Case Number: 19STCP02317 Hearing Date: January 21, 2020 Dept: 85

Edward G. Everett, et al. v. County of Los Angeles, et al, 19STCP02317

Tentative decision on petition for writ of mandate: granted

Petitioners Edward G. Everett (“Everett”) and Robert Wagner Jr. (“Wagner”) petition the court for a writ of mandate to compel Respondents County of Los Angeles, Los Angeles County Sheriff’s Department (“Department”), and Alex Villanueva, Sherriff of the County of Los Angeles (“Sheriff”)(collectively, “County”) to rescind actions to deduct from Petitioners’ wages and to restore all deducted wages.

The court has read and considered the moving papers, opposition, and reply,[1] and renders the following tentative decision.

A. Statement of the Case

1. Petition

Petitioners commenced this proceeding on June 10, 2019, alleging causes of action for traditional mandamus and seeking the remedy of declaratory relief. The verified Petition alleges in pertinent part as follows.

At all times relevant, Everett was employed by the County as a Bonus II Bomb Technician and Arson Investigator and retired on February 15, 2019. At all times relevant, Wagner was employed by the County as a Bonus II Detective and retired on February 29, 2019.

In May 2017 and April 2018, the County informed Petitioners that, due to an alleged result of administrative errors in the implementation of its payroll system in April 2012, they had been overpaid. The County further informed Petitioners that, unless, the alleged overpayments were remitted in full, the County would begin to make unilateral deductions from their wages to recoup the overpayments.

In May 2017, Petitioner received letters stating that the County had mistakenly failed to apply a salary cap and overpaid Petitioners. The letters also stated that, pursuant to Article 18(B) of the Memorandum of Understanding (“MOU”) between the Association for Los Angeles Deputy Sheriffs (“ALADS”) and the County, Petitioners were required to choose between repaying the County for the overpayment or having the amount owed deducted from payroll. Enclosed with the letters was an spreadsheet which set forth the amounts allegedly overpaid by the County. The spreadsheets failed to set forth the particular “Sergeant Item’s sixth step” cap for any given year such that Petitioners could adequately ascertain whether the alleged overpayment figures were accurate.

Beginning May 15, 2018, the County began to make the unilateral deductions. The County has now fully recouped the alleged overpayments from Petitioners. In May 2018, Petitioners filed grievances pursuant to the applicable procedures detailed in the MOU. Those grievances were submitted to arbitration, and arbitrators were selected. On or about March 12, 2019, the County’s counsel informed Petitioners’ counsel that ERCOM did not have jurisdiction over retired members, and therefore Petitioners’ claims could not be arbitrated.

Petitioners contend that Article 18 of the MOU does not authorize Respondents to unilaterally deduct their wages to recoup overpayments. The County also should have discovered, using reasonable diligence, the April 2012 alleged administrative error in the conversion to a new payroll system. Accordingly, Petitioners contend that the statute of limitations bars Respondents from recouping in May 2018 overpayments for a mistake occurring in April 2012. Respondents’ unilateral deduction of overpayments from Petitioner’s wages was a failure to act in conformity with their ministerial duty to adhere to the law.

2. Course of Proceedings

On August 7, 2019, the County demurred to the Petition. The County took the demurrer off calendar on September 25, 2019.

B. Standard of Review

A party may seek to set aside an agency decision by petitioning for either a writ of administrative mandamus (CCP §1094.5) or of traditional mandamus. CCP §1085. A petition for traditional mandamus is appropriate in all actions “to compel the performance of an act which the law specially enjoins as a duty resulting from an office, trust, or station.” Ibid.

A traditional writ of mandate under CCP section 1085 is the method of compelling the performance of a legal, ministerial duty. Pomona Police Officers’ Assn. v. City of Pomona, (1997) 58 Cal.App.4th 578, 583-584. Generally, mandamus will lie when (1) there is no plain, speedy, and adequate alternative remedy, (2) the respondent has a duty to perform, and (3) the petitioner has a clear and beneficial right to performance. Id. at 584. Whether a statute imposes a ministerial duty for which mandamus is available, or a mere obligation to perform a discretionary function, is a question of statutory interpretation. AIDS Healthcare Foundation v. Los Angeles County Dept. of Public Health, (2011) 197 Cal.App.4th 693, 701.

No administrative record is required for traditional mandamus to compel performance of a ministerial duty or as an abuse of discretion.

C. Governing Law

1. Wage Garnishment Law

The Wage Garnishment Law (codified at CCP section 706.010 et seq.) provides the exclusive procedure for withholding an employees’ earnings, except for an earning assignment order of support. Earnings are defined as compensation payable by an employer to an employee for personal services performed by such employee, whether denominated as wages, salary, commission, bonus, or otherwise. CCP §706.011.

An employer is thus not generally entitled to a setoff of debts owed to it by an employee against wages due to that employee. Barnhill v. Robert Saunders & Co., (1981) 125 Cal.App.3d 1, 6. The wage garnishment law provides the exclusive judicial procedure by which a judgment creditor can execute against the wages of a judgment debtor, except for cases of judgments or orders for support. California State Employee’s Association v. State of California, (“CSEA”) (1988) 198 Cal.App.3d 374, 377. The wage garnishment law applies to public employees. Id. at 377, n.3.

2. Labor Code

It shall be unlawful for any employer to collect or receive from an employee any part of wages paid by the employer to the employee. Labor Code §221.

The provisions of Sections 221, 222 and 223 shall in no way make it unlawful for an employer to withhold or divert any portion of an employee’s wages when the employer is required or empowered so to do by state or federal law or when a deduction is expressly authorized in writing by the employee to cover insurance premiums, hospital or medical dues, or other deductions not amounting to a rebate or deduction from the standard wage arrived at by collective bargaining or pursuant to wage agreement or statute, or when a deduction to cover health and welfare or pension plan contributions is expressly authorized by a collective bargaining or wage agreement. Labor Code §224.

