Williams v. Hacla

• Decision Date: 12 August 2004
• Docket Number: No. B164111.,B164111.
• Citation: 17 Cal.Rptr.3d 374,121 Cal.App.4th 708
• Court: California Court of Appeals Court of Appeals
• Parties: Michael D. WILLIAMS, Plaintiff and Appellant, v. HOUSING AUTHORITY OF THE CITY OF LOS ANGELES, Defendant and Respondent.

17 Cal.Rptr.3d 374

121 Cal.App.4th 708

Michael D. WILLIAMS, Plaintiff and Appellant, v. HOUSING AUTHORITY OF THE CITY OF LOS ANGELES, Defendant and Respondent.

No. B164111.

Court of Appeal, Second District, Division Three.

August 12, 2004.

The Aikins Law Firm and Lenton Aikins, Long Beach, for Plaintiff and Appellant.

Stephan, Oringher, Richman & Theodora, Martha A. Shen and Efrat M. Cogan, Los Angeles, for Defendant and Respondent.

CROSKEY, Acting P.J.

In Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 6 Cal.Rptr.3d 457, 79 P.3d 569 (Schifando), the California Supreme Court determined that a city employee who claimed to have suffered employment-related discrimination was not required to exhaust both the internal administrative remedy in the city charter and the administrative remedy provided by the California Fair Employment and Housing Act (FEHA; Gov.Code, § 12900 et seq.),¹ before filing a FEHA disability discrimination claim in superior court. In this case, we must resolve a question identified in Schifando but not addressed, that is, whether a public employee who claims employment-related discrimination, and asserts both FEHA claims and nonstatutory claims for wrongful demotion and constructive termination in violation of public policy² must exhaust the internal administrative remedy provided by his or her employer with respect to those nonstatutory claims before filing a civil action.³ We conclude that Schifando's exemption must also apply to FEHA-related nonstatutory claims when the resolution of those claims would have a preclusive impact on the FEHA claim. To require exhaustion of internal administrative remedies for those FEHA-related nonstatutory claims would unduly burden a public employee. A public employee would first have to successfully challenge the administrative findings in an administrative mandamus action, which might detrimentally impact the employee's right to bring a FEHA claim, and his or her right under Schifando, to choose the appropriate forum to pursue that claim. In light of Schifando, and based on the conclusion we reach here, the trial court erred in dismissing plaintiff Michael D. Williams's (Williams) complaint alleging retaliation (§ 12940, subd. (h)) for failure to exhaust his internal administrative remedy, but did not err in dismissing Williams's nonstatutory claims because those claims are not FEHA-related.⁴ Thus, as alleged, the resolution of Williams's nonstatutory claims will have no preclusive effect on his FEHA claim against his former employer, the defendant and respondent Housing Authority of the City of Los Angeles (HACLA).⁵ Accordingly, Williams's claims for wrongful demotion and constructive termination in violation of public policy are barred for failure to exhaust his internal administrative remedy. Therefore, we affirm in part, and reverse in part.

FACTUAL AND PROCEDURAL BACKGROUND⁶

1. Williams's Demotion and Termination

Williams worked for HACLA as a print-shop supervisor before he was disciplined demoted, and ultimately terminated for job abandonment.

Williams's trouble began when he received a civil subpoena on two days' notice to testify in court in an unrelated civil action. HACLA management initially told Williams to comply with the subpoena, but the afternoon before his scheduled appearance, HACLA's attorney told him not to appear in court. Williams disregarded that advice.

About two weeks later, Williams received a "notice of intent to discharge" arising from, among other things, his insubordination for failure to follow HACLA's attorney's advice. Williams was not discharged. Following a Skelly hearing,⁷ he was instead demoted to residence cleaner. Williams did not report to his new assignment and HACLA terminated his employment.

2. HACLA's Grievance Procedure Permitted Williams to Challenge the Adverse Employment Decisions

Williams had a right to challenge the adverse employment decisions that ultimately led to his termination. HACLA's internal procedure is set forth in its manual of policy and procedure. Chapter 108, section 108:0906 of the HACLA personnel rules (hereafter Section 108:0906), provides that whenever a permanent employee has been "discharged, demoted or suspended," he or she may appeal to the executive director by written notice prior to the expiration of the appeals period.⁸ If the employee is dissatisfied with the executive director's decision, he or she may appeal the disciplinary action to the commission. The commission may hear the appeal, or may designate a hearing officer in its place. If a hearing officer is designated, that decision is an advisory recommendation to the commission. The commission's decision is final.

