Ass'n for L. A. Deputy Sheriffs v. Cnty. of L. A.

• Decision Date: 29 January 2021
• Docket Number: B296425
• Citation: 274 Cal.Rptr.3d 493,60 Cal.App.5th 327
• Court: California Court of Appeals Court of Appeals
• Parties: ASSOCIATION FOR LOS ANGELES DEPUTY SHERIFFS, Plaintiff and Appellant, v. COUNTY OF LOS ANGELES, Defendant and Respondent.

60 Cal.App.5th 327

274 Cal.Rptr.3d 493

ASSOCIATION FOR LOS ANGELES DEPUTY SHERIFFS, Plaintiff and Appellant,

v.COUNTY OF LOS ANGELES, Defendant and Respondent.

B296425

Court of Appeal, Second District, Division 8, California.

Filed January 29, 2021

Rains Lucia Stern St. Phalle & Silver, Jacob A. Kalinski, Santa Monica, and Brian P. Ross, Dublin, for Plaintiff and Appellant.

Miller Barondess, Mira Hashmall, Los Angeles, Andrew H. Dubin and Emily A. Sanchirico, Los Angeles, for Defendant and Respondent.

GRIMES, Acting P. J.

SUMMARY

The Association for Los Angeles Deputy Sheriffs (ALADS) sought a writ of mandate and declaration that a provision of the memorandum of understanding (MOU) between ALADS and the County of Los Angeles is unenforceable, on the ground it violates wage garnishment law and the Labor Code. In the provision at issue, the parties agreed on how paycheck errors would be corrected, including how overpayments to employees would be recovered by the county.

The trial court sustained the county's demurrer to the petition on the ground ALADS did not exhaust administrative remedies. We follow the analysis in an appellate case decided after the trial court's ruling in this case and conclude ALADS's administrative remedies are inadequate, so dismissal on that ground was improper. ( Association for Los Angeles Deputy Sheriffs v. County of Los Angeles (2019) 42 Cal.App.5th 918, 256 Cal.Rptr.3d 139 ( ALADS 2019 ).) We further conclude, however, dismissal was proper because ALADS's petition does not state valid claims against the county. The home rule doctrine gives the county the exclusive right to regulate matters relating to its employees’ compensation. The county's MOU with ALADS, approved by the board of supervisors, is a lawful exercise of that exclusive right, and the Labor Code provision at issue does not apply to a charter county. Consequently, ALADS cannot allege sufficient facts to state a cause of action.

FACTS

ALADS is the recognized employee organization that represents sworn nonmanagement peace officers employed by the Los Angeles County Sheriff's Department. An MOU sets forth the understanding of ALADS and the county "regarding the wages, hours and other terms and conditions of employment" of the covered employees.

Article 18 of the MOU governs "Paycheck Errors," including both "Underpayments" (part A) and "Overpayments" (part B). The "Overpayments" provision states: "1. Employees will be notified prior to the recovery of overpayments. [¶] 2. Recovery of more than 15% of net pay will be subject to a repayment schedule established by the appointing authority under guidelines issued by the Auditor-Controller. Such recovery shall not exceed 15% per month of disposable earnings (as defined by State law), except, however, that a mutually agreed-upon acceleration provision may permit faster recovery."

In April 2012, during conversion to a new payroll system, the county failed to apply an agreed-upon cap to certain bonus payments. This error resulted in salary overpayments to 107 deputies.

In May 2017, the county sent letters to the overpaid deputies, informing them of the overpayment, and giving them two repayment options: remitting payment in full, or repaying the amount through payroll deductions at a specified rate. A spreadsheet was enclosed with each letter, specifying the amounts overpaid, "dating back, in some cases, to April 2012."

ALADS's counsel wrote to the county, asserting the actions described in the May 2017 letters were unlawful. After a meeting, the county sent letters suspending its efforts to collect funds for 90 days so the parties could discuss a potential resolution. Apparently there was none, and on April 2, 2018, the county sent new letters stating it would deduct the overpayments as described in the May 2017 letters.

Beginning on May 15, 2018, the county began the paycheck deductions as described in the May 2017 and April 2018 letters.

Meanwhile, on April 19, 2018, ALADS filed its initial petition. After the trial court sustained a demurrer to ALADS's first amended petition, ALADS filed the operative second amended petition, alleging the facts we have described. Further, the petition alleged that, "[o]ut of an abundance of caution," grievances had been filed on behalf of the affected employees, challenging the unilateral deductions "in order to prevent the waiver of rights in the event that it was later determined that such actions were subject to the grievance procedure in the MOU."