3. MOU

The MOU’s purpose is to promote and provide for harmonious relations, cooperation and understanding between Management and the employees covered herein: to provide an orderly and equitable means of resolving any misunderstandings or differences which may arise, under this Memorandum of Understanding; and to set forth the full and entire understanding of the parties reached as a result of good faith negotiations regarding the wages, hours and other terms and conditions of employment of the employees covered hereby, which understanding the parties intend jointly to submit and recommend for approval and implementation to County’s Board of Supervisors. Stratton Decl. Ex. 1.

Article 18(B) (Overpayments) provides:

“1. Employees will be notified prior to the recovery of overpayments.

2. Recovery of more than 15% of net pay will be subject to a repayment schedule established by the appointing authority under guidelines Issued by the Auditor-Controller. Such recovery shall not exceed 15% per month of disposable earnings (as defined by State law) except however that a mutually agreed-upon acceleration provision may permit faster recovery.” Stratton Decl. Ex. 1.

D. Statement of Facts

1. Petitioner’s Evidence[2]

Petitioners are retired deputy sheriffs who worked for the County. Everett was employed as a Bonus II Bomb Technician and Arson Investigator. He retired on February 15, 2019. Everett Decl. ¶2. Wagner was employed by the County as a Bonus II Detective. He retired on February 29, 2019. Wagner Decl. ¶2.

Petitioners were members of ALADS, which is the recognized employee organization representing sworn non-management peace officers employed by the Department and District Attorney’s Office with regard to all matters concerning wages, hours and working conditions. Hsieh Decl. ¶2. In December 7, 2016, Lieutenant Daniel V. Lopez (“Lopez”), on behalf of the Sheriff, sent a letter to Derek Hsieh, Executive Director of ALADS (“Hsieh”), notifying Hsieh that “During a recent audit conducted by the Department’s Personnel Administration Bureau, it was discovered that 155 Bonus II deputies at the top of Bonus II pay were being overpaid.” Hsieh Decl. ¶4, Ex. A. The letter stated that the bonus pay would be adjusted beginning with the December 15, 2016, payroll check for the affected Bonus II deputies. Hsieh Decl. Ex. A. Lopez indicated that it was unclear whether the County would seek reimbursement for the overpayments. Hsieh Decl. Ex. A. Enclosed with the December 7, 2016 letter was a draft letter to be sent to affected deputies. Hsieh Decl. Ex. A. Lopez sent out a revised letter on December 8, 2016. Hsieh Decl. ¶5, Ex. B.

Hsieh spoke with County personnel Greg Nelson (“Nelson”) and Kim Unland (“Unland”) about whether they were going to seek overpayment reimbursements. Hsieh Decl. ¶6. Initially it was the Department’s position that it probably would not recoup the money because it was relatively small in nature, had occurred some time ago, and the Department was more focused on fixing what they thought was the issue on a go-forward basis. Hsieh Decl. ¶6.

In response to Lopez’s December 8 revised letter, Rebecca Bueno (“Bueno”), a Labor Relations Specialist for ALADS, sent Lopez a December 13, 2016 letter with assistance from Hsieh. Hsieh Decl. ¶7, Ex. C. Bueno’s letter requested pay tables for all affected members, their bonus pay prior to the revision, and what their pay would be after the revision. Ex. C. The letter also demanded that the Department cease and desist from making any payroll changes to affected members until the parties had the opportunity to meet on the issue. Ex. C. A subsequent meeting did not resolve the issue. Hsieh Decl. ¶8.

Around the same time, Petitioners received a letter from Acting Captain Richard J. Harpham (“Harpham”), on behalf of the Sheriff, regarding a Bonus II Overpayment. Everett Decl. ¶3, Ex. A; Wagner Decl. ¶3. Harpham’s letter stated that, during an audit, it was discovered that Bonus II deputies at the top of Bonus II pay were being overpaid, and that such overpayment occurred due to a change in the calculation of bonus percentages during the Countywide implementation of the eHR system. Everett Decl. Ex. A; Wagner Decl. ¶3. Harpham’s letter noted that it was unclear if the County would seek reimbursement for the overpayments. Everett Decl. Ex. A; Wagner Decl. ¶3.

In May 2017, Petitioners received a letter from Captain Kimberly Unland (“Upland”), which noted that Petitioners had been overpaid due to an administrative error and their salaries exceeded the Sergeant item’s sixth step. Everett Decl. ¶5, Ex. B; Wagner Decl. ¶5. Unland’s letter gave Petitioners two repayment options: (a) immediately pay the alleged amount in full, or (b) repay the amount through payroll deductions beginning with the June 15, 2017 payday. Everett Decl. Ex. B; Wagner Decl. ¶5. The letter stated that if the Petitioners did not respond by June 1, 2012, the County would begin unilaterally deducting from the deputies’ paychecks. Everett Decl. Ex. B; Wagner Decl. ¶5. Attached to each Petitioners’ letter was an “Overpayment Detail” which allegedly set forth the amounts he had been overpaid. Everett Decl. Ex. B; Wagner Decl. ¶5.

Between May 17 and August 2, 2017, the parties communicated on the issue and ALADS sent email blasts to its members. Hsieh Decl. ¶¶ 9, 11, Exs. D-F; Wexler Decl. ¶3, Ex. A.

On August 2, 2017, the County issued a letter to affected employees stating that it had suspended any efforts to collect funds from affected employees for 90 days so the parties could discuss a potential resolution. Everett Decl. ¶7, Ex. C; Wagner Decl. ¶6.

