Appendix — Hassey v. City of Oakland (No. 08-854)

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08-854 DEC 16 2008

=6F ROC Prt CrERK

IN THE

Supreme Court of the Anited States

No.

KENNY D. HASSEY,

Petitioner,

V.

CITY OF OAKLAND,

Respondent.

On Petition for Writ of Certiorari

to the California Court of Appeal

for the First District

APPENDIX TO THE

PETITION FOR WRIT OF CERTIORARI

JON P. WEBSTER

Counsel of Record

THE LAW OFFICES OF JON WEBSTER

1985 BONIFACIO STREET, SUITE 102

CONCORD, CA 94520

TELEPHONE: (925) 686-8790

FACSIMILE: (925) 686-8795

Attorneys for Petitioner

December 15, 2008

No.

IN THE

Supreme Court of the Gnited States

KENNY D. HASSEY,

Petitioner,

CITY OF OAKLAND,

Respondent.

On Petition for Writ of Certiorari

to the California Court of Appeal

for the First District

APPENDIX TO THE

PETITION FOR WRIT OF CERTIORARI

JON P. WEBSTER

Counsel of Record

THE LAW OFFICES OF JON WEBSTER

1985 BONIFACIO STREET, SUITE 102

CONCORD, CA 94520

TELEPHONE: (925) 686-8790

FACSIMILE: (925) 686-8795

Attorneys for Petitioner

December 15, 2008

i

TABLE OF APPENDICES

Appendix

Appendix A — Opinion of the California

Court of Appeals for the First District,

Dated and Filed June 17, 2008

Appendix B — Order of the Superior Court

of California County of Alameda

Granting Motion of Plaintiff for

Summary Judgment, Dated and Filed

September 19, 2006

Appendix C — Order of the Superior Court

of California County of Alameda

Denying Motion of Defendant for

Summary Judgment, Dated and Filed

September 19, 2006

Appendix D — Notice of Entry and Judgment

of the Superior Court of California

County of Alameda, Dated and Filed

October 5, 2006

Appendix E — Order of the California

Court of Appeals for the First District

Denying Review and Modifying

Opinion [No Change In Judgment],

Dated and Filed July 15, 2006

il

TABLE OF APPENDICES - Continued

Appendix Page

Appendix F — Order of the California

Court of Appeals for the First District

Modifying Opinion [No Change In

Judgment], Dated and Filed

July 17, 2006

Appendix G — Opinion of the California

Supreme Court Denying Review

Dated and Filed September 17, 2006 .... 64a

Appendix H — United States Department

of Labor, Wage and Hour Division,

Opinion Letter, Dated October 21, 1992

(1992 WL 845111)

Appendix I — United States Department

of Labor, Wage and Hour Division,

Opinion Letter, Dated September 3, 1999,

(1999 WL 1788152)

Appendix J — United States Department

of Labor, Wage and Hour Division,

Opinion Letter, Dated September 30, 1999

(1999 WL 1788162)

Appendix K — United States Department

of Labor, Wage and Hour Division,

Opinion Letter, Dated May 31, 2005

(2005 WL 2086807)

ili

TABLE OF APPENDICES - Continued

Appendix L — Selected Provisions of the

Memorandum of Understanding,

Between City of Oakland and

Oakland Police Officers’ Association,

Regarding Police Officer Training

Appendix M — Conditional Offer of Position

as a Police Officer Trainee with the

Oakland Police Department

Appendix N - Training Costs Repayment

Agreement with the City of Oakland

Police Services Agency

Appendix O - Petitioner Kenny D. Hassey’s

Final Payroll Check from the City of

Oakland

Appendix P — Petitioner Kenny D. Hassey’s

Retroactive Payroll Check from the City

of Oakland

Appendix Q — Title 29, Section 531(d)

of the United States Code of Federal

Regulations

Appendix R — Title 29, Section 531.32

of the United States Code of Federal

MSE. Go cs ee eee ees 93a

iv

TABLE OF APPENDICES - Continued

Appendix S — Title 29, Section 531.35

of the United States Code of Federal

Regulations ...

