Labor Code doesn’t require Cal State to reimburse employee expenses

The Labor Code provisions on employee expense reimbursements don't apply to California State University because no specific wording says so, a Los Angeles judge ruled Wednesday.

Superior Court Judge David S. Cunningham III sustained without leave to amend the university's demurrer against a professor's proposed class action seeking reimbursement for the expenses of working from home during the COVID shutdown.

"Defendant argues that it is a public entity with broad sovereign governmental powers to address matters of employee allowances and expense reimbursement. Defendant also argues that Section 2802 is silent as to its applicability to public employers, and [ ...] should not apply to defendant in this case," Cunningham wrote in a tentative ruling he adopted after arguments.

"The defendant made the argument that they were different from a regular agency, so the Labor Code did not apply to them," said Beth Gunn, who represented the plaintiff along with Gunn Coble LLP partner Catherine J. Coble.

Cal State was represented by Julie R. Trotter and Jacqueline M. Beaumont of Call & Jensen, who were unavailable for comment.

Cunningham wrote that the plaintiff's argument runs "contrary to well-established principles of statutory construction. A traditional rule of statutory construction is that absent express words to the contrary, governmental agencies are not included within the general words of a statute. The Labor Code applies only to private sector employees."

Plaintiff Patrick Krug, a doctorate holder and professor, is also represented by Jennifer R. Kramer and Robert A. Hennig from Hennig Kramer Ruiz & Singh LLP.

The complaint argued the board of trustees of the California State University failed to reimburse its employees for their expenses incurred by required working from home and stated that "due to COVID-19, since March 16, 2020, the plaintiff class members worked and continue to work from home, including being ordered to teach all classes from home using remote computer technology. They have been denied access to their workplace offices and work-provided computers and campus provided internet." Patrick Krug, Ph.D. v. Board of Trustees of the California State University 21STCV14538 (L.A. Super. Ct., filed Apr. 16 2021).

The expenses include electricity, postage, internet service charges, use of personal phones, office supplies, chairs, computers, printers and more which "were not reimbursed by defendants in violation of California law, including Labor Code Section 2802," according to the complaint.

Kramer argued at the hearing that Cal State should be expected to act in compliance with both the Education Code and Labor Code.

Gunn commented, "The concern would be that if CSU's argument succeeds, what it does is give them permission to violate the Labor Code. We do not think that is the correct outcome. I think that would be a really negative outcome."

Cunningham also sustained the demurrer on the civil penalties under the Private Attorney General's Act.

Trotter said in the hearing that "the PAGA claims are derivative. If the plaintiff cannot maintain his first cause of action against CSU, the defendant cannot be considered a violator."

Kramer mentioned after the ruling was confirmed the next step would be to file an appeal.

"If we don't succeed we will appeal. CSU is a huge employer and to give them permission to violate Labor Code seems a really bad outcome for a very large number of people. Teachers already do not get paid enough. They should not have to pay out of their pockets to perform their duties," remarked Gunn before the hearing.