Court Opinion

ID: 3133019
Source: CourtListenerOpinion
Date Created: 2015-10-20 19:03:07.238512+00
Date Added: 2024-06-11T11:53:21.436369
License: Public Domain

Filed 10/20/15
                        CERTIFIED FOR PUBLICATION

          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                   DIVISION FOUR

NICOLLETTE SHERIDAN,                          B254489

        Plaintiff and Appellant,              (Los Angeles County
                                               Super. Ct. No. BC435248)
        v.

TOUCHSTONE TELEVISION
PRODUCTIONS, LLC,

        Defendant and Respondent.

        APPEAL from a judgment of the Superior Court of Los Angeles County,
Michael L. Stern, Judge. Reversed.
        Baute Crochetiere & Gilford, Mark D. Baute and David P. Crochetiere;
Greines, Martin, Stein & Richland and Robin Meadow for Plaintiff and Appellant.
        Mitchell Silberberg & Knupp, Adam Levin, Aaron M. Wais and Jorja A.
Cirigliana; Horvitz & Levy, Mitchell C. Tilner and Frederic D. Cohen for
Defendant and Respondent.
      Touchstone Television Productions (Touchstone) hired actress Nicollette
Sheridan to appear in the television series Desperate Housewives, a show created
by Marc Cherry.1 Sheridan sued Touchstone under Labor Code section 6310,2
alleging that Touchstone fired her in retaliation for her complaint about a battery
allegedly committed on her by Cherry. The trial court sustained Touchstone’s
demurrer to the complaint on the basis that Sheridan failed to exhaust her
administrative remedies by filing a claim with the Labor Commissioner. The sole
issue on appeal is whether Sheridan was required to exhaust her administrative
remedies under sections 98.7 and 6312. We conclude that she was not required to
do so and therefore reverse.

              FACTUAL AND PROCEDURAL BACKGROUND3
      Touchstone hired Sheridan in 2004 under an agreement with her loan-out
company Starlike Enterprises, to play the character of Edie Britt in the television
series Desperate Housewives. The agreement was for the show’s initial season and

1
       In a prior proceeding involving Touchstone and Sheridan, we granted
Touchstone’s petition for writ of mandate and directed the superior court to grant
Touchstone’s motion for a directed verdict on Sheridan’s cause of action for wrongful
termination in violation of public policy. (Touchstone Television Productions v. Superior
Court (2012) 208 Cal. App. 4th 676, 684 (Touchstone I).) We further directed the court to
permit Sheridan to file an amended complaint alleging a cause of action under Labor
Code section 6310 that Touchstone retaliated against her for complaining about unsafe
working conditions. (Id. at p. 678.) Sheridan’s amended complaint is the subject of this
appeal.
2
      Further unspecified statutory references are to the Labor Code.
3
      In reviewing the order sustaining the demurrer, we accept the factual allegations of
the complaint as true. (Lueras v. BAC Home Loans Servicing, LP (2013) 221
Cal. App. 4th 49, 55.)

                                            2
gave Touchstone the option to renew the contract on an annual basis for an
additional six seasons. (See Touchstone I, supra, 208 Cal.App.4th at p. 679.)
Touchstone renewed Sheridan’s contract for five seasons, through 2008. Sheridan
alleged that during a September 24, 2008 rehearsal, Sheridan attempted to question
Cherry about the script, and he struck her in response. Sheridan complained about
the alleged battery to Touchstone.
      After Touchstone did not renew Sheridan’s contract for season 6, she sued
Touchstone for, inter alia, wrongful termination in violation of public policy,
alleging that Touchstone fired her because of her complaint about the alleged
battery. The jury deadlocked and the court declared a mistrial. As noted above,
we granted Touchstone’s petition for writ of mandate and directed the superior
court to grant Touchstone’s motion for a directed verdict on Sheridan’s cause of
action for wrongful termination in violation of public policy and to permit
Sheridan to file an amended complaint alleging a cause of action under section
6310. (Touchstone I, supra, 208 Cal.App.4th at p. 678.)
      Sheridan filed a second amended complaint (the operative complaint),
alleging that Touchstone retaliated against her in violation of section 6310 for
complaining about Cherry’s alleged battery. Touchstone demurred, arguing that
Sheridan failed to exhaust her administrative remedies by filing a claim with the
Labor Commissioner under sections 98.7 and 6312. The trial court overruled the
demurrer, finding that the exhaustion of administrative remedies was not required
to plead a violation of section 6310. Touchstone filed a petition for writ of
mandate with this court in May 2013. In August 2013, the Third Appellate District
held that an employee must exhaust the administrative remedy set forth in section
98.7 before filing a complaint for retaliatory discharge in violation of section 6310.
(See MacDonald v. State of California (2013) 161 Cal. Rptr. 3d 520, petition for

