Changes to California’s Wage and Hour Practices Effective January 1, 2016

Leyla

Associate

The California Legislature passed, and Governor Jerry Brown signed, numerous labor and employment bills into law in 2015. This article highlights some of the key changes to California’s Wage and Hour practices, including:

Each new law discussed is effective January 1, 2016 unless expressly stated otherwise.

Senate Bill (SB) 588 – California Labor Commissioner – Judgment Enforcement

SB 588 seeks to reduce millions of dollars of wage theft violations occurring each year, and holds individuals responsible and accountable for wage theft.    It gives the Labor Commissioner new tools to collect from employers.  Specifically, the Labor Commissioner now has the right to use any of the existing remedies available to a judgment creditor and to act as a levying officer when enforcing a judgment.  If an employee brings a successful Wage and Hour claim against an employer, the Labor Commissioner can place a lien on the employer’s real and personal property or levy on the business’s bank accounts and accounts receivable. If the aggrieved employee incurred attorneys’ fees, then the Labor Commissioner can include those attorneys’ fees in the lien or levy.  For more, see e.g., Labor Code Sections 238.2, 238.3.

Furthermore, the employer cannot close down its business and re-opening under a new name in an effort to avoid debts to workers.  Any new business that is “similar in operation and ownership” to the guilty employer is also liable for the wages owed.  The new business is considered the “same employer” for purposes of liability if (1) “the employees of the successor employer are engaged in substantially the same work in substantially the same working conditions under substantially the same supervisions,” or (2) “if the new entity has substantially the same production process or operations, produces substantially the same products or offers substantially the same services, and has substantially the same body of consumers.”  For more, see Labor Code Section 238(e).

Importantly, until the passage of SB 588, there was no individual liability for state Wage and Hour violations in California.  In this regard, by limiting the definition of “employer,” California state law offered greater protections to individuals than the protections offered under federal law.  Specifically, under the Fair Labor Standards Act of 1938 (FLSA), the definition of “employer” includes “any person acting directly or indirectly in the interest of an employer in relation to an employee.”  Courts have interpreted this definition broadly, allowing employees to bring federal wage and hour claims against individual defendants.  That was not the case in California, where the definition of “employer” was more narrowly construed and did not include individual corporate agents acting within the scope of their agency.

As of January 1, 2016, however, courts will now also allow California state wage and hour claims against individual defendants.  California has expanded the definition of “employer” to include any “person acting on behalf of an employer.”  Any such person can now be held liable for Wage and Hour violations, including violations of Sections 203, 226, 226.7, 1193.6, 1194, and 2802 of the Labor Code.  Persons acting on behalf of an employer include natural persons who are owners, directors, officers, or managing agents of the employer.  The Labor Commissioner can seize the personal property and bank accounts of individual owners and others who violate California’s Wage and Hour laws.  High level employees must therefore be mindful of both federal and California wage and hour laws because they can be held personally accountable for violations of both.  For more, see Labor Code Section 558.1.

Once an employer is found to have violated California’s Wage and Hour laws, and the employer’s nonpayment of wages stays unsatisfied after any appeal rights have expired, that employer may not continue to conduct business in California unless the employer obtains a bond and files a copy of the bond with the Labor Commissioner.  Labor Code Section 238.  The bond amount can range from $50,000, if the unsatisfied portion of the judgment is no more than $5,000, up to $150,000, if the unsatisfied portion of the judgment is more than $10,000.  The Labor Commissioner can create a lien on the employer’s real or personal property in California, if the employer continues conducting business without satisfying the bond requirement for the full amount of any wages, interest and penalties claimed to be owed to an employee.  The employer may be subject to a stop order disallowing use of labor until compliance is obtained. Failure to comply with such stop order is deemed a misdemeanor.  For more, see Labor Code Section 238.1.

SB 588 also authorizes civil penalties for wage and hour violations.  These are owed in addition to any wages and attorneys’ fees owed to employees.  The penalty is $2,500 for the first offense and $100 for each calendar day the employer continues to do business in violation of the law, up to $100,000.00.  For more, see Labor Code Section 238(f).

