state aid

has occurred well after March 25. If the parties have not reached agreement

on or before that deadline, either one may file a petition with the

Commission within 14 days asking it to resolve the industrial dispute.

Commission of Industrial Relations Decision. The Commission

will limit its consideration to those issues which the resolution officer

determined that the parties negotiated in good faith but could not agree

upon. If the parties forego the resolution officer factfinding process, the

Commission will resolve the “industrial disputes” if either party petitions the

Commission for a hearing. The Commission will decide the case in either

circumstance based on its traditional criteria of comparability and

prevalence, not on the resolution officer’s standard of the “most reasonable

final offer.” It must issue its decision for the contract year by September

15 th .

If you are a KSB client and you believe that you will not reach an

agreement, please let us know immediately. If you have questions, we

recommend that you consult with your school district’s attorney or call

Karen, Steve or Bobby.

The IRS Does it Again: 1094-C and 1095-C Reporting Deadlines Extended

Now that most “Applicable Large Employer” school districts and ESUs (whose

“large employer number” is 50 or greater) have begun filling out the 1094-C

and 1095-C reporting documents, the IRS has extended the deadlines to file

these reports.

The 1095-C, which was previously due by January 31, 2016, is now due to

employees and the IRS by March 31, 2016.

The 1094-C, which was due by February 29, 2016 if filed in paper form and

March 31, 2016 if filed electronically, is now due either May 31, 2016

(paper) or June 30, 2016 (electronically).

The IRS issued Notice 2016-4 on December 28, 2015 to explain the

extensions and provide guidance to individuals who may elect to file their

tax returns before their employers issue their 1095-C forms. Keep in mind

that the 1095-C’s will be made a part of an individual’s income tax filings,

much like the W-2. If you have been using this time to fill out the reporting

forms over the break without students and staff in the building, we think

you’ve made the smart decisions. While you now have additional time to file

these reports, hopefully you will avoid confusion and a lot of questions from

staff members by completing them early!

If you have questions or concerns about these or any other issues related to

the PPACA reporting obligations, we recommend that you consult with your

school district’s attorney or call Karen, Steve, or Bobby.

Cash Is Not King: IRS Issues New Guidance on Cash-in- Lieu and Other Arrangements Which Will Impact PPACA Compliance and Reporting

Yesterday, December 16, 2015, around the same time that Karen and Bobby

were giving a statewide presentation regarding PPACA reporting, the IRS

issued Notice 2015-87 (Notice). The Notice includes many important

updates on issues we’ve addressed yesterday and at other times, including

tax penalty amounts, special rules for “educational organizations” (think

subs and coaches), COBRA coverages, and many others. We will cover

these in detail at upcoming presentations. However, because PPACA

reporting will begin in a few short weeks, we want to draw your attention to

the issues which specifically impact reporting in this update.

The Notice addresses cash-in- lieu and other “flex cash out” arrangements.

This is one of the more troublesome reporting issues we’ve been discussing

for months and which Karen and Bobby discussed yesterday. As we feared,

the IRS has taken the approach which could significantly impact school

districts with these arrangements.

As part of the required reporting, the IRS requires each employer with 50 or

more employees report the employee’s cost of the cheapest available single

insurance plan. If you require an employee to pay $100 toward the cost of

their insurance each month, you would report $100 on each month of the

applicable form 1095-C. The IRS will then take this cost information and

compare it to the employee’s household income to determine if your

district’s offer of insurance was “affordable.”

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The Cash-in- Lieu Issue. For those of you who “speak PPACA,” this new

Notice document confirms our fear that in addition to the actual employee

cost, the IRS will now require employers to put their cash-in- lieu options into

the “cost” section of the form 1095-C, Line 15. The theory behind it is

simple: if you offer cash-in- lieu, the employee is required to give up the

cash in order to enroll in the insurance. The IRS now confirmed that they

consider this part of the “cost” to enroll. This concept is best illustrated by

way of example. Assume, like above, that you require an employee to pay

$100 toward their insurance premium, or they can decline insurance

coverage and receive $50 a month cash instead. If you had not offered the

cash-in- lieu, the IRS would require you to report only the $100 per month

you require the employee to pay in Line 15 of form 1095-C. However, the

$50 cash-in- lieu amount must be included, as well. So, the per-month

“cost” for that employee is now the $100 actual cost and the $50 cash

amount, for a total of $150 per month.

This is even more significant considering some of the offers made in

collective bargaining agreements to certificated staff. Some districts offer up

to the amount of a full family premium cost as a cash-in- lieu, upwards of

$20,000. That means for every employee who is offered the cash, their

1095-C must include the full $20,000 (or whatever the actual number is) in

the employee’s “cost” section. (Remember, however, that on the 1095-C,

the “cost” you are reporting on is the cost of a single premium. Think of it

this way: how much money could an employee get if he/she did not take

the single insurance? That amount is the “cost” of the cash-in- lieu.)

HRA’s, Flex Credits, and the Cash Out Problem. In the Notice, the IRS

confirmed its position that in some cases an employer may count the

employer’s contributions toward health reimbursement arrangements (HRA)

and flex credits in the calculation of the employee’s “cost.” For HRA’s, the

rules are complicated. If you have an HRA, you should contact your

district’s attorney to discuss whether you may consider it as part of your

employer contribution and whether it complies with other market reforms

under PPACA and the implementing regulations.