                                          3
review denied and opinion ordered depublished, November 26, 2013, S213450
(MacDonald).) We denied Touchstone’s petition for writ of mandate without
prejudice to Touchstone filing a motion for reconsideration in the trial court in
light of MacDonald.
      Touchstone renewed its demurrer in the trial court. At a hearing in October
2013, the trial court found that MacDonald controlled. Thus, on November 5,
2013, the court sustained the demurrer and dismissed Sheridan’s complaint without
leave to amend because she failed to exhaust her administrative remedies. On
November 26, 2013, the California Supreme Court denied the petition for review
in MacDonald and ordered the opinion depublished.
      In October 2013, the Legislature amended the Labor Code, adding two new
provisions effective January 1, 2014. (Stats. 2013, ch. 577, § 4, p. 5 & ch. 732,
§ 3, pp. 5-7.) Section 244 provides in relevant part that “An individual is not
required to exhaust administrative remedies or procedures in order to bring a civil
action under any provision of this code, unless that section under which the action
is brought expressly requires exhaustion of an administrative remedy.” (§ 244,
subd. (a).) The newly-enacted subdivision (g) of section 98.7 similarly provides
that “In the enforcement of this section, there is no requirement that an individual
exhaust administrative remedies or procedures.”
      Sheridan filed a motion for new trial and a motion for reconsideration,
arguing that, in light of MacDonald’s depublication and the statutory amendments,
it was clear she was not required to exhaust administrative remedies. The trial
court denied Sheridan’s motion for new trial on the basis that there was “no new
law stated.” However, the court subsequently granted Sheridan’s motion for
reconsideration, overruled Touchstone’s demurrer, and ordered that a case
management conference be held.

                                          4
      Touchstone filed another writ petition in this court. We issued an alternative
writ of mandate, requiring the court to enter a new order denying Sheridan’s
motion for reconsideration on the ground that the trial court lacked jurisdiction to
consider the matter. The trial court vacated the order granting Sheridan’s motion
for reconsideration and entered a new order denying the motion on the ground that
it lacked jurisdiction to reconsider the matter. Sheridan timely appealed.

                                    DISCUSSION
      The question we must decide is whether sections 98.7 and 6312 required
Sheridan to exhaust her administrative remedies before filing suit under section
6310. We begin with the language of the statutes.
      Sheridan’s action is brought under section 6310, subdivision (a)(1), which
prohibits an employer from discriminating against an employee who makes “any
oral or written complaint.” Subdivision (b) provides that “[a]ny employee who is
discharged, threatened with discharge, demoted, suspended, or in any other manner
discriminated against in the terms and conditions of employment by his or her
employer because the employee has made a bona fide oral or written complaint to
. . . his or her employer . . . of unsafe working conditions, or work practices . . .
shall be entitled to reinstatement and reimbursement for lost wages and work
benefits caused by the acts of the employer.”
      Section 6312 provides in full: “Any employee who believes that he or she
has been discharged or otherwise discriminated against by any person in violation
of Section 6310 or 6311 may file a complaint with the Labor Commissioner
pursuant to Section 98.7.”
      Section 98.7, subdivision (a) provides, in pertinent part: “Any person who
believes that he or she has been discharged or otherwise discriminated against in

