Court Opinion

ID: 2805980
Source: CourtListenerOpinion
Date Created: 2015-06-05 19:03:16.199486+00
Date Added: 2024-06-11T11:12:46.200398
License: Public Domain

Filed 6/5/15 In re Acknowledgment Cases CA4/2

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
 California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
                                     or ordered published for purposes of rule 8.1115.

           IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                   FOURTH APPELLATE DISTRICT

                                                 DIVISION TWO

IN RE ACKNOWLEDGMENT CASES                                               E058460

                                                                         (Super.Ct.No. JCCP4412)

                                                                         OPINION

         APPEAL from the Superior Court of Los Angeles County. Elihu M. Berle, Judge.

Affirmed in part; reversed in part with directions.

         The Law Offices of Jon Webster, Jon Webster, James A. Arcellana and Raymond

M. Yetka for Defendants and Appellants.

         Michael N. Feuer, City Attorney, Amy Jo Field, Assistant City Attorney, Gregory

P. Orland, Brian I. Cheng and Juliann Anderson, Deputy City Attorneys, for Plaintiff and

Respondent.

                                                             1
                                     INTRODUCTION

       The City of Los Angeles (the city), the respondent in this case, requires that all

newly hired police officers attend and graduate from the Los Angeles Police Academy.

In the early 1990’s, the city realized that many officers who graduated from the academy

were leaving within a few years to join other law enforcement agencies. The city sought

to find a way to curtail the attrition. The city enacted Los Angeles Administrative Code

section 4.1700 (hereafter LAAC § 4.1700), which provides, in part, that any police

officer hired by the Los Angeles Police Department (LAPD) is required to reimburse the

city a prorated portion of the cost of training at the academy if he or she voluntarily

leaves the LAPD after serving less than 60 months following graduation and goes to

work for another law enforcement agency within one year after terminating employment

with the LAPD. LAAC section 4.1700 further provides that upon application for a job as

a police officer, the applicant shall sign an agreement stating that he or she intends to

maintain employment with the LAPD for at least 60 continuous months and agreeing to

reimburse the city for the direct and indirect costs of training if he or she leaves the

LAPD within five years after graduation and becomes employed by another law

                                              2
enforcement agency within one year after leaving the LAPD. (LAAC § 4.1700.)1 The

agreement is called “the acknowledgment.”2

       This case is a coordinated action involving 43 former officers of the LAPD, all but

three of whom were successfully sued by the city for breach of the acknowledgment.

Judgment was also entered against the former officers, referred to hereafter collectively

as appellants, on their cross-complaint. On appeal, they contend that the

acknowledgement fails as a contract for lack of consideration, but that if there was a

contract, it was unenforceable as contrary to multiple state and federal laws. We agree in

part with appellants’ contention that LAAC section 4.1700 violates Labor Code section

2802, and that the acknowledgment is void pursuant to Labor Code section 2804. As we

explain below, we do not reach appellants’ other contentions at this time.

       1  The parties stipulated that exhibit 51, admitted at trial, is the version of LAAC
section 4.1700 which was operative on the dates that the four representative defendants
signed the acknowledgment (Apr. 13, 1998 (Alvo); Sept. 27, 1999 (Murdoch); Nov. 7,
2001 (Marsh); and Mar. 10, 2003 (Ramos)). The pertinent portion of the operative
ordinance, as reflected in exhibit 51, provides:
        “1. Any Police Officer of the Los Angeles Police Department who receives basic
recruit training and any Police Specialist who receives lateral training at the Los Angeles
Police Department Police Academy shall reimburse the Police Department for the
estimated costs of that training should he/she voluntarily leave the Department before
having served sixty continuous months following successful completion of such training
and, within a year thereof, become employed by another law enforcement agency.”

       The full title of the document is “Acknowledgment of Los Angeles Police
       2
Department’s Intent To Seek Reimbursement Of Costs Of Basic And Lateral Training,
And Agreement To Repay Pro-Rated Costs Of Training.”

