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Trustees of the Southern California IBEW-NECA Pension Plan v. Los Angeles Unified School District

August 16, 2010

TRUSTEES OF THE SOUTHERN CALIFORNIA IBEW-NECA PENSION PLAN ET AL., PLAINTIFFS AND RESPONDENTS,
v.
LOS ANGELES UNIFIED SCHOOL DISTRICT ET AL. DEFENDANTS AND APPELLANTS



APPEAL from a judgment of the Superior Court of Los Angeles County. Judith J. Chirlin, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC389607).

The opinion of the court was delivered by: Zelon, J.

CERTIFIED FOR PARTIAL PUBLICATION*fn1

I. INTRODUCTION

Appellant Los Angeles Unified School District sought a judicial declaration that Labor Code section 1776, subdivision (e) prohibited it from producing personal employee information contained in third-party certified payroll records. After holding a bench trial, the court ruled in favor of Respondents. Appellant now appeals, arguing that it has an absolute privilege to withhold the information at issue. We disagree and conclude that the information is only subject to a conditional privilege.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. The LAUSD Project Stabilization Agreement and California's Certified Payroll Record Requirements

1. The LAUSD Project Stabilization Agreement

The Los Angeles Unified School District (LAUSD or the District) and numerous unions are signatories to the "Project Stabilization Agreement" (PSA), which is a construction labor agreement that is intended to promote the timely completion of LAUSD public works projects. The Agreement is binding on contractors who enter into construction contracts with the LAUSD and mandates that they pay their laborers the prevailing wage rate set by the Department of Industrial Relations. In addition, contractors are required to provide contributions for employee fringe benefits, which are paid directly to various trusts that administer the employee benefits programs. The trusts, in turn, are responsible for allocating the benefits to the contractors' employees.

2. California's Certified Payroll Records Requirements

California Labor Code section 1776, subdivision (a)*fn2 requires contractors who enter into public works contracts to maintain certified payroll records (CPRs) that show, among other things, the name, address, social security number, work classification and hours worked for each employee. (§ 1776, subd. (a).) Contractors are required to make copies of CPRs available to their employees, the body that awarded the public work project (the awarding agency) and various California labor agencies. (§ 1776, subds. (b)(1) & (2).) Section 1776 further provides that "the public" may inspect the awarding agency's copies of contractor CPRs (§ 1776, subd. (b)(3)), but directs that such copies "shall be marked or obliterated to prevent disclosure of an individual's name, address, and social security number." (§ 1776, subd. (e).)

B. Summary of the Proceedings Below

On April 23, 2008, the Trustees of the Southern California IBEW-NECA Pension Plan and various other parties*fn3 (collectively Trustees) filed a complaint against the LAUSD and Integrated/TEC (Integrated). The complaint alleged that Integrated, which was a construction contractor working for the District, violated the terms of the PSA by failing to pay the Trustees approximately $20,000 in employee fringe benefits. The complaint also sought an order directing the LAUSD to withhold funds from Integrated in an amount equal to the unpaid fringe benefits.

Shortly thereafter, on June 6, 2008, the LAUSD filed a cross-complaint for declaratory relief against the Trustees seeking a declaration that Section 1776, subdivision (e) prohibited the LAUSD from producing personal employee information contained in Integrated's CPRs, including the employees' names, social security numbers and addresses (personal employee information). The declaratory relief claim was intended to resolve an ongoing dispute with the Trustees regarding the effect of Section 1776, subdivision (e). In numerous prior law suits involving unpaid fringe benefits, the Trustees had filed document subpoenas against the LAUSD requesting unredacted contractor CPRs that showed the personal employee information. The Trustees contended that this information was needed to properly allocate fringe benefits to the contractors' employees. In each case, the LAUSD unsuccessfully argued that, pursuant to Section 1776, subdivision (e), the personal employee information was privileged and could not be produced. The LAUSD's declaratory relief claim in the current litigation was brought to clarify whether the personal employee information contained within its CPRs was privileged pursuant to Section 1776, subdivision (e), and therefore not subject to discovery.

After the LAUSD filed its cross-complaint, the Trustees obtained payroll information that enabled it to determine the specific amount that Integrated owed for unpaid employee fringe benefits. Integrated subsequently agreed to pay the outstanding benefits contributions and the Trustees dismissed their complaint against both the LAUSD and Integrated. The LAUSD, however, declined to dismiss its declaratory relief action, arguing that the parties needed to determine the effect of Labor Code section 1776, subdivision (e) to avoid future discovery disputes regarding the production of unredacted CPRs. In support, the LAUSD identified eight lawsuits filed by the Trustees since 2007 in which the parties had litigated the identical discovery issue. The trial court ...


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