                                            5
violation of any law under the jurisdiction of the Labor Commissioner may file a
complaint with the division within six months after the occurrence of the
violation.” Subdivision (f) states that “[t]he rights and remedies provided by this
section do not preclude an employee from pursuing any other rights and remedies
under any other law.” Subdivision (g) states that there is no requirement that an
individual exhaust administrative remedies.
      The plain language of sections 6312 and 98.7 before the 2013 amendments
did not require exhaustion. Both stated that a person who believed that he or she
had been discriminated against in violation of the relevant Labor Code provisions
“may,” not “shall,” file a complaint with the Labor Commissioner or the Division
of Labor Standards Enforcement.4 As provided in section 15, enacted in 1937, as
used in the Labor Code, “‘Shall’ is mandatory and ‘may’ is permissive.” Thus, a
straightforward reading of the statutes establishes an administrative claim is
permitted, but not required. (Nolan v. City of Anaheim (2004) 33 Cal. 4th 335, 340
[“To determine legislative intent, we turn first to the words of the statute, giving
them their usual and ordinary meaning. [Citations.] When the language of a
statute is clear, we need go no further.”].)
      Given that exhaustion was not required under the pre-2013 versions of
sections 6312 and 98.7, the 2013 enactment of section 244, subdivision (a) and
section 98.7, subdivision (g), merely clarified existing law. Thus, those
enactments apply to Sheridan’s lawsuit. “Where the Legislature makes material
changes in statutory language to clarify a statute’s meaning, ‘[s]uch a legislative
act has no retrospective effect because the true meaning of the statute remains the
same.’ [Citation.] Consequently, ‘[i]f the amendment merely clarifie[s] existing

4
      (See § 79, creating the division.)

                                           6
law, no question of retroactivity is presented’ because ‘the amendment would not
have changed anything.’ [Citation.]” (Satyadi v. West Contra Costa Healthcare
Dist. (2014) 232 Cal. App. 4th 1022, 1028-1029 (Satyadi).) “[I]f the courts have not
yet finally and conclusively interpreted a statute and are in the process of doing so,
a declaration of a later Legislature as to what an earlier Legislature intended is
entitled to consideration. [Citation.]” (McClung v. Employment Development
Dept. (2004) 34 Cal. 4th 467, 473 (McClung).)
      Contrary to Touchstone’s contentions, the purported requirement of
exhaustion of the administrative remedies under sections 98.7 and 6312 had not
been “finally and conclusively” decided by the courts before the 2013 enactments.
(McClung, supra, 34 Cal.4th at p. 473.) Of course, MacDonald, the now-
depublished decision on which the trial court relied in sustaining Touchstone’s
demurrer, is not definitive authority. (See Cal. Rules of Court, rules 8.1115(a),
8.1125(c)(2); Farmers Ins. Exchange v. Superior Court (2013) 218 Cal. App. 4th
96, 109 [although “Supreme Court depublication does not necessarily constitute
disapproval,” it is “well established that . . . nonpublished opinions have no
precedential value. [Citations.]”].)
      Further, as we explain, the cases on which Touchstone relies – Abelleira v.
District Court of Appeal (1941) 17 Cal. 2d 280 (Abelleira) and Campbell v. Regents
of University of California (2005) 35 Cal. 4th 311 (Campbell) – involved the
general requirement of exhaustion under statues that explicitly required exhaustion
of administrative remedies. In contrast, the statutes at issue here permit, but do not
require the use of administrative remedies. Moreover, neither Abelleira nor
Campbell addressed section 98.7 or 6312.
      The plaintiff in Campbell was an employee of the Regents of the University
of California who reported alleged violations of state competitive bidding laws to

                                           7
the Regents and to the FBI. After she was discharged, she filed an internal
complaint under the grievance procedures set forth in her personnel policy. The
university sent her a letter in response to her complaint, informing her that the
procedure she used did not apply to her complaint. Instead, she was required to
file her grievance under the university’s policy and procedures applicable to
whistleblowing. Rather than refiling her complaint under the applicable policy and
procedures, she filed a complaint in superior court, “seeking damages for
retaliatory termination under Government Code section 12653 and Labor Code
section 1102.5.” (Campbell, supra, 35 Cal.4th at p. 319.)
       The California Supreme Court explained that the Regents’ personnel policies
“‘may enjoy a status equivalent to that of state statutes.’ [Citation.]” (Campbell,
supra, 35 Cal.4th at p. 320.) The policy for handling whistleblower claims thus
was “treated as a statute in order to determine whether the exhaustion doctrine
applies.” (Id. at p. 321.) The policy required the plaintiff “to resort initially to
internal grievance practices and procedures” before filing suit. (Id. at p. 324.)
After examining the Regents’ policy and the statutes the plaintiff cited to argue that
exhaustion did not apply, the court concluded that, “absent a clear indication of
legislative intent, we should refrain from inferring a statutory exemption from our
settled rule requiring exhaustion of administrative remedies.”5 (Id. at p. 333.)