On October 19, 2017, ALADS sent an email blast to its members. Hsieh Decl. Ex. G. The email noted that the County had not responded to ALADS’ arguments and continued to suspend all collection efforts. Hsieh Decl. ¶12, Ex. G.

On April 2, 2018, Captain Unland sent new letters to affected employees stating that the County would soon deduct the wages of the employees. Everett Decl. ¶8, Ex. D; Wagner Decl. ¶7. ALADS then sent out an email blast to affected deputies stating that if affected members elected either option for repayment offered by the County, ALADS might be significantly limited in its ability to assist them in challenging the claimed overpayment. Hsieh Decl. ¶14, Ex. H.

On May 1, 2018, ALADS sent an email blast to affected members summarizing the dispute. Hsieh Decl. Ex. I. The blast also noted that Bonus II deputies who had retired were in a different situation because the County could not unilaterally deduct from their wages and would have to prove up the indebtedness through some sort of process. Hsieh Decl. ¶16.

Beginning May 15, 2018, the County began unilaterally deducting wages from affected employees. Everett Decl. ¶9; Wagner Decl. ¶8. To date, neither Petitioner understands how the County computed the “Should Be Paid” column on the Overpayment Detail that was sent to the individual deputies. Everett Decl. ¶9; Wagner Decl. ¶8. The County has also not clearly explained to either retired deputy exactly how it came up with the “Should Be Paid” column on the Overpayment Detail. Everett Decl. ¶9; Wagner Decl. ¶8. Neither Everett nor Wagner knows whether the amounts stated in the Overpayment Detail were actually overpaid by the County. Everett Decl. ¶9; Wagner Decl. ¶8.

2. Respondents’ Evidence[3]

The Enterprise Human Resources System (“eHR”) was implemented by the County on April 1, 2012. Ramirez Decl. ¶3. The eHR system was adopted County-wide, and was designed to be an integrated, networked system which allowed the user to access various databases in a flexible and integrated manner. Ramirez Decl. ¶3. The prior system was known as “CWTAPPS.” Ramirez Decl. ¶3.

Following the implementation of eHR, the Department discovered that there was a slight increase in salary paid out to certain classes of employees at the time the data was converted from the prior system. Ramirez Decl. ¶4. Specifically, the top step of Deputy Sheriff Level II Bonus positions was converted from 23.5% to 26.4538%, resulting in an overstated salary that exceeded the sixth step of the Sergeant’s salary, the maximum salary allowed for the Deputy Sheriff Level II Bonus position under the MOU. Ramirez Decl. ¶4; Unland Decl. ¶3; Chevalier Decl. ¶5. Regular earnings were not the only component of compensation affected by the error. Ramirez Decl. ¶5. Other elements of compensation are based upon the amount of regular earnings — overtime and leave payouts — and these other forms of compensation were also overpaid. Ramirez Decl. ¶5.

The Department spent significant time and personnel hours to determine which employees were affected and how much they were overpaid. Unland Decl. ¶4. The Department is required to recoup monies that it has overpaid under the California Constitution, which prohibits the gift of public funds. Unland Decl. ¶5.

The County Auditor Controller’s Office calculated the overpayments and established a repayment schedule for each affected employee. Banuelos Decl. ¶6. On May 12, 2017, notice was provided to each affected employee, and those letters were signed by Unland, who was the head of Personnel Administration. Banuelos Decl. ¶6; Unland Decl. ¶2. Those letters were sent to all affected employees holding the Deputy Sheriff Level II Bonus position, including Everett and Wagner. Banuelos Decl. ¶7; Unland Decl. ¶7. The letters explained the issue, and also provided the amounts of salary overpaid to each employee. Banuelos Decl. ¶7, Exs. 1, 2; Unland Decl. ¶7, Exs. 1, 2.

Each employee’s letter enclosed a spreadsheet prepared by the Auditor Controller’s Office describing each incident of overpayment to the employee. Banuelos Decl. ¶8, Exs. 1, 2. On a line-by-line basis, the spreadsheet detailed the relevant pay period (“accrual date”), pay event (the code as reflected on the employee’s pay detail accompanying the pay check), the description of the compensation type (“description”), the amount actually paid (“was paid”), the amount that should have been paid (“should be paid”), and the specific amount of each overpayment in dollars and cents (“overpaid”). Banuelos Decl. ¶9, Exs. 1, 2. At the end of the spreadsheet, each employee was given the full amount due based upon each employee’s specific circumstances. Banuelos Decl. ¶9, Exs. 1, 2.

The recoupment of these overpayments was made in accordance with MOU Article 18. Overpayments due to administrative errors occasionally occur and the Department uses the recoupment procedures set forth in Article 18, which also governs situations where the employee is underpaid. Banuelos Decl. ¶10.

All affected employees, including Wagner and Everett, were provided with two repayment options. Banuelos Decl. ¶11. The first option (“Option A”) was an option to pay the amount in full. Banuelos Decl. ¶11. The second option (“Option B”) allowed each employee to repay the amount through payroll deductions for a total of 23 pay periods. Banuelos Decl. ¶11. The specific dollar amounts were detailed in each employee cover letter. Banuelos Decl. ¶11. If the employee did not elect an option, or failed to respond by June 15, 2017, the Department intended to proceed under Option B, with the first deduction to occur with the June 30, 2017 pay period. Banuelos Decl. ¶11.

Each employee was also given the opportunity to question the numbers or to seek additional information and were provided with the relevant contact information. Banuelos Decl. ¶12. At no time did Petitioners make any inquiry regarding any issue relating to the repayment. Banuelos Decl. ¶12.

The Department also considered cases of hardship and offered modifications to the repayment schedule as necessary on a case by case basis. Banuelos Decl. ¶13. The overpayment recovery complied with the MOU and the guidelines of the Auditor-Controller. The recovery did not exceed 15% per month of disposable earnings (as defined by State law) in accordance with the provisions of the MOU. Banuelos Decl. ¶14.