Finally, employers in the long-term care industry, such as skilled nursing facilities, intermediate care facilities, congregate living health facilities, hospice facilities, adult residential facilities, residential care facilities for persons with chronic life-threatening illnesses, residential care facilities for the elderly, continuing care retirement community, home health agency, or home care organizations, need to be particularly mindful of new changes to the Wage and Hour laws.  If such long-term care facilities are found to be in violation of the newly created Labor Code Section 238, they may be denied a new license, or the renewal of an existing license.  Specifically, if a final judgment against an employer arising from the employer’s nonpayment of wages remains unsatisfied after the time to appeal expires, an employer in the long-term care industry may be denied a new or renewed operating license if the employer fails to obtain a necessary bond.  For more, see Labor Code Section 238.4.

Senate Bill (SB) 327 – Employees in Health Care Industry; Waiver of Meal Periods

The law was enacted to address the uncertainty created by an appellate court decision in Gerard v. Orange Coast Memorial Medical Center, 234 Cal. App. 4th 285 (2015).  SB 327 simply affirms that employers in the health care industry can continue to allow employees to voluntarily waive one of their two meal periods, even if the employee’s shift exceeds 12 hours.  This was an urgency statute which became effective immediately on October 5, 2015, and which amends Labor Code Section 516.

Assembly Bill (AB) 970 – California Labor Commissioner; Enforcement of Employee Claims

Much like SB 588, Assembly Bill 970 expands the Labor Commissioner’s enforcement powers.  In AB 970, the California legislature authorizes the Labor Commissioner to issue citations to enforce local minimum wage and overtime laws.  Various Labor Code Sections were amended accordingly, including Labor Code Sections 558, 1197, 1197.1, and 2802.

Senate Bill (SB) 358 –Addresses Gender Pay Inequality

SB 358, the California Fair Pay Act, is the  “strongest equal pay law in the nation” according to Governor Brown.  Full time working women in California lose more than $33 billion each year due to the wage gap.  The Fair Pay Act is expected to eliminate loopholes that prevent effective enforcement and empowers employees to discuss their pay without fear of retaliation.  Previously, employees claiming gender-discriminatory pay practices had to prove that they were getting paid less for “equal” work.   The new law lowers that burden of proof by prohibiting employers from paying lower wages for “substantially similar” work.   On the other hand, the law increases the burden of proof for employers defending against such claims – the new law requires employers to demonstrate that a wage differential is based on a bona fide factor other than the employee’s gender.  The new law also discourages secrecy by explicitly prohibiting retaliation or discrimination against employees who disclose, discuss, or inquire about their own or co-workers’ wages.

Assembly Bill (AB) 1513 –   Modifies Workers’ Compensation and Piece Rate Compensation Rules

AB 1513 added a new section 226.2 to the Labor Code concerning piece-rate compensation.  The new law became effective January 1, 2016.  It is designed to resolve controversies over how to compensate piece-rate workers for rest and recovery periods and other “nonproductive” work time that does not generate piece-rate earnings.

The new law requires that the itemized wage statement provided to employees compensated on a piece-rate basis must also separately state:

  • the total hours of compensable rest and recovery periods available under the law, the rate of compensation, and the gross wages paid for those periods during the pay period, as well as
  • the total hours of “other nonproductive time,” the rate of compensation and the gross wages paid for such time during the pay period.

The new law defines “other nonproductive time” to mean time under the employers’ control exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.  The new law requires employees to be compensated for rest and recovery periods and other nonproductive time at or above specified minimum hourly rates, separately from any piece-rate compensation.  In other words, employers who pay on a piece-rate basis will only be able to satisfy the new law if they pay minimum wage for all hours worked, in addition to any piece rate.

The new law does, however, provided a limited safe harbor for employers that have not been sued regarding these issues prior to April 2014; who come into compliance with all of the obligations described in Labor Code Section 226.2 before the end of 2015, and who pay actual or liquidated damages by the end of 2016.

Employers may assert an affirmative defense to all liability for failure to compensate for rest and recovery periods and other non-productive time if they satisfy all of the following requirements by December 15, 2016:

(1) if the employer pays to its current and former employees all compensation now required for periods January 1, 2012 – December 31, 2015;

(2) if the employer makes a good faith effort to locate and provide these payments to each of its former employees; and

(3) if the employer provides written notice to the Department of Industrial Relations by July 1, 2016 that it intends to make these payments.

Employers who have paid, or continue to pay, on a piece rate basis must be mindful of the limited timeframe for coming into compliance with the new requirements regarding piece rate compensation.  Those who have paid on a piece-rate basis should consult counsel to make sure they comply with the new requirements by the end of 2016, or risk exposure to significant liability in current and/or future litigation.