5
        The plaintiff argued that neither Government Code section 12653, subdivision (c),
nor Labor Code section 1102.5 required her to exhaust her administrative remedies.
(Campbell, supra, 35 Cal.4th at p. 324.) Government Code section 12653, subdivision
(c), provided that an employee may bring an action in superior court for a violation of the
False Claims Act, which “protects public funds by authorizing employee informants who
discover fraudulent claims made against state and local governmental entities to file qui
tam suits on behalf of those entities. [Citation.]” (Id. at p. 325.) The whistleblower
statutes cited by the plaintiff, found in sections 1102.5 to 1105, were silent on
administrative remedies and stated that nothing in the chapter prevented an injured
employee from recovering damages from his employer. (Id. at p. 329.)
                                                8
Because the policy required the use of administrative procedures and the statutes
did not evince legislative intent to abrogate the exhaustion requirement, the court
affirmed the judgment dismissing the plaintiff’s suit for failure to exhaust her
administrative remedies. (Ibid.)
      In Abelleira, the statute at issue was the California Unemployment Insurance
Act enacted in 1935. (See Abelleira, 17 Cal.2d at pp. 283-284.) Similar to the
Regents’ policy in Campbell, the statute explicitly required an employee to resort
to administrative remedies.6 (See California Unemployment Insurance Act, Stats.
1935, ch. 352, § 65 [“Immediately upon becoming unemployed, an eligible
employee shall file a notice of unemployment in such manner and at such place as
the commission, by rule, prescribes.”], italics added; Deering’s General Laws, Act
8780d, § 66 [“Claims for benefits shall be made in accordance with such
regulations as the commission may prescribe.”].)
      Unlike the statute in Abelleira and the policy in Campbell, the pre-2013
versions of sections 98.7 and 6312 did not require an employee to “resort initially”
to administrative procedures by filing a complaint with the Labor Commissioner.
(Campbell, supra, 35 Cal.4th at p. 324.) Instead, the statutes used permissive
language, providing that an employee “may file a complaint . . . .” (§§ 98.7, 6312,
italics added.) Thus, Abelleira and Campbell do not govern this case. (See
Satyadi, supra, 232 Cal.App.4th at p. 1030 [reasoning that “in Campbell no party

6
       Touchstone asserts in its brief that Abelleira is one “of a broad body of cases
holding that administrative remedies are mandatory even when expressed in permissive
language.” The citations to Abelleira that Touchstone provides, however, do not
establish that the administrative remedies at issue in Abelleira were expressed in
permissive language. (See Abelleira, supra, 17 Cal.2d at pp. 283, 292.)

                                           9
raised any argument regarding the effect of section 98.7, and that statute is not
mentioned in the court’s opinion.”].)
      Our reasoning is supported by Lloyd v. County of Los Angeles (2009) 172
Cal. App. 4th 320 (Lloyd), in which Division Three of this district found that the
plaintiff was not required to exhaust the administrative remedy of section 98.7.
(Id. at p. 331.) In Lloyd, the plaintiff alleged that he had been terminated from his
job with a county due to his whistleblowing activity. He further alleged that his
termination violated the Labor Code, including sections 98.7 and 1102.5. The
appellate court rejected the county’s argument that the plaintiff’s failure to exhaust
the administrative remedy of section 98.7 barred his causes of action for statutory
violations of the Labor Code. (Ibid.) The court found that section 98.7 “merely
provides the employee with an additional remedy, which the employee may choose
to pursue.” (Ibid.) The court further reasoned that “case law has recognized there
is no requirement that a plaintiff proceed through the Labor Code administrative
procedure in order to pursue a statutory cause of action. [Citations.]” (Id. at pp.
331-332.) The court thus concluded that there was no administrative exhaustion
requirement for plaintiffs suing for Labor Code violations. (Id. at p. 332; see also
Daly v. Exxon Corp. (1997) 55 Cal. App. 4th 39, 46 [no requirement to exhaust
administrative remedies before filing suit for retaliation under section 6310];
Murray v. Oceanside Unified School Dist. (2000) 79 Cal. App. 4th 1338, 1359
[noting that section 98.7 states that a person “‘“may file a complaint”’” in
concluding that exhaustion was not required to file suit alleging sexual orientation
discrimination under former section 1102.1].)
      Our reasoning is also supported by Satyadi, supra, in which the First
Appellate District considered whether the 2013 amendments, adding section 244,
subdivision (a), and section 98.7, subdivision (g), applied to the plaintiff’s appeal.