Appendix T — Title 29, Section 778.104

of the United States Code of Federal

ee 8d oy soa eee 96a

la

APPENDIX A

CERTIFIED FOR PUBLICATION

Court of Appeal, First Appellate District

FILED

JUN 17 2008

Diana Herbert,

Clerk by____ Ss Deputy Clerk

IN THE COURT OF APPEAL OF THE STATE OF

CALIFORNIA FIRST APPELLATE DISTRICT

DIVISION FOUR

CITY OF OAKLAND, A116360

Plaintiff, Cross (Alameda County

defendant and Super. Ct. No. 2001-

Respondent, 027607)

Vv.

KENNY D. HASSEY,

Defendant, Cross-

complainant and

Appellant:

RICHARD WORD,

Cross-defendant and

Respondent

2a

Respondent City of Oakland (Oakland) sued

appellant Ke any D. Hassey for breach of contract after

Hassey failed to reimburse the city (as agreed) for the

costs of training him to become a police officer with the

Oakland Police Department. Hassey filed a cross-

complaint against Oakland and respondent Richard

Word, the chief of the Oakland Police Department,

alleging that the agreement to repay Oakland for

training costs violated the Fair Labor Standards Act

(29 U.S.C. §§ 201-219 (FLSA)) and various state laws.

The trial court granted Oakland’s motion for summary

judgment on its complaint, granted respondents’

motion for summary judgment on Hassey’s cross-

complaint, and denied Hassey’s summary judgment

motion on both complaints. We conclude that Hassey

failed to establish that the agreement to reimburse

Oaklend fer training costs violated the FLSA, although

Oakland’s withholding of Hassey’s final paycheck to

cover his debt did. We al: 0 agree with Hassey that the

trial court erred in concluding that some of the causes

of action in his cross-complaint against Oakland were

barred by the statute of limitations. We therefore

affirm in part and reverse in part.

[I FACTUAL AND PROCEDURAL BACKGROUND

The relevant facts are largely undisputed.

Oaklani owns and operates the Oakland Police

Academy, which is certified by the Commission on

Peace Officer Standards and Training (POST). (Cal.

Code Regs., tit. 11, §1005, subd. (a)(1) [minintum

standards for training of entry level peace officers].) It

is city policy to send police officer trainees to its own

academy, even though there are other POST-certified

3a

academies in the state. Oakland found that it lost

money when it trained officers who left its police

department within a few years after receiving training.

To encourage police officers to stay with the

department longer, Oakland entered into a

memorandum of understanding (MOU) with the

Oakland Police Officers’ Association in 1996

authorizing the city to require those who went through

training at its academy to reimburse the city for

training costs if the person left the police department

before completing five years of service. The MOU also

provided, “Repayment shall be due and payable at the

time of separation and the City shall deduct any

amounts owed under this provision from the

employee's final paycheck. If said deduction does not

fully reimburse the City for outstanding costs, the

balance shall thereupon be due and owing.”

On December 15, 1997, Hassey signed a

“Conditional Offer of Vosition as a Police Officer

Trainee” (conditional offer) with the Oakland Police

Department. The conditional offer provided, consistent

with the MOU, that Hassey’s selection as a police

officer trainee was subject to (among other things) the

condition that he repay his $8,000 training expenses if

he voluntarily terminated his employment with the

police department before the end of five years. '

' The MOU in effect at the time Hassey signed the conditional

offer provided: “Police Office[r] Trainee Training Costs. The

parties recognize that in the past a substantial number of persons

have accepted the benefit of training at the Oakland Police

Academy and then have voluntarily separated from service to join

other safety agencies or have decided for personal reasons that

police work is not their preference. The purpose of this provision

1s toinsure that the recruit either accept a commitment of service

4a

The $8,000 represented the expenses associated with

training a police officer at the academy; the figure did

not include wages paid to police officer trainees while

they attended the academy. Hassey’s repayment

obligation was to decrease each year he remained with

the police department, so that he would owe repayment

of the entire $8,000 if he left after less than a year, 80

percent of the $8,000 if he left before the end of his

second year, 60 percent if he left before the end of his

third year, 40 percent if he left before the end of his

fourth year, down to 20 percent of the $8,000 if he left

before the end of his fifth year.