3. Williams Initially Invoked HACLA's Internal Administrative Remedy but Abandoned the Process and Filed a Civil Action

After receiving his supervisor's intent to discharge him for insubordination, Williams responded and requested reinstatement. Rather than reinstatement, Williams was demoted. Williams appealed that decision to the commission. But Williams then abandoned his appeal.

Because Williams did not report to his new assignment, he received a second notice of discharge for, among other things, unexcused absences and job abandonment (hereafter, second notice). This second notice also informed Williams that he had a right to appeal the decision. In a footnote, the second notice stated: "Please note that your demotion, and the grounds for your demotion, are not an issue in this case. The simple basis for my decision to terminate your employment is that you have refused to report for work. Indeed, even if your demotion is overturned, my decision to terminate your employment will not be impacted."

4. HACLA Challenged Williams's Civil Action Because He Failed To Exhaust His Internal Administrative Remedies

Following his termination, Williams filed suit alleging wrongful demotion in violation of public policy, constructive termination in violation of public policy, and retaliation in violation of the FEHA. Williams's claims are based upon HACLA's actions allegedly taken as a result of Williams's response to the subpoena.⁹

Williams's successive complaints alleged that he complied with the Tort Claims Act, and that he had exhausted his administrative remedy under the FEHA, but HACLA continued to challenge his complaint because Williams did not allege that he complied with Section 108:0906, or that he was excused from complying with that section. HACLA's demurrer to the initial complaint was sustained with leave to amend.

Williams then filed a first amended complaint, but again failed to plead that he had exhausted the internal appeals of Section 108:0906. HACLA's demurrer on the ground that Williams had failed to exhaust his internal administrative remedies again was sustained with leave to amend because, according to the trial court, Williams had failed to allege "whether he pursued the agency's appellate procedures [and] if not, why not."

In his second amended complaint, Williams alleged that he had responded to the initial charge of discipline,¹⁰ but that he was not required to exhaust what he alleged to be the optional appeals procedure under Section 108:0906. Even if he were required to do so, Williams alleged that HACLA's second notice "specifically informed him in a written decision that any and all applicable internal appellate procedures would be futile."¹¹ (Emphasis in original.)

HACLA again filed a demurrer to the second amended complaint. It argued that the amendments still were insufficient to show that Williams had exhausted his internal administrative remedy because he had not alleged that he had completed the internal appeals process of Section 108:0906, nor had he alleged an exception to the exhaustion requirement. The trial court agreed with HACLA. It concluded that the allegations in the second amended complaint were "insufficient to plead exhaustion," and that Williams had failed to show that the second notice would have made any subsequent participation in the internal appeals process futile. The trial court sustained the demurrer without leave to amend, and entered judgment dismissing the action. Williams timely filed this appeal.

Following oral argument, our Supreme Court decided Schifando, supra, 31 Cal.4th 1074, 6 Cal.Rptr.3d 457, 79 P.3d 569, in which it concluded that a public employee need not exhaust both an available internal administrative remedy and the FEHA remedy when asserting a FEHA claim, and that receiving a right-to-sue letter from the Department is a sufficient prerequisite to filing an FEHA claim in superior court. We asked the parties to submit supplemental briefs on the impact of Schifando to this case. We also asked the parties to further brief the issue we resolve here, namely, whether in light of Schifando, an employee must exhaust his or her internal administrative remedy on nonstatutory claims.¹²

THE PARTIES' CONTENTIONS

Williams contends that, based on Schifando, supra, 31 Cal.4th 1074, 6 Cal Rptr.3d 457, 79 P.3d 569, he was not required to exhaust HACLA's internal administrative remedy to proceed with his FEHA claim as long as he complied with the FEHA exhaustion requirement. With respect to his nonstatutory claims, Williams contends that those claims should be exempt from the internal administrative exhaustion requirement based on a concept akin to supplemental or pendent jurisdiction. In his words: The "nonstatutory claims [should] ride to the courthouse on the FEHA claims." Assuming that the nonstatutory causes of action are subject to an exhaustion requirement under HACLA's personnel rules, Williams contends that (1) the administrative process is permissive, not mandatory, (2) he has alleged an exception to the exhaustion requirement, and/or (3) he should have been given leave to amend his second amended complaint to allege equitable estoppel.

HACLA acknowledges that Schifando, supra, 31 Cal.4th 1074, 6 Cal.Rptr.3d 457, ...