During the COVID-19 pandemic, employees of California State University (CSU) were ordered to conduct their classes remotely. In order to comply, one biology professor tried to retrieve his computer and other vital equipment from his on-campus office, but he was denied permission to enter it. As a result, he had to pay for replacement equipment himself. His request for reimbursement was denied by CSU, so he sued them. He lost due to exemptions for government employees in the California Labor Code. He appealed and now has lost again.

Patrick Krug taught biology at CSU Los Angeles. His case against the CSU Board of Trustees, which later became a class action suit on behalf of additional CSU faculty members, was brought according to California Labor Code Section 2802(a), which states “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties…” CSU demurred, arguing that it “enjoys broad exemption from Labor Code provisions that infringe on its sovereign powers.”

At the trial court level, Los Angeles Superior Court Judge Carolyn B. Kuhl sustained CSU’s demurrer without leave to amend. A unanimous panel from Division One of California’s Second District Court of Appeal affirmed her decision on August 29. The opinion was written by Justice Victoria Caney with concurrences by Acting Presiding Justice Helen Bendix and Associate Justice Gregory J. Weingart.

Prior to his appeal, Professor Krug asked the State’s Department of Industrial Relations Division of Labor Standards Enforcement (DLSE), the government agency that claims it “protects and improves working conditions in California for more than 18 million workers and helps employers follow labor laws,” to evaluate CSU’s interpretation. DLSE responded that it disagreed with CSU’s interpretation of the Labor Code.

Later, Krug amended his complaint to add a complaint under the Private Attorneys General Act (PAGA), which allows suits against State departments if “the underlying penalties provide for civil penalties,” which the Labor Code does not do.

In her opinion which sustains Kuhl’s demurrer, Justice Caney first looked to the Labor Code’s text as “the best indicator of legislative purpose.” She found that “absent express words to the contrary, (under) the State’s Labor Code, government agencies are not included within the general rules of the statute.” In other words, it applies only to private-sector employees.

To support her conclusion, Caney applied a three-part test that examines the “express words of the statute,” any “positive indicia of legislative intent,” and absent both, whether “the statute would result in an infringement of sovereign governmental powers.” The opinion found that the State’s Education Code puts public education “among the state’s most sovereign powers.” As a result, the court was “not persuaded” by Krug’s arguments that government agencies are to be included in the Labor Code. The Labor Code’s failure to place limits on the word “employer” was seen as “legislative silence,” not a “positive indicium of legislative intent.”

Given this interpretation, Caney then examined whether applying Labor Code Section 2802 to CSU would “infringe on its sovereign governmental powers.” She concluded that it not only would but would also subject the educational institution to additional expenses such as attorney’s fees and other costs, thus “divert(ing) limited educational funds from CSU’s core function.” She concluded that CSU has the “vested authority to set terms for employee expense reimbursement.”

In addition, the State’s Education Code, Section 89500, gives CSU the “discretion to make its own rules for reimbursement.” In the appellate opinion’s conclusion, however, Justice Caney cautioned that her ruling did not mean Labor Code Section 1802 could never apply to public employees, but “only that it does not apply in this case because the Legislature vested the CSU with sovereign authority with which Section 1802 would interfere.” Krug’s PAGA claim was rejected for similar reasons.

The hardships caused by COVID were certainly not the fault of CSU employees, and faculty members private at institutions of higher education would likely be reimbursed in cases similar to Krug’s. Even though the law in this case is on the side of the university, reimbursing college professors for the additional costs they were forced to incur to keep the university system alive throughout the pandemic would have been an affordable and just recognition of the unique hardships caused by the need to teach remotely.