Oakland hired Hassey as a police officer trainee

on March 16, 1998. The same day, he signed a

document titled “reimbursement of training expenses’

(reimbursement agreement), which contained the same

repayment provision that was set forth in the

conditional offer. Hassey attended the Oakland Police

Academy from April to November 1998, when he

graduated.”

to the City or be responsible for costs associated with Academy

training. Thus the parties agree that any member who, prior to

completing five years of service, voluntarily separates from service

with the department shall be responsible for reimbursing the City,

on a full or pro[ Jrata basis, for the $8000 cost of his or her

training at the Police Academy... .” (Fn. omitted.) Oakland and

the Police Officers’ Association later entered into another MOU,

which contained an identical provision.

* Oakland acknowledged below that it was required by state law

to send Hassey toa POST-certified police academy. (Ven. Code, §§

832, subd. (a) [peace officers shall complete specified training],

13510 [adoption of minimum standards for recruitment and

training].) Lateral hires who are already police officers do not go

through the same training; Oakland sends them to a “mini

,

Ja

That same month, he was promoted to police officer

and was assigned to the police department’s field

training program to receive additional instruction.

According to Hassey’s declaration in support of

his summary judgment motion, his field training

officer told him in February 1999 that be was “not

performing to standards and that [he] should consider

resigning in lieu of termination.” Hassey resigned on

February 10, 1999, based on his field training officer's

representation. On February 16, 1999, Hassey signed

a document titled “training costs repayment

agreement” (repayment agreement), which

acknowledged that Hassey owed repayment of $8,000

for his training costs, to be paid in 24 monthly

installments of $333.34.

Oakland withheld Hassey’s final paycheck dated

February 25, 1999 (for $725.28) to cover some of the

money owed under the repayment agreement. A check

dated April 30, 1999 (for $654.80) to cash out Hassey’s

retirement balance also was withheld to cover money

owed under the repayment agreement. That left a

balance of $6,619.92 owed by Hassey under the

repayment agreement. Oakland sent a series of

collection notices to Hassey; Hassey apparently did not

respond.

academy. The trial court found that “[t]he record clearly

establishes that the City’s reimbursement provision only applies

to applicants without the basic training required of all peace

officers under state law,” and that Hassey was free to seck

training at another POST-certified academy before applying to

work for Oakland in heu of attending the city’s academy

Oa

On October 17, 2001, Oakland filed a complaint

against Hassey alleging breach of contract. Oakland

sought the amount owed under the repayment

agreement, plus a $100 collection fee, interest, attorney

fees, and costs. Hassey’s answer to the complaint

included an affirmative defense that the contract was

unenforceable because it violated the FLSA and

various provisions of the California Labor and

Business and Professions Codes (Lab. Code, §§ 221-

223, 432.5, 450; Bus. & Prof. Code, §§ 16600, 17200).

On May 10, 2002, Hassey filed a cross-complaint

against respondents Oakland and Word, the chief of

the Oakland Police Department. Like Hassey’s answer

to Oakland’s complaint, the cross-complaint alleged

that the conditional offer that Hassey was “compelled”

to sign violated the FLSA and various state laws. The

cross-complaint alleged causes of action for deprivation

of civil rights (42 U.S.C. § 1983); violation of the FLSA;

violations of Labor Code sections 221, 223, 432.5, and

450; “unlawful contract” (Civ. Code, §§ 1667-1668);

“void contract” (Bus. & Prof. Code, § 16600); and unfair

competition (Bus. & Prof. Code, § 17200).”

Two other former Oakland police officers, Matthew DeLorenzo

and Chris Baker, later “opted in’ to the cross-complaint pursuant

to the FLSA. The trial court granted respondents’ summary

judgment motion as to DeLorenzo and Baker, and denied

DeLorenzo’s and Baker's summary judgment motion. DeLorenzo

and Baker appealed; however, their counsel informed this court

that they requested to withdraw from the appeal. We therefore do

not consider those portions of the trial court's orders that were

directed at DeLorenzo and Baker

5

fa

Hassey and_ respondents filed summary

judgment motions on the same day. Hassey argued

that Oakland's lawsuit against him had no merit

because the conditional offer and repayment

agreement violated federal and state law. He sought

summary judgment as a defendant on Oakland’s

complaint and as a cross-complainant on his cross-

complaint. Oakland argued in its motion for summary

judgment, among other things, that various causes of

action in Hassey’s cross-complaint were barred by the

statute of limitations, and that requiring employees to

reimburse Oakland for training costs did not violate

the FLSA. Oakland also sought summary judgment on

its complaint, arguing that there was no dispute that

Hassey owed money under the repayment agreement.