As it relates to flex accounts, generally for these arrangements to “count”

the employee must be able to use the amounts to pay for certain medical

expenses. Again, you should contact your attorney and/or accountant to

determine whether your flex plan meets the use requirements. However, the

most important question as it relates to calculating employee “cost” asks

whether the employee has the option to “cash out.” Many districts have

structured their Section 125 and other flex-type plans to permit an employee

cash-out option to avoid negative tax consequences. Now, however, the

IRS’s position in the Notice makes clear that if the employee is permitted to

withdraw from the flex account a taxable cash amount, the contribution

made by the employer will not qualify and cannot be used to offset the

employee’s reported “cost.” That means if you have a cash option out of

your 125 plan, you will have to list the amount that could be flexed out on

line 15 of form1095-C for employees regardless of whether they take

insurance.

The Notice does provide a type of transition relief for HRAs and flex plans

prior to 2017, in some cases. If you have an HRA or flex plan, we encourage

you to speak with your district’s attorney or accountant on the ability to use

an otherwise non-qualifying HRA or flex plan contribution to offset employee

costs for the next few years.

Delayed Enforcement and Alternative Arrangements. As we read the

Notice, the IRS will release regulations on these issues relatively soon. In

addition to the de facto transition relief for many HRAs and flex plans, it

appears the IRS will not enforce the cash-in- lieu reporting until it can release

final regulations. As the Notice states: “[The] IRS anticipate[s] that the

regulations generally will apply only for periods after the issuance of final

regulations.” If you meet one of these conditions, you do not have to list

your cash-in- lieu amount in line 15 for 2015 only:

1. The employer offered the cash “opt out” (i.e., cash-in- lieu)

arrangement with respect to health coverage provided for a plan year

including Dec. 16, 2015;

2. A board, committee, or similar body or authorized officer of the

employer specifically adopted the opt-out arrangement before Dec. 16,

2015; or

3. The employer had provided written communications to employees on

or before Dec. 16, 2015 indicating that the opt-out arrangement would

be offered to employees at some time in the future.

If you have always had a cash-in- lieu arrangement, we believe the

continuing contract obligations in Nebraska will support every school’s

argument that they meet at least one of these tests, assuming they do not

otherwise meet them. If your board is currently negotiating for a new

or “substantially increased” cash-in- lieu payment of any sort, you

should contact your attorney before reaching any new agreement

with your teachers’ union. If you have a long-standing cash-in- lieu

program, you should be entitled to the flex payment transition relief

that was announced yesterday.

As part of these regulations, the IRS also seems likely to permit districts

with cash-in- lieu options now and in the future to impose “other meaningful

requirements…such as a requirement to provide proof of coverage provided

by a spouse’s employer.” Assume, for example, your district says that

employees are only entitled to the cash-in- lieu if they provide proof of

insurance through a spouse or other means. The IRS’s eventual regulations

may permit you to forego including the cash-in- lieu in the employee’s “cost”

if you have a condition like that in place. Obviously we do not know what

the IRS will ultimately decide, but its Notice indicated that the IRS at least

appears open to this concept.

Penalty Amounts for 2016. Lastly, we want to point out that the Notice

document clarifies the IRS’s long-held position that the “tax” (i.e., penalty)

amounts for both the 4980H penalties (“death penalty” and “unaffordable

penalty”) will be increased each year based on the “premium adjustment

percentage” in the ACA, tied to increases in premiums in the health

insurance market. For 2016, the “death penalty” (for failing to offer to 95%

of all full-time staff after transition relief) will be $2,080. The “unaffordable

penalty” (failing to offer “affordable” insurance to “full time” employees after

transition relief—which differs for 50-99 versus 100+ large employers) will

be $3,120.

This new Notice provides the clarity that we have been hoping for. However,

unless your district is proactive in learning how and when it will impact your

offerings, you may face increased penalty possibilities and other unintended

consequences. We strongly encourage you to address these matters with

your boards, and if you have questions or concerns about these or any

related issues, we recommend that you consult with your school district’s

attorney or call Karen, Steve, or Bobby.

Time to Evaluate Probationary Employees

The month of December is a busy one for school administrators. In

addition to supervising basketball and wrestling contests, printing programs for

the holiday concert, and rounding up members of the PTO to provide cookies

for the teachers’ holiday tea, administrators must be sure they have evaluated

all probationary teachers during the first semester.

All probationary employees must be evaluated during the first

semester of the 2015-2016 school year. You also must schedule a post

conference for each probationary teacher’s evaluation prior to the

beginning of second semester so that there is no confusion about

whether the evaluation truly occurred during first semester. See NEB.

REV. STAT. § 79-828(2).

The evaluation statute applies to probationary teachers and probationary

administrators, such as principals and athletic directors. The failure to

evaluate probationary certificated employees in the manner required by statute

can result in a loss of the school district's ability to nonrenew a poorly-

performing employee.

In the hustle of finalizing probationary evaluations, administrators are

tempted to short-circuit the evaluation process. Remember that probationary

employees must be evaluated based upon an “actual classroom observation.”

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Evaluate all probationary teachers-- not just those who appear to have

deficiencies. Sometimes significant problems with probationary employees

appear for the first time late in the second semester.

If you have employees who perform a combination of teaching and non-

teaching jobs, such as a librarian who teaches one study skills course, you

must evaluate during classroom time. The Commissioner of Education takes

the position that if a probationary employee teaches even one class, his or her

evaluation must be based on that instruction rather than on an overall review

of his or her performance in all duties.