                                             3
                                  PROCEDURAL HISTORY3

       On August 9, 2001, the city filed a complaint in the San Bernardino County

Superior Court for breach of contract, quantum meruit and fraud against Anthony Alvo, a

resident of that county, alleging that Alvo was required by the terms of the

acknowledgment to reimburse the city $34,000. Alvo answered the complaint, denying

the allegations and asserting multiple affirmative defenses, including the assertion that

the acknowledgment violated Labor Code section 2802. Alvo and Daniel Fernandez filed

a cross-complaint and then a first amended cross-complaint, on behalf of themselves and

others similarly situated. Fernandez was also a former LAPD officer who had signed the

acknowledgment, and the city had threatened him with legal action.4 The city then filed

breach of contract claims in Los Angeles County against additional defendants. Alvo and

Fernandez sought to have all of the lawsuits litigated in a coordinated proceeding in San

Bernardino County. The Chair of the Judicial Council authorized coordination of the

suits. The assigned coordination motion judge ordered coordination of the five cases, and

       3  This is the second time this matter has come before this court. In In re
Acknowledgment Cases (Mar. 13, 2008, E040511) (nonpub. opn.), we held that the
defendants’ appeal from an order denying their motion to certify their cross-complaint as
a collective action under title 29 United States Code section 216(b) was premature. We
remanded the cause for further proceedings. Although most of the pertinent facts are
contained in the statement of decision filed in this case, a few background facts are not.
Accordingly, we will refer from time to time to our opinion in case No. E040511 as
“Acknowledgment Cases I.”

       4 As of April 30, 2002, the date of filing the first amended cross-complaint, the
city had not yet filed suit against him. The city later filed suit against a Daniel
Fernandez.

                                             4
recommended that the cases be tried in Los Angeles County, outside the city limits of the

City of Los Angeles. The coordination motion judge designated this court as the court

for any writ or appellate proceedings.5 Seven additional “add-on” cases, which had by

then been filed, were stayed until a coordination judge had been appointed in Los

Angeles County and had ruled on the appropriateness of coordinating the add-on cases.

(Acknowledgment Cases I, supra, E040511.)

       The Honorable Daniel Solis Pratt, sitting in Norwalk, was assigned as the

coordination judge. Judge Pratt ordered what was by then a total of 34 cases coordinated.

However, he ordered the litigation to proceed only on the original five cases. The

remaining cases, and any additional cases filed thereafter, which would also be joined in

the coordinated actions, would be stayed pending resolution of the five original cases.

(Acknowledgment Cases I, supra, E040511.)

       Thereafter, Alvo and Fernandez filed a motion to certify the cross-complaint as a

collective action pursuant to title 29 United States Code section 216(b). Judge Pratt

denied the motion. (Acknowledgment Cases I, supra, E040511.) Alvo and Fernandez

filed a notice of appeal from the order denying certification. (Ibid.) We held that the

order was not appealable as a final judgment because it did not terminate the action as to

all putative class members. (Ibid.)

       5  Section 404.2 of the Code of Civil Procedure provides that the coordination
motion judge shall select the reviewing court having appellate jurisdiction if the actions
to be coordinated are within the jurisdiction of more than one appellate court. In contrast,
the coordination motion judge merely recommends to the Chair of the Judicial Council a
particular superior court for trial of the coordination proceedings. (Cal. Rules of Court,
rule 3.530(a).)

                                             5
       Following remand to the superior court for further proceedings, four cases were

selected for trial. The defendants in those cases were Anthony Alvo, Duncan Murdoch,

Randall Marsh and Juan Ramos. The operative pleadings were the city’s complaint

against each defendant, an amended consolidated answer, an amended consolidated

cross-complaint, and the city’s answer to the cross-complaint.

       Trial was conducted primarily on the parties’ briefing, exhibits and argument. The

parties stipulated to allow testimony limited to cross-examination of opposing witnesses.

The parties stipulated that the judgment would apply to all pending cases. Following

trial, the court issued its statement of decision and entered judgment in favor of the city

against the representative defendants, except defendant Murdoch, as to whom the court

found the complaint time-barred. Judgment was entered as to the four representative

defendants. That judgment was later vacated, and the parties stipulated to a final

judgment on all pending cases, incorporating the terms of the original judgment and

stating the amount awarded to the city with respect to each defendant who was found

liable to the city. The stipulated judgment also provided that in addition to Murdoch,

defendants Daniel Baltazar and Marc Gonzales were awarded judgment against the city.

