Ohio Attorney General Issues Opinion on Property Valuation Settlements

The Ohio attorney general recently published an opinion that addressed several questions regarding property valuation settlements when property owners and boards of education contest an auditor’s value (O.A.G. No. 2018-011).

A party such as a board of education or a property owner who contests an auditor’s property valuation will begin by filing a complaint with the board of revision. A party who disagrees with the requested valuation may file a counter-complaint. While the complaint is pending before the board of revision, the complaining parties may enter into a settlement agreement, either dismissing the complaint or stipulating to an agreed property valuation, both of which options may be accompanied with a payment from the property owner to the board of education.

The attorney general’s opinion answered four questions raised by the Stark County prosecuting attorney, all of which used the same hypothetical property valuations:

  • The county auditor values a property at $400,000.
  • The local board of education files a complaint to increase the property valuation to $550,000.
  • The property owner files a counter-complaint to reduce the valuation to $350,000.

Scenario 1

In the scenario in the first two questions, the board of education dismisses the complaint in exchange for a one-time payment of $5,000. In their simplest form, the questions arising from this scenario are as follows:

  1. Is this scenario permissible?
  2. If so, may a board of revision require disclosure or approval of the settlement agreement as a condition for the board of education to dismiss the complaint?

The short answer to question 1 is yes, this is permissible. The attorney general explained that a board of education may voluntarily dismiss a pending complaint. Furthermore, a board of education has the authority to enter into a settlement agreement. This includes the terms of the settlement – in this scenario, receiving a payment in exchange for dismissing the complaint.

In answer to question 2, the attorney general noted that a board of revision has no authority to require a party to disclose the settlement agreement, nor to require the board of revision’s approval of the settlement agreement, as a condition for the board of education to dismiss the complaint.

Scenario 2

In the scenario in the final two questions, the board of education and the property owner agree to a property value of $450,000, which is halfway between the differing valuations of the board of education ($550,000) and the property owner ($350,000). Provided the board of revision agrees to the stipulated value, the property owner will then pay the board of education a one-time payment of $2,500. The questions arising from this scenario are as follows:

  1. Is this scenario permissible?
  2. If so, prior to the board of revision’s approving the stipulated value, may a board of revision require disclosure of the payment arrangement and consider that arrangement when determining whether to approve or reject the stipulated value?

Again, the short answer to question 3 is yes. A board of education may agree to accept payment from a property owner in exchange for stipulating to a certain property value. Stipulations are common tools that litigating parties employ. However, only the county auditor and board of revision have the authority to determine a property’s valuation. Therefore, although a board of education and a property owner may stipulate to a particular valuation, the board of revision must approve the valuation.

Question 4 is whether the board of revision may require disclosure of the payment arrangement and consider that arrangement when deciding whether to approve the stipulated property value. To determine the property value, the auditor considers not only the land and the improvements to the land, but also the present use of the land and the best probable use of the land. These factors include such things as supply and demand, financing, time and cost of development, and many others – all of which are physical and geographic characteristics. These considerations do not include any agreed payment amount between a board of education and a property owner. Therefore, a board of revision may neither require the disclosure of any such payment nor consider such payment in making a decision on the stipulated property valuation.

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Clients of Ennis Britton receive our School Law Review newsletter, in which we address what this OAG opinion means for school districts in Ohio.

First Amendment Free Speech Rights: Can Student Athletes #TakeTheKnee?

During a speech in Alabama on September 22, President Trump made some comments that provoked a number of professional athletes to kneel or sit – or even stay in the locker room – during the national anthem on Sunday’s NFL games. In a nutshell, Trump said that NFL owners should fire their players who disrespect the U.S. flag. This statement generated repercussions among professional athletes, who enjoy the same constitutional rights to freedom of speech that others in the country enjoy. Kneeling during the national anthem (which gained the hashtag #TakeTheKnee on Twitter), although not verbal speech, is a form of nonverbal speech or expression that is protected under the First Amendment.

Whereas the U.S. Constitution provides the U.S. government with certain powers, the Bill of Rights restricts those governmental powers by providing people within the United States with the named rights, such as freedom of speech. Therefore, constitutional rights must be honored by governmental actors, including public school districts. Because the NFL is not a public employer, it does not have a constitutional obligation to allow these freedoms.