The first and second causes of action, seeking declaratory relief and a writ of mandate, challenged the lawfulness of the county's deductions and sought to compel the county to comply with state laws and statutes of limitations. ALADS alleged the wage garnishment law ( Code Civ. Proc., § 706.010 et seq. ) provided the exclusive procedure for withholding an employee's earnings, and those earning are exempt from prejudgment attachment (§ 487.020, subd. (c)).

ALADS further alleged the deductions violated Labor Code section 221, which makes it unlawful "for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee." The petition alleged the MOU "does not and could not lawfully authorize Defendants to unilaterally deduct from [the employees’] wages in order to recoup alleged overpayments." In the event the court were to hold otherwise, the petition alleged, the county failed to demonstrate that any amounts had been overpaid; in cases dating back to April 2012, a three-year statute of limitation applied and had expired; and the overpaid employees were entitled to offsets for overpaid taxes. The petition also alleged administrative remedies were inadequate.

A third cause of action sought declaratory relief on the same bases, alleging the county had a "pattern and practice of unilaterally deducting the wages of ALADS-represented employees."

The county demurred, contending ALADS failed to exhaust its remedies under the MOU and those remedies were adequate. The county also asserted the petition failed to state valid claims, contending the home rule doctrine applied, Labor Code section 221 does not apply to the county, the MOU governs overpayments and recoupment, and the wage garnishment law does not apply. ALADS filed its opposition arguing to the contrary.

On January 29, 2019, the trial court sustained the county's demurrer without leave to amend on the ground ALADS failed to exhaust administrative remedies. The court granted judicial notice of a request for arbitration ALADS filed on behalf of one of its members, and also judicially noticed a November 26, 2018 letter from ALADS's attorney to the Employee Relations Commission stating "the parties have selected arbitrators for about 106 grievances." From the petition and judicially noticeable record, the court concluded the MOU provided an adequate administrative remedy to resolve the dispute at issue. The court rejected several other contentions raised by ALADS, including that the MOU remedies were inadequate because they did not allow for resolution of issues on behalf of an entire class of persons. The court was "not persuaded that a representative action by a union is functionally equivalent to a class action."

The court did not reach the county's arguments that ALADS did not allege sufficient facts to state a cause of action.

The court entered judgment of dismissal on February 20, 2019, and ALADS filed a timely notice of appeal.

Both parties have filed requests for judicial notice. The county requested judicial notice of its petition to confirm a November 21, 2019 arbitration award in favor of the county and against Deputy Sheriff Robert Harris, one of the overpaid employees, with exhibits including the MOU, the July 19, 2018 request for arbitration, and the arbitrator's award. ALADS requested judicial notice of Mr. Harris's "Response and Notice of Non-Opposition" to the county's petition to confirm the award, and of the trial court's September 11, 2020 ruling confirming the award. We grant both requests.

DISCUSSION

1. The Standard of Review

A demurrer tests the legal sufficiency of the complaint. We review the complaint de novo to determine whether it alleges facts sufficient to state a cause of action. For purposes of review, we accept as true all material facts alleged in the complaint, but not contentions, deductions or conclusions of fact or law. We also consider matters that may be judicially noticed. ( Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.)

When a demurrer is sustained without leave to amend, "we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm." ( Blank v. Kirwan, supra, 39 Cal.3d at p. 318, 216 Cal.Rptr. 718, 703 P.2d 58.) Plaintiff has the burden to show a reasonable possibility the complaint can be amended to state a cause of action. ( Ibid. )

2. Exhaustion of Remedies

a. The legal principles

The principle that a party must exhaust administrative remedies before resorting to the courts has been described many times, including in ALADS 2019 . The exhaustion doctrine " ‘ "is principally grounded on concerns favoring administrative autonomy (i.e., courts should not interfere with an agency determination until the agency has reached a final decision) and judicial efficiency (i.e., overworked courts should decline to intervene in an administrative dispute unless absolutely necessary)." ’ [Citation.] In addition, even if an administrative proceeding does not eliminate the need for a subsequent judicial action, it ‘will still promote judicial efficiency by unearthing the relevant evidence and by providing a record which the court may review.’ " ( ALADS 2019, supra, 42 Cal.App.5th at pp. 927–928, 256 Cal.Rptr.3d 139.)

The exhaustion doctrine is subject to exceptions. "In particular, the...