The judgment awarded costs and attorney fees to Murdoch, Baltazar, and Gonzales, and

to the city with respect to the remaining defendants.

       This appeal followed.

                                              6
                                   LEGAL ANALYSIS

                                              1.

  LAAC SECTION 4.1700 AND THE ACKNOWLEDGMENT ARE VOID TO THE

EXTENT THAT THEY PROVIDE FOR REIMBURSEMENT OF TRAINING OTHER

           THAN STATUTORILY MANDATED BASIC “POST” TRAINING

       Both as an affirmative defense and as a cause of action in their cross-complaint,

appellants contend that the acknowledgment and its source, LAAC section 4.1700, run

afoul of Labor Code sections 2802 and 2804. The trial court found otherwise.

Appellants reassert this contention on appeal. We agree, in part.6

       Labor Code section 2802, subdivision (a), provides, in pertinent part: “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 . . . .”

Appellants contend that because the LAPD requires all newly hired officers to attend its

academy, the cost of the academy is a necessary expenditure incurred as a direct

consequence of the discharge of the officer’s duties, and that LAAC section 4.1700 and

the acknowledgment are therefore void. The city responds that because appellants did

not pay for their training, they did not incur any out-of-pocket expense. However, the

city then contradicts itself by acknowledging that appellants did become liable for a

portion of the cost of their training because they failed to abide by the terms of the

       6  We review independently both the interpretation of a statute (People ex rel.
Lockyer v. Shamrock Foods Co. (2000) 24 Cal. 4th 415, 432) and the application of a
statute to undisputed facts (International Engine Parts, Inc. v. Feddersen & Co. (1995)
9 Cal. 4th 606, 611).

                                              7
acknowledgment. The city also contends that Labor Code section 2802 does not apply

because the training recruits receive is mandated by law under the Peace Officer

Standards and Training (POST) legislation. (Pen. Code, §§ 832, 13510 et seq.)

       Labor Code section 2802 does not explicitly provide that costs of employee

training are to be borne by the employer, nor does it expressly exclude training costs from

“necessary expenditures or losses incurred by the employee” in direct consequence of the

discharge of the employee’s duties. (Lab. Code, § 2802, subd. (a).) We have found no

cases addressing training as a cost covered by Labor Code section 2802. Accordingly,

the statute contains an unresolved ambiguity on this point. In interpreting a statute, a

court’s task is to attempt to discern and give effect to the Legislature’s intent. (Ross v.

California Coastal Com. (2011) 199 Cal. App. 4th 900, 922.) Where the language of a

statute is ambiguous, the court may look to outside sources to assist it in that task. (Ibid.)

Although courts have the final responsibility for interpreting a statute, an administrative

agency’s interpretation of a statute involving its area of expertise is entitled to great

weight. (Ibid.) Indeed, a court must defer to the agency’s interpretation of such a statute

unless that interpretation contradicts the clear language and purpose of the statute. (Id. at

p. 938.)

       With respect to the question of liability for training costs under Labor Code

section 2802, the Department of Industrial Relations, Division of Labor Standards

Enforcement, or DLSE, has stated as follows:

       “There is generally no requirement that an employer pay for training leading to

licensure or the cost of licensure for an employee. While the license may be a

                                               8
requirement of the employment, it is not the type of cost encompassed by Labor Code

[section] 2802. The most important aspect of licensure is that it is required by the state or

locality as a result of public policy. It is the employee who must be licensed and unless

there is a specific statute which requires the employer to assume part of the cost, the cost

of licensing must be borne by the employee.

       “There may be situations, however, where licensure is not actually required by

statute or ordinance but the employer requires either the training or the licensing (or both)

simply as a requirement of employment. In that case, the provisions of Labor Code

[section] 2802 would require the employer to reimburse the cost.” (DLSE Op. Ltr. (Nov.

17, 1994) at p. 1, fn. omitted.)

       We agree with the DLSE’s analysis. As noted above, we have found no cases

which address whether training costs fall under Labor Code section 2802. However, it is

established that the broad purpose of Labor Code section 2802 is to require an employer

to bear all of the costs inherent in conducting its business and to indemnify employees

from costs incurred in the discharge of their duties for the employer’s benefit. (See

Edwards v. Arthur Andersen LLP (2008) 44 Cal. 4th 937, 952 and cases cited therein.)

