AN UNPAID VOLUNTEER IS NOT AN EMPLOYEE FOR PURPOSES OF DISCRIMINATION CLAIM
On July 24, 2013, the California Court of Appeal, 2d Appellate District, ruled in Estrada v. City of Los Angeles, 2013 DAR 9621, that a reserve police officer, who serves without compensation, may not sue a city for disability discrimination under the Fair Employment and Housing Act (FEHA). This decision was reached despite the fact that reserves receive certain benefits, including coverage under workers’ compensation.
Facts
Frank Estrada was a member of the Los Angeles Police Reserve Corps, whose members are defined in the Los Angeles Administrative Code as “volunteer workers only and [who] shall not be, or be deemed to be, employees of the City or of the Police Department for any purpose other than for the purposes of Section 22.233 of this Article and shall serve gratuitously except as provided in Section 22.230 of this Article.”
Section 22.233 provides that police reserve officers are deemed employees of the City for the limited purpose of recovery of workers’ compensation benefits, and 22.230 states that police reserve officers are not paid salary, wages, or compensation for services rendered, but are furnished with a police uniform and necessary equipment, as well as $50 per deployment period as reimbursement for expenses.
Estrada was involved in traffic collisions, while on duty, in 1995 and 1996 and, “in both instances, he obtained workers compensation benefits and continued to receive benefits, as his injuries were not fully resolved.”
In 2004, he was the subject of an internal affairs investigation regarding his selling a nutritional supplement which contained a drug which required a prescription. As a result, he was ultimately terminated from the Reserve Corps in 2007, after 17 years as a reserve officer.
“On June 3, 2009, Estrada filed suit against the City, alleging: disability discrimination under FEHA (Gov. Code, § 12945.2, subd. (l)) (first cause of action); retaliation for filing workers’ compensation claim (Lab. Code, § 132a) (second cause of action); and intentional infliction of emotional distress (third cause of action). Estrada subsequently withdrew the second cause of action, and the third cause of action was eliminated on demurrer. Thus, this matter proceeded only on the first cause of action, the FEHA claim.”
“The trial court ruled ‘because the City of Los Angeles is a public agency whose applicable ordinance only permits employment of those appointed pursuant to the City Civil Service Rules and Estrada was not so employed, he is not an employee for purposes of the [FEHA].’”
In the Court of Appeal, Estrada argued, among other things, that “FEHA defines ‘employee’ broadly,” and the trial court was in error in ruling that “the definition of ‘employee’ for purposes of his FEHA discrimination claim is governed by the City’s civil service rules. . . .”
FEHA and Employment Status
In discussing the purpose behind FEHA, the Court of Appeal noted that “FEHA prohibits an employer from discriminating because of a disability against employees or applicants for employment ‘in compensation or in terms, conditions, or privileges of employment.’” However, “in order to recover under the discrimination in employment provisions of the FEHA, the aggrieved plaintiff must be an employee.”
The Court observed that FEHA’s provisions regarding the definition of employees was not helpful in deciding who was, or was not, an employee for purposes of coverage under the Act. Therefore, the Court looked to the regulations enacted by the Department of Fair Employment and Housing (DFEH), which was created by FEHA. Those regulations defined an employee as “[a]ny individual under the direction and control of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written.” (Italics in original.)
The Court referred to an earlier Court of Appeal decision, Mendoza v. Town of Ross,(2005) 128 Cal.App.4th 625, which held that “appointment” must be in accordance with the controlling local ordinance. Ross had been issued a police ID card which stated that, “This is to certify that Peter Mendoza is a duly appointed Community Service Officer.” Mendoza argued, therefore, that he met the definition contained in the DFEH regulations.
However, the Mendoza court held that the language on the card was irrelevant. “Regardless of what verbiage may appear on Mendoza’s identification card, Mendoza ignores the controlling local ordinance, which vests the Town Council with the exclusive authority to make appointments to employment.”
