Gomez v. Regents of the Univ. of Cal.

• Decision Date: 23 April 2021
• Docket Number: D077181
• Citation: 277 Cal.Rptr.3d 735,63 Cal.App.5th 386
• Court: California Court of Appeals Court of Appeals
• Parties: Guivini GOMEZ, Plaintiff and Appellant, v. The REGENTS OF the UNIVERSITY OF CALIFORNIA, Defendant and Respondent.

63 Cal.App.5th 386

277 Cal.Rptr.3d 735

Guivini GOMEZ, Plaintiff and Appellant,

v.The REGENTS OF the UNIVERSITY OF CALIFORNIA, Defendant and Respondent.

D077181

Court of Appeal, Fourth District, Division 1, California.

Filed April 23, 2021

Law Office of Kevin T. Barnes, Kevin T. Barnes, Gregg Lander ; Sansanowicz Law Group, Leonard H. Sansanowicz ; Davtyan Law Firm and Emil Davtyan for Plaintiff and Appellant.

Reed Smith, Raymond A. Cardozo and Brian A. Sutherland for Defendant and Respondent.

HUFFMAN, J.

Guivini Gomez is a former employee of the Regents of the University of California (Regents). She sued the Regents, as the named plaintiff in a purported class action, claiming the Regents failed to pay her the required minimum wage for all hours she worked. However, she does not allege that the Regents set her hourly wage below the minimum wage as established by California law. Instead, she contends the Regents' time-keeping procedures of rounding hours and automatically deducting 30 minute meal breaks resulted in her not receiving the minimum wage for all hours she actually worked. In addition to claiming the Regents did not pay her the minimum wage, Gomez also sought penalties under the Private Attorneys General Act of 2004, Labor Code ¹ section 2698 et seq. (PAGA).

The superior court sustained the Regents' demurrer without leave to amend and entered judgment in their favor. Gomez appeals, arguing the superior court erred in concluding that the minimum wage laws do not apply to the Regents and that she could not seek penalties against the Regents under PAGA as a matter of law.

We reject these contentions and affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Gomez worked for the Regents as an hourly-paid, nonexempt employee at University of California, San Diego Medical Center from February 2, 2017 to April 9, 2018. During this time, the Regents utilized "a uniform company policy and practice" to pay employees. Two facets of this practice included rounding the actual time worked ("usually down") and automatically deducting a 30-minute meal period regardless of whether an employee was actually offered or took a meal period.

On June 17, 2019, Gomez brought suit, on behalf of herself and other similarly situated individuals, against the Regents.² She alleged that the Regents engaged in certain payment policies that resulted in nonexempt employees, like Gomez, receiving less than minimum wage for the hours worked. Gomez averred that the Regents were liable, under sections 1194 and 1197, "for the unpaid balance of the full amount of the unpaid minimum wages owed." Gomez also sought civil penalties under PAGA for the Regents' violation of section 1194.

The Regents demurred to the complaint, arguing the first cause of action for failure to pay minimum wage for all hours worked was barred as a matter of law because the Regents are exempt from statutes and regulations that govern wages and benefits of public employees. The Regents further contended Gomez's claim under PAGA was barred because: (1) it is derivative of the minimum wages claim; (2) the Labor Code only applies to employees in the private sector unless the provision specifically states it applies to public employees; and (3) the Regents are exempt under Government Code section 818.

Gomez opposed the demurrer, asserting that minimum wage laws apply to all workers employed in California, without limitation, and such laws are an exercise of the state's police powers and concern a matter of statewide concern. In so arguing, Gomez urged the superior court to follow Marquez v. City of Long Beach (2019) 32 Cal.App.5th 552, 244 Cal.Rptr.3d 57 ( Marquez ). Gomez also maintained that PAGA applied to the Regents, and Government Code section 818 did not provide the Regents any exemption from civil penalties.

The superior court sustained the Regents' demurrer without leave to amend. In doing so, the court found that the instant matter was analogous to Kim v. Regents of University of California (2000) 80 Cal.App.4th 160, 95 Cal.Rptr.2d 10 ( Kim ), in which the appellate court concluded the Regents could not be liable for failing to pay their employees overtime pay. ( Id. at p. 167, 95 Cal.Rptr.2d 10.) The superior court observed: "[T]here is no reasonable or meaningful distinction between overtime and minimum wage requirements [that] would support a diversion from the holding in Kim. " The superior court further found the Regents were exempt from PAGA under Government Code section 818.

Gomez timely appealed the amended judgment.