Public school districts, however, are governmental actors. Because the government must allow constitutional rights, our question then becomes, do student athletes have the same constitutional rights to freedom of speech? Or more simply, can student athletes #TakeTheKnee?

Participation in extracurricular activities is a privilege and not a right protected by law. Under Ohio law, boards of education are permitted to adopt a policy authorizing district employees who coach a pupil activity program to prohibit a student from participating in the program under conditions of the policy. Such conditions may include requirements such as maintaining a certain minimum grade point average or acting in a manner that does not bring discredit or dishonor upon the school. If a student violates the policy, he or she may be removed from the activity program without due process requirements.

A school may not impose a condition that violates a student’s constitutional rights. Although students do not necessarily have the same constitutional rights in the school as they do in public, they do not lose their constitutional rights when they enter the school building.

The Third Circuit Court of Appeals once heard two separate court cases centered on free speech rights of the First Amendment. In both cases, students were disciplined for off-campus social media posts. The court issued two opposing opinions on the same day in these two similar cases. This led to the full court panel rehearing the two cases. The full panel held that the speech was protected by the First Amendment in both cases. The takeaway from these cases is that courts are often willing to protect a student’s free speech rights – even if the speech is offensive and hurtful – if a school cannot prove that the speech sufficiently disrupted the educational process.

In the 1969 landmark case Tinker v. Des Moines Independent Community School District, the U.S. Supreme Court heard a case regarding whether students’ political actions would be protected under the free speech clause of the First Amendment. Several students wore black armbands in protest of the Vietnam War, despite the school’s policy prohibiting students from wearing these armbands. The Court held that the students’ wearing these armbands was considered protected speech under the First Amendment and declared the school’s policy unconstitutional. The Court noted that this action led to no disruption of or interference with the educational environment.

Going back even further, the U.S. Supreme Court issued an opinion on Flag Day (June 14) in 1943 that a state may not compel unwilling school children to salute and pledge allegiance to the flag of the United States. Furthermore, any discipline brought on by “an act of disrespect, either by word or action” was also prohibited. Ohio even has a statute (R.C. 3313.602) that states that no student shall be required to participate in the pledge of allegiance.  The bottom line is that schools may not require students to participate in acts of patriotism, such as recitation of the pledge of allegiance or participation in a certain manner during the national anthem.

Federal Court Blocks New FLSA Overtime Rule

A federal judge in Texas has granted a nationwide temporary injunction in response to a lawsuit filed by 21 states, including Ohio, to challenge the new Fair Labor Standards Act (FLSA) overtime rule. The court agreed with the plaintiff states that the new rule could cause irreparable harm if it was not stopped before it was scheduled to go into effect on December 1, 2016, saying that the Department of Labor (DOL) exceeded the authority it was delegated by Congress in issuing this overtime rule.

Under the new overtime rule, “white collar” salaried employees not otherwise exempt from overtime pay would be eligible for overtime pay if their weekly salary is less than $913, which equals $47,476 when calculated on an annual basis – doubling the previous salary threshold.

Although application of the new rules has been stayed, school districts should continue to track eligible employees’ hours and maintain meticulous payroll records. They should also require that employees submit time records.

Districts should be mindful that the new rule would affect only the salary threshold component of the overtime-exemption test – a two-part test that requires that employees meet the salary threshold as well as perform duties that are exempt under FLSA. Therefore, employees who meet the lower salary threshold ($23,660 annually) must also perform exempt duties for the overtime exemption to apply. Employees who perform nonexempt job duties are eligible for overtime regardless of their salary.

Ennis Britton attorneys are available to help with any questions regarding the overtime rule, the injunction, which employees are affected, how to maintain payroll records, and how the two-part salary–duties test applies.

Proposed Legislation to Address Student Threats of Violence

Senate Bill 297 was proposed by Senator Jim Hughes on March 21, 2016. This Bill seeks to amend Ohio’s student discipline statutes to address threats of violence made by students.
The proposed Bill would allow a board of education to adopt a resolution to permit a superintendent to expel a student for up to 60 days for “communicating a threat to kill or do physical harm to persons or property” if all of the following conditions are met:

  • The threat is communicated verbally or in writing, in person or via telephone, computer, or with another electronic communication device; and
  • The threat is made against persons or property at a school, on a bus, at an athletic competition, extracurricular event, other program or activity sponsored by the school district or in which the district participates, or at any other property controlled by the board of education; and
  • The student engaged in “conduct that constitutes a substantial step in a course intended to culminate in the commission of the threatened act, as determined by the superintendent in consultation” with law enforcement.

