Opinion
A165323
06-29-2023
DAVID LaCLAIR et al., Plaintiffs and Appellants, v. STATE OF CALIFORNIA et al., Defendants and Respondents
NOT TO BE PUBLISHED
Alameda County Super. Ct. No. RG15766724
TUCHER, P.J.
In this action, several Cal Fire employees and the union that represents them (collectively, plaintiffs) assert the employees were improperly treated as firefighters rather than law enforcement officers for purposes of determining their right to overtime compensation. The only issue before us on appeal is whether defendants, the State of California and several of its officials, have breached the employees' contractual rights. The trial court found the undisputed facts showed no breach of contract and granted summary judgment to defendants. We affirm.
Plaintiffs in this action are David LaClair, Byron Darrington, Sr., Gregory Ewing, Wayne Howerton, David Cabral, Christopher Palmer, Branden Smith, and Cal Fire Firefighters Local 2881. The named defendants are the State of California, Cal Fire, a state agency, California Department of Human Resources, and several individuals in their capacities as Governor of the State of California, Director of Cal Fire, Director of the California Department of Human Resources, and Controller of the State of California. For the sake of convenience, we will at times refer to defendants simply as "the state."
FACTUAL AND PROCEDURAL BACKGROUND
The parties stipulated to most of the facts at issue. The Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (FLSA) establishes a partial exemption from normal overtime pay requirements for certain law enforcement and fire protection employees. Although their work schedules may differ from the standard 40-hour week, they are entitled to premium overtime pay when certain thresholds are exceeded. (29 U.S.C. § 207(k) (§ 7(k)).)
Pursuant to this authorization, the California State Civil Service Pay Scales Manual defines overtime differently for these classes of employees. For ordinary workers, who are "not eligible for exemption under Section 7[(k)] of the FLSA," overtime is "defined as all hours worked in excess of 40 hours in a period of 168 hours" (i.e., one week). (§ 7(k).) But for "employees in law enforcement classes, for which exemption under Section 7[(k)] of the FLSA is claimed," overtime generally does not begin until the employee has worked more than 171 hours in a period of 28 days; and for "employees in fire suppression classes, for which exemption under Section 7[(k)] of the FLSA is claimed," that figure is 212 hours in 28 days.
More precisely, for employees in law enforcement classes for which the exemption is claimed, overtime is "defined as all hours worked in excess of 171 hours in a period of 28 consecutive 24-hour periods or a proportional number of hours for any other number of consecutive 24-hour periods down to seven. (42.75 hours in seven consecutive 24-hour periods.)" For employees in fire suppression classes for which the exemption is claimed, overtime is "defined as all hours worked in excess of 212 hours in a period of 28 consecutive 24-hour periods or a proportional number of hours for any other number of consecutive 24-hour periods down to seven. (53 hours in seven consecutive 24-hour periods)."
Plaintiffs allege they were employed by Cal Fire as either fire captains or battalion chiefs, and in that capacity were peace officers under California law. They are or were members of Bargaining Unit 8, represented by Cal Fire Firefighter Local 2881 (the union) for purposes of collective bargaining. The union and the state entered into, and the Legislature approved, memoranda of understanding (MOUs) in effect July 1, 2010 through July 1, 2013 and January 1, 2017 through July 1, 2021. From July 2, 2013 through December 31, 2016, the union and the state continued to give effect to the provisions of the 2010-2013 MOU regarding wages and hours. The MOUs provide that the classes including fire captains and battalion chiefs receive overtime pay for all hours in excess of 212 hours during a 28-day consecutive work period.
The MOUs also address the possibility that an employee classified as a fire captain or battalion chief might, at least for a time, not qualify as exempt under the FLSA. Section 8.21 of both MOUs, entitled "FLSA Exempt Duty Week," is the relevant provision, and its interpretation is central to this case. Section 8.21 provides, "[e]mployees who are covered by the FLSA and are found not to qualify for a full or partial exemption from the overtime provisions of the Act will be covered by Section 8.4." (All further undesignated section references are to the MOUs.) Section 8.4, in turn, pertains to employees of Cal Fire who may be scheduled to work a 40-hour duty week.