It is consistent with this purpose to require that where an individual must, as a matter of

law, have a license to carry out the duties of his or her employment, the employee must

bear the cost of obtaining the license. It is also consistent with this purpose to require an

employer to bear the cost of training which is not required to obtain the license but is

intended solely to enable the employee to discharge his or her duties.

                                              9
        A POST certificate is a statutory prerequisite to exercising the powers of a peace

officer in California:

       “(a) Every person described in this chapter as a peace officer shall satisfactorily

complete an introductory training course prescribed by the Commission on Peace Officer

Standards and Training. On or after July 1, 1989, satisfactory completion of the course

shall be demonstrated by passage of an appropriate examination developed or approved

by the commission. . . . [¶] (b) [¶] (1) Every peace officer described in this chapter, prior

to the exercise of the powers of a peace officer, shall have satisfactorily completed the

training course described in subdivision (a). [¶] (c) Persons described in this chapter as

peace officers who have not satisfactorily completed the course described in

subdivision (a), as specified in subdivision (b), shall not have the powers of a peace

officer until they satisfactorily complete the course.” (Pen. Code, § 832, subds. (a), (b),

(c).) POST certification is deemed by the Legislature to be a “professional certificate,”

(Pen. Code, § 13510.1, subd, (a)), and is in effect licensure to act as a peace officer.

       Moreover, the POST commission, not the individual police agency, sets the

standards for training and certification of city police officers and other peace officers.

(Pen. Code, § 832, subd. (a).) And, POST training and certification is not exclusively

available through a police agency or exclusively available to individuals who have been

accepted as recruits by a police agency. On the contrary, any individual may obtain the

required training, testing and certification from any institution approved by the POST

                                              10
commission. (Pen. Code, §§ 832, subd. (g), 13511.) Approved training facilities include

community colleges throughout the state. (See Cal. POST list of basic training

academies  [as of May 19,

2015].)

       For these reasons, we conclude that basic POST certification training is not

employer-mandated training, as described by the Division of Labor Standards

Enforcement, and is not an expense of discharging the duties of employment, within the

meaning of Labor Code section 2802, but is rather an expense which is to be borne by the

individual officer. (DLSE Op. Ltr. (Nov. 17, 1994) at p. 1.)

       Local police agencies may, however, establish standards for selection and training

of peace officers which exceed the minimum standards established by the POST

commission. (Pen. Code, § 13510, subd. (d).) At trial, the city emphasized that its

academy provides training in excess of the basic POST training that is available through

community colleges. The city’s academy training consists of 644 hours of POST training

and 420 hours of “department required” training. The department-required training

addresses, in part, “challenges that are present within the City of Los Angeles [such as]

crime occurrences, crime patterns, crime trends that are specific to the city.” Such

training, which is not required by statute or public policy but is rather instituted purely to

satisfy the needs of the city, is an expense which the city must bear. (DLSE Op. Ltr.

(Nov. 17, 1994) at p. 1.) Accordingly, Labor Code section 2802 precludes the city from

requiring recruits to reimburse it for the cost of the portion of the training which is in

excess of that required for basic POST certification. And, the city cannot avoid

                                              11
application of Labor Code section 2802 by requiring recruits to enter into a contract such

as the acknowledgment: A contract which purports to waive the protection of Labor

Code section 2802 is void. (Lab. Code, § 2804; Edwards v. Arthur Andersen LLP, supra,

44 Cal.4th at pp. 951-952.) Accordingly, both LAAC section 4.1700 and the

acknowledgment are void to the extent that they require reimbursement for the cost of

training other than basic POST certification training.

       The city contends, and the trial court held, that this case is governed by City of

Oakland v. Hassey (2008) 163 Cal. App. 4th 1477 (Hassey). In Hassey, the Court of

Appeal held that Oakland could require reimbursement of police training costs under

circumstances similar to—but yet distinguishable from—the circumstances in this case.

