Judge: Peter A. Hernandez, Case: 24STCV21684, Date: 2024-12-12 Tentative Ruling

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Case Number: 24STCV21684    Hearing Date: December 12, 2024    Dept: 34

1.               Defendants Pepperdine University and Britta Steinbrenner’s Demurrer to Plaintiff Alex Valencia’s Complaint is OVERULLED.

2.               Defendants Pepperdine University and Britta Steinbrenner’s Motion to Strike Portions of Plaintiff Alex Valencia’s Complaint is DENIED.  

Background

            On August 26, 2024, Plaintiff Alex Valencia (“Plaintiff”) filed a complaint against Defendants Pepperdine University, Britta Steinbrenner, and Does 1-25 (“Defendants”) arising from Plaintiff’s employment with Defendants alleging causes of action for:

1.                Retaliation in Violation of Cal. Lab. Code § 1102.5;

2.               Retaliation in Violation of Cal. Lab. Code § 6310;

3.               Interference under CFRA (Cal. Gov't. Code § 12945.2(q));

4.               Retaliation under CFRA (Cal. Gov't. Code § 12945.2(k));

5.               Failure to Accommodate (Cal. Gov’t Code § 12940(m));

6.               Failure to Engage in an Interactive Process (Cal. Gov’t Code § 12940(n));

7.               Discrimination Based on Disability (Cal. Gov’t Code § 12940(a));

8.               Hostile Work Environment § 12940(j);

9.               Retaliation under FEHA (Cal. Gov't. Code § 12940(h));

10.            Failure to Prevent Discrimination, Harassment, or Retaliation (Gov’t. Code §  

12940(k));

Failure to Provide Rest Periods (Cal. Lab. Code §§ 226.7);

11.            Failure to Provide Meal Breaks (Labor Code § 226.7);

12.            Wrongful Termination in Violation of Public Policy;

13.            Intentional Infliction of Emotional Distress;

14.            Defamation; and

15.            Failure to Reimburse Business Expenses (Cal. Lab. Code § 2802).

On October 25, 2024, the court entered Plaintiff’s Request for Dismissal of his fifteenth cause of action for defamation.

On October 31, 2024, Defendants filed a Demurrer and Motion to Strike Plaintiff’s complaint. On November 27, 2024, Plaintiff filed oppositions to Defendants’ motions. On December 5, 2024, Defendants filed replies to Plaintiff’s oppositions.

1.               Demurrer

Legal Standard

            “The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of” various grounds listed in statute. (Code Civ. Proc., § 430.10.)

            When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

            Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245).

Discussion

            Defendants demur to Plaintiff’s first cause of action for violation of Labor Code section 1102.5 on the basis that it is time barred by the applicable statute of limitations. Additionally, Defendant Britta Steinbrenner demurs to Plaintiff’s first cause of action on the basis that there is no individual liability under section 1102.5.

Cal. Lab. Code § 1102.5 (Statute of Limitations)

            Defendants argue that Plaintiff’s claim for whistleblower retaliation under Labor Code section 1102.5 is time-barred as Plaintiff seeks civil penalties and such relief must have been sought within one year following the claims accrual. (Demurrer, at p. 7, relying on Hector Tapia v. Hyatt Corp. (C.D. Cal. June 30, 2021) 2021 WL 3076650, at *5.) Defendants contend that Plaintiff alleges that he was terminated on April 17, 2023 but did not file this action until August 26, 2024. (Demurrer, at p. 8.) Defendants also argue that the three-year statute of limitations set forth in Code of Civil Procedure section 338 for “an action upon a liability created by statute” does not apply here since Plaintiff expressly seeks civil penalties in his prayer for relief. (Ibid.) Defendants contend that even if Plaintiff had not sought civil penalties, a one-year statute of limitations applies here since civil penalties are mandatory under section 1102.5, relying on Melamed v. Cedars-Sinai Medical Center, (2017) 8 Cal.App.5th 1271. (Ibid.)

            In opposition, Plaintiff argues that the complaint does not seek civil penalties under Labor Code section 1102.5, subdivision (f), and therefore not subject to a one-year statute of limitations. (Opp., at p. 4.) Plaintiff contends that his complaint seeks compensatory, general, and punitive damages making the three-year statute of limitations under CCP section 338. (Id., at p. 5.)  

            In reply, Defendants argue that Plaintiff does not provide support for its contention that a three-year statute of limitation applies. (Reply, at p. 5.) Defendants also argue that Plaintiff does not address the case law and reasoning presented by Defendants. (Ibid.)

            As the parties note in their briefs, there is no controlling authority addressing the statute of limitations applicable for Labor Code section 1102.5. The court finds that Defendants’ argument is unpersuasive because it would not dispose of Plaintiff’s entire cause of action. Demurrers do not lie as to only parts of causes of action where some valid claim is alleged but “must dispose of an entire cause of action to be sustained.”¿ (Poizner¿v. Fremont General Corp.¿(2007) 148 Cal.App.4th 97, 119.)¿¿As alleged, Plaintiff seeks compensatory, general, and punitive damages according to proof as well as civil penalties. (Compl., Prayer for Relief.) Thus, the three-year statute of limitation would apply for the portion of the claim that seeks compensatory, general, and punitive damages for the alleged retaliation. (Code Civ. Proc. § 338.) Thus, Plaintiff’s first cause of action is largely timely because the complaint was filed on August 26, 2024, and as a result, a demurrer is not the proper mechanism to dispose of Plaintiff’s first cause of action and request for civil penalties.  