Senate Bill (SB) 501 – Wage Garnishment Restrictions

The existing Wage Garnishment Law prescribes the procedure for withholding an employee’s earnings for purposes of paying a debt.  Prior to January 1, 2016, the law prohibited the amount of an individual judgment debtor’s weekly disposable earnings subject to levy under an earnings withholding order from exceeding the lesser of 25% of the individual’s weekly disposable earnings or the amount by which the individual’s disposable earnings for the week exceed 40 times the state minimum hourly wage in effect at the time the earnings are payable.

The new law, effective as of January 1, 2016, reduces the prohibited amount of an individual judgment debtor’s weekly disposable earnings subject to levy from exceeding the lesser of the following:

  • 25 % of the individual’s weekly disposable earnings or
  • 50 % of the amount by which the individual’s disposable earnings for the week exceeds 40 times the (i) state minimum hourly wage or (ii) applicable local minimum wage, if higher, in effect at the time the earnings are payable.

IWC Minimum Wage Order, MW-2014:

Effective January 1, 2016, California’s minimum wage has increased to $10.00 per hour.   Thus, as of January 1, 2016, the minimum annual salary for exempt employees is $41,600.

Assembly Bill (AB) 1506:  PAGA Amendments   

Amendments to the Private Attorney General Act of 2004 (PAGA) provide some relief to the employers relating to claims under Labor Code section 2699.    The new law allows employers a limited right to cure wage statement violations, which involve failure to provide itemized wage statements containing (1) pay period dates and (2) the name and address of the legal entity, before individuals can bring civil suits for such alleged violations. Under the new law, the employer can cure the violation only if the employer provides a fully compliant, itemized wage statement to each aggrieved employee.  The employer cannot take advantage of the new law’s notice and cure provisions more than one time in a 12-month period for the same violation or violations set forth in the Labor & Workforce Development Agency (LWDA) notice, despite the location of the worksite.  This law was enacted as an urgency statute and is effective October 2, 2015.  Sections 2699, 2699.3 and 2699.5 of the Labor Code were amended accordingly.

Prior Restraints

Gregory-J.-WoodThe law against preliminary injunctions restricting speech is nothing short of brutal:

“The right to free speech is … one of the cornerstones of our society,” and is protected under the First Amendment of the United States Constitution and under an “even broader” provision of the California Constitution. (Hurvitz v. Hoefflin (2000) 84 Cal.App.4th 1232, 1241, 101 Cal.Rptr.2d 558; see Cal. Const., art. I, § 2, subd. (a).) An injunction that forbids a citizen from speaking in advance of the time the communication is to occur is known as a “prior restraint.” (DVD Copy, supra, 31 Cal.4th at p. 886, 4 Cal.Rptr.3d 69, 75 P.3d 1; Hurvitz v. Hoefflin, supra, 84 Cal.App.4th at p. 1241, 101 Cal.Rptr.2d 558.) A prior restraint is “ ‘the most serious and the least tolerable infringement on First Amendment  *1167 rights.’ ” (DVD Copy, supra, 31 Cal.4th at p. 886, 4 Cal.Rptr.3d 69, 75 P.3d 1; Near v. Minnesota (1931) 283 U.S. 697, 713, 51 S.Ct. 625, 75 L.Ed. 1357.) Prior restraints are highly disfavored and presumptively violate the First Amendment. (Maggi v. Superior Court (2004) 119 Cal.App.4th 1218, 1225, 15 Cal.Rptr.3d 161; Hurvitz v. Hoefflin, supra, 84 Cal.App.4th at p. 1241, 101 Cal.Rptr.2d 558.) This is true even when the speech is expected to be of the type that is not constitutionally protected. (See Near v. Minnesota, supra, 283 U.S. at pp. 704–705, 51 S.Ct. 625 [rejecting restraint on publication of any periodical containing “malicious, scandalous and defamatory” matter].)67 To establish a valid prior restraint under the federal Constitution, a proponent has a heavy burden to show the countervailing interest is compelling, the prior restraint is necessary and would be effective in promoting this interest, and less extreme measures are unavailable. (See Hobbs v. County of Westchester (2d Cir.2005) 397 F.3d 133, 149; see also Nebraska Press Assn. v. Stuart (1976) 427 U.S. 539, 562–568, 96 S.Ct. 2791, 49 L.Ed.2d 683.) Further, any permissible order “must be couched in the narrowest terms that will accomplish the pin-pointed objective permitted by constitutional mandate and the essential needs of the public order….” (Carroll v. Princess Anne (1968) 393 U.S. 175, 183–184, 89 S.Ct. 347, 21 L.Ed.2d 325.)89 Even if an injunction does not impermissibly constitute a prior restraint, the injunction must be sufficiently precise to provide “a person of ordinary intelligence fair notice that his contemplated conduct is forbidden.” (United States v. Harriss (1954) 347 U.S. 612, 617, 74 S.Ct. 808, 98 L.Ed. 989; see also People ex rel. Gallo v. Acuna (1997) 14 Cal.4th 1090, 1115, 60 Cal.Rptr.2d 277, 929 P.2d 596.) An injunction is unconstitutionally vague if it does not clearly define the persons protected and the conduct prohibited.