Between April 2012 and the date of the parties' August 2020 stipulation, plaintiffs were regularly scheduled to work duty weeks of either 72 hours (for fire captains and for battalion chiefs hired after May 12, 2006) or 84 hours (for battalion chiefs hired before May 12, 2006). They received overtime pay after working 212 hours in a 28-day period, based on the FLSA's fire-protection exemption. These policies have been applied to fire captains since approximately 1985 and to battalion chiefs since approximately 1995.
Plaintiffs brought a class action petition for writ of mandate and complaint for damages and declaratory relief (the complaint) in April 2015, alleging they were entitled to greater overtime pay calculated in one of two manners: either overtime pay for all hours worked in excess of 171 hours in a 28-day period under the partial exemption for law enforcement personnel, or overtime pay for all hours worked in excess of 40 hours per workweek. They alleged the following causes of action: (1) failure to pay contractual overtime in violation of Labor Code section 222; (2) unpaid wages in violation of the FLSA; (3) failure to pay overtime in breach of common law contractual obligations; (4) failure to comply with statutory and regulatory obligations; (5) declaratory relief; and (6) mandamus.
On November 6, 2018, the trial court certified a class of" 'Individuals who are or were sworn Peace Officers, who, between April 12, 2012 and the date of this Order, were or are employed in positions as Fire Captain Specialists or Battalion Chiefs which required Peace Officer status and who have been classified as firefighters for purposes of computing overtime payments.' "
Defendants moved for summary judgment or summary adjudication, arguing that each cause of action must be dismissed, and the trial court ultimately agreed and granted judgment in defendants' favor. On appeal, plaintiffs challenge the ruling only as it pertains to the third cause of action, for common law breach of contract, the fifth cause of action, for a declaration that they are entitled to additional overtime compensation, and the sixth cause of action, for a writ of mandate directing defendants to pay the amount due in overtime as a result of miscalculation and misclassification and to comply with their obligations to pay the necessary overtime compensation.
DISCUSSION
A party moving for summary judgment or summary adjudication bears the burden to show there is no triable issue of material fact, and the party is entitled to judgment as a matter of law. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; see Grant-Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 1361, 1370 [same standards applied to summary judgment and summary adjudication].) A triable issue of fact exists only if the evidence would allow a reasonable trier of fact to find that fact in favor of the party opposing the motion. (Aguilar, at p. 850.) On appeal, we review the grant of summary judgment de novo (Crown Imports, LLC v. Superior Court (2014) 223 Cal.App.4th 1395, 1403), but the appellant bears the burden to show error (Claudio v. Regents of University of California (2005) 134 Cal.App.4th 224, 230).
Plaintiffs' contentions in this appeal are directed solely to the proper interpretation of section 8.21, which provides that "[e]mployees who are covered by the FLSA and are found not to qualify for a full or partial exemption from the overtime provisions of the Act will be covered by Section 8.4," applicable to employees who work a 40-hour work week. Plaintiffs contend that this provision is ambiguous, that it is reasonably susceptible to an interpretation requiring the state to have treated the class members as non-exempt employees with a 40-hour work week (rather than as law enforcement employees) and back-pay overtime accordingly because it first misclassified them as fire suppression personnel, that a trial is necessary to clarify the parties' intent, and that the trial court accordingly erred in granting summary adjudication on these causes of action.
This is the only theory upon which plaintiffs contend on appeal the state breached its contractual duties, or indeed any duties, to them. In support of the breach of contract cause of action, they do not argue, for instance, that the MOUs themselves imposed a contractual duty for the state to apply the 171-hour peace officer exemption to them. Nor do they challenge the trial court's grant of summary adjudication on any cause of action based on alleged violations of federal or state labor laws; as a result, this appeal does not raise the question of whether they were misclassified under FLSA. Our discussion is therefore limited to whether section 8.21 may reasonably be read to support the interpretation plaintiffs advocate.