The trial court granted respondents’ motion for

summary judgment. As to Oakland’scomplaint against

Hassey, it concluded that there were no triable issues

as to whether Hassey owed money under the

repayment agreement, and concluded that Hassey

owed Oakland $6,619.92. As to Hassey’s cross-

complaint, the trial court concluded that the causes of

action were barred by the statute of lmutations or

failed for other reasons. The trial court also denied

Hassey’s motion for summary judgment. Hassey timely

appealed the subsequent judgment.

8a

Il. DISCUSSION

On appeal, the parties disagree over whether the

conditional offer, reimbursement agreement, and

repayment agreement violate the FLSA and various

other laws, but do not always specify to which of the

trial court’s two orders (or to which of the two

complaints at issue) they direct their arguments. We

find it helpful to address the complaint and cross-

complaint separately.

A. Summary Judgment Proper on Oakland’s

Complaint.

1. Oakland’s breach of contract cause of action.

A plaintiff is entitled to summary judgment on

a contract cause of action where it establishes by

competent evidence the existence of a contract,

defendant's breach and damages, and defendant does

not controvert such facts. (Law Offices of Dixon R.

Howell v. Valley (2005) 129 Cal.App.4th 1076, 1092 [29

Cal.Rptr.3d 499] (Law Offices); see also Code Civ.

Proc., § 437c, subd. (p)(1).) Our review of the granting

or denial of summary judgment is de novo. (Law

Offices, at p. 1092.) Here, the trial court granted

summary judgment on Oakland’s complaint for breach

of contract, ruling that Hassey owed $6,619.92 on the

agreements he signed with Oakland to repay his

training costs. We concur with this finding. (/bid.)

Indeed, Hassey admitted in his separate statement in

response to Oakland's statement of undisputed facts

(Code Civ. Proc., § 437c, subd. (b)(3)) that he signed the

Qa

conditional offer, reimbursement agreement, and

repayment agreement. Although he disputed whether

he was legally obligated to repay his training costs, he

did not otherwise dispute the accuracy of the amount

that was due under the repayment agreement. “Thus,

putting aside any affirmative defenses (discussed

below), [Oakland] was entitled tosummary judgment.”

(Law Offices, at p. 1092.)

Hassey argued in hissummary judgment motion

as to Oakland’s complaint against him that the

conditional offer and reimbursement agreement were

void and violated the FLSA and various other federal

and state laws. The trial court rejected Hassey’s

arguments and denied his motion for summary

judgment. “While an order denying summary judgment

is not directly appealable, it is reviewable after entry

of judgment.” (Law Offices, supra, 129 Cal.App.4th at

p. 1091.)

We first note that although the trial court’s

orders do not make this point, there are actually two

distinct inquiries here. The first is whether the

conditional offer, reimbursement agreement, or

repayment agreement violate the FLSA (or other

federal and state laws); the second is whether

withholding Hassey’s checks violated those same laws.

2. Reimbursement agreement valid.

As to the first inquiry, we conclude that Hassey

failed to establish that the conditional offer,

reimbursement agreement, and repayment agreement

were unlawful. He first argues on appeal, as he did

below, that the reimbursement agreement violates the

FLSA. He notes that the FLSA mandates that Oakland

pay its employees at least the minimum wage (25

U.S.C. § 206), that it pay them overtime (29 U.S.C. §

207(a)(1)), and that for this purpose, each workweek

stands alone (29 C.F.R. § 778.104 (2007)). In other

words, an employee who works 30 hours curing one

week but 50 hours the next must be paid overtime

compensation for the overtime hours worked during

the second week, even though the “average” number of

hours worked over two weeks is 40. (29 C.F.R. §

778.104 (2007).) Hassey argues that Oakland violated

these minimum wage and overtime mandates because

even though it paid him “well above” the minimum

wage during his tenure with the police department, he

did not receive his wages “unconditionally” or “ ‘free

and clear,” as required by federal regulations. (29

C.F.R. § 531.35 (2007).) He claims that while’ he was

working under the reimbursement agreement, he was

being paid under the “ ‘condition’ ” that he repay his

training costs should he leave before the end of five

years.

