Gateway Community Charters v. Spiess
9 Cal. App. 5th 499
| Cal. Ct. App. | 2017Background
- Gateway Community Charters is a California nonprofit public benefit corporation that operates charter schools; Heidi Spiess was an at-will employee at one such school and was terminated.
- Spiess filed a wage claim alleging failure to timely pay final wages; the Labor Commissioner awarded wages, liquidated damages, interest, and waiting time penalties under Labor Code § 203.
- The Labor Commissioner and, on de novo trial, the superior court concluded Gateway was not an “other municipal corporation” under Labor Code § 220(b) and thus not exempt from § 203 waiting time penalties.
- Gateway appealed, arguing § 220(b)’s exemption for counties, cities, towns, or “other municipal corporation” should encompass nonprofit charter operators.
- The Court of Appeal analyzed statutory text and related canons (noscitur a sociis, ejusdem generis), compared characteristics of entities previously held to be municipal or quasi‑municipal, and evaluated whether Gateway shares those defining features.
- The court affirmed: Gateway lacks key municipal/quasi‑municipal attributes (elected board, taxing/eminent domain powers, geographic jurisdiction, regulatory/police powers), so it is not an “other municipal corporation” exempt from § 203 penalties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Gateway qualifies as an "other municipal corporation" under Labor Code § 220(b) and thus is exempt from § 203 waiting time penalties | Gateway: charter‑school operator should be treated like public/quasi‑municipal entities because it performs a public function (education), is part of the public school system for some statutory purposes, and is subject to open‑meeting/public records laws | Spiess: Gateway lacks the core attributes of municipal/quasi‑municipal corporations (no elected board, no taxing authority, no eminent domain, no geographic jurisdiction, no independent regulatory/police powers); public‑policy arguments for exemption should be addressed by the Legislature | Court: Gateway is not an "other municipal corporation" for § 220(b); it lacks multiple defining municipal/quasi‑municipal characteristics, so § 203 penalties apply |
Key Cases Cited
- Murphy v. Kenneth Cole Productions, Inc., 40 Cal.4th 1094 (2007) (administrative interpretation not entitled to heightened deference when inconsistent)
- Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC, 61 Cal.4th 830 (2015) (statutory interpretation principles: plain meaning, context, legislative intent)
- Kistler v. Redwoods Community College Dist., 15 Cal.App.4th 1326 (1993) (construed community college district as a municipal corporation for § 220(b) purposes)
- Johnson v. Arvin‑Edison Water Storage Dist., 174 Cal.App.4th 729 (2009) (identified factors—elected board, regulatory/police powers, taxing/assessment/eminent domain powers, open meeting/public records—supporting classification as "other municipal corporation")
- Division of Labor Law Enforcement v. El Camino Hosp. Dist., 8 Cal.App.3d Supp. 30 (1970) (adopted broad reading of "other municipal corporation" to include certain quasi‑municipal entities such as a public hospital district)