ALADS representatives met with Department representatives to discuss the recoupment and ALADS requested the Department delay action until they had an opportunity to confer with its affected members. Banuelos Decl. ¶16; Unland Decl. ¶8. As a result of this request, on August 2, 2017, Unland sent a letter stating that the process would be temporarily suspended. Banuelos Decl. ¶17, Ex. 3; Unland Decl. ¶8, Exs. 3, 4.

Following the expiration of the stop period, the Department determined that it would go forward with recoupment process under the applicable MOU provisions. Banuelos Decl. ¶19; Unland Decl. ¶9; Chevalier Decl. ¶6. On April 2, 2018, the Department sent a second repayment letter to affected employees mirroring the first. Banuelos Decl. ¶19; Unland Decl. ¶9. The following was sent to each employee in this transmittal: (1) The cover letter detailing repayment options to the employees and amounts; (2) the same detail prepared by the Auditor Controller, which was enclosed with the first letter, (3) memoranda explaining the recoupment process, and (4) the relevant salary schedules. Banuelos Decl. ¶19, Exs. 5, 6; Unland Decl. ¶9, Exs 5, 6.

Neither Everett nor Wagner made an election to fully compensate the County for the overpayments in one lump sum (which was “Option A”). Banuelos Decl. ¶20. As such, both were deemed to have selected Option B. Banuelos Decl. ¶20. Automatic salary deductions were made for both employees. Banuelos Decl. ¶20.

The automatic deductions for Wagner commenced with his May 15, 2018 check and ended with his March 15, 2019 check, a total reimbursement to the County in the sum of $2,964,74. Banuelos Decl. ¶20, Ex. 7. No further reimbursements are being asked of Wagner. Banuelos Decl. ¶20.

The automatic deductions for Everett commenced with his May 15, 2018 check and ended with his February 28, 2019 check, for a total reimbursement of $2,881,30. Banuelos Decl. ¶21, Ex. 8. No further reimbursements are being asked of Wagner. Banuelos Decl. ¶21.

Everett filed a grievance on May 30, 2018 regarding his claim that he did not owe any reimbursement for overpayments he received in the course of his employment. Chevalier Decl. ¶7, Ex. 1. On May 31, 2018, the Department and Everett agreed to waive Step 1 of the grievance process and move it to the Executive Level at Step 2. Chevalier Decl. ¶8.

No action was taken at Step 2 because Everett’s grievance was combined with other employee grievances regarding the same issue in an arbitration filed by ALADS under pertinent MOU provisions. Chevalier Decl. ¶9. ALADS filed the arbitration demand with ERCOM on or about July 23, 2018. Chevalier Decl. ¶9, Ex. 2. Everett’s arbitration demand was identified as ALADS ARB No. 37. Chevalier Decl. ¶9. These arbitrations became identified collectively as AI.ADS ARBS 1-107(B). Chevalier Decl. ¶9. ERCOM moved the demand for arbitration to hearing on July 30, 2018 and there is no record that Everett withdrew or dismissed his grievance. Chevalier Decl. ¶¶ 10-11.

On May 17, 2018, Wagner filed a grievance related to his claim that the was not overpaid during the course of his employment and did not owe reimbursement to the County. Chevalier Decl. ¶12, Ex. 3. On May 22, 2019, the parties agreed to waive the first step in the grievance process and to move it to Step 2, the Executive Level. Chevalier Decl. ¶13. There was no action taken on the Executive Level because Wagner’s grievance was addressed in the same arbitration proceeding filed by ALADS for other similarly situated employees. Chevalier Decl. ¶14. Wagner’s arbitration was identified as ALADS ARB No. 59 and his status as an interested party requesting arbitration is also reflected in the arbitration demand tiled by ALADS. Chevalier Decl. ¶14, Ex. 2. There is no record that Wagner withdrew or dismissed his grievance. Chevalier Decl. ¶15.

On November 21, 2019, Arbitrator Byron Berry signed his decision in ARB 1-107(B)-9, denying the grievance ALADS had filed on behalf of another grievant. Goodman Decl. ¶5, Ex. 1.[4]

ALADS filed another mandamus action on the same issue, which the court dismissed in favor of the County on February 20, 2019. Resp. RJN Ex. 2. ALADS subsequently appealed the judgment. Resp. RJN Ex. 3.

3. Reply Evidence

Claims for damages on behalf of Petitioners were filed with the County on May 14, 2019. Ross Decl. ¶¶ 3-4, Exs. A-B. Counsel for Petitioners received Notices of Receipt from the County as to the claims. Ross Decl. ¶¶ 6-8, Exs. C-D.

On May 15 and 17, 2019, the County sent a letter to Petitioners’ counsel informing them that certain claims filed by Petitioners were being rejected as untimely while others were being investigated. Ross Decl. ¶¶ 9-10, Exs. E-F.

A judgment of dismissal was entered in ALADS I on February 20, 2019. Kalinski Decl. ¶5.

On February 5, 2019, counsel for Petitioners emailed the County’s counsel and asked when the first arbitration hearing in the matter could be heard. Kalinski Decl. ¶6. On March 12, 2019, counsel for the County responded that the County’s position is that it cannot consent to ERCOM’s jurisdiction over retirees. Kalinski Decl. ¶6, Ex. B.

E. Analysis

Petitioners seek a writ of mandate directing Respondents to rescind their actions deducting overpayments from Petitioners’ wages and directing them to restore all deducted wages. Petitioners argue that Respondents are not permitted to unilaterally deduct from employee wages and, even if permitted, the deductions are limited by statute of limitations.