Particularly during the Christmas season, you may be tempted to sugar-

coat or soften criticisms or concerns you may have about a teacher’s

performance. Using kid gloves and veiling true weaknesses with flowery and

imprecise language is EXACTLY why we school attorneys have so much work to

do each spring. Being too nice or unclear does a disservice to both the teacher

and to you and can hurt your school district in the long run.

If you have any questions about the evaluation of probationary

employees or would like us to review proposed evaluations, please don’t

hesitate to contact Karen, Steve or Bobby.

We’ve read the ACLU’s email regarding gender identity, and we’re sure you have, too!

On October 27, 2015, the Nebraska ACLU’s legal counsel, Amy Miller, sent

an email to Nebraska school administrators entitled “ACLU guidance related

to transgender students.” The email provides information regarding the

alleged obligations of school districts as they relate to transgender students.

Ms. Miller notes that a similar email went to the Nebraska School Activities

Association in light of their considerations regarding activity participation for

transgender students. We certainly appreciate the ACLU adding their voice

to the already-robust discussion of these issues in Nebraska public schools.

We agree that boards of education should make informed decisions on these

important issues with all available information, which compels us to clarify

several points from Ms. Miller’s email.

Ms. Miller states that students have “clear legal rights” regarding gender

identity. We disagree that the law and these “rights” are clear in all cases.

Neither Nebraska’s Unicameral nor Congress has passed laws clearly

establishing “gender” as a legally protected class like they have for sex,

national origin, and age, to name a few. In fact, legislation attempting to

add “gender” as a protected class has categorically failed at both levels.

Similarly, no court case and none of the cases cited in the email, such as

Mathis, Hart, and Doe, establish gender as a protected class or fully clarify

the obligations of Nebraska schools. Mathis is a Colorado Human Rights

Commission case, not a court case with precedent applying to Nebraska

schools. Hart was an employment discrimination case from a lower

Maryland federal court. Doe was a case interpreting Maine’s state law

regarding gender identity, not a federal law or Nebraska law. In short, there

is no definitive court case on this issue.

Ms. Miller is correct that the U.S. Supreme Court and other courts have

prohibited discrimination based specifically on “gender norms,” but they

have not deemed transgender citizens to be a protected class. This is an

important legal distinction. We believe schools across Nebraska are

appropriately addressing any perceived discrimination, harassment, or

bullying based on gender norms, but that is a separate question from

schools’ obligations regarding all matters involving gender identity.

If the law was as clear as Ms. Miller states, we would not have court

decisions such as G.G. v. Gloucester Cnty. Sch. Bd., No. 15-54 (E.D.Va.

Sept. 17, 2015). In G.G., a federal court in Virginia declined to issue a

preliminary injunction requiring a school to permit a transgender student to

use the bathroom consistent with the student’s gender identity. The

Department of Justice (DOJ) made nearly identical arguments to those

contained in Ms. Miller’s email. As the court pointed out, federal regulation

34 C.F.R. § 106.33 specifically permits facilities to be assigned based on

“sex,” and the court noted that the DOJ’s position in the case was

inconsistent with this federal law. Considering the context of Ms. Miller’s

email, it is important to note that the court also concluded that federal

agencies such as the DOJ and the Department of Education’s Office for Civil

Rights (OCR) cannot simply create legal standards by changing their

interpretation of existing federal law to protect gender identity. You can

read the G.G. opinion here.

Ms. Miller is correct that the DOJ and OCR take the position that

discrimination on the basis of gender identity is prohibited by federal law.

Ms. Miller cites to OCR “Resolution Agreements” from Downey Unified School

District and Arcadia Unified School Districts and “guidance” issued by the

DOJ and OCR to support the idea that public schools do have heightened

legal obligations regarding gender identity. These “Resolution Agreements”

are essentially settlement agreements between individual schools and the

OCR, in which the OCR has taken the position that the school must permit

the student to use the restroom and locker room facilities consistent with

their gender identity. The DOJ has taken the same position and has come to

similar agreements with employers and other entities.

However, these “Resolution Agreements” are not court cases binding on

Nebraska schools. These are agreements reached with individual schools to

resolve OCR complaints, with the alternatives for schools being lengthy

investigations and lawsuits aimed at stripping schools of federal funding. As

the Virginia court noted, there are no new laws, just new interpretations. In

response, at least one school is pushing back against the OCR. An Illinois

district is refusing to comply with an OCR directive to permit a transgender

female student to use the female locker room. We are monitoring this case

as it progresses, but it illustrates the point that the law is not clear and that

OCR’s interpretation is not the same as law.

In summary, the law on the issue gender identity and the obligations of

public schools is far from settled. It is true that the DOJ and OCR may deem

your school in violation of federal law if a complaint is filed and you do not

follow their interpretations. It is also true that the DOJ, OCR, and/or ACLU

may file a lawsuit against your district if you do not accept their position.

Under this threat of litigation, the ACLU suggests that your school consider a

policy, much like the NSAA is considering an activity participation policy.

You are not required to establish a formal policy, nor do we

recommend it to our clients at this time. Policies should be clear and simple,

and the law surrounding gender identity is anything but clear and simple.

The law in this area is evolving so frequently that any policy enacted by a

school, regardless of its stance on gender identity, could directly invite

litigation or establish obligations on the district which simply are not

required by state or federal law.