Evans v. Evans, 162 Cal. App. 4th 1157, 1166-67, 76 Cal. Rptr. 3d 859, 867 (2008)

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Summary Judgment Motion

Gregory-J.-WoodThere are a few different tools defense lawyers can use to defend a case.  One tool is the motion for summary judgment and/or motion for summary adjudication (“MSJ/MSA”).

A MSJ/MSA says two things to the Court.  It first says that the material facts of the case are undisputed.  There is no need for a trial.  The Court can decide this one on the papers.  The Motion then says: under these undisputed facts and the applicable law, moving party should win the case.

Motions for summary judgment and/or summary adjudication of causes of action are weapons of mass destruction that rarely detonate.  There is strong public policy in favor of giving plaintiffs their day in Court.  So, judges are reluctant to grant MSJ/MSA’s.  Judges can usually find at least one or more material facts in dispute to support a denial.  At the firm, we tell our clients that the best MSJ/MSA ever written in the history of time had a 50% of winning.

That said, the potency of the motion makes it worth filing if there are grounds to do so.  Trial is absurdly expensive.  Defeating a claim – or even reducing it in scope – can save the client hundreds of thousands of dollars in fees and costs alone, not to mention resolve the dispute favorably.

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Contractors licensing law 7031

Gregory-J.-WoodUnder the Contractors’ State Licensing Law, “no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required by this chapter…”  Further, “A person who utilizes the services of an unlicensed contractor may bring an action in any court of competent jurisdiction in this state to recover all compensation paid to the unlicensed contractor for performance of any act or contract.”

Being able to claw back fees paid to someone that has done the work may seem like a draconian rule.  California Courts have said, however, regardless of the equities, section 7031 bars all actions, however they are characterized, which effectively seek “compensation” for illegal unlicensed contract work. (Lewis & Queen, 48 Cal.2d at pp. 150-152, 308 P.2d 713.)  Thus, an unlicensed contractor cannot recover either for the agreed contract price or for the reasonable value of labor and materials.  (See Davis Co. v. Superior Court (1969) 1 Cal.App.3d 156, 159, 81 Cal.Rptr. 453; Grant v. Weatherholt (1954) 123 Cal.App.2d 34, 41-42, 266 P.2d 185.)  The statutory prohibition operates where the person for whom the work was performed knew the contractor was unlicensed.  (Pickens, 269 Cal.App.2d at p. 302, 74 Cal.Rptr. 788; Cash v. Blackett (1948) 87 Cal.App.2d 233, 196 P.2d 585.)  The statutory prohibition even operates where the person for whom the work was performed engaged in fraud.  (Hydrotech Systems, Ltd. v. Oasis Waterpark (1991) 52 Cal.3d 988, 803 P.2d 370.

The appellate court in Pacific Custom Pools, Inc. v. Turner Construction Co. (2000) 79 Cal.App.4th at p. 1262, 94 Cal.Rptr.2d 756, stated the rule and then provided its explanation for the basis thereof as follows.  “ ‘Because of the strength and clarity of this policy, it is well settled that section 7031 applies despite injustice to the unlicensed contractor. “Section 7031 represents a legislative determination that the importance of deterring unlicensed persons from engaging in the contracting business outweighs any harshness between the parties, and that such deterrence can best be realized by denying violators the right to maintain any action for compensation in the courts of this state.” ‘ “ (79 Cal.App.4th at p. 1261, 94 Cal.Rptr.2d 756; citations omitted.

