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James Sheppard v. North Orange County Regional Occupational Program

December 23, 2010

JAMES SHEPPARD, PLAINTIFF AND APPELLANT,
v.
NORTH ORANGE COUNTY REGIONAL OCCUPATIONAL PROGRAM, DEFENDANT AND RESPONDENT.



Appeal from a judgment of the Superior Court of Orange County, David C. Velasquez, Judge. Affirmed in part and reversed in part. (Super. Ct. No. 04CC11086)

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

CERTIFIED FOR PUBLICATION

OPINION

INTRODUCTION

Plaintiff James Sheppard was a part-time instructor employed by defendant North Orange County Regional Occupational Program (NOCROP). NOCROP was created by four public school districts. During his employment, Sheppard was required to spend 20 minutes of unpaid time preparing for every hour he spent teaching. Sheppard sued NOCROP and sought compensation for his unpaid preparation time by asserting claims for violation of the minimum wage law, pursuant to the Industrial Welfare Commission's (IWC) wage order No. 4-2001 (Wage Order No. 4-2001)*fn1 and Labor Code section 218, breach of contract, and quantum meruit. (All further statutory references are to the Labor Code unless otherwise specified.)

Following a series of challenges to Sheppard's pleadings, judgment was entered in favor of NOCROP. Sheppard contends the trial court erred by (1) ordering judgment on the pleadings as to the violation of the minimum wage law claim contained in the first amended complaint; (2) sustaining, without leave to amend, NOCROP's demurrer to Sheppard's breach of contract claim as contained in the original complaint; and (3) sustaining, without leave to amend, NOCROP's demurrer to his quantum meruit claim as contained in the third amended complaint.

We reverse in part and affirm in part. We reverse the trial court's order granting judgment on the pleadings as to the violation of the minimum wage law claim. Sheppard alleged he was employed by a regional occupational program which was the creation of one or more public school districts through Education Code section 52301. We conclude the minimum wage provision in Wage Order No. 4-2001 applies to Sheppard's employment with NOCROP. We hold the Legislature has plenary authority over public school districts and was constitutionally authorized to vest in the IWC, through section 1173, the power to impose the minimum wage law provision contained in Wage Order No. 4-2001 as to employees of such public school districts. (For the reasons we explain, this holding is limited to employees of public school districts.) We therefore reverse the trial court's order granting judgment on the pleadings as to the violation of the minimum wage law claim.

We also reverse the order sustaining NOCROP's demurrer to Sheppard's breach of contract claim. California Supreme Court precedent establishes that a public employee has a contractual right to earned but unpaid compensation, which is protected by the state Constitution.

We affirm the order sustaining the demurrer to the quantum meruit claim because the Government Claims Act (Gov. Code, § 810 et seq.) bars the assertion of such a claim against a public entity.

BACKGROUND

In November 2004, Sheppard filed a complaint against NOCROP for failure to pay wages in violation of Wage Order No. 4-2001, failure to pay wages in breach of a written contract, and unfair competition. The complaint alleged that "[b]etween approximately January 1, 2000 and the present," Sheppard was employed "as a full-time and/or part-time instructor" by NOCROP which "was and is a governmental entity doing business in Orange County, California." The complaint further alleged that before Sheppard began his employment with NOCROP and each school year after that, he was required to sign a document entitled "North Orange County Regional Occupational Program Notice of Offer [o]f Employment-Certificated Employee" (notice of offer), which stated in part: "[F]ull-time work and salary schedules are based upon an 8 hour day/40 hour week. A full-time classroom/lab schedule is 30 hours per week with 10 hours per week of preparation time. Part-time assignments require 20 minutes of unpaid preparation time for each hour of classroom/lab instruction." (Boldface omitted.) The complaint stated that "as a part-time instructor, [Sheppard] has not [been] and is not paid for 20 minutes of required preparation time" and that "he is seeking all unpaid wages owed between approximately January 2000 and the present based upon the fact that he has not been paid for 20 minutes of required preparation time for each hour of classroom/lab instruction." The complaint further alleged that on September 27, 2004, Sheppard submitted a claim for damages to NOCROP, pursuant to Government Code section 910, and NOCROP rejected his claim on October 26, 2004. All three claims of the complaint were based on the applicability of the minimum wage requirement contained in Wage Order No. 4-2001 to the 20 minutes of unpaid preparation work Sheppard performed for NOCROP under the notice of offer.

The trial court sustained NOCROP's demurrer, without leave to amend, as to Sheppard's breach of contract and unfair competition claims "for lack of opposition,"*fn2 but overruled the demurrer as to the violation of the Wage Order No. 4-2001 claim.

Sheppard filed a first amended complaint which contained a single cause of action for violation of Wage Order No. 4-2001. The first amended complaint alleged that although Wage Order No. 4-2001 requires that all employees be paid at least $6.75 per hour for all hours worked, NOCROP required its part-time instructors, including Sheppard, who were paid between $31.35 and $36.15 per hour, to spend 20 minutes of unpaid time to prepare for every hour of classroom or laboratory instruction they performed. The first amended complaint also contained class action allegations.