                                          10
(Satyadi, supra, 232 Cal.App.4th at p. 1024.) The plaintiff had sued her former
employer under section 1102.5, alleging that “she had been fired in retaliation for
reporting and refusing to participate in her employer’s allegedly illegal activities.”
(Ibid.) The trial court dismissed the action, ruling that Campbell required her “first
to seek relief from the Labor Commissioner before filing suit in court.” (Ibid.)
The appellate court found that Campbell did not address section 98.7, but Lloyd
“squarely confronted” the issue of exhaustion under section 98.7. (Id. at p. 1030.)
The court further noted that federal cases addressing the exhaustion issue were
divided.7 (Id. at p. 1031; compare Dowell v. Contra Costa County (N.D. Cal.
2013) 928 F. Supp. 2d 1137, 1153 [discussing Lloyd and Campbell and concluding
the plaintiff was not required to exhaust her administrative remedies before filing
her claim under section 1102.5] with Oyarzo v. Tuolumne Fire Dist. (E.D. Cal.
2013) 955 F. Supp. 2d 1038, 1102 [exhaustion required before bringing suit under
section 1102.5].)
       Because Lloyd found no exhaustion requirement and Campbell “provided no
direct support for the view that” plaintiffs filing suit for violations of section
1102.5 must exhaust section 98.7’s administrative remedy, Satyadi concluded that
“prior to the Legislature’s amendments to the Labor Code, California case law did
not require exhaustion of the section 98.7 remedy.” (Satyadi, supra, 232
Cal.App.4th at p. 1032.) The court thus concluded that the 2013 amendments did
not change the law but merely clarified existing law that “a party may bring a civil
action for violation of the Labor Code without first exhausting the remedy
provided by section 98.7, subdivision (a).” (Ibid.)

7
       Similar to the parties here, the parties in Satyadi cited federal law to support their
positions. (Satyadi, supra, 232 Cal.App.4th at p. 1031.) “[T]he opinions of lower federal
courts are not binding on us, particularly on issues of California law. [Citation.]” (Ibid.)

                                             11
       We agree. Before the 2013 amendments, sections 98.7 and 6312 permitted
but did not require plaintiffs to resort to administrative procedures. The California
Supreme Court had not settled the issue, and Lloyd had held that exhaustion under
section 98.7 was not required before filing suit under section 1102.5. (Satyadi,
supra, 232 Cal.App.4th at p. 1032.) Thus, exhaustion of the remedy provided by
section 98.7 was not required, and the 2013 enactments simply clarified this point.
(Ibid.) The same reasoning applies to section 6312, which, like section 98.7, does
not require administrative exhaustion and had not been “finally and definitively
interpreted.” (McClung, supra, 34 Cal.4th at p. 473.) Sheridan therefore was not
required to exhaust her administrative remedies before filing suit for a violation of
section 6310.8
       In light of our conclusion, we need not address the line of cases discussed by
Touchstone regarding the general exhaustion rule.9 None of the cases cited by
Touchstone addressed the statutes at issue here. (See, e.g., Abelleira, supra, 17
Cal. 2d 280 [Unemployment Act]; County of Los Angeles v. Farmers Ins. Exchange
(1982) 132 Cal. App. 3d 77 [Insurance Code]; Park ‘N Fly of San Francisco, Inc. v.
City of South San Francisco (1987) 188 Cal. App. 3d 1201 [city ordinance imposing
business license tax]; People v. Coit Ranch, Inc. (1962) 204 Cal. App. 2d 52
[Agricultural Code].) The administrative exhaustion rule articulated in cases that
did not address these statutes cannot compel a conclusion contrary to the statutes’
plain language. For the foregoing reasons, we conclude that Sheridan was not
required to exhaust her administrative remedies under sections 98.7 and 6312.

8
        The trial court’s decision to sustain the demurrer was based solely on the ground
that Sheridan failed to exhaust her administrative remedies. We do not address whether
the allegations of the complaint are sufficient as a matter of law in any other respect.
9
       Nor need we discuss Sheridan’s alternative argument that the proceedings under
section 98.7 do not satisfy due process.
                                           12
                                  DISPOSITION
             The judgment of dismissal in favor of Touchstone is reversed and the
matter is remanded to the trial court with instructions to vacate the order sustaining
Touchstone’s demurrer without leave to amend and to enter a new order overruling
the demurrer to the complaint. Sheridan is entitled to costs on appeal.
             CERTIFIED FOR PUBLICATION

                                               WILLHITE, J.

             We concur:

             EPSTEIN, P. J.

             MANELLA, J.

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