As a condition to reinstatement from expulsion, the board of education can require the student to undergo an assessment to determine whether the student poses a danger to himself/herself or to others. The superintendent may extend the expulsion for not more than one calendar year if the student fails to undergo the assessment.
A student expelled under this Bill can only be reinstated if the superintendent determines that the student has shown sufficient rehabilitation.

Another provision in this Bill allows a board of education or law enforcement agency to file a civil action seeking recovery for restitution from the parent, guardian, or custodian of a student who is expelled under this Bill. Restitution sought is for the costs of the school district or law enforcement agency that are incurred with the student’s conduct that gave rise to the expulsion.
This Bill was just recently introduced and must make its way through the legislative process before it becomes law. We will continue to keep our clients updated on its status.

The U.S. Supreme Court Hears Oral Arguments In Case to Decide Legality of Fair Share Fees

The U.S. Supreme Court heard oral arguments on January 11th in an important case that could eliminate union “fair share fees” and make every state in the country a “right to work” state.

The case was initially filed in California and involves a group of teachers who decided not to join the teachers’ union.  It is interesting to note that the case has almost no factual record. This is because the teachers admitted that the lower courts did not have the authority to decide in their favor in light of the U.S. Supreme Court’s 1977 decision in Abood v. Detroit Board of Education, 431 U.S. 209 (1977).  They requested that the lower courts rule against them so the case could be presented directly to the Supreme Court.

It was somewhat surprising that the Supreme Court even agreed to hear the appeal because it previously approved fair share fees in the Abood decision.  We thought this might be an indication of the Court’s willingness to overturn its Abood decision and prohibit mandatory fair share fees.  Our initial thinking was further bolstered yesterday by the tough questions posed by the Court to the union at oral argument. For instance, Justice Kennedy, who often serves as a swing vote, said:

“The union basically is making these teachers compelled riders for issues on which they strongly disagree.  Many teachers think that they are devoted to the future of America, to the future of our young people, and that the union is equally devoted to that, but that the union is absolutely wrong in some of its positions.   And agency fees require, as I understand it, correct me if I’m wrong, agency fees require that employees and teachers who disagree with those positions must nevertheless subsidize the union on these very points.”

Ohio law (R.C. 4117.09) permits fair share fees if the public employer and union have agreed in a collective bargaining agreement to require fair share fees as a condition of employment.  A ruling in this case against the union will have huge implications for Ohio’s public sector unions.  If the Court rules in the favor of the non-union teachers, it would declare that it is unconstitutional for a state to allow public sector unions to charge a mandatory fair share fee to non-members.  This would likely mean that non-members could not be forced to pay a fair share fee if they do not agree to pay the fee, which would obviously have a negative impact on the revenue of unions and could lead to more resentment from union members against non-members (or so-called “free riders” as they are often referred to).

A decision in this case is expected later this summer. We will continue to monitor any developments and will update our clients as soon as the decision is announced.

Friedrichs v. California Teachers Association (Case No. 14-915).

UPDATE:

The U.S. Supreme Court announced on March 29th, 2016 that it was deadlocked with a 4-4 decision on a case brought before it to challenge the practice of public employer unions collecting fair share fees.

Initially filed in California by a group of teachers who decided not to join the union, the case served as a direct challenge to a well-recognized U.S. Supreme Court decision from 1977, Abood v. Detroit Board of Edn., which declared fair share fees legal.

Many interpreted the Supreme Court’s decision to hear the case as an indication that Abood may be overruled given the Court’s more conservative composition. However, the death of Antonin Scalia, who presumably would have provided the swing vote to overturn Abood, passed away before the decision was rendered.

A split decision in this case means that, at least for now, Abood remains good law and the practice of fair share fees will continue. This is a decisive victory for unions across the nation, although representatives from both sides have indicated that they may request a rehearing on the matter.