NOCROP filed a motion for summary judgment to the first amended complaint. The trial court treated the motion for summary judgment as a motion for judgment on the pleadings, which it granted. The court also granted Sheppard "leave to amend the complaint to state a cause of action for an alleged violation of Education Code section 45025."*fn3 The trial court denied Sheppard's motion requesting the court's reconsideration of the order granting judgment on the pleadings.

Sheppard filed a second amended complaint which contained a claim for violation of Education Code section 45025, based on the allegation he was not paid for all hours he worked on a part-time basis. The trial court overruled NOCROP's demurrer to the second amended complaint.

Sheppard filed a third amended complaint in which he added a claim for quantum meruit, seeking recovery of the "reasonable value" of unpaid preparation time. The trial court sustained NOCROP's demurrer to the quantum meruit claim, without leave to amend, on the ground such a claim may not be maintained against a public entity.

Pursuant to Sheppard's request to voluntarily dismiss his claim for violation of Education Code section 45025 and the trial court's order granting his request, the court clerk entered dismissal of the action with prejudice. Sheppard appealed.

DISCUSSION

I.

STANDARD OF REVIEW

This appeal involves issues arising from an order granting judgment on the pleadings and orders sustaining demurrers. A judgment on the pleadings and a judgment following the sustaining of a demurrer are reviewed under the same de novo standard. (McCutchen v. City of Montclair (1999) 73 Cal.App.4th 1138, 1144; Boccato v. City of Hermosa Beach (1994) 29 Cal.App.4th 1797, 1803-1804.) Accordingly, we treat the properly pleaded allegations of a challenged complaint as true, and liberally construe them to achieve "'"substantial justice"'" among the parties. (American Airlines, Inc. v. County of San Mateo (1996) 12 Cal.4th 1110, 1118.)

We consider only the allegations of a challenged complaint and matters subject to judicial notice to determine whether the facts alleged state a cause of action under any theory. (American Airlines, Inc. v. County of San Mateo, supra, 12 Cal.4th at p. 1118.) "'Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.]'" (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)

II.

THE TRIAL COURT ERRED BY GRANTING JUDGMENT ON THE PLEADINGS AS TO SHEPPARD'S CLAIM FOR VIOLATION OF THE MINIMUM WAGE LAW.*fn4

In support of Sheppard's claim that NOCROP violated the minimum wage law, the first amended complaint alleged that although Wage Order No. 4-2001 requires all employees be paid minimum wage for all hours worked, NOCROP required its part-time instructors, including Sheppard, to spend 20 minutes of unpaid time to prepare for every hour of classroom or laboratory instruction they performed. NOCROP filed a motion for summary judgment on the ground that Sheppard is a public employee and thus Wage Order No. 4-2001 does not and cannot apply to him.*fn5

The trial court's order granting judgment on the pleadings in favor of NOCROP stated in pertinent part: "Defendant has met its burden of showing the action, which is based solely on alleged violation of a wage order promulgated by the Industrial Welfare Commission, has no merit and that Defendant has a complete defense. . . . [¶] . . . It is undisputed the Defendant was created by a Joint Powers agreement between four school districts. As a public school entity, the State Legislature has plenary power over wage and hour disputes between the school districts and certificated teachers. (Wilson v. State Bd. Of Education (1999) 75 Cal.App.4th 1125, 1134-1135.) Public agencies are not bound by general words of a statute absent express language or necessary implication. (Wells v. One2One Learning Foundation (2006) 39 Cal.4th 1164; Campbell v. Regents of the University of California (2005) 35 Cal.4th 311; see also Kistler v. Redwoods Community College Dist. (1993) 15 Cal.App.4th 1326, 1331-1332.) Neither the wage order relied upon by the Plaintiff nor the implementing Labor Code sections expressly, or by necessary implication, obligate Defendant to pay Plaintiff hourly wages for 'preparation time' beyond the hourly wages mandated by Education Code section 45025. Thus, the wage order is not applicable to Defendant."

Although the trial court stated it found that NOCROP met its burden in moving for summary judgment and that Sheppard failed to carry his burden of demonstrating the existence of a triable issue of material fact, the court did not grant summary judgment in favor of NOCROP. Instead, the court stated it "will treat the matter as a motion for judgment on the pleadings and grant [Sheppard] leave to amend the complaint to state a cause of action for an alleged violation of Education Code section 45025." The court added it assumed all the facts pleaded were true for purposes of the motion only and explained it concluded the first amended complaint failed to allege facts sufficient to state a cause of action.

As explained in detail post, we conclude the trial court erred by ruling that Sheppard failed to allege facts sufficient to state a claim for violation of the minimum wage law. For the reasons we will explain, we conclude (1) by its terms, the minimum wage provision contained in Wage Order No. 4-2001 applies to Sheppard's employment with NOCROP; (2) the Legislature authorized the IWC to so extend the application of the minimum wage law to apply to certain public employees; and (3) the Legislature has plenary authority over public school districts in California and was not otherwise barred by the state Constitution from requiring ...


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