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Independent contractor versus employee

doug-039-2-255x255Whether a worker is an independent contractor or an employee largely turns on whether the employer “has the right to control the manner and means by which the worker accomplishes the work.”  Estrada v. FedEx Ground Package System, Inc., 154 Cal. App. 4th 1, 10 (2007); see Cal. Lab. Code § 3353 (defining independent contractor as “any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished”); S.G. Borello & Sons, Inc. v. Department of Indus. Relations, 48 Cal. 3d 341, 350 (1989) (noting that “[the] principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired”); see also In re Brown, 743 F.2d 664, 667 (9th Cir. 1984) (stating that, under California law, “the most significant factor is the right to control the means by which the work is accomplished”).  Even the trial court in our case agreed that this factor is the “most significant question in the independent contractor/employee determination.”  (6 AA at 1728.)

“While . . . the right to control work details is the ‘most important’ or ‘most significant’ consideration, the authorities also endorse several ‘secondary’ indicia of the nature of a service relationship.”  S.G. Borello & Sons, Inc., 48 Cal. 3d at 350.  Those “secondary indicia” “have been derived principally from the Restatement Second of Agency.”  Id. at 351.  They include,

(1) whether the worker is engaged in a distinct occupation or business, (2) whether, considering the kind of occupation and locality, the work is usually done under the principal’s direction or by a specialist without supervision, (3) the skill required, (4) whether the principal or worker supplies the instrumentalities, tools, and place of work, (5) the length of time for which the services are to be performed, (6) the method of payment, whether by time or by job, (7) whether the work is part of the principal’s regular business, and (8) whether the parties believe they are creating an employer-employee relationship.

Estrada, 154 Cal. App. 4th at 10; see Antelope Valley Press, 162 Cal. App. 4th at 852-53.  Additionally, S.G. Borello & Sons Inc. also

noted with approval the six-factor test developed by other jurisdictions [which b]esides the right to control the work . . . include[s] (1) the alleged employee’s opportunity for profit or loss depending on his managerial skill; (2) the alleged employee’s investment in equipment or materials required for his task, or his employment of helpers; (3) whether the service rendered requires a special skill; (4) the degree of permanence of the working relationship; and (5) whether the service rendered is an integral part of the alleged employer’s business.

Bowman v. Wyatt, 186 Cal. App. 4th 286, 301 (2010) (internal quotation marks omitted) (citing S.G. Borello & Sons, Inc., 48 Cal. 3d at 354–55).  If these were not enough criteria to consider, the courts have found that the “the right to discharge at will without cause” is yet another “secondary factor . . . constituting strong evidence in support of an employment relationship” and against a contractor relationship.  Angelotti v. Walt Disney Co., 192 Cal. App. 4th 1394, 1404 (2011); see S.G. Borello & Sons, Inc., 48 Cal. 3d at 350; Kowalski v. Shell Oil Co., 23 Cal. 3d 168, 177 (1979).  Failure to consider these secondary factors is considered error.  See Bowman, 186 Cal. App. at 303-304 (holding that CACI jury instruction did not articulate a “correct statement of the law” because it failed to “instruct the jury that it must weigh all of [the secondary] factors”); Messenger Courier Assn. of Americas v. Cal. Unemployment Ins. Appeals Bd.,175 Cal. App. 4th 1074, 1095 (2009).

The fact that there is a contract between the parties that characterizes the relationship between the Parties as contractor/client or employee/employer is of limited relevance in determining a worker’s proper classification under law:  “The agreement characterizing the relationship as one of client – independent contractor will be ignored if the parties, by their actual conduct, act like employer – employee.”  Toyota Motor Sales U.S.A., Inc. v. Superior Court, 220 Cal. App. 3d 864, 877 (1990) (internal quotations omitted); see Tieberg v. Unemployment Ins. App. Bd., 2 Cal. 3d 943, 952 (1970).  “Indeed, attempts to conceal employment by formal documents purporting to create other relationships have led the courts to disregard such terms whenever the acts and declarations of the parties are inconsistent therewith.”  Toyota Motor Sales U.S.A., Inc., 220 Cal. App. 3d at 877; see, e.g., Pacific Lbr. Co. v. Ind. Acc. Com., 22 Cal. 2d 410, 422 (1943); White v. Uniroyal, Inc., 155 Cal. App. 3d 1, 27 (1984); Bemis v. People, 109 Cal. App. 2d 253, 266 (1952); Lewis v. Constitution Life Co., 96 Cal. App. 2d 191, 194 (1950).  As a matter of law it is not particularly relevant what an agreement might say about labor classification between the parties.