The trial court interpreted section 8.21 to mean that employees who were found not to fall within any full or partial exemption must have a 40-hour work-week schedule. Plaintiffs do not contend this is an unreasonable interpretation, but instead argue that section 8.21 is also reasonably susceptible to the following interpretation: If the state treats an employee as subject to a full or partial exemption from FLSA and there is later a determination that that particular exemption is inapplicable, the employee is then subject to a 40-hour work week, even if the employee falls within another exemption. Under this interpretation, plaintiffs appear to contend, even though their theory of this case is that they are law enforcement rather than fire protection personnel, the state breached its contractual obligations to them by failing to treat them as 40-hour-a-week employees and pay overtime accordingly. And, they argue, extrinsic evidence may and should be used to resolve the claimed ambiguity in section 8.21.
"An ambiguity exists when language as applied to a concrete dispute is reasonably susceptible of different, plausible, meanings." (California Dept. of Human Resources v. Service Employees Internat. Union, Local 1000 (2012) 209 Cal.App.4th 1420, 1430 [interpretation of MOU].) Unless the interpretation of a contract turns on the credibility of extrinsic evidence, we interpret an MOU independently. (City of El Cajon v. El Cajon Police Officers' Assn. (1996) 49 Cal.App.4th 64, 71 (El Cajon).)"' "The test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible." '" (Gribaldo, Jacobs, Jones &Associates v. Agrippina Versicherunges A.G. (1970) 3 Cal.3d 434, 443.)
We also bear in mind that "collective bargaining agreements are intended to govern' "a myriad of cases which the draftsmen cannot wholly anticipate"' [citation]; that resort may be had, in appropriate circumstances, to the parties' practice, usage, and custom in interpreting the agreement [citation]; and that such agreements 'often contain implied, as well as express, terms.'" (Retired Employees Assn. of Orange County, Inc. v. County of Orange (2011) 52 Cal.4th 1171, 1179.)
The parties disagree on the extent to which we apply ordinary principles of contract interpretation in construing a collective bargaining agreement. Plaintiffs point to cases explaining that" '" '[a] collective bargaining agreement is not an ordinary contract' [citation] and is not governed by the common law concepts that control private contracts. [Citation.] '[I]t is a generalized code to govern a myriad of cases which draftsmen cannot wholly anticipate.'" '" (Amalgamated Transit Union Local 1277 v. Los Angeles County Metropolitan Transportation Authority (2003) 107 Cal.App.4th 673, 689, italics omitted, quoting Mechanical Contractors Assn. v. Greater Bay Area Assn. (1998) 66 Cal.App.4th 672, 684 and Steelworkers v. Warrior &Gulf Co. (1960) 363 U.S. 574, 578.) As a result, they argue, the court should consider extrinsic evidence of bargaining history and past practices even if the agreement is clear and unambiguous. (See Operating Engineers Pension Trust v. Cundiff (C.D.Cal. 1985) 619 F.Supp. 1003, 1009.)
The state, on the other hand, points to cases stating that ordinary rules of contract interpretation are used to construe public sector MOUs. (See, e.g., County of Fresno v. Fresno Deputy Sheriff's Assn. (2020) 51 Cal.App.5th 282, 292; National City Police Officers' Assn. v. City of National City (2001) 87 Cal.App.4th 1274, 1278-1279; El Cajon, supra, 49 Cal.App.4th at pp. 70-71.) These principles are explained in County of Fresno: "The goal of contract interpretation is to effectuate the mutual intent of the parties as it existed at the time of contracting insofar as it is ascertainable and lawful. [Citation]' "Such intent is to be inferred, if possible, solely from the written provisions of the contract. [Citation.] The 'clear and explicit' meaning of these provisions, interpreted in their 'ordinary and popular sense,' unless 'used by the parties in a technical sense or a special meaning is given to them by usage' [citation], controls judicial interpretation. [Citation.] Thus, if the meaning a layperson would ascribe to contract language is not ambiguous, we apply that meaning." '" (County of Fresno, at p. 292.) And courts do not"' "adopt a strained or absurd interpretation in order to create an ambiguity where none exists," '" but will rather "seek a commonsense interpretation which avoids absurd results." (Mount Vernon Fire Ins. Co. v. Busby (2013) 219 Cal.App.4th 876, 882 (Mount Vernon).)
