Marquez v. City of Long Beach

• Decision Date: 25 February 2019
• Docket Number: B282270
• Citation: 32 Cal.App.5th 552,244 Cal.Rptr.3d 57
• Court: California Court of Appeals Court of Appeals
• Parties: Wendy MARQUEZ et al., Plaintiffs and Appellants, v. CITY OF LONG BEACH, Defendant and Respondent.

32 Cal.App.5th 552

244 Cal.Rptr.3d 57

Wendy MARQUEZ et al., Plaintiffs and Appellants,

v.CITY OF LONG BEACH, Defendant and Respondent.

B282270

Court of Appeal, Second District, Division 7, California.

Filed February 25, 2019

Weinberg, Roger & Rosenfeld, David A. Rosenfeld, Alameda, Lisl R. Soto and Alejandro Delgado, Los Angeles, for Plaintiffs and Appellants.

Rutan & Tucker and George W. Shaeffer, Jr., Costa Mesa, for Defendant and Respondent.

FEUER, J.

Plaintiffs Wendy Marquez and Jasmine Smith appeal from a judgment of dismissal entered after the trial court sustained without leave to amend the demurrer filed by the City of Long Beach (City) to plaintiffs' class action complaint. Plaintiffs alleged causes of action for violations of the Labor Code and the Industrial Welfare Commission’s (IWC) wage orders based on the City’s alleged failure to pay workers employed as pages and recreation leader specialists wages at or above the statewide minimum wage.

The trial court found the authority to determine employee compensation was reserved to the City as a charter city under article XI, section 5 of the California Constitution, and the state could not impose a minimum wage for the City’s employees because the City’s compensation of its employees was not a matter of statewide concern. On appeal, plaintiffs contend the Legislature’s interest in the provision of a living wage to all workers is a matter of statewide concern, and the minimum wage requirement is appropriately tailored to address that concern.

This case pits article XI, section 5 of the state Constitution, which grants to charter cities authority over municipal affairs, including "plenary authority" to provide for the compensation of city employees, against article XIV, section 1 of the state Constitution, which provides "[t]he Legislature may provide for minimum wages and for the general welfare of employees ...." Despite the century-long history of the home rule doctrine (see Popper v. Broderick (1899) 123 Cal. 456, 56 P. 53 ( Popper )) and the state’s regulation of the minimum wage (see Stats. 1913, ch. 324, pp. 632-637), the Supreme Court has not squarely resolved whether charter cities must comply with state law minimum wage requirements.

We conclude legislation setting a statewide minimum wage, generally applicable to both private and public employees, addresses the state’s interest in protecting the health and welfare of workers by ensuring they can afford the necessities of life for themselves and their families. Thus, the Legislature may constitutionally exercise authority over minimum wages, despite the constitutional reservation of authority in charter cities to legislate as to their municipal affairs. We reverse.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Complaint

On June 9, 2016 plaintiffs filed their putative class action complaint asserting causes of action under Labor Code sections 1182.12 and 1194,¹ as well as under section 4 of IWC Wage Order Nos. 4-2001 and 10-2001 ( Cal. Code Regs., tit. 8, §§ 11040, 11100 )² for the failure to pay the state minimum wage. The complaint alleged the City is a charter city, and Marquez, Smith, and approximately 200 employees have been employed by the City’s Library Services Department and Parks, Recreation, and Marine Department during the relevant period. The City employed Marquez as a page and Smith as a recreation leader specialist. The complaint further alleged plaintiffs and the putative class are classified as nonexempt, hourly employees, and from January 1, 2016 until approximately April 18, 2016 the City paid the class members less than the legally mandated state minimum wage of $10.00 per hour. The complaint sought damages, civil penalties, and equitable relief.

B. The City’s Demurrer

In its demurrer, the City argued the plaintiffs' claims were barred under the home rule doctrine because wages set by charter cities are municipal affairs, not subject to state regulation. The City also asserted in its reply that charter cities did not come within the statutory definition of employers subject to the minimum wage requirement. Further, the wages to be paid to the City’s pages and recreation leadership specialists were set by a memorandum of understanding (MOU) between the union representing those employees and the City, ratified by the City Council.³

According to the City, application of the minimum wage to its employees would unlawfully impair the MOU.

After sustaining the City’s demurrer without leave to amend, on March 2, 2017 the trial court entered a judgment dismissing the action with prejudice. Plaintiffs timely appealed.

DISCUSSION

A. Standard of Review

"In reviewing an order sustaining a demurrer, we examine the operative complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory. [Citation.] Where the demurrer was sustained without leave to amend, we consider whether the plaintiff could cure the defect by an amendment." ( T.H. v. Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162, 226 Cal.Rptr.3d 336, 407 P.3d 18 ; accord, Centinela Freeman Emergency Medical Associates v. Health Net of California, Inc. (2016) 1 Cal.5th 994, 1010, 209 Cal.Rptr.3d 280, 382 P.3d 1116.) When evaluating the complaint, "we assume the truth of the allegations ...." ( Lee v. Hanley (2015) 61 Cal.4th 1225, 1230, 191 Cal.Rptr.3d 536, 354 P.3d 334 ; accord, McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415, 106 Cal.Rptr.2d 271, 21 P.3d 1189.)