There is an alternative course. We know that school boards, administrators,

and staff strive to treat everyone with respect and provide a top quality

education to all students. We believe school districts are acting completely

appropriately and within the existing legal framework by addressing these

matters on a case-by- case basis, without adopting formal policies. Boards

are certainly free to pass policies regarding gender identity as the ACLU

suggests, but we strongly encourage boards and administrators to

collaborate with legal counsel on all matters involving transgender students

and staff, especially if your board is inclined to pass a policy.

If you have questions or concerns about these or any related issues, we

recommend that you consult with your school district’s attorney or call

Karen, Steve, or Bobby.

Reggie Jackson Ain’t Got Nothing on Us! In Nebraska, October Means it’s Time for Negotiations

As Major League Baseball enters the postseason, school boards and

administrators in Nebraska need to prepare for an event of a different sort.

School boards should be using October to get ready to negotiate contracts

with their local teachers' unions. Boards of education, administrators, and

teachers should move quickly to work through the negotiations process for

the 2016-17 school year.

The Nebraska education community is growing more comfortable with the

statutory timelines for negotiations, but it is still worthwhile to review the

dates. Board and teacher associations are obligated to begin negotiations

for the 2016-17 contract year by November 1, 2015. This year November 1 st

falls on a Sunday, so we are urging boards to schedule their first

negotiations session no later than the week of October 26. You have only

until February 8 th (100 days from November 1 st ) to finish negotiations. This

means that if you have your school board meetings on the second Monday of

the month, you could wait until your February board meeting to have a draft

agreement ready for board approval. We believe the better practice is to

have the proposed agreement ready for submission to the board at its

regular January board meeting. If the board and association cannot reach

agreement by February 8 th , they must be ready to submit the matter to a

resolution officer.

Recommendations. With all this in mind, we recommend the following:

 Beat the Negotiation Deadline. We strongly encourage boards to

conclude negotiations and have a tentative agreement in place no

later than the scheduled winter break and to ratify the agreement at

the regular January board meeting. Why the urgency? The 100 day

time period includes the Thanksgiving, Christmas, and New Year's

breaks.

 Review Your Entire Negotiated Agreement. Sometimes boards of

education focus on base salary to the detriment of other important

issues. This is the perfect time of year to review your entire contract

for provisions which are poorly-written, unclear, or unwise. Few

school district cases go to the Commission of Industrial Relations, but

we deal with the negative effects of poorly-worded collective

bargaining provisions every day. The Nebraska State Education

Association has very strategically focused on bargaining issues like

paid time off and unlimited prior experience across the state. School

boards who are not aware of the unintended consequences of these

sorts of provisions can agree to include them in their agreement only

to regret that decision later.

 Conduct a Comparability Study. We encourage boards to use a

comparability study as part of the negotiations process. A

comparability study allows the board to negotiate from a position of

power and knowledge rather than guesswork and emotion. If your

school district ever goes before a resolution officer or the CIR, a

comparability study will serve as the basis for determining the

ultimate resolution. Nebraska law requires boards of education to pay

their teachers between 98 and 102 percent of the midpoint of their

array. Boards have no way of knowing if they are hitting this

benchmark from year to year if they do not periodically perform a

formal comparability study.

If you have questions or if you do not believe your school district will be able

to comply with these deadlines, you need to obtain professional advice

promptly. We recommend that you consult with your school district’s

attorney or call Karen, Steve, or Bobby.

Transgender Bathroom Lawsuit Dismissed by Federal District Court

Schools across the country are struggling with the best legal and practical

approaches to deal with the needs of transgendered students. One of the

most emotionally-charged issues is which bathroom a transgendered student

should use. A federal district court in Virginia issued a decision last week in

a case in which a transgendered student sued the high school over the

student’s desire to use a specific bathroom. Although this case is not

binding on Nebraska schools, it provides some interesting insights into how

courts are addressing this issue.

The case, G.G. v. Gloucester Cnty. Sch. Bd., No. 15-54 (E.D.Va. Sept. 17,

2015), was filed by the ACLU on behalf of a student who is biologically

female but who identifies as male. The student and mother informed the

school that the student would like to use the boys’ bathrooms at the school.

With permission from school administrators, the student used the boys’

restroom for almost two months. After receiving complaints from some

parents and residents of Gloucester County, the school board adopted the

new policy which limits the use of boys’ and girls’ bathrooms to students of

the “corresponding biological gender.” Under the policy, trangender

students who do not wish to use the bathroom designated for their biological

sex are permitted to use separate unisex bathrooms. The ACLU filed suit

against the school arguing that the school board’s policy excluding the

student from using the boys’ restroom based on gender identity amounted

to sex discrimination in violation of Title IX.

The court dismissed the student’s Title IX claim. The court relied on a US

Department of Education regulation that expressly “allows schools to provide

separate bathroom facilities based upon sex, so long as the bathrooms are

comparable.” The court reasoned that, since schools are allowed to maintain

separate bathrooms based on sex, the school’s policy “did not run afoul of

Title IX by limiting G.G. to the bathrooms assigned to his birth sex.”

Significantly, the court specifically rejected the ACLU’s argument that the

term “sex” could only mean gender identity. Instead, the court ruled that

“under any fair reading, sex in Section 106.33 clearly includes biological

sex.”

The ACLU and the U.S. Department of Justice argued that the school had to

provide the student with access to the boys’ bathroom based on a “Dear

Colleague Letter” which was sent to schools by the Office for Civil Rights.