We need not determine which of these approaches is correct because, even under that advocated by plaintiffs, we conclude the trial court properly granted summary adjudication of the cause of action for common law breach of contract. Under plaintiffs' interpretation of the MOU, if the state erroneously applied the wrong exemption to an employee but another exemption could have applied, the state has a contractual duty not to compensate the employee under the correct work-week schedule but rather under an incorrect schedule. That is, if, as plaintiffs contend, they are not fire suppression personnel, as they have been treated, but peace officers, the state is contractually bound to compensate them not as partially exempt law enforcement employees but as non-exempt employees subject to a 40-hour work week.
Plaintiffs do not argue the MOUs require the state to compensate them based on a 40-hour week going forward; rather, they take the position they should be classified under the partial exemption for law enforcement employees. But, they contend, for the alleged past misclassification, under the FLSA the state may not receive the retroactive benefit of the 171-hour peace officer exemption, but must instead now compensate them for all time they worked in excess of 40 hours per week. (See Clayton v. State of Or., By and Through Dept. of Police (D.Or. 1990) 1990 WL 32088, p. *7 [in FLSA action, employer may not retroactively rely on later-established work 28/171 work period].) But in the cause of action for breach of contract, we must consider first what duties the contract itself imposed. (See Chen v. PayPal, Inc. (2021) 61 Cal.App.5th 559, 570 [breach of contract is wrongful failure to perform terms of contract].) That is, only if section 8.21 of the MOU imposed a contractual duty on the state to apply section 8.4's 40-hour work schedule (rather than the law enforcement work schedule) if plaintiffs were found not to qualify for exemption as fire-protection employees, can the state be found to have breached its obligations under that provision by failing to do so.
We are not bound by unpublished decisions of lower federal courts, but they may be cited for their persuasive value. (Aleman v. Airtouch Cellular (2012) 209 Cal.App.4th 556, 576, fn. 8.)
That plaintiffs' remedy for an FLSA violation may not be found in a cause of action for breach of contract does not leave plaintiffs without legal recourse, if the state has failed to comply with the FLSA. The trial court explained in its ruling that employees whose rights under the FLSA have been violated may pursue their claims through the federal Department of Labor.
Neither the language of section 8.21 nor the extrinsic evidence proffered by plaintiffs leads to a result in which the state, having once applied the wrong exemption to an employee, is thereafter barred from applying another appropriate exemption. Such as result is, on its face, absurd and may be reached through only the most strained interpretation. (See Mount Vernon, supra, 219 Cal.App.4th at p. 882.) No natural or commonsense reading of section 8.21 suggests that such an employee does not "qualify for a full or partial exemption from the overtime provisions of the Act." Rather, that employee does qualify for an exemption, albeit a different one than originally applied. Thus, the plain meaning of section 8.21 indicates the state did not have a contractual duty to treat plaintiffs as 40-hour-a-week employees, defeating a claim for breach of contract on this theory.
The extrinsic evidence proffered by plaintiffs does not suggest otherwise. Plaintiffs point to declarations of two people involved in negotiating the MOUs. Dennis O'Brien, a former union representative who helped negotiate the 1985-1987, 1987-1988, and 1988-1991 MOUs, stated that the provision that later became section 8.21 was added to the 1985-1987 MOU as part of an effort to ensure that employees receive compensation in a manner consistent with then-recently enacted FLSA provisions regarding compensation. Both parties understood the provision to mean that "when an employee whom the State had treated as wholly or partially exempt from the FLSA no longer qualified for such exemption, the employee would be moved to a 40-hour duty week and be eligible for overtime compensation for all hours worked in excess of 40 in a week." And, he went on, "the parties intended to ensure that if the State's treatment of an employee as wholly or partially exempt from the FLSA conflicted with the FLSA's requirements, this could be corrected by treating the employee as eligible for overtime compensation for all hours worked in excess of 40 hours in a week." Relying on this provision, the state would move union-represented employees temporarily to a 40-hour work week when they were injured and placed on a light duty assignment that did not involve fire-suppression activities. Kevin O'Meara, a union representative who served on the union's bargaining team from 1992 to 2017, similarly declared that the parties mutually understood section 8.21 to mean that when an employee treated as exempt under FLSA did not qualify for "such exemption," the employee would be moved to a 40-hour duty week and receive overtime for all hours over 40 in a week.