            Accordingly, the demurrer to the first cause of action is overruled.  

Cal. Lab. Code § 1102.5 (Individual Liability)

            Defendants argue that Plaintiff’s first cause of action as to Defendant Steinbrenner should be demurred based on the reason that only an employer, and not individual employees, can be held liable for workplace retaliation pursuant to Labor Code section 1102.5. (Demurrer, at p. 10.) Defendants contend that in 2014, the Legislature amended section 1102.5 to state that “[a]n employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information...” (Ibid.) Defendants argue that there are no state court decisions directly addressing whether this amendment created individual liability for workplace retaliation that did not exist before. (Ibid.) Nevertheless, Defendants argue that federal district courts have held that the amendment did not create individual liability. (Ibid.)

            In opposition, Plaintiff argues that section 1102.5 expressly includes individuals as the statute states: “An employer, or any person acting on behalf of the employer, shall not retaliate against an employee...” (Opp., at p. 6 [emphasis added].) As such, Plaintiff contends that the plain language makes clear an intent to expand liability. (Ibid.) Plaintiff also argues that several sections of the Labor Code imposes personal liability for violations and ignoring the “any person” provision would render the amendment meaningless. (Id., at pp. 6-7.) Lastly, Plaintiff argues that the federal authorities cited by Defendants are not binding nor persuasive. (Id., at p. 8.)

            In reply, Defendants dispute Plaintiff’s arguments while restating their demurring contentions.

             This court finds that Labor Code section 1102.5 can be viewed to extend to a supervisor, given the 2013 statutory amendment adding “any person acting on behalf of the employer” to the statutory language. (2013 Cal. Legis. Serv. Ch. 781.) Defendants have offered no relevant California authority to the contrary. As there is no binding case law on this issue, the court looks to the legislative history of the statute. Labor Code § 1102.5 currently states: 

   An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information, or because the employer believes that the employee disclosed or may disclose information … to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance, or for providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee's job duties.”

(Labor Code § 1102.5(b) [emphasis added].)

            Here, Defendants rely solely on federal district court cases and California cases pre-dating the 2013 amendment to Labor Code § 1102.5. This court is not persuaded that it should depart from the apparent intent of the California Legislature. Accordingly, based on the 2013 amendment, Labor Code § 1102.5 can be viewed to extend liability to a supervisor. 

            The demurrer to the first cause of action as to Defendant Steinbrenner is overruled.  

2.               Motion to Strike

Legal Standard

Pursuant to Code of Civil Procedure section 436, “the court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” The grounds for a motion to strike must “appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437.)

Discussion

            Defendants moves to strike Plaintiff’s request for civil penalties arguing that they are barred by the applicable statute of limitations. (MTS, at p. 5.)  Defendants contend that Plaintiff seeks civil penalties in his eleventh cause of action for failure to provide rest periods under Labor Code section 226.7 and 512, sixteenth cause of action for failure to reimburse business expenses under Labor Code 2802, and generally in his prayer for relief. (Ibid.) Defendants contend that as Labor Code sections 226.7, 512, and 2802 do not include specific statutes of limitation, the one-year statute of limitations under CCP section 340(a) applies. (Ibid.) As such, Defendants argue that Plaintiff alleges that he was terminated on April 18, 2023 and did not file his action until August 26, 2024, making his claims untimely. (Ibid.)

            In opposition, Plaintiff argues that as his claims under Labor Code section 226.7 are compensatory, the three-year statue of limitations under CCP section 338(a) applies making Plaintiff’s claims timely. (Opp., at p. 5.) Plaintiff also argues that his claims under section 2802 are also subject to CCP section 338(a) as the claim seeks restitution of unreimbursed expenses. (Ibid.) Lastly, Plaintiff argues that Defendants’ motion to strike is procedurally improper as it is being used as a substitute of a demurrer. (Ibid.)

            In reply, Defendants again argue that as Plaintiff seeks civil penalties in his complaint, CCP section 340(a) sets a one-year statute of limitation for requests for civil penalties. (Reply, at p. 2.) Additionally, Defendants contend that a motion to strike is appropriate to strike Plaintiff’s requests for civil penalties. (Ibid.)

            As to section 226.7, the California Supreme Court has held that section 226.7 is a remedy, and not a penalty, and it is thus error to apply a one-year statute of limitations. (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1114.)  Under the continuing violation doctrine, incidents for which the filing would be individually untimely can be considered if they are cumulatively part of an ongoing unlawful practice with incidents that do fall within the statute of limitations.  (Richards v. CH2M Hill, Inc. (2001) 26 Cal. 4th 798, 811-824.) Thus, as a liability created by statute, section 226.7 carries a 3-year statute of limitations. (Code Civ. Proc., § 338. subd. (a).) The court denies the motion to strike as to civil penalties requested under section 226.7 and 512.

            Similarly, the court finds that section 2802 is also a remedy, and not a penalty, subject to a 3-year statute of limitations under CCP section 338(a). As such, the court denies the motion to strike as to civil penalties requested under section 2802.

Conclusion

1.               Defendants Pepperdine University and Britta Steinbrenner’s Demurrer to Plaintiff Alex Valencia’s Complaint is OVERULLED.

2.               Defendants Pepperdine University and Britta Steinbrenner’s Motion to Strike Portions of Plaintiff Alex Valencia’s Complaint is DENIED.