That letter stated that “Under Title IX, a recipient must generally treat

transgender students consistent with their gender identity in all aspects of

the planning, implementation, enrollment, operation, and evaluation of

single-sex classes.”

The district court flatly rejected the reasoning in that letter. “To defer to the

Department of Education’s newfound interpretation would be nothing less

than to allow the Department of Education to ‘create defacto a new

regulation’ through the use of a mere letter and guidance document.”

In sum, the district court concluded that the school “seeks to protect an

interest in bodily privacy that the Fourth Circuit has recognized as a

constitutional right while G.G. seeks to overturn a long tradition of

segregating bathrooms based on biological differences between the sexes.”

It found that “[b]ecause G.G. has failed to show that the balance of

hardships weighs in his favor, an injunction is not warranted while the Court

considers this claim.”

Obviously this is only one case, and the litigation between schools and

transgendered students will continue. Even this specific lawsuit is not

completely resolved. The student’s claims that the school violated the Equal

Protection Clause of the United States Constitution will continue to be

litigated by the parties, and the ACLU will likely appeal last week’s decision.

Schools should deal with the needs of transgendered students with care and

sensitivity, but it is important for schools to know that the law related to

transgendered students is far from settled.

The Intersection of HIPAA and FERPA

As school attorneys, we are constantly admonishing school staff to be

mindful of their obligation to keep student information confidential pursuant

to FERPA and the IDEA. However, we also frequently encounter confusion

among staff about the Health Insurance Portability and Accountability Act

(HIPAA) on school districts. HIPPA is a federal law which, among other

things, provides the first national privacy law for individual health

information. HIPAA mandates actions that “covered entities” must take to

protect the privacy of an individual’s health information. The U.S.

Department of Health and Human Services (“HHS”) has issued rules to

implement and enforce these privacy requirements. Generally, entities

covered by HIPAA may release or receive “protected health information”

about an individual only if that individual gives permission or the Act

expressly permits its release.

HIPAA defines “covered entity” to mean a health plan; a health care

clearinghouse; or a health care provider who transmits any health

information in electronic form in connection with a transaction covered under

the Act. “Protected health information” is defined as individually identifiable

health information that is transmitted by electronic media; maintained in any

medium meeting the definition of electronic media; or transmitted or

maintained in any other form or medium.

Under a final rule issued by HHS, health information contained within

student educational records that are subject to the Family Educational Rights

and Privacy Act (“FERPA”) is exempt from the requirements of HIPAA. (See

HIPAA, 24 CFR 164.501.) “Educational record” includes individually

identifiable health information of students under the age of 18 created by a

nurse in a primary or secondary school receiving federal funds. In addition,

medical records that are excepted from FERPA’s definition of “education

records” under FERPA section 99.3 are also exempted from coverage by

HIPAA. The HHS reasoned that subjecting districts to both FERPA and HIPAA

requirements as to these records would be confusing and unduly

burdensome. Of course, districts must continue to ensure that these records

are received, maintained and transmitted in a manner consistent with

FERPA.

The regulations suggest that school-based health centers may qualify

as “health care providers.” This will only be an issue where centers are

sponsored by health care entities covered by HIPAA, such as health

departments, hospitals or community health centers. Those entities are

subject to the HIPAA privacy requirements and will be responsible for

compliance. This may result in health information kept in the school district

being treated as FERPA records, and the same information kept in the health

facility being covered by HIPAA.

For example, when a center is performing school health functions or

implementing health mandates on behalf of the school board, and the health

information of students who use the facility are entered into the educational

record, the information is covered by FERPA. Any health care information

that is retained by the health care provider will be covered by HIPAA.

Protected health information that exists only in the office of a health care

provider may not be released to school personnel or other third parties

without parental authorization. Districts may need to coordinate with these

centers in drafting HIPAA-compliant authorizations if the school requires

health information that is produced and available only outside of the school

district. These health care providers will most likely be able to provide

forms for this purpose.

A confusing aspect of HIPAA is whether school nurses who are

employees of the district are subject to HIPAA as “health care providers.”

The regulations are silent on this precise point, but the 2000 regulations

state, “The educational institution or agency that employs a school nurse is

subject to our regulation as a health care provider if the school nurse or the

school engages in a HIPAA transaction.”

Some sources interpret this regulation to mean that school nurses, as

health care providers, are covered entities under HIPAA only if they transmit

health information electronically in connection with a HIPAA transaction. This

language suggests that when a school nurse is not billing electronically but

simply providing care pursuant to an IEP or section 504 plan, the

information generated by the care becomes an educational record covered

under FERPA, but not subject to HIPAA.

Another area of concern is the release of health information relating to

student athletes, as in when an athletic trainer is asked to disclose

information regarding an injury to a player. While it is disputed that such a

disclosure to the coaching staff would violate HIPAA (as FERPA applies), the

safest course is for personnel to refrain from discussing such injuries with

third parties outside the school/district (such as the media) absent a specific

authorization. There is nothing in the regulations, however, that would limit

the trainer from sharing this information with other school staff members.

Student confidentiality is an important legal issue, but staff should not

be so fearful of violating HIPAA that they neglect to adequately share

information with other district staff that could better serve students. If you

have questions, we recommend that you consult with your school district’s

attorney or call Karen, Steve or Bobby.

Teacher Oath of Office and Pledge: to Administer or Not Administer?