The trial court rejected this argument, relying

primarily on Heder v. City of Two Rivers, Wisconsin

(7th Cir. 2002) 295 F.3d 777 (Heder), which we find

persuusive. Heder involved a_ reimbursement

agreement similar to the one at issue here. A city

lla

provided firefighters with p aramedic training, with the

understanding that firefighters who left within three

years of receiving the training would reimburse the

city for training costs. (Jd. at p. 778.) A firefighter quit

less than two years after beginning his training, and

the city withheld all of his pay from his last two pay

periods. (Jbid.) The firefighter sued, and the city filed

a counte rclaim for the remainder of the money it

claimed the firefighter owed. (Jbid.)

Heder rejected the firefighter’s argument that

the repayment agreement violated a Wisconsin statute

prohibiting covenants not to compete, concluding that

the agreement did not restrict the firefighter’s ability

to compete against the city after leaving its employ.

(Heder, supra, 295 F.3d at p. 780.) The court noted that

even though the city’s repayment obligation made it

more costly to change jobs, that was not enough to

invalidate the agreement. (Jbid.) The court likened the

repayment agreement to other valid incentives that

employers offer their workers to stay with them. (/d. at

pp. 780-781.) The court also noted that residents of the

city where the firefighters worked received the benefit

of a more skilled fire department, and that the city

might be less likely to provide that benefit if it feared

that employees would leave the fire department, taking

their new skills elsewhere. (/d. at p. 781.) Likewise

here, Oakland was permitted to seek reimbursement

from police officers who gained the benefit of its

training program at the Oakland Police Academy but

did not stay with the police department long enough for

Oakland to benefit from that training.

12a

Hassey directs us to nocontrary authority in his

appellate briefs. He relies primarily on three opinion

letters from the Wage and Hour Division of the United

States Department of Labor. Two of the opinion letters

are easily distinguishable, because they addressed

whether employers were permitted under the FLSA to

seek reimbursement for an employee’s salary paid

while receiving training, as opposed to the cost of the

training itself. (Dept. Lab. Opn. Letter (May 31, 2005)

2005 WL 2086807; Dept. Lab. Opn. Letter (Oct. 21,

1992) 1992 WL 845111.) As to the third letter, issued

in 1999, we agree with the trial court that it is unclear

whether the opinion addressed reimbursement of

training costs, as opposed to salary paid during

training. (Dept. Lab. Opn. Letter (Sept. 30, 1999) 1999

WL 1788162.) In any event, we note that the

subsequent 2005 opinion letter reed on by Hassey

cites with approval BH: «er, supra, 295 F.3d 777 (albeit

for a different pointj, an indication that the

Department of Labor would not disapprove of the type

of reimbursement agreement at issue there.* (2005 WL

2086807.)

Hassey does not address (or even cite) Heder in

his opening brief. He argues in his reply brief that the

decision analyzed Wisconsin law and did not address

whether the reimbursement agreement violated the

FLSA’s “anti-kickback provision (29 C.F.R. § 531.35).”

For the first time in this litigation, Hassey argued at

oral argument in this court that the reimbursement

agreement violates the FLSA because his training was

* We reject out of hand Hassey’s argument that Oakland's breach

of contract cause of action is “preempted” by the FLSA, as he

identifies no law subject to “preemption.”