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Religious Land Use and Institutionalized Persons Act aka RLUIPA

doug-039-2-255x255“RLUIPA is the latest skirmish in a tug of war between Congress and the Supreme Court over the meaning and application of the Free Exercise Clause of the United States Constitution.” (Lennington,Thou Shalt Not Zone: The Overbroad Applications and Troubling Implications of RLUIPA’s Land Use Provisions (2006) 29 Seattle U. L.Rev. 805, 806–807.) Adopted in response to the Supreme Court’s partial invalidation of the Religious Freedom Restoration Act, title 42 United States Code section 2000bb (RFRA), in City of Boerne v. Flores (1997) 521 U.S. 507 [117 S.Ct. 2157, 138 L.Ed.2d 624], RLUIPA applies to a government’s implementation of land use regulations so long as the government makes, or has in place procedures allowing it to make, “individualized assessments of the proposed uses for the property involved.” (42 U.S.C. § 2000cc (a)(2)(C).) If applicable, RLUIPA prohibits a government from implementing a land use regulation in a way that “imposes a substantial burden” on one’s “religious exercise” unless the burden satisfies strict scrutiny.8 In passing the Act, Congress intended to relax the requirement under First Amendment jurisprudence that the “religious exercise” be central to the individual’s religion. Under RLUIPA, free exercise includes “any exercise of religion, whether or not compelled by, or central to, a system of religious belief.” (42 U.S.C. § 2000cc–5(7)(A).) *118 Particularly relevant to our inquiry here, RLUIPA provides that “[t]he use, building, or conversion of real property for the purpose of religious exercise shall be considered to be religious exercise of the person or entity that uses or intends to use the property for that purpose.” (42 U.S.C. § 2000cc–5(7)(B).)

A RLUIPA substantial burden analysis proceeds in sequential steps.  First we look, as a threshold question, to determine if the government has made an “individualized assessment” in its implementation of laws affecting land.  42 U.S.C. § 2000cc(a)(2)(C).  Second, “the plaintiff must demonstrate that a government action has imposed a substantial burden on the plaintiff’s religious exercise.”  Int’l Church of Foursquare Gospel v. City of San Leandro, 673 F.3d 1059, 1066 (9th Cir. 2011) [hereinafter Foursquare Gospel]; see 42 U.S.C. § 2000cc(a)(1) (providing that a land-use regulation “impos[ing] a substantial burden on the religious exercise of a . . . religious assembly or institution” is unlawful).  Finally, “once the plaintiff has shown a substantial burden, the government must show that its action was the least restrictive means of further[ing] a compelling governmental interest.”  Id.

In the United Methodist Church case, we argued the pending demolition and CUP permits qualified for RLUIPA protection.  Courts have repeatedly held that a city’s “treatment of [a] Church’s [CUP] applications” which include a demolition permit “constitutes an ‘individualized assessment’” subject to RLUIPA.  Foursquare Gospel, 673 F.3d at 1066; see Guru Nanak, 456 F.3d at 987 (same); Acad. of Our Lady of Peace v. City of San Diego, 09-CV962 (WQH) (AJB), 2010 WL 1329014, at *10 (S.D. Cal. Apr. 1, 2010) (examining whether a CUP that included a demolition permit was subject to RLUIPA and “conclude[ing] that RLUIPA applies in this case”).

We further argued the second part of the test, a substantial burden existed because, as a consequence of a city’s denial of a CUP—a CUP which includes a demolition permit—the religious organization suffered the “ultimate burden on the use of the [affected] land,” the burden of effective non-use of that land, quoting:

The burden on the Church’s use of land in this case is not only substantial, but entire. By denying the conditional use permit, the City has effectively barred any use by the Church of the real property in question. This is not a case where the Church’s proposed use of land—equated with “religious exercise” by RLUIPA—is restricted in a minor or “unsubstantial” way (e.g., by limiting a building’s size or occupancy). Rather, the denial of the CUP bars the Church’s use altogether, thereby imposing the ultimate burden on the use of that land.

Elsinore Christian Ctr. v. City of Lake Elsinore, 291 F. Supp. 2d 1083, 1090 (C.D. Cal. 2003), reversed on other grounds, Elsinore Christian Ctr. v. City of Lake Elsinore, 197 Fed. Appx. 718, 719 (9th Cir. 2006) (reversing the district court’s holding that RLUIPA was unconstitutional but affirming the district court’s holding that the City violated RLUIPA).