Respondents assert that Petitioners do not fulfill the requirements for traditional mandamus because they cannot demonstrate that the County has a ministerial duty to act in a certain manner and that they have a beneficial right to performance of that duty.

1. Procedural Issues

a. Government Claims Act

Respondents note that Petitioners both have retired and fully repaid the County and argue that damages now are their only remedy. Yet, Petitioners have failed to establish compliance with the Government Claims Act (“Claims Act”). Even if this mandamus petition is considered a wage claim, it is subject to the Claims Act if there is a local ordinance so stating. Govt. Code §§ 905(c), 935. The County has such an ordinance. Los Angeles County Code §§4.04.020-030. Respondents argue that Petitioners have not adequately pled compliance with the Claims Act, and even if they have, their claims would accrue continually, and a claim would have to be submitted within six months of each salary withdrawal. Opp. at 7, 11.

The Government Claims Act (“Claims Act”) bars any suit for money or damages against a public entity on a cause of action for which a claim is required to be presented until a written claim has been presented and acted upon or has been deemed rejected. Govt. Code §§ 905, 910, 911.2, 945.4; City of Stockton v. Superior Court, (2007) 42 Cal.4th 730, 738.

Petitioners do not dispute that they must comply with the Claims Act; they argue that they have complied. Reply at 7-8.

Everett and Wagner both filed claims with the County on May 20, 2019, and the County acknowledged receipt of these claims that same day. Ross Decl. Exs. A-D. Equitable tolling applies to the timeliness of their Claims Act compliance while Petitioners pursued the arbitration process. See Baillargeon v. Department of Water & Power, (1977) 69 Cal.App.3d 670, 683. That process ended, at the earliest, with County counsel’s March 12, 2019 letter informing Petitioners that the County would not consent to ERCOM’s jurisdiction over retirees. Kalinski Decl. ¶6, Ex. B. Since Petitioners’ claims were equitably tolled during the entire repayment period, the continuing accrual of their claims during that tolling period has no bearing on the timeliness of their May 20, 2019 claim. A single timely claim also is permissible for the continually accrued claims. Dillon v. Board of Pension Commissioners of City of Los Angeles, (1941) 18 Cal.2d 427, 434.

Petitioners complied with the Claims Act.

b. Exclusive Concurrent Jurisdiction

Respondents argue that the doctrine of exclusive concurrent jurisdiction bars the instant action because it is the third proceeding on the same issues. Opp. at 15.

“Under the rule of exclusive concurrent jurisdiction, when two superior courts have concurrent jurisdiction over the subject matter and the parties, the first court to assume jurisdiction has exclusive and continuing jurisdiction until such time as all necessarily related matters have been resolved.” Lawyers Title Ins. Corp. v. Superior Court, (1984) 151 Cal.App.3d 455, 460. The remedies in the suits need not be precisely the same; rather, the issues in the two proceedings must be substantially similar and the suits must have the potential to result in conflicting judgments. County of Siskiyou v. Superior Court, (2013) 217 Cal.App.4th 83, 91.

As Petitioners correctly note (Reply at 14), the doctrine of exclusive concurrent jurisdiction cannot apply because it requires two superior courts to have concurrent jurisdiction. ALADS I is on appeal and no superior court has jurisdiction of that case. The doctrine of exclusive concurrent jurisdiction does not apply.[5]

2. Respondents Followed Article 18(B)

Petitioners do not deny that they were overpaid and do not dispute the calculation for repayment. They merely contend that they were confused by the payroll system, which is complicated, and that the spreadsheet provided was cryptic. Opp. at 9-10.

Respondents rely on MOU Article 18 to permit them to recoup salary overpayments by deducting such amounts from employee wages. Opp. at 10.

Article 18 is entitled “Paycheck Errors”. Article 18(A) concerns paycheck errors for the underpayment of compensation. Article 18(B) is entitled “Overpayments” and provides:

“1. Employees will be notified prior to the recovery of overpayments.

2. Recovery of more than 15% of net pay will be subject to a repayment schedule established by the appointing authority under guidelines Issued by the Auditor-Controller. Such recovery shall not exceed 15% per month of disposable earnings (as defined by State law) except however that a mutually agreed-upon acceleration provision may permit faster recovery.” Stratton Decl. Ex. 1.

Petitioners argue that Article 18(B) does not authorize deductions for overpayments without a legal proceeding. Nor does it waive any applicable statute of limitations. Article 18(B) states that employees will be notified prior to recovery of overpayments, but it does not provide that the County may do so without a legal proceeding. Article 32 provides that any waiver of legal rights must be expressly stated, and Article 18(B) is subject to the Wage Garnishment Code and Labor Code. Pet. Opp. Br. at 6.

As Respondents argue, contract principles of interpretation apply to the interpretation of an MOU. Vallejo Police Officers Assn. v. City of Vallejo, (2017) 15 Cal.App.5th 601, 613. The basic goal of contract interpretation is to give effect to the parties’ mutual intent at the time of contracting, and the words should be understood in their ordinary and popular sense. Franco v. Greystone Ridge Condominium, (2019) 39 Cal.App.5th 221. Article 18(B) gives the County the authority to recover paycheck overpayments, and must be construed in conjunction with Article 18(A) concerning underpayments. Collectively, the Article 18 provisions show a mutual intent to allow the County to correct paycheck errors without undergoing a cumbersome legal process. Opp. at 10.[6]

Petitioners also argue that the County’s deductions are barred by CCP section 338(d)’s statute of limitations. In the exercise of reasonable diligence, the County could have discovered the error when it occurred in 2012. Pet. Op. Br. at 18. Petitioners assert that the County’s deductions from their paychecks long after 2012 are barred by the three-year statute of limitations. Pet. Op. Br. at 18-19.