13a

provided primarily for the benefit of his employer,

which brought it into the definition of “wages” under

the statute.” (29 U.S.C. § 203(m); 29 C.F.R. §

031.3(d)(1) (2007).) The FLSA defines wages to include

the reasonable cost to an employer of furnishing an

employee with “board, lodging, or other facilities, if

such board, lodging, or other facilities are customarily

furnished by such employer to his employees.” (29

U.S.C. § 203(m); Arriaga v. Florida Pacific Farms,

L.L.C. (11th Cir. 2002) 305 F.3d 1228, 1235.) This

means that when anemployer pays for “board, lodging,

or other facilities,” it may add the costs of those items

to an employee’s cash wage for purposes of complying

with the minimum set forth in the FLSA. Department

* This court sent notice to the parties on March 19, 2008,

scheduling oral argument. After one continuance, oral argument

was eventually set for May 13. On May 8, less than a week before

oral argument and more that seven weeks after this court sent

oral argument notice, Hassey notified this court that he planned

to rely at argument on Rivera v. Brickman Group, LTD. (E.D.Pa.,

Jan. 7, 2008, No. 05-1518) 2008 WL 81570, which was decided

after bricfing was completed in this case but more than two

months before the parties received notice of oral argument. On

May 7, 2008 (again, less than a week before oral argument),

Hassey filed a request for judicial notice of a Wisconsin statute

and excerpts from an enforcement manual issued by California’s

Division of Labor Standards Enforcement. “An appellate court

may properly decline to take judicial notice under Evidence Code

sections 452 and 459 of a matter which should have been

presented to the trial court for its consideration tn the first

instance.” (Brosterhous v. State Bar (1995) 12 Cal.4th 315, 325-326

[48 Cal.Rptr.2d 87, 906 P.2d 1242] : see also People v. Preslie

(1977) 70 Cal.App.3d 486, 494 [138 Cal.Rptr. 828] (“desirable in

the interest of orderly judicial procedure that [request for judicial

notice] be made well before” briefing stage], italics added.) The

Wisconsin statute and enforcement manual are such matters, and

we denied Hassey’'s request on May 19.

l4a

of Labor regulations state that an employer may not

count as “other facilities” things that are “primarily for

the benefit or convenience of the employer,” such as

tools of the trade or uniforms. (29 C.F.R. § 531.3 (d)(1)-

(2) (2007).) Employers likewise may not pass along to

employees the costs of such facilities if to do so would

cut into an employee’s minimum wage. (29 C.F.R. §

531.35 (2007).) In other words, if an employer passes

along such an expense to the employee, the expense is

deducted from the cash wage to determine comphance

with the FLSA minimum. (Arriaga v. Florida Pacific

Farms, L.L.C., supra, 305 F.3d at p. 1236.)

Not surprisingly, the parties disagreed at oral

argument whether Hassey’s training was “primarily for

the benefit” of Oakland. It appears, however, that this

is the first time in this litigation that they advanced

their respective arguments with respect to the cited

United States Code and Code of Federal Regulations

provisions, as they did not brief this issue in the trial

court or in this court. The trial court’s order certainly

did not analyze whether providing Hassey’s training

was primarily for the benefit of Oakland, or cite title 29

United States Code section 203(m) or 29 Code of

Federal Regulations part 531.3(d) (2007).

Even assuming arguendo that providing training

to Hassey was primarily for the benefit of Oakland,

and thet Oakland therefore could not deduct the cost of

the training from Hassey’s wages if to do so would

drive wages below the minimum wage, Hassey has not

established a violation of the FLSA here. As Hassey’s

counsel argued at oral argument, “[wlorkers must be

reimbursed during the first workweek for pre-

lS5a

employment expenses which primarily benefit the

employer, to the point that wages are at least

equivalent to the minimum wage.” (Arriaga v. Florida

Pacific Farms, L.L.C., supra, 305 F.3d at p. 1237.)

Here, however, Hassey received training while he was

an employee of Oakland and was receiving wages; he

thus incurred no “pre-employment expenses.”

To the extent that an employer must reimburse

an employee for expenses during employment that

drive wages below minimum wage, “[i]f an expense is

determined to be primarily for the benefit of the

employer, the employer must reimburse the employee

during the workweek in which the expense arose.”

