University Did Not Need to Reimburse Professor for Expenses Related to Pandemic

​After a state university in California directed its faculty to provide instruction remotely due to the COVID-19 pandemic, a professor incurred expenses for a computer and other equipment and sought reimbursement from the university. The university was not required to reimburse the professor, a California appeals court recently ruled.

In March 2020, the California State University (CSU) ordered its faculty to begin teaching classes remotely. The professor did so but was denied access to his workplace office at CSU-Los Angeles to retrieve his university-provided computer and printer. He absorbed the cost for replacing these items himself, then asked for reimbursement, which CSU denied.

CSU took the position that the state's Labor Code Section 2802, subdivision (a), which addresses business-related expenses, did not apply to the university because such an application would infringe on its sovereign powers as a department of the state. The law obligates employers to indemnify employees for all necessary expenditures incurred in direct consequence of the discharge of work duties.

The professor filed a class-action complaint, seeking reimbursement of home-office expenses for himself and other CSU faculty under Section 2802. He alleged that he incurred necessary business expenses to pay for electricity, postage, internet service, use of personal phones for work-related purposes, office supplies, chairs, computers, printers, ink and toner, and computer monitors required to perform his work.

CSU sought to have the lawsuit dismissed before trial, arguing that, as a department of the state, it was not subject to Section 2802. The trial court dismissed the lawsuit, and the professor appealed.

Does Section 2802 Apply Here?

The appeals court first noted that a traditional rule of statutory construction is that, absent express words to the contrary, governmental agencies are not included within the general words of a statute.

Therefore, the Labor Code applies only to private-sector employees unless a provision is specifically made applicable to public employees.

But, the court continued, this rule of construction excludes governmental agencies from the operation of general statutory provisions only if their inclusion would result in an infringement upon sovereign governmental powers. Where no impairment of sovereign powers would result, the reason underlying this rule of construction ceases to exist, and the California Legislature may properly be held to have intended that the statute apply to governmental bodies even though it used general statutory language only.

Furthermore, the court added, although the "sovereign powers" principle can help resolve an unclear legislative intent, it cannot override positive indications of a contrary legislative intent.

Therefore, the court said, it applies a three-part test to determine whether the "sovereign powers" canon overcomes a generally applicable Labor Code provision. First, it looks for "express words" referring to governmental agencies. If there are none, it looks for positive indications of a legislative intent to exempt such agencies from the statute. If no such indications appear, it then asks whether applying the statute would result in an infringement upon sovereign governmental powers.

CSU, the court said, is a state agency with the sovereign power to produce public university-level education. To fulfill its mandate, the Legislature vests CSU with broad authority over the purchase of supplies and equipment, and over employee expense reimbursements.

The expenses the employee alleges—for computers, monitors, chairs, printers, electricity, internet and other items—fall directly within CSU's authority to set rules for employee equipment allowances and the purchase of materials, supplies and equipment, the court said.

Here, the court said, Section 2802 contains no express words referring to governmental agencies, nor positive indications of a legislative intent to exempt such agencies from the statute.

The question therefore becomes whether applying Section 2802 to CSU would infringe upon its sovereign governmental powers; that is, would it affect the functions and responsibilities given to the public employer by the Legislature? The court concluded that it would.

Applying Section 2802 to CSU in this case, the court found, would infringe upon its sovereign governmental powers by limiting the discretion vested in CSU to establish policies for employee reimbursement for necessary expenses.

The court noted that it was not saying Section 2802 could never apply to CSU, only that it did not apply in this case because the professor's claim fell squarely within the scope of CSU's vested authority to set the terms for employee expense reimbursement.

The court affirmed the trial court's dismissal of the action.

Krug v. Board of Trustees of the California State University, Calif. Ct. App., No. B320588 (Aug. 29, 2023).

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.