Respondents correctly respond that the overpayment deductions were authorized by the MOU and that CCP section 338(a) is a statute of limitations filing an “action”, which is a lawsuit. CCP §22. Opp. at 12. No judicial proceeding was involved, and the statute of limitations does not apply.

3. The Wage Garnishment Law and Labor Code Section 221

Petitioners’ principal argument is that Article 18(B) does not trump the Wage Garnishment Law and Labor Code[7] section 221, the protections of which cannot be waived. Therefore, the County’s unilateral deductions from Petitioners’ salaries violate its ministerial duty embodied in section 221. Pet. Op. Br. at 11-12; Reply at 12-13.

Petitioners point out that, with an inapplicable exception, the Wage Garnishment Law provides the exclusive procedure for withholding an employee’s earnings. An employer is thus generally not entitled to set off debts owed by an employee against his or her wages — permitting an employer to do so would let the employer accomplish what another creditor could do by attachment. Banhill v. Robert Saunders & Co. (1081) 125 Cal.App.3d 1, 6. Pet. Op. Br. at 11-12.

In support of the Wage Garnishment Law, section 221 (Repayment of Wages to Employer) provides: “It shall be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee.” The wage garnishment law applies to public employees. California State Employees’ Assn. v. State of California, (“CESA”) (1988) 198 Cal.App.3d 374, 377.

Section 224 states an exception that the provisions of Sections 221, 222 (Withhold of Part of Wage) and 223 (Payment of Less than Statutory or Contractual Wage Scale) “shall in no way make it unlawful for an employer to withhold or divert any portion of an employee’s wages when the employer is required or empowered so to do by state or federal law or when a deduction is expressly authorized in writing by the employee to cover insurance premiums, hospital or medical dues, or other deductions not amounting to a rebate or deduction from the standard wage arrived at by collective bargaining or pursuant to wage agreement or statute, or when a deduction to cover health and welfare or pension plan contributions is expressly authorized by a collective bargaining or wage agreement.” (emphasis added).

a. Berkeley Council

Petitioners rely on Berkeley Council, in which PERB addressed an expired collective bargaining agreement (“CBA”) between a school district and teachers union. Pet. RJN Ex A. The expired CBA contained a provision permitting the district to recoup erroneous overpayments in salary by withholding from the employee’s wages, and the district demanded that the same provision be included in the parties’ new CBA. Ex. A, p. 2. The union contended that the proposed provision waived employee rights and therefore was a non-mandatory subject of bargaining. Ex. A, p. 2.

PERB relied on CSEA, which it described as concerning a state effort to recoup salary overpayments to individual employees. The state sent the employees a letter notifying them of the amount of their overpayment, described a schedule for deduction the payments from their wages, and offered a one-week opportunity to negotiate a different schedule based on hardship. Ex. A, p. 2. The CSEA court ruled that the state’s statutory policy of protecting employee wages took precedence. CSEA quoted an earlier case which noted that the policy underlying the state’s wage exemption statutes is to ensure that a debtor will retain sufficient money to maintain a basic standard of living, the pre-judgment attachment statutes are governed by due process concerns, and an employer’s setoff of debt would defeat the due process concerns for statutory attachment. Ex. A, p.4.

PERB concluded that the expired CBA was similar to the overpayment issue in CSEA, and any distinction that the district proposed a contract provision while the state employer in CSEA relied on a statutory recoupment procedure was ineffectual. Ex. A, p. 4.

PERB also considered the district’s reliance on Social Services v. Board of Supervisors, (“Social Services”) (1990) 222 Cal.App.3d 279, to contradict CSEA. Ex. A, p. 5. PERB noted that Social Services involved a wage deduction reimbursing a county for premium increases in employee health insurance coverage while negotiations were pending under the Meyers-Milias-Brown Act over those premium increases. Ex. A, p. 5. After the board of supervisors decided that the employees should repay the county for the 14 months of premium increases, the union challenged the monthly repayment deductions. Ex. A, p. 5.

According to PERB, the Social Services court acknowledged the state policy articulated in CSEA against attaching employee wages, but it ruled that wage deductions for increased health insurance premiums was expressly permitted by section 224. Ex. A, p.6. The Social Services court held that, since section 224 was a specific statute permitting the recoupment of insurance premium, the deductions were not prohibited by the attachment and wage garnishment laws once the board of supervisors imposed the recoupment obligation. Ex. A, p. 6-7. The Social Services court also rejected the argument that the union could not waive its members rights. While in general unions lack the capacity to waive employees’ statutory or constitutional rights, section 224 expressly authorizes unions to do so. Ex. A, p.7. Therefore, the payroll deductions were not extra-judicial seizures of the type condemned in CSEA. Ex. A, p. 7.

PERB concluded that Social Services permits collectively bargained deductions from wages, but only for the limited purposes authorized in section 224. Ex. A, p. 8. Social Services does not authorize employers and unions to collectively bargain for additional exceptions to the state policy confirmed in CSEA against pre-judgment attachment of wages. Ex. A, p. 8. PERB stated that the only exception to the legal requirement that an employee may authorize and employer to reduce his or her wages to recoup monies owed to the employer, and that a union cannot do so through a CBA or wage agreement, is a deduction for health and welfare or pension plan contributions. Ex. A, p. 9.

Respondents attempt to distinguish Berkeley Council as a case where the local government insistence on renewing a previous recoupment provision over union objection was a mandatory or non-mandatory subject of bargaining, and hence whether the labor practice was unfair. Ex. A, p. 16. Opp. at 13. That certainly was one of the issues, but Berkeley Council plainly held that, consistent with Social Services, the only permitted collectively bargained deduction from wages is for the limited purpose authorized in section 224. Ex. A, p. 8.