(Arriaga v. Florida Pacific Farms, L.L.C., s:pra, 305

F.3d at p. 1237.) The reimbursement agreement stated

that the cost to train Hassey was $8,000. Hassey’s final

paycheck shows that he earned $23.39 per hour during

the final pay period when he was employed for

Oakland; Hassey acknowledged in briefing before the

trial court that there was no evidence of how much he

made during his training. Even assuming that

Oakland had deducted the cost of training as he

reccivea it, it is unclear that such a hypothctical

deduction would have driven Hassey’s salary below the

minimum wage. Hassey emphasized at oral argument

that each workweek stands alone (29 C.F.R. § 778.104

(2007)), presumably meaning that Oakland was not

permitted to deduct the entire $8,000 cost of training

from a single paycheck. While we certainly agree with

that proposition (post, § IT.A.3.), there is no evidence

that deducting training costs from Hassey’s paycheck

as they were incurred would have reduced his wages

below minimum wage.

l6a

The California statutes upon which Hassey

rclics likewise do not support his position. Three of the

Labor Code provisions he cites address proper payment

of wages, an issue not contemplated by the agreement

to repay Oakland for training expenses. (Lab. Code, §§

221 [“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.”], 222

funlawful in case of wage agreement arrived at

through collective bargaining “either willfully or

unlawfully or with intent to defraud anemployee...to

withhold from said employee any part of the wage

agreed upon’ ], 223 [“it shall be unlawful to secretly pay

a lower wage while purporting to pay the wage

designated by statue or by contract’].) Labor Code

section 432.5, upon which Hassey also relies, prohibits

employers from requiring employees or prospective

employees “to agree, in writing, to any term or

condition which is known by such empleyer. .. to be

prohibited by law.” Again, we conclude that there was

nothing unlawful about requiring Hassey to repay his

training costs if he left the police department before

five years.” For this same reason, we conclude that

Civil Code sections 1667 and 1668,' and Business and

° We likewise reject Hassey’s argument that requiring him to

repay his training costs violates Labor Code section 450, which

prohibits employers from coercing employees to patronize an

employer or to purchase anything of value. As the trial court

found, Hassey was free to seek employment with another law

enforcement agency or obtain training at another academy before

applying to work with the Oakland Pohce Department. (See post,

§ 11.B.6.)

’ Civil Code section 1667 defines unlawfulness as that which is “1.

Contrary to an express provision of law; [{] 2. Contrary to the

17a

Professions Code section 17200,” also relied on by

Hassey, are inapplicable.

To the extent that Hassey argues that his

agreement to repay Oakland was an impermissibie

covenant not to compete in violation of Business and

Professions Code section 16600,? we note that an

identical argument with respect to a Wisconsin anti-

competition statute was specifically rejected in Heder.

(Heder, supra, 295 F.3d at p. 780 [reimbursement

agreement did not restrict employee’s ability to

compete with city after leaving its employ].) We

recognize that in California, “the general rule is that

covenants not to compete are void” (Kelton vu.

Stravinski (2006) 138 Cal.App.4th 941, 946 [41

Cal.Rptr.3d 877]), whereas under the Wisconsin law

analyzed in Heder, restrictive covenants’ in

employment contracts are permitted if they are

“reasonably necessary for the protection of the

employer or principal.” (Wis. Stat. § 103.465; cf.

Application Group, Inc. v. Hunter Group, Inc. (1998) 61

policy of express law, though not expressly prohibited; or, {4] 3.

Otherwise contrary to good morals.” Civil Code section 1668

provides, “All contracts which have for their object, directly or

indirectly, toexempt anyone from responsibility for his own fraud,

or willful injury to the person or property of another, or violation

of law, whether willful or negligent, are against the policy of the

law.”

* Business and Professions Code section 17200 defines “unfair

competition’ as “any unlawful, unfair or fraudulent business act

or practice [or] unfair, deceptive, untrue or misleading advertising

‘Business and Professions Code section 16600 provides, “Except

as provided in this chapter, every contract by which anyone is

restrained from engaging ina lawful profession, trade, or business

of any kind is to that extent void.”

18a

Cal.App.4th 881, 900 [72 Cal. Rptr.2d 73] [Bus. & Prof.

Code, § 16600 “ ‘has specifically been held to invalidate

employment contracts which prohibit an employee

from working for a competitor when the employment

has terminated, unless necessary to protect the

employer’s trade secrets. [Citation.]’ ”].) The fact

remains, however, that nothing in the agreements

Hassey signed “restrained [him] from engaging in [his]

lawful trade, business or profession.” (Kolani v. Gluska

(1998) 64 Cal.App.4th 402, 407 [75 Cal. Rptr.2d 257]

[analyzing Bus. & Prof. Code, § 16600].) Nothing

prevented him from