In our analysis of whether a state law applies to a charter city, we "accord great weight to the factual record that the Legislature has compiled," but these factual findings "are not controlling." ( State Building & Construction Trades Council of California v. City of Vista (2012) 54 Cal.4th 547, 558, 143 Cal.Rptr.3d 529, 279 P.3d 1022 ( City of Vista ); accord, County of Riverside v. Superior Court (2003) 30 Cal.4th 278, 286, 132 Cal.Rptr.2d 713, 66 P.3d 718 ( County of Riverside ).) "[T]he question whether in a particular case the home rule provisions of the California Constitution bar the application of state law to charter cities turns ultimately on the meaning and scope of the state law in question and the relevant state constitutional provisions. Interpreting that law and those provisions presents a legal question, not a factual one." ( City of Vista , at p. 558, 143 Cal.Rptr.3d 529, 279 P.3d 1022 ; accord, County of Riverside , at p. 286, 132 Cal.Rptr.2d 713, 66 P.3d 718 ["The judicial branch, not the legislative, is the final arbiter of this question."].)

"We independently review the construction of statutes [citation] and begin with the text. If it ‘is clear and unambiguous our inquiry ends.’ [Citation.] Wage and hour laws are ‘to be construed so as to promote employee protection.’ [Citations.] These principles apply equally to the construction of wage orders." ( Mendiola v. CPS Security Solutions, Inc. (2015) 60 Cal.4th 833, 840, 182 Cal.Rptr.3d 124, 340 P.3d 355 ; accord, Kilby v. CVS Pharmacy, Inc. (2016) 63 Cal.4th 1, 11, 201 Cal.Rptr.3d 1, 368 P.3d 554 ["IWC regulations are liberally construed to protect and benefit employees."].)

B. The Trial Court Erred in Sustaining the City’s Demurrer

1. California’s minimum wage law

"Over a century ago, the Legislature responded to the problem of inadequate wages and poor working conditions by establishing the IWC, giving it authority to investigate various industries and promulgate wage orders establishing minimum wages, maximum work hours, and conditions of labor." ( Kilby v. CVS Pharmacy, Inc., supra , 63 Cal.4th at p. 10, 201 Cal.Rptr.3d 1, 368 P.3d 554.) The Legislature created the IWC in 1913, and delegated to it the power to set minimum wages and working conditions for women and children.

( Martinez v. Combs (2010) 49 Cal.4th 35, 50, 109 Cal.Rptr.3d 514, 231 P.3d 259 ( Martinez ), citing Stats. 1913, ch. 324, § 13, p. 637.) The 1913 act charged the IWC with setting labor conditions in accordance with " ‘the comfort, health, safety and welfare of such women and minors’ " and setting "for each industry ‘[a] minimum wage to be paid to women and minors ... adequate to supply ... the necessary cost of proper living and to maintain [their] health and welfare.’ " ( Martinez , at pp. 54-55, 109 Cal.Rptr.3d 514, 231 P.3d 259, quoting Stats. 1913, ch. 324, §§ 3, subd. (a), & 6, subd. (a), par. 1, pp. 633-634.)

The same year, the Legislature "propos[ed] to the voters a successful constitutional amendment confirming the Legislature’s authority" to regulate the minimum wage and to delegate authority to the IWC, which the voters enacted as former article XX, section 17 ½ of the California Constitution. ( Martinez, supra , 49 Cal.4th at p. 54 & fn. 20, 109 Cal.Rptr.3d 514, 231 P.3d 259 ; accord, Pacific G. & E. Co. v. Industrial Acc. Com. (1919) 180 Cal. 497, 500, 181 P. 788.) The argument in support of the constitutional amendment was that protected employees " ‘should be certain of a living wage—a wage that insures for them the necessary shelter, wholesome food and sufficient clothing,’ " and "that substandard wages frequently led to ill health and moral degeneracy." ( Martinez, at p. 54, 109 Cal.Rptr.3d 514, 231 P.3d 259, quoting Ballot Pamp., Gen. Elec. (Nov. 3, 1914) argument in favor of Assem. Const. Amend. No. 90, p. 29.)

The IWC set the first statewide minimum wage in 1916 by issuing industry- and occupation-wide wage orders, applicable to women and children. ( Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1026, 139 Cal.Rptr.3d 315, 273 P.3d 513 ( Brinker ); Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 700, 166 Cal.Rptr. 331, 613 P.2d 579.) The minimum wage for women and children was raised from time to time. In 1972 the Legislature extended the protections of the minimum wage to all employees, and "expanded the IWC’s jurisdiction to include all employees, male and female, in response to federal legislation barring employment...