Respondents point out that Berkeley Council is not binding on the court. This is true, but PERB decisions are persuasive authority on legal matters that are within its expertise. City of Palo Alto v. Public Employment Relations Bd., (2016) 5 Cal.App.5th 1271, 1287–88. PERB’s construction of a statute within its field of expertise is given deference and will be followed unless clearly erroneous. The issue of the collective bargaining authority of a public employer and a public employee union under state law is a matter within PERB’s jurisdiction and expertise. Therefore, PERB’s decision carries significant weight.

b. Respondents’ Arguments

Respondents argue that the Labor Code does not apply to public employees unless a statute specifically states so and section 221 does not apply to public employers and their employees. Opp. at 14-15.

Petitioners demonstrate that section 221 does apply to public employers. Both Berkeley Council and section 220’s express exemption for public employers show otherwise. Section 220 lists the provisions of the Labor Code that are inapplicable to public employers (sections 200-11, 215-19). The list does not include section 221. Furthermore, Respondents’ cited cases — Social Services and Huimin Song v. County of Santa Clara, (“Huimin Song”) (9th Cir. 2017) 705 F.Appx. 492 — implicitly apply section 221 to public employers; there would be no need to find a section 224 exemption of section 221 did not do so. Reply at 10.

Respondents argue that Article 18(B) is consistent with the Wage Garnishment Law’s purpose of ensured that a debtor will retain enough money to maintain a basic living because there is a 15% limit on any recovery from net salary. Respondents rely on Social Services, supra, 222 Cal.App.3d at 287, and note that it recoupment process that was imposed upon employees through the county’s retroactive deduction from payroll for employees who elected dependent coverage. Id. at 283. Opp. at 11-13. To some extent this is true, but that does not mean Article 18(B) can replace the Wage Garnishment Law absent some statutory authority to do so.

Respondents argue that section 224 is an exception to section 221 and permits an employer to engage in payroll deductions for “other deductions…arrived at by collective bargaining or pursuant to wage agreement or statute.” Article 18 is a “wage agreement”. A “wage” is anything promised as part of the compensation for employment. Davis v. Farmers Insurance Exchange, (2016) 245 Cal.App.4th 1302, 1331, n.20 (citation omitted). Under the MOU, the County never promised Petitioners any compensation over that paid to Sergeants on the sixth step. Therefore, the overpayment was not wages; Petitioners were never paid any less than their stated wages under the MOU. Opp. at 14-15.

As Petitioners note (Reply at 11), Respondents fail to address Sciborski v. Pacific Bell Directory, (2012) 205 Cal.App.4th 1152, 1166. There, a jury found that an employer violated section 221 by deducting approximately $19,000 in wages from an employee to recover a $36,000 commission paid to her. Id. at 1152. The court noted that section 221 prohibits an employer from deducting an employee’s wages, even as a setoff for amounts clearly owed by the employee. Id. at 1166. Section 221’s rights are non-negotiable and cannot be waived by the parties. Id. at 1166. In enacting section 221, the legislature prohibited employers from using self-help to take back any party of “wages theretofore paid” to an employee, except in narrowly defined circumstances provided by statute. Id. (citation omitted). Because of this strong public policy, an employer’s right to recoup an advance not yet earned as an exception under section 224 generally requires a showing that the employee agreed in writing to the specific condition and the employer’s right to recoup under stated conditions. Id. at 1167.

Generally, a collective bargaining agreement may not waive statutory rights which arise from an extraordinarily strong and explicit state policy. Social Services, supra, 222 Cal.App.3d 279, 287. Sciborski interprets section 224 as permitting recoupment of monies when required by state or federal law and in three listed situations: (1) when the employee expressly authorizes in writing a deduction to cover insurance premiums, hospital or medical dues, (2) other deductions not amounting to a rebate or deduction from the standard wage arrived at by collective bargaining, wage agreement, or statue, and (3) when a deduction to cover health and welfare or pension plan contributions is expressly authorized by a collective bargain or wage agreement. Thus, section 224 expressly authorizes agreements between public employees and their employers for the payment of health and welfare or pension plan contributions through payroll deductions. Id. Otherwise, section 221 rights are non-negotiable and non-waivable. Id. at 1166.

Respondent’s rely solely on section 224’s exception for “other deductions not amounting to a rebate or deduction from the standard wage arrived at by collective bargaining, wage agreement, or statue”. The court accepts Respondents’ argument that Article 18 of the MOU is a wage agreement. The problem with Respondents’ argument is that, while they may reasonably argue that the overpayments to Petitioners were not wages – although they were paid as wages — the County deducted the overpayment from wages. Hence the County’s deduction of the overpayments is a “deduction from Petitioners’ standard wage”. See also Berkeley Council, Pet. RJN Ex. 1, p. 9. (“The only exception [to section 221] permitted [by section 224] solely on the basis of an express authorization in a collective bargaining or wage agreement is a deduction for health and welfare or pension plan contributions.”).

Respondents contend that their position is stronger than Social Services, which is controlling, because the county in Social Services compelled a result while the parties’ existing MOU authorizes deductions for overpayments in Article 18(B). Social Services is a case concerning reimbursement for health care costs and it relied on section 224’s exemption for “other deductions…arrived at by collective bargaining or pursuant to wage agreement or statute…” Respondents conclude that Article 18 is a wage agreement exempt from section 221 by section 224, and the Ninth Circuit determined as much in Huimin Song, supra, 705 Fed. Appx. at 495.[8]

Respondents’ reliance on Social Services is unavailing. As found by PERB in Berkeley Council and argued by Petitioners, Social Services is distinguishable because it only permitted payroll deductions for health care costs — an express exception in section 224 — whereas the instant dispute involves overpayment of wages. Pet. Op. Br. at 14-15; Reply at 11-12. Although Respondents argue that Section 224 should be interpreted more broadly to allow for all deductions arrived at by collective bargaining or pursuant to a wage agreement or statute, this interpretation is directly contradicted by PERB precedent. [9]