DISCUSSION

I

DEMURRER

A. Standard of Review

"On appeal from an order of dismissal after an order sustaining a demurrer, the standard of review is de novo: we exercise our independent judgment about whether the complaint states a cause of action as a matter of law." ( Stearn v. County of San Bernardino (2009) 170 Cal.App.4th 434, 439, 88 Cal.Rptr.3d 330.) We evaluate whether a cause of action has been stated under any legal theory. ( Curcini v. County of Alameda (2008) 164 Cal.App.4th 629, 637, 79 Cal.Rptr.3d 383 ( Curcini ).) In making our determination, we admit all facts properly pleaded ( Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967, 9 Cal.Rptr.2d 92, 831 P.2d 317 ); we " ‘give the complaint a reasonable interpretation, reading it as a whole and its parts in their context’ " ( Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38, 77 Cal.Rptr.2d 709, 960 P.2d 513 ). We read the allegations "in the light most favorable to the plaintiff and liberally construed with a view to attaining substantial justice among the parties." ( Venice Town Council v. City of L.A. (1996) 47 Cal.App.4th 1547, 1557, 55 Cal.Rptr.2d 465.)

If the pleading is insufficient on any ground specified in a demurrer, we will uphold the order sustaining it, even if it is not the ground relied upon by the trial court.³ ( Sheehan v. San Francisco 49ers, Ltd. (2009) 45 Cal.4th 992, 998, 89 Cal.Rptr.3d 594, 201 P.3d 472.)

B. The Minimum Wage Claim

1. Gomez's Contentions

Gomez's first cause of action involves allegations that the Regents' time-keeping procedures of rounding hours worked and automatically deducting 30-minute meal breaks resulted in her receiving less than minimum wage for all the hours that she worked. She claims the Regents violated sections 1194⁴ and 1197.⁵ Although the complaint only mentions wage orders in general, on appeal, Gomez makes clear she believes Wage Order No. 4-2001 (Wage Order No. 4) applies to the Regents. Underlying Gomez's first cause of action is her assertion that minimum wage laws apply to the Regents.

2. Wage Order No. 4

The Industrial Welfare Commission (IWC) was created in 1913 with express authority to adopt regulations—called wage orders—governing wages, hours, and working conditions in the state of California. (Stats. 1913, ch. 324, § 6, pp. 634-635; see Martinez v. Combs (2010) 49 Cal.4th 35, 52-57, 109 Cal.Rptr.3d 514, 231 P.3d 259.) These wage orders, being the product of quasi-legislative rulemaking under a broad delegation of legislative power, are entitled to great deference, and they have the dignity and force of statutory law. ( Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1027, 139 Cal.Rptr.3d 315, 273 P.3d 513.) The Legislature's authority to delegate its legislative power to the IWC is expressly recognized in the state's Constitution. ( Martinez , at pp. 60-61, 109 Cal.Rptr.3d 514, 231 P.3d 259.) The Legislature can enact statutes that supersede the wage orders, but courts must seek to harmonize IWC wage orders with statutes to the extent possible. ( Brinker , at p. 1027, 139 Cal.Rptr.3d 315, 273 P.3d 513.)

Wage Order No. 4, which is at issue here, governs wages, hours, and working conditions in professional, technical, clerical, mechanical, and similar occupations. (See Cal. Code Regs., tit. 8, § 11040, subd. 1.) Among other things, Wage Order No. 4 includes a minimum wage section ( Section 4 ), which requires employers to pay their employees at not less than a designated hourly rate "for all hours worked." ( Cal. Code Regs., tit. 8, § 11040, subd. 4(A).) Gomez asserts this portion of Wage Order No. 4 applies to the Regents. Not surprisingly, the Regents argue it does not.

3. The Regents

"The California Constitution establishes the Regents as a ‘public trust ... with full powers of organization and government.’ ( Cal. Const., art. IX, § 9, subd. (a).)"⁶ ( Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 320, 25 Cal.Rptr.3d 320, 106 P.3d 976.) "The authority granted the Regents includes ‘full powers of organization and government, subject only to such legislative control as may be necessary to insure compliance with the terms of the endowment of the University and the security of its funds.’ [Citation.] Thus, ‘[t]he Regents have been characterized as "a branch of the state itself" [citation] or "a statewide administrative agency" [citation]’ [citation], and ‘[i]t is apparent that the Regents as a constitutionally created arm of the state have virtual autonomy in self-governance’ [citation]. Therefore, ‘[t]he Regents [have] the general rule-making or policy-making power in regard to the University [citation], and [are] ... fully empowered with respect to the organization and government of the University.’ " ( Id. at pp. 320-321, 25 Cal.Rptr.3d 320, 106 P.3d 976.) The Regents have "general immunity from legislative regulation." ( San Francisco Labor Council v. Regents of the Univ. of Cal. (1980) 26 Cal.3d 785, 788, 163 Cal.Rptr. 460, 608 P.2d 277 ( Labor Council ).)

The Regents, however, are not entirely autonomous. The Legislature may regulate the Regents' conduct in three areas. "First, the Legislature is vested with the power of appropriation, preventing the [R]egents from compelling appropriations for salaries." ( Labor Council, supra , 26 Cal.3d at p. 789, 163 Cal.Rptr. 460, 608 P.2d 277.) "Second, it is well settled that general police power regulations governing...