School districts across Nebraska have received an email from the ACLU

regarding the pledge contained in NEB. REV. STAT. § 79-8,108. This statute and

NEB. REB. STAT. § 11-101.01, which contains an oath of office for state

employees, both require anyone “paid from public funds for their services,

including teachers and all other employees paid from public school funds” to

take an oath of employment and pledge. Section 11-101.01 also requires

the oaths to be filed with the Department of Administrative Services or the

county clerk.

Section 11-101.01 states in full:

All persons in Nebraska, with the exception of executive and

judicial officers and members of the Legislature who are required

to take the oath prescribed by Article XV, section 1, of the

Constitution of Nebraska, who are paid from public funds for

their services, including teachers and all other employees paid

from public school funds, shall be required to take and subscribe

an oath in writing, before a person authorized to administer

oaths in this state, and file same with the Department of

Administrative Services, or the county clerk of the county where

such services are performed, which oath shall be as follows:

“I, .........., do solemnly swear that I will support and
defend the Constitution of the United States and the
Constitution of the State of Nebraska, against all
enemies, foreign and domestic; that I will bear true
faith and allegiance to the same; that I take this
obligation freely, without any mental reservation or
for purpose of evasion; and that I will faithfully and
impartially perform the duties of the office of ..........
according to law, and to the best of my ability. And I
do further swear that I do not advocate, nor am I a
member of any political party or organization that
advocates the overthrow of the government of the
United States or of this state by force or violence;
and that during such time as I am in this position I
will not advocate nor become a member of any
political party or organization that advocates the
overthrow of the government of the United States or of this state by force or violence. So help me God.”

— NEB. REV. STAT. § 11-101.01.

Section 79-8,108 states in full:

All persons engaged in teaching in the public schools of the State

of Nebraska and all other employees paid from public school

funds, shall sign the following pledge:

“I, .........., do believe in the United States of America
as a government of the people, by the people, for
the people; whose just powers are derived from the
consent of the governed; a democracy in a republic;
an indissoluble nation of many sovereign states; a
perfect union, one and inseparable; established upon
those principles of freedom, equality, justice and humanity
for which American patriots sacrificed their lives and fortunes.
I acknowledge it to be my duty to inculcate in the
hearts and minds of all pupils in my care, so far as it
is in my power to do, (1) an understanding of the
United States Constitution and of the Constitution of Nebraska,
(2) a knowledge of the history of the nation and of the sacrifices
that have been made in order that it might achieve its present
greatness, (3) a love and devotion to the policies and institutions
that have made America the finest country in the
world in which to live, and (4) opposition to all
organizations and activities that would destroy our
present form of government.”

— NEB. REV. STAT. § 79-8,108.

The Oath and Pledge are Probably Unconstitutional, if Required.

As you can see, both statutes require a signed document. It’s an “oath” for

purposes of section 11-101.01 and a “pledge” for section 79-8,108. If you

have never administered, signed, or even heard of these things, you are not

alone. In fact, it has long been our position that requiring all school

employees to comply with these laws probably violates the United States

and Nebraska Constitutions. At a minimum, as the ACLU mentions, you may

face litigation if you force employees to comply.

Although Nebraska does not have a Nebraska Supreme Court case

interpreting the constitutionality of the oath, the ACLU correctly notes a

Lancaster County District Court case in line with the U.S. Supreme Court and

several other state and federal courts which have decided the issue. For

example, in Nicholson v. Board of Comm’rs, 338 F. Supp. 48, 56 (M.D. Al.

1972), a federal court in Alabama held that the phrase “So help me God”

administered in an oath “infringes upon the free exercise clause of the first

amendment.” Likewise, in Vogel v. County of Los Angeles, 68 Cal. 2d 18,

(Cal. Sup. Ct. 1967), the California Supreme Court held that an oath violated

the First Amendment where it required the promisor to swear he or she was

“not a member of any party or organization, political or otherwise, that now

advocates the overthrow of the Government of the United States…by force

or violence or other unlawful means . . . .”

These cases are just a few examples of numerous courts which have

invalidated oaths and pledges like those found in sections 11-101.01 and 79-

8,108. A Nebraska court would likely find these laws to be unconstitutional,

as well. However, we do believe that a school employee is entitled to take

the oath if they so choose. Denying an employee to right take the oath

might well violate the employee’s First Amendment rights. See Newdow v.

Roberts, 603 F.3d 1002, 1006 (D.C. 2010) (holding that President Obama

had a “First Amendment right” to conclude his Oath of Office with “So help

me God.”).

I read in the news that other attorneys are telling schools to

require the oath and pledge, so what should we do?

There is no known consequence for failing to administer the oath, and we believe

requiring it would almost certainly subject your school to litigation as noted

in the ACLU email to Nebraska schools. If you have an employee who requests to take

the oath, you should let them.

Some schools and the State Board of Education have been faced with

patrons demanding that the oaths be administered, and we certainly

understand the strong feelings expressed by those who support such an oath

and pledge. We likewise understand the rationale behind following

mandates created by statute, even if they are “dead laws” which probably

are not constitutional. However, following the law merely buys you an

argument in a lawsuit—it does not prevent an employee or the ACLU on their

behalf from suing the district. While we don’t want to seem unpatriotic and

understand that board members and administrators don’t want to be labeled

a “communist,” we believe the ACLU has the law on their side.