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California State Law

Gregory-J.-Wood

In 1963, the State of California enacted Government Code sections 25373 and 37361.  Section 25373 provides in pertinent part:

(b) The board may, by ordinance, provide special conditions or regulations for the protection, enhancement, perpetuation, or use of places, sites, buildings, structures, works of art and other objects having a special character or special historical or aesthetic interest or value.
§ 37361 is identical and applies to cities.

In enacting subsection (b), the State Legislature expressly granted to cities and counties broad powers to regulate and protect all kinds of structures.  (Cal. Govt. Code §§ 25737 and 37361.)

The broad power granted by subsection (b) encompasses not only landmarking but all manner of preservation.  In fact, the word “landmark” is not used.  (Cal. Govt. Code §§ 25737(b) and 37361(b).)

In 1994, by Assembly Bill No. 133, the broad powers granted to cities and counties by subsection (b) were expressly taken away from cities and counties with respect to noncommercial property held by religious organizations.  The Legislature amended both statutes to allow religiously affiliated organizations to exempt their noncommercial property (“exempt property”) from the placement of any condition, or any regulation, for the protection, enhancement, perpetuation, or use of said property.  Subsection (d) provides:

Subdivision (b) shall not apply to noncommercial property owned by any association or corporation that is religiously affiliated and not organized for private profit …

(Cal. Govt. Code § 25737(d).)

Thus, in 1963, the State of California expressly granted to local governments broad powers to regulate and protect all kinds of structures and, in 1994, expressly took that power away from local governments with respect to exempt property.  The result is that local governments are without power to place any “special conditions or regulations for the protection, enhancement, perpetuation, or use of places, sites, buildings, structures, works of art and other objects having a special character or special historical or aesthetic interest or value.”  (Cal. Govt. Code §§ 25737 and 37361.)

The California Supreme Court has discussed the purpose of the Government Code exemptions, which is to protect religious freedom:

An explanation of the purpose of the exemption subdivisions was included in Senate Bill No. 1185 (1993–1994 Reg. Sess.), the 1993 legislation, and in Assembly Bill No. 133 (1993–1994 Reg. Sess.), the 1994 bill (hereafter Assembly Bill No. 133), each of which, after noting that historic landmark restrictions were not related to or compelled by public health or safety concerns, stated: “Sections 1 and 2 of this act ensure the protection of religious freedom guaranteed by Section 4 of Article I of the California Constitution and by the First Amendment to the United States Constitution.” (Stats.1993, ch. 419, § 7, p. 2388; see Stats.1994, ch. 1199, § 3 [substantially identical].)

East Bay Asian Local Dev. Corp. v. State of Cal., 24 Cal.4th 693, 702 (2000) (East Bay).

The legislative history is even more specific.  With respect to the Senate bill, Section 7 of Stats.1993, c. 419 (S.B.1185), provides:

“(a) The Legislature hereby finds and declares that Section 2 of this act addresses a matter of statewide interest and concern… (b) Sections 1 and 2 of this act ensure the protection of religious freedom guaranteed by Section 4 of Article I of the California Constitution and by the First Amendment to the United States Constitution.”

(West’s Ann. Cal. Govt. Code § 25373.)

With respect to the Assembly bill, Section 3 of Stats.1994, c. 1199 (A.B.133), provides:

“Sections 1 and 2 of this act address a matter of statewide interest and concern…

Therefore, Sections 1 and 2 of this act ensure the protection of religious freedom guaranteed by Section 4 of Article I of the California Constitution, and by the First Amendment to the United States Constitution.”

(West’s Ann. Cal. Govt. Code § 25373.)

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Disclaimer

Every legal dispute is infinitely different.  Successes in other cases are not a guarantee or prediction of success in your case.

The articles and information on this site are based on California law at the time they were written. They are informational only and should not be relied upon except in conjunction with the advice and counsel of an attorney licensed to practice law. Everyone’s situation is different and general advice, as is discussed here, is not helpful in a particular case.

If you are in the process of making decisions that may have legal consequences, you must contact a lawyer to update you on the current law and apply it to your specific facts. If you are interested is discussing potential representation by Wood Robbins, LLP, call for a free consultation (415) 247-7900. Your communications may be privileged, but the firm does not represent you as your lawyer unless and until a written fee agreement is signed and in effect.

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