The Court of Appeal noted that “(t)he Mendoza court also relied on “Labor Code section 3352, subdivision (i) [which] excludes public agency volunteers from workers’ compensation coverage. ‘Employee’ excludes ‘[a]ny person performing voluntary service[s] for a public agency or a private, nonprofit organization who receives no remuneration for . . . services other than meals, transportation, lodging, or reimbursement for incidental expenses.’”
Furthermore, under federal law: “Title VII ‘succinctly defines employee’ as an ‘individual employed by an employer.’ The first prong of the title VII test in determining if someone is an employee requires the plaintiff to prove he or she was hired by the putative employer.”
In order to prove such employment status, first “. . . a purported employee must establish the existence of remuneration, in some form, in exchange for work,” and subsequent court decisions have supported the requirement of remuneration in order to prove employment status. (Italics in original.)
The Court of Appeal, however, noted that the Mendoza court had held that, “(e)ven substantial indirect compensation can satisfy the threshold requirement of remuneration for purposes of employee status under title VII. If not direct salary, substantial benefits which are not merely incidental to the activity performed, such as health insurance, vacation or sick pay, are indicia of employment status.” (Italics in original.)
Under the instant set of circumstances, the Court held that although Estrada was appointedto a volunteer position, without remuneration, he “was not appointed to an employeeposition. To reiterate, the instant civil service rules define an employee as ‘a person occupying a position in the classified civil service.’ Estrada admittedly was not appointed to a position in the classified civil service. Accordingly, Estrada was not an employee of the City.”
“Employee” Status for Workers’ Compensation Benefits
Finally, the Court addressed the fact that the City defined reserves as “employees” for purposes of workers’ compensation coverage. “The City does so despite the fact the Workers’ Compensation Act excludes from the definition of employee ‘[a]ny person performing voluntary service for a public agency or a private, nonprofit organization who receives no remuneration for the services other than meals, transportation, lodging, or reimbursement for incidental expenses.’”
“Clearly, the City has made a policy decision to extend such benefits to volunteer reserve officers, who serve gratuitously and put themselves in harm’s way to protect the community. However, the consequence of this policy decision by the City is not to convert these uncompensated volunteers into municipal employees for all purposes. The fact the City provides volunteer reserve officers with workers’ compensation benefits if they sustain industrial injuries does not change the fact they serve without remuneration.”
In conclusion, the Court of Appeal states that, “(i)rrespective of the significant value of workers’ compensation benefits, the purpose of workers’ compensation is ‘to compensate for losses resulting from the risks to which the fact of employment in the industry exposes the employee.’ The fact the City ensures that unpaid volunteers such as Estrada are compensated for industrial injuries does not mean that such persons are deemed employees for purposes of the FEHA.”
HOW THIS AFFECTS YOUR AGENCY
“To pay, or not to pay” volunteers appears, once again, to be a question of significance. There are many law enforcement agencies which provide remuneration to their reserve peace officers – in some cases, substantial remuneration. Setting aside the reasons behind such decisions, the issue now before those governmental entities is whether that should be done in light of this case?
Had Estrada received remuneration, other than the de minimis payments for meals, transportation, lodging, or reimbursement
for incidental expenses, he would have been considered an employee and, therefore, able to sue, pursuant to FEHA, claiming disability discrimination. Although such a claim might not have created liability for the City, although there is no way of knowing for sure, it certainly would have created litigation, and the City would incur costs and expenses arising out of such litigation.
It also appears that the logic of this decision could be extended to any claim an employee might raise pursuant to FEHA, not just disability discrimination. If that is true, then one who is not an employee would not be able to raise other FEHA claims, either. This decision implies that if cities and counties wish to limit such litigation, in addition to the question of remuneration of volunteers, it is important that cities and counties have a definition of an “employee” which is consistent with that contained in the Estrada case.
As with all issues involving the law, it is imperative to consult with, and secure advice and guidance from, your agency’s legal counsel. As always, if you wish to discuss this decision in greater detail, please feel free to contact me at (714) 446 – 1400 or via email atmjm@jones-mayer.com.
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