In the end, this is a board decision. As you may recall, Commissioner

Blomstedt sent out a Memo to schools on May 11, 2015, in part bringing

section 79-8,108 to the attention of Nebraska districts. As the

Commissioner noted, this is a decision to be made within each district.

Boards are entitled to weigh the consequences of requiring the oath and

pledge versus not requiring them.

If you have questions, we recommend that you consult with your

school district’s attorney or call Karen, Steve or Bobby.

SPED Show Choir

K.S. was a 16 year-old biracial student who was diagnosed with Asperger

Syndrome, obsessive compulsive disorder, mood disorder, adjustment

disorder, and Tourette's syndrome. These diagnoses significantly affected

K.S.'s communication, socialization, and behavior. In addition, K.S. had a full

scale IQ of 123, excelled in math and science, successfully took several

advanced placement classes, and was involved in extracurricular activities

including show choir, the school musical, and volleyball.

As a result of her diagnoses, K.S. was identified as an individual with a

disability under the IDEA, and received special education and related

services under an individualized education program (“IEP”) during her

freshman and sophomore years. She participated in an autism spectrum

disorder (ASD) program, was provided with a one-on- one paraprofessional

for the entire school day, could return to the ASD classroom any time during

the school day, and also could use the ASD classroom to take tests in a quiet

environment. Despite her social difficulties, K.S. was able to stay in the

general education setting most of the day and ranked near the top ten

percent of her class.

K.S. was raped during the 2011-12 Christmas break. K.S.'s mental health

providers recommended getting her back into a routine as quickly as

possible. K.S. returned to class in January 2012 and participated in the

school’s junior high show choir. Due to the circumstances, K.S.’s mother

agreed to postpone the annual IEP review scheduled for January. An interim

IEP was put in place that included several additional accommodations to

ease K.S.'s transition back to school after the rape. The interim IEP was

reaffirmed in February. The parties planned to conduct a full IEP review in

September 2012 after everyone had a better understanding of how K.S. had

recovered from her traumatic experience.

K.S. experienced several difficulties in the spring semester. She reported

that a student held a knife to her throat and threatened to cut her. The

matter was investigated, and the student was admonished. Later that

spring, K.S. slapped a student and used foul language because the student

tapped her to get her attention. An IEP meeting was held in May, and

wording was added to the IEP to add paraprofessional support for K.S.’s

extracurricular activities. The next setback for K.S. occurred when she was

not selected for varsity or junior varsity show choir, scoring 62nd out of 100

girls.

K.S.’s bat-shit- crazy mother filed a civil rights lawsuit against the school

district, claiming K.S. was excluded from the show choir because of her

disability and race. In an attempt to end the dispute, the district offered to

place K.S. in the junior varsity show choir. The mother rejected the offer. A

hearing was held, and the district court rejected the mother’s request for a

temporary restraining order and preliminary injunction. The district court

found there was no evidence that the decision regarding show choir had

anything to do with K.S.'s disability or race. Nonetheless, in an effort to

resolve the case before it proceeded to IDEA litigation, the school again

offered to reinstate K.S. to the junior varsity show choir. The mother again

refused the offer.

K.S. last attended school May 18, the day the show choir results were

publicized, and she eventually took her final exams off-campus. K.S.

attended every volleyball summer conditioning session in June, July, and

August, during which she got along well with coaches and students.

An IEP meeting was held on August 16. K.S.’s mother spent most of the

meeting presenting information to support her claim that K.S. must be

placed in the varsity show choir. The mother insisted that K.S.’s

participation in varsity show choir was a necessary prerequisite to attend

school in the fall. However, the IEP team determined that K.S.'s needs for

social skills, physical activities that reinforce skills, consistent routines,

regular schedule, and challenging academic courses could be met in ways

other than her being placed in the varsity show choir.

The mother withdrew K.S. from the public school and filed a due process

complaint seeking tuition reimbursement for placement at a private school.

The administrative law judge found in favor of the school district, and the

mother appealed to the Eighth Circuit.

The court indicated that in order to get reimbursement for a private

placement, two requirements must be established: that the school failed to

provide a FAPE; and that the private school is an “appropriate” placement

within the meaning of the IDEA. In addition, the school is not required to

provide an optimal experience for a student with a disability, but instead

must simply provide the student with a FAPE consistent with the IEP.

The mother claimed that the district did not conduct a genuine review in

August 2012 to address K.S.'s needs for the upcoming school year,

essentially claiming that the district “recycled” the old IEP. The court

rejected this claim. The court said that the IDEA does not require officials to

revise the IEP on an annual basis; they simply must review it. Additionally,

the school district had not neglected its duties. Despite the parties agreeing

to postpone the annual review until the fall of 2012, the IEP was reviewed in

February and reviewed and revised in May to address concerns that had

arisen.

The mother argued that the emotional changes that K.S. underwent from

January 2012 to August 2012 required more than minor changes to the IEP.

The school district responded that the IEP team worked closely with K.S.'s

medical team and implemented the team's recommendations and advice

that K.S. remain in as consistent a routine as possible during the aftermath

of the rape. The school district also pointed out that the real reason that

K.S. withdrew from school was due to the show choir decision.

The mother also argued that he court must find in her favor “because she

presented a consensus of medical and psychological experts at the due

process hearing, while the school only presented district employees such as

the paraprofessional, the special education director, and the principal.” The

court said: “The district employees did not attempt to give inappropriate

medical testimony about K.S.; instead, they offered professional

observations based upon actual and ongoing contact with K.S. regarding her

educational and social performance in a variety of school settings.” The

court rejected her request to rule in her favor “simply based on the sheer

number of experts she compiled compared to the district.”