However, because the appellant in Hassey did not rely on Labor Code section 2802 either

in his answer to the complaint or in his cross-complaint and raised the issue only in his

reply brief, the court expressly declined to address the contention that Labor Code section

2802 prohibits the reimbursement requirement the city imposed. (Hassey, at pp. 1490-

1491.) Accordingly, Hassey is not authority with respect to the effect of Labor Code

sections 2802 and 2804 on the ordinance and/or the acknowledgment.7 Hassey is

distinguishable from this case in any event, because Oakland did not require its officers

to attend its police academy for basic POST training. Applicants who were already

POST certified, including lateral officers, attended a “mini academy” and were not

       7  For the same reason, and contrary to the city’s contention, this case is one of
first impression with respect to Labor Code sections 2802 and 2804.

                                             12
subject to the reimbursement provisions which applied to recruits who chose to attend the

Oakland police academy for basic POST training. (Hassey, at p. 1484, fn. 2.)

       Our ruling as to the effect of Labor Code sections 2802 and 2804 on the ordinance

and the acknowledgment only partially resolves the dispute between the parties. Because

the case was tried on an “all or nothing” basis—either appellants owed the full amount

demanded by the city or they owed the city nothing at all—there is no evidence in the

record which permits apportionment of the cost of academy training between basic POST

training and the department-mandated training. In addition, there is possible merit to

appellants’ contention that because the city requires all recruits to attend the academy for

all training, the entire training program is employer-mandated training, the full cost of

which the city must bear. The city contends that even with respect to POST training, its

academy provides training which is superior to that offered elsewhere—that its academy

is the Harvard of police academies—and that it wants all of its recruits, including lateral

officers and others who already have POST certification, to receive the full benefit of that

superior training. This arguably lends support to appellants’ assertion.8 However, the

record is not sufficiently developed to permit us to determine whether the

acknowledgment should be deemed entirely void for this reason. Further development of

the evidence bearing on these questions might also assist us in addressing some of

       8  The issue was properly before the trial court because one of the four
representative defendants, Duncan Murdoch, stated in his declaration in lieu of testimony
that he had completed POST-certified training at Alan Hancock Junior College and the
LAPD reserve police officer academy, and was working as a reserve officer before he
was accepted to attend the academy.

                                             13
appellants’ other contentions, such as whether the acknowledgment places an unlawful

burden on their ability to pursue their profession, in violation of Business and Professions

Code section 16600.

       Accordingly, we will remand the matter for further proceedings to address whether

the city is entitled to recoup the cost of POST certification training from any of the

defendants. This would include the questions whether the city can require recruits who

do not have a current POST certificate to undergo POST training at its academy and

whether the city can require recruits who do have a current POST certificate to repeat

POST training at the academy. If the trial court determines that the city is entitled to

recoup the cost of POST training from some or all of the defendants, the city has the

burden of proving the cost of POST training during each of the relevant years.

                                             2.

                    APPELLANTS’ REMAINING CONTENTIONS

       Appellants contend that part of the training costs the city sought to recover

through the acknowledgment constituted their wages while they were attending the

academy, in violation of both state law and the federal Fair Labor Standards Act (29

U.S.C. § 201 et seq.), or that reimbursement amounts to an unlawful kickback, and that

the acknowledgment operates as an unlawful covenant not to compete. They contend the

acknowledgement is unlawful for a number of other reasons. If on remand the trial court

finds that Labor Code sections 2802 and 2804 do not preclude the city from recouping

the cost of POST certification training, appellants may revisit these other contentions on

appeal from the judgment entered following remand.

                                             14
       Appellants also contend that the trial court erred in refusing to allow them to opt in

to the cross-complaint as a collective action. They do not otherwise assert any error with

respect to the judgment on the cross-complaint. In the absence of any error in entering

judgment for the city on the cross-complaint, the collective action issue is moot, and we

decline to address it.

                                      DISPOSITION

       The judgment on the cross-complaint is affirmed.

       The judgment on the complaint is reversed, and the cause is remanded for further

proceedings as described in the final paragraph of section 1, above. Upon entry of

judgment, the court shall enter a judgment of dismissal as to defendants Duncan

Murdoch, Daniel Baltazar and Marc Gonzales. All defendants are awarded costs and

attorney fees on appeal. (Lab. Code, § 2802, subd. (c).)

       NOT TO BE PUBLISHED IN OFFICIAL REPORTS

                                                                McKINSTER
                                                                                            J.
We concur:

RAMIREZ
                         P. J.

KING
                            J.

                                             15