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Adeline Tapia Guerrero v. the Superior Court of Sonoma County

February 11, 2013

ADELINE TAPIA GUERRERO, PETITIONER,
v.
THE SUPERIOR COURT OF SONOMA COUNTY, RESPONDENT; JO WEBER, AS DIRECTOR, SONOMA COUNTY DEPARTMENT OF HUMAN SERVICES ET AL., REAL PARTIES IN INTEREST.



Trial Court: Sonoma County Superior Court Trial Judge: Hon. Elliot Daum Super. Ct. No. SCV248680)

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

CERTIFIED FOR PUBLICATION

Sonoma County

INTRODUCTION

Petitioner Adelina Tapia Guerrero was employed to provide in-home support services (IHSS) to eligible recipients in Sonoma County (County) under the In-Home Support Services Act. (Welf. & Inst. Code, § 12300 et seq.*fn1 ) She was never paid for any of the services she rendered to program recipient Alejandra Buenrostro from November 4, 2008 through January 29, 2009, despite a comprehensive scheme of federal and California statutes, implemented within County through enactment of local ordinances that spell out the responsibilities of County and the Sonoma County In-Home Support Services Public Authority (Public Authority) for establishing and monitoring IHSS providers' wages, hours, and conditions of employment. She contends that County and Public Authority were her "joint employers" with Buenrostro for purposes of her federal and state wage and hour claims. The Sonoma County Superior Court rejected this contention, sustaining without leave to amend, the demurrer of real parties in interest Jo Weber, as Director of the Sonoma County Department of Human Services, and Michael Humphrey, as Manager of the Public Authority, as to her causes of action for unpaid wages and overtime under the Fair Labor Standards Act (FLSA) (29 U.S.C. § 201 et seq.); California statues (Lab. Code, §§ 1182.12, 1194, 1194.1, 1194.2 & 1197; §§ 12301.6, subd. (c)(1), 12302.25) and Industrial Welfare Commission (IWC) wage order No. 15-2001 (Cal. Code Regs., tit. 8, § 11150 et seq.).

Guerrero seeks extraordinary relief from the order. She contends the superior court erred in determining that real parties County and Public Authority were not her "employers" or "joint employers" with other defendants for purposes of her federal and state wage and hour claims and by failing to consider whether real parties acted "in the interest of an employer in relation to [her]" under the FLSA. (29 U.S.C. § 203(d).) She further contends that the superior court erred in sustaining real parties' demurrer to her claims for unpaid wages, based upon its determinations that her job classification was exempt from federal and state wage and hour laws and that the California wage and hour laws upon which she relied did not apply to public entities. Underlying these contentions is Guerrero's assertion that disputed material facts exist as to all of these issues, so that the sustaining of demurrers to her wage and hour claims was error.

We shall conclude the superior court erred in sustaining the demurrer to Guerrero's federal and state wage and hour claims.

FACTS AND PROCEDURAL BACKGROUND

A. The first amended complaint

On February 22, 2011, Guerrero filed the instant first amended complaint naming as defendants real parties County and Public Authority and defendants Buenrostro and Sherry Amezcua.*fn2 The complaint alleged as follows: Buenrostro was disabled and a recipient and a consumer of IHSS services as provided in an interagency agreement between County and Public Authority and a memorandum of understanding between the Public Authority and Service Employees International Union (SEIU), effective October 1, 2007 through September 30, 2009. County and Public Authority authorized Buenrostro and Amezcua to hire and engage an IHSS provider and they engaged Guerrero to provide IHSS services from November 4, 2008 through January 29, 2009. Guerrero provided services seven days a week, for seven hours a day and had worked no fewer than 501 hours regular time and not less than 87 hours of overtime. Guerrero alleged she performed general household work exceeding 20 percent of her total weekly hours worked. Guerrero provided services to Buenrostro at all times under the supervision and direction of Amezcua. Buenrostro, Amezcua and real parties County and Public Authority failed to pay her for the personal services she rendered to Buenrostro and refused to pay minimum wages and overtime premium wages owed.

The first amended complaint further alleged that each defendant (County, Public Authority, Buenrostro and Amezcua) employed Guerrero and either directly or indirectly exercised control over her wages or hours or conditions of employment or all of the foregoing. It further alleged that in failing to pay Guerrero minimum wages and overtime premium wages owed for her personal services, all defendants, including real parties, had violated the federal FLSA (29 U.S.C., § 201 et. seq.), California statutes, including Labor Code sections 1194, 1194.1, and IWC wage order No. 15-2001. In addition to federal and state wage and hour claims, the complaint also contained a cause of action for breach of a contract entered into by Buenrostro and Amezcua with County and the Public Authority, to which Guerrero alleged she was a third-party beneficiary, and for breach of the collective bargaining agreement entered into by County and Public Authority with SEIU and providers of IHSS in Sonoma County, to which Guerrero alleged she was a third party beneficiary.