The trial court sustained defendants' objection to the O'Brien declaration on the ground it was not properly verified. (Code Civ. Proc., § 2015.5.) It sustained in part an objection to the O'Meara declaration to the extent it purported to explain how the State understood Section 8.21 of the MOUs.
But despite sustaining these objections, the trial court considered the declarations and explained that neither created a triable issue of material fact "regarding whether the State ever understood [section] 8.21 to mean what Plaintiffs assert it to mean, as opposed to what [section] 8.21 plainly states." The declarations did not lay a foundation for their claims regarding the state's understanding through, for example, evidence of discussions the parties had about section 8.21's meaning or of past practices consistent with plaintiffs' interpretation, as there was no evidence that employees who had been moved to a 40-hour work week while on light duty, or any other employees subject to section 8.21, qualified for another FLSA exemption.
Plaintiffs object that the absence of detailed support for the declarants' assertions is understandable in light of the passage of time, and not a reason to discount them. But we agree with the trial court the lack of factual support is fatal to plaintiffs' argument, not because it undermines the declarants' credibility but because mutual assent to a contract is assessed "under an objective standard applied to the outward manifestations or expressions of the parties . . . not their unexpressed intentions or understandings." (ASP Properties Group, L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1269.) While plaintiffs' declarants aver the parties intended to ensure compensation complied with the FLSA's overtime requirements, they describe no outward manifestations of any kind that shed light on the parties' contemporaneous views on how the MOUs address the specific question before the court.
In a footnote, plaintiffs argue that the trial court should not have sustained the objections to the two declarations. We may disregard points not raised in a properly headed argument (Roberts v. Lomanto (2003) 112 Cal.App.4th 1553, 1562; Provost v. Regents of University of California (2011) 201 Cal.App.4th 1289, 1294; Cal. Rules of Court, rule 8.204 (a)(1)(B)), but in any event, the trial court's ruling on the admissibility of the declarations is of no moment, given that the declarations relate no outward manifestations of the state's agreement to plaintiffs' proposed interpretation of the MOUs.
None of plaintiffs' other arguments persuades us section 8.21 is reasonably susceptible to their suggested interpretation. They point out that in the trial court the state initially argued that section 8.4 established only a 40-hour work week for certain classifications, not a 40-hour overtime threshold; the state went on to make the argument the trial court accepted, that even if section 8.4 established a 40-hour overtime threshold, a plain reading of section 8.21 meant an employee who qualifies for any exemption should not be treated as subject to section 8.4. Plaintiffs suggest the state thus offered alternative interpretations of section 8.21 and that the existence of multiple reasonable interpretations showed the provision's ambiguity. We disagree. The state's first argument dealt with the meaning not of section 8.21 but of section 8.4, and it does not indicate section 8.21 contains an ambiguity that makes it reasonably susceptible to plaintiffs' favored interpretation.
Plaintiffs also argue that the trial court's ruling contradicted an earlier ruling, made by a different judge. overruling defendants' demurrer to the first, third, and fourth causes of action. In connection with the demurrer, the trial court had ruled that the "provisions of the MOU, including the 'found not to qualify' language, are less than clear and subject to multiple reasonable constructions," and that extrinsic evidence may be necessary to determine their meaning. We reject plaintiffs' contention. First, when considering a motion for summary adjudication, a trial court is not bound by rulings made on demurrer. (Aerojet-General Corp. v. Commercial Union Ins. Co. (2007) 155 Cal.App.4th 132, 139, fn. 6.) In any case, the issue before us now is not whether the term "found not to qualify" is ambiguous; it is whether a material issue of fact remains, the resolution of which could lead to a judgment that section 8.21 requires the state, after misclassifying an employee under one exemption, to pay overtime based on a 40-hour work week even if the employee qualifies for another exemption. The trial court's earlier ruling does not reveal any ambiguity that assists plaintiffs in this appeal.
DISPOSITION
The judgment is affirmed.
WE CONCUR: FUJISAKI, J., RODRÍGUEZ, J.