The court was not fooled by the mother’s attempt during the appeal to focus

on the content of the IEP and whether the district was meeting K.S.’s needs

with the IEP. The court noted that the mother spent a “substantial portion”

of the August IEP meeting advocating that K.S. be placed in varsity choir

rather than advocating for any specific substantive changes to the IEP. “[I]t

is abundantly clear from reading the entirety of the administrative record

that [the mother]’s focus, until the time she unilaterally pulled K.S. from the

district, was getting K.S. into show choir—and not just any show choir, as

the district made an unconditional offer in July 2012 to place K.S back into

the [junior varsity] show choir. The case was litigated in federal district

court in a quest for a TRO, and at the school district level, with the nearly

singular focus that K.S.'s educational needs could only be met by placing her

in the Happiness show choir.”

The court found that because the IEP advanced by the district was providing

K.S with “some educational benefit” as of August 2012 when the mother

unilaterally removed her from the district, the mother failed to prove that

the district was not providing K.S. a FAPE at that time. “Given all of the

opportunities and resources available to K.S. via the IEP and other

extracurricular activities at Kennedy, we find that the district's refusal to

override the show choir audition process and unilaterally require the show

choir director to place K.S. in the Happiness show choir did not deny K.S. a

FAPE.”

When Can Reporting Suspected Child Abuse Create Legal Liability for the School?

All education professionals know that they are legally obligated to

report suspected child abuse or neglect to child welfare authorities.

Although we encourage schools to report abuse whenever they have

reasonable cause to believe it has or will occur, you should make sure that

you are not making a report in retaliation for parents’ advocacy on behalf of

their disabled children. Two recent cases show the difference between

permissible and retaliatory reporting.

In Wenk v. O'Reilly, 115 LRP 16032 (6th

Cir. 2015), a federal court held that a

school administrator could be sued after

she reported the father for suspected

child abuse. After a hostile IEP meeting,

the special education director sent an e-

mail to other educational members of the

student’s team saying that she hoped

“we have laid groundwork for future

meetings that will help eliminate his long

time assumption that"what he wants; he

gets," and speculating that the father

was “purposely removing his email

access as a way to force us to spoon feed

[him] information". After the meetings,

the father called the state department of

education to discuss his concerns about

his daughter’s IEP. The special education director then called state child

welfare officials and reported that the father was "unkempt" that staff

members had described the father as "creepy" and that he made their "skin

crawl" they were "fearful of meeting him", and that from her observations,

he was "verbally aggressive, bullies other staff and becomes upset when

things don't go his way". The special education director told the state

officials that "as aggressive as dad is at school and with staff, [she] can't

imagine him acting any different at home".

The father filed suit against the special education director claiming that

she called the state to retaliate against him for his advocacy on behalf of his

child. The special education director filed a motion to dismiss. The Court

held that the lawsuit could proceed. The judges explained that a report of

child abuse qualifies as retaliation under the First Amendment if the parents'

advocacy plays any role in the decision to report. The court pointed out that

the administrator's critical comments about the father in emails that she

sent to other district employees after IEP meetings suggested that she

"harbored animus" toward him. "Although [the administrator's] report did

contain some true allegations, the facts taken in the light most favorable to

[the parents] suggest that she embellished or entirely fabricated other

allegations, including those that most clearly suggested sexual abuse" the

court concluded.

In contrast, Smith v. Harrington, 65 IDELR 95 (N.D. Cal. 2015)

provides an example of a school that was found not to have retaliated

against a special education parent after he filed multiple complaints about

disability harassment.

According to the district's records, the parent angrily reacted to a

classmate's mother taking candid photos, "burst" into district offices in an

aggressive manner, and interrupted another child's IEP meeting in the

school library to yell at the principal.

The reports by the principal and the school psychologist also showed

that they had a good basis for their concern about the student. When the

father would engage in angry and paranoid behavior, it would distress the

student, causing her to begin cowering on the floor to avoid her father.

Educators walk a fine line in reporting suspected abuse or neglect by a

special education parent. Recent state and national cases have caused some

law enforcement agencies to urge reporting upon any suspicion, while

lawsuits like these demonstrate the other side of this difficult area. If you

suspect abuse and do not report it, you have violated NEB. REV. STAT. § 28-

711. However, your motivations for filing the report matter: if you are

motivated even in part by a desire to get back at a parent who is making

your life difficult, you could be found to have violated the parent’s civil

rights.

There is lawsuit pending in Nebraska regarding teachers’ obligations

under the reporting statutes. The North Platte Education Association filed

suit against North Platte Public Schools regarding the district’s practices and

procedures for contacting administrators and parents before making a report

to HHS or law enforcement. While the lawsuit is still in the beginning

stages, the underlying issues make it one worth monitoring over the next

school year. Of particular interest to us is the involvement of the NSEA and

its legal counsel. While this is a unique case with other issues at the

forefront, it highlights the importance of the reporting requirements for

everyone involved in the educational process.

With any special education issue, especially those involving reporting,

it is always better to find out the answer before you take action. Feel free to

contact Karen, Steve or Bobby or your school district's attorney to be sure

that your district is complying with IDEA and Rule 51 of the Nebraska

Department of Education.