B. Demurrer

County and Public Authority filed a joint demurrer to the complaint, in which they argued: (1) Guerrero's federal wage and hour claims failed to state facts sufficient to constitute a cause of action against them because they were not her employer for purposes of her FLSA wage and hour claims; (2) alternatively, Guerrero's federal wage and hour claims failed because her job was exempt from the FLSA minimum wage and overtime provisions; (3) Guerrero's claims under the California Labor Code failed because real parties were not her employer for purposes of state wage and hour claims; and (4) alternatively, that her claims under state law failed because the relevant portions of the California Labor Code did not apply to public entities such as real parties. Real parties also argued the breach of contract cause of action failed because Guerrero failed to comply with the requirements of the Government Claims Act. (Gov. Code, § 915.)

On July 18, 2011, the trial court filed its order sustaining real parties' demurrer without leave to amend as to all federal and state statutory claims for minimum wage and overtime premium wage. The court overruled the demurrer as to the contractual cause of action, finding the complaint had adequately pleaded excuse from the Government Claims Act.

C. Writ proceedings

On September 19, 2011, Guerrero filed a writ petition in this court, seeking extraordinary relief. On November 23, 2011, we issued an order to show cause why the relief requested in the petition should not be granted. On that date we also granted Guerrero's request for judicial notice of certain provisions of the California Department of Social Services Manual - Social Service Standards, Service Program No. 7: In-Home Supportive Services, pp. 50-115 (hereafter, "DSS Manual") and of the California Department of Social Services County Fiscal Letter (CFL) No. 10/11-43 (Dec. 13, 2010) and its attachment relating to funds allocated to counties for fraud investigations and program integrity activities.

Real parties filed their answer and return on January 12, 2012. Guerrero's traverse was filed February 2, 2012. We granted requests of the California State Association of Counties to file an amicus curiae brief in support of real parties in interest and to the National Employment Law Project (NELP) to file an amicus letter in support of Guerrero. Petitioner's answer to the amicus brief filed by CSAC was filed on February 14, 2012 and oral argument was held.

DISCUSSION

The threshold issue here is whether County, Public Authority, or both of them were Guerrero's "employer" for purposes of federal and state wage and hour laws. To assist in that determination, we describe in some detail the IHSS Program and its implementation in Sonoma County.

I. The IHSS Program

A. Statutory background

"IHSS is a state social welfare program designed to avoid institutionalization of incapacitated persons. It provides supportive services to aged, blind, or disabled persons who cannot perform the services themselves and who cannot safely remain in their homes unless the services are provided to them. The program compensates persons who provide the services to a qualifying incapacitated person." (Basden v. Wagner (2010) 181 Cal.App.4th 929, 931.)*fn3 The statutory background of the IHSS program was described by the Third Appellate District in Basden v. Wagner:

"In 1973, the Legislature enacted the IHSS program to enable aged, blind or disabled poor persons to avoid institutionalization by remaining in their homes with proper supportive services. (Welf. & Inst. Code, § 12300 et seq.) 'Supportive services' are described in discrete categories, such as 'domestic services,' 'personal care services,' and 'protective supervision,' to name a few. (§ 12300, subd. b).) [Footnotes omitted.] [*fn4 ]

"The Department [the state Department of Social Services or DSS] promulgates regulations that implement the program, and county welfare departments administer the program under the Department's supervision. Counties process applications for IHSS, determine the individual's eligibility and needs, and authorize services. The county either obtains and pays the provider of the services, or it pays the recipient who hires a provider. (Miller v. Woods (1983) 148 Cal.App.3d 862, 868 (Miller).)

"The total amount of services provided to any one person is limited by statute. Severely impaired recipients may receive up to 283 hours per month, or approximately 65.4 hours per week, of supportive services paid through the program. Less severely impaired recipients may receive up to 195 hours per month, or approximately 45 hours per week. (§ 12303.4.)" (Basden v. Wagner, supra, 181 Cal.App.4th at pp. 933-934.)*fn5

The services that may be authorized through IHSS are specified in the DSS Manual sections 30-757.11 through 30-757.19. (DSS Manual, § 30-757.1.) The Department must adopt regulations establishing a uniform range of services available to all eligible recipients based up individual needs, subject to county plans developed in conformity with state law. (§§ 12301.1, 12302.) Counties evaluate the recipients based on those regulations and reassess periodically, but at least annually. (§ 12301.1) The Department, in consultation with the counties, must also "establish and implement statewide hourly task guidelines" and a standardized tool to assess recipient needs. (§§ 12301.2, 12309.) Although County may authorize exceptions to the hourly task time guidelines for particular services based on factors set forth in the DSS Manual (see DSS Manual, § 30-757.1), no exception may result in the recipient's total hours exceeding the maximum monthly limits specified. (Id., § 30-757.1(a)(4).)