In sum, the general prohibition of section 221 applies to the overpayments, section 224 provides no applicable exception, and Respondents have a ministerial duty to comply with section 221 by pursuing the collection of overpayments through the Wage Garnishment Law.[10]

4. Home Rule Doctrine

Respondents argue that Section 221 is inapplicable under the Home Rule Doctrine. Under the Home Rule Doctrine, the County has authority to establish conditions of employment, including compensation, and did so through the MOU. Dimon v. County of Los Angeles, (2008) 166 Cal.App.4th 1276, 1283. The Home Rule Doctrine dictates that local governing bodies such as the County Board of Supervisors, and not the state legislature, have a right to “provide ‘for the number, compensation, tenure and appointment of employees.’” Id. at 1282 (citations omitted). The compensation of employees falls within the “County’s exclusive constitutional purview.” Curcini v. Couniy ofAlameda (2008) 164 Cal.App.4th 629, 645.

The County can choose to address compensation either by ordinance or resolution which includes entering into an MOU with a union to cover compensation. Dimon, supra, 166 7 Cal.App.4th at 1284 (MOU approved by the Board of Supervisors which included provisions for meal periods differed from, and precluded application of Labor Code provisions). Similarly, section 221 did not prevent the County from bargaining for different provisions in the MOU for recoupment by deducting overpayment of wages. Petitioners’ allegations that the County must follow section 221 are incorrect. Opp. at 13-14.

The Home Rule Doctrine provides that local governing bodies, not the state legislature, have a right to provide for the number, compensation, tenure, and appointment of employees. Dimon, supra, 166 Cal.App.4th at 1282. However, the instant dispute does not concern the compensation of County employees, but rather the County’s unilaterally deduction from employee wages. Pet. Op. Br. at 17-18; Reply at 13. Furthermore, the protections of the Wage Garnishment Law and section 224 are matters of statewide concern which apply even to charter cities and counties and the legislature may regulate such matters over local regulations. See Baggett v. Gates, (1982) 32 Cal.3d 128, 137-38 (Police Officer Bill of Rights Act does not interfere with charter cities setting of peace officer compensation).

The Home Rule Doctrine does not exempt the County from section 221.

F. Conclusion

The Petition for writ of mandate is granted. Petitioners are entitled to mandamus directing Respondents to rescind their actions deducting overpayments from Petitioners’ wages and directing them to restore all deducted wages. Respondents will have to pursue the overpayments through small claims actions.

Petitioners’ counsel is ordered to prepare a proposed judgment and writ, serve them on Respondents’ counsel for approval as to form, wait ten days after service for any objections, meet and confer if there are objections, and then submit the proposed judgment and writ along with a declaration stating the existence/non-existence of any unresolved objections. An OSC re: judgment is set for February 27, 2020 at 9:30 a.m.

[1] The parties did not include exhibit tabs with their courtesy copies and their counsel is directed to do so in all future writ proceedings.

[2] Petitioners request judicial notice of: (1) Berkeley Council of Classified Employees v. Berkeley Unified School District, (“Berkeley Council”) (2012) PERB Decision No. 2268 (Ex. A); and (2) Preamble and Article I of the Charter of the City of Oakland (Ex. B). The request for Exhibit A is granted. Evid. Code §452(b). While Oakland’s Charter would be subject to judicial notice if it were relevant, it is not. The request is denied for Exhibit B.

[3] Respondents request judicial notice of (1) the second amended complaint in ALADS I (Ex. 1); (2) the judgment of dismissal in ALADS I, (Ex. 2); and (3) the notice of appeal in ALADS I (Ex. 3). The existence of the requested documents, but not the truth of their contents, is judicially noticed. Evid. Code §452(d); Sosinsky v. Grant, (1992) 6 Cal.App.4th 1548, 1551.

[4] Petitioner moves to strike the Goodman declaration and its exhibit because an arbitrator’s decision for another grievant does not bind either them or this court. This is not a reason to strike the declaration. As the County argues, it is evidence of an ongoing arbitration process. The motion is denied.

[5]Although not argued by Respondents, this case is not subject to a stay as a plea in abatement either. The court judicially notices Department 82’s January 29, 2019 ruling in ALADS I, and the basis for that ruling – and the issue on appeal – was that Petitioners must exhaust their administrative remedies by pursuing arbitration. Petitioners did pursue arbitration, only to be rebuffed by the County’s assertion that ERCOM does not have arbitration jurisdiction for retired employees. While Petitioners have not formally withdrawn from the arbitration process, Respondents do not seek to compel them to do so. In any event, this Petition may be deemed a withdrawal from arbitration.

[6] Petitioners contend that the County never showed that the overpayment amounts were accurate because the spreadsheets do not show any calculations or even what the cap was in any given period. Pet. Op. Br. at 19. The County presented evidence that all affected deputies were free to question the numbers or to seek additional information. Banuelos Decl. ¶12. Petitioners never inquired regarding any issue relating to the repayment. Banuelos Decl. ¶12. The County had no ministerial duty to do more.

[7] All further statutory citations are to the Labor Code unless otherwise stated.

[8] Huinmin Song is an unpublished federal case not binding on the court. As Petitioners argue, its one-sentence reference to section 224 is devoid of analysis and of little persuasive value. Reply at 12.

[9] Respondents argue that Petitioners are guilty of unclean hands because they cannot pick and choose what provisions of the MOU to enforce by filing grievances, participating in an arbitration process, but rejecting Article 18(B). Opp. at 12-13, 16. There is nothing wrong with performing a contract, while contending that one provision is unlawful and unenforceable. This is not unclean hands.

[10] The court need not address Respondents’ arguments that declaratory relief is unavailable. Opp. at 15-16.