Counties are tasked with performing "quality assurance activities," including establishing a dedicated, specialized unit or function to ensure quality assurance and program integrity, including fraud detection and prevention in the provision of services; performing routine reviews of supportive case services to ensure there are accurate assessments of needs and hours; developing, with the state, policies, procedures, timelines, and instructions under which counties will receive, resolve and respond appropriately to claims data match discrepancies or other information that indicates potential overpayments to providers or recipients or third-party liability; monitoring the delivery of supportive services to detect and prevent potential fraud by providers, recipients and others to maximize recovery of overpayments. (§ 12305.71, subds. (a), (b), (c).) Such monitoring may include unannounced home visits to a recipient's home to verify the receipt of services. (§ 12305.71, subd. (c)(3)(A), (B).)

B. Sonoma County's implementation of the IHSS program

"The California Legislature set eligibility standards and methods by which counties could provide in-home care. [(E.g., §§ 12302, 12304.)] The counties were responsible for the day-to-day operation of the programs." (Bonnette v. California Health and Welfare Agency (9th Cir. 1983) 704 F.2d 1465, 1467 (Bonnette).) "A county may deliver services under the IHSS program by (1) hiring in-home supportive personnel in accordance with established county civil services requirements, (2) contracting with a city, county, city or county agency, a local health district, a voluntary nonprofit agency, a proprietary agency or an individual, or (3) making direct payment to a recipient for the purchase of services. (Welf. & Inst. Code, § 12302.)" (SEIU, supra, 22 Cal.App.3d at p. 765; see Bonnette, supra, at p. 1467.) A county board of supervisors may also elect to either "[c]ontract with a nonprofit consortium to provide for the delivery of in-home supportive services" (§ 12301.6, subd. (a)(1)) or "[e]stablish, by ordinance, a public authority to provide for the delivery of in-home supportive services." (§ 12301.6, subd. (a)(2), italics added.)

Pursuant to section 12301.6, in 2001, the Sonoma County Board of Supervisors chose to establish Public Authority to provide for the delivery of services. (Sonoma County Mun. Code, Art. XXIV, §§ 2-358 through 2-360 (Ord. No. 5289 § 1 (part), 2001.) The county board of supervisors is the governing board of Public Authority. (Id., § 2-361.) The board may abolish Public Authority by repealing the article establishing it. (Id., § 2-371.)

Public Authority was established as a separate entity from County and was given all powers "necessary and convenient" to carry out the powers conferred by sections 12300 et seq. and the Sonoma County Municipal Code, "including the power to contract for services pursuant to Welfare and Institutions Code [s]sections 12302 and 12302.1 . . . ." (Sonoma County Mun. Code, § 2-364, subd. (b).) Consequently, Public Authority has the power to determine the method of delivery of IHSS services to recipients and to contract with appropriate entities or individuals to deliver those services. (Sonoma County Mun. Code, § 2-364, subd. (b).*fn6 ) Public Authority also has the authority to provide for delivery of services by direct payment to a provider chosen by the recipient. (§ 12301.6, subd. (d).)

Public Authority was charged with implementing the goals and objectives of section 12301.6, including, but not limited to: (1) establishing a registry to provide assistance to recipients in finding providers; (2) investigating the qualifications and background of potential providers; (3) establishing a referral system under which providers shall be referred to recipients; (4) providing for training for providers and recipients*fn7 ; (5) performing any other functions related to the delivery of in-home supportive services; and (6) assuring that the requirements of the personal care option under federal law are met. (§ 12301.6 (a)-(e); Sonoma County Mun. Code, § 2-363, subds. (a)-(c).)

Recipients may elect to receive services from providers who are not referred to them by the Public Authority. However, those providers must be referred to the Public Authority "for the purpose of wages, benefits, and other terms and conditions of employment." (§ 12301.6, subd. (h), italics added.)

At all times relevant here, Public Authority was "deemed to be the employer" of IHSS providers for purposes of collective bargaining under the Meyers-Milias-Brown Act (Gov. Code, § 3500 et seq., hereafter the MMBA.) (§12301.6, subd. (c)(1); accord, Sonoma County Mun. Code, § 2-364, subd. (e).) However, "[r]ecipients shall retain the right to hire, fire, and supervise the work of any in-home supportive services personnel providing services to them." (§ 12301.6, subd. (c)(1); see Sonoma County Mun. Code, § 2-364, subd. (e) ["Nothing in these enumerated powers shall be construed to limit or interfere with the rights of IHSS recipients to hire, fire and supervise the work of any worker providing services to them."].)

Public Authority is not responsible for (1) authorizing services for a recipient; (2) determining a recipient's need for services, the level and quality of services required, or the eligibility of recipients; (3) conducting assessments of the need for services; and "[t]erminating the recipient's participation in the IHSS program." (Sonoma County Mun. Code, § 2-363, subd. (d).) These services and functions are "the exclusive responsibility of the [C]county of Sonoma." (Ibid.)

County, therefore, makes the threshold determination whether an individual is financially eligible for IHSS services, the level of services required, and the number of hours of service to which the recipient is entitled under the statutes and regulations. County also enters the provider's timesheet into a database maintained by the state. The state issues the checks to the providers. County also "[a]uthorize[s] the disbursement of all funds paid . . . by: (1) [r]eviewing all time sheets prior to entry of time sheet data into the system to ensure consistency between hours reported and hours authorized [and by] (2) [r]eviewing any significant discrepancies between hours reported and hours authorized to determine the reason and take corrective action as indicated." (DSS Manual, § 30-769.241, subd. (c)(1), (2).) The state has the responsibility for the state payroll system, unemployment insurance, and workers' compensation for service providers. (§§ 12301.6, subd. (i), 12302.2; Sonoma County Mun. Code, § 2-364, subd. (f).) Where a county provides for direct payment to a provider chosen by a recipient, as County does here,*fn8 the state either performs or assures the performance of all the recipient's obligations as an employer, relating to unemployment compensation, disability benefits, workers' compensation, federal and state income tax and federal old-age survivors and disability insurance benefits. (§ 12302.2.)

Public Authority is "deemed not to be the employer of in-home supportive services personnel referred to recipients under this section for purposes of liability due to the negligence or intentional torts of the in-home supportive services personnel." (§ 12301.6, subd. (f)(1), (2), italics added; see Sonoma County Mun. Code, § 2-365, subd. (c).) Further, "[e]mployees of the public authority shall not be employees of the county for any purpose." (§ 12301.6, subd. (b)(2)(B); Sonoma County Mun. Code, § 2-365, subd. (c).) Both the County and the state are "immune from any liability resulting from its implementation of Welfare and Institutions Code Section 12301.6 et seq. in the administration of In-Home Supportive Services." (§ 12301.6, subd. (f)(3)*fn9 ; Sonoma County Mun. Code, § 2-365, subd. (d).)

II. Standard of Review

This action arises on the superior court's sustaining of real parties' demurrer to Guerrero's causes of action for alleged violation of the FLSA and state wage and hour laws. Our standard of review is well established.

We review orders sustaining demurrers de novo. (Sheppard v. North Orange County Regional Occupational Program (2010) 191 Cal.App.4th 289, 297 (Sheppard).) "[F]ollowing the sustaining of a demurrer without leave to amend, we assume the truth of all properly pleaded facts. (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6; [citation].) We also accept as true all facts that may be implied or inferred from those expressly alleged. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403; [citation].)" (Curcini v. County of Alameda (2008) 164 Cal.App.4th 629, 633, fn. 3 (Curcini).) We "liberally construe [the properly pleaded allegations of a challenged complaint] to achieve ' " 'substantial justice' " ' among the parties. (American Airlines, Inc. v. County of San Mateo (1996) 12 Cal.4th 1110, 1118.)" (Sheppard, at p. 297.) If the trial court sustains a demurrer without leave to amend, we determine whether or not plaintiffs could amend the complaint to state a cause of action. (Curcini, at p. 637.) Plaintiffs bear the burden of proving the trial court abused its discretion in denying leave to amend. (Leonard v. John Crane, Inc. (2012) 206 Cal.App.4th 1274, 1282, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) " 'We do not review the reasons for the trial court's ruling; if it is correct on any theory, even one not mentioned by the court, and even if the court made its ruling for the wrong reason, it will be affirmed. [Citations.]' (Coastside Fishing Club v. California Resources Agency (2008) 158 Cal.App.4th 1183, 1190-1191.)" (Curcini, at pp. 637-638.)

III. Real Parties as "Employers" or "Joint Employers" Under the FLSA*fn10

In Basden v. Wagner, supra, 181 Cal.App.4th 929, the Court of Appeal recognized that "[t]he IHSS statutes treat providers as employees for some purposes, but not for all.

"IHSS providers work pursuant to various arrangements. Some are civil service employees of a county; some are employees of an entity that contracts with the county; some contract directly with the county or authorized entity; some are referred to the recipient by the authorized entity; and some contract directly with the recipient. (§§ 12301.6, 12302, 12302.1, 12302.25.)

"Each county is required to act as an 'employer,' or to establish an 'employer,' for IHSS providers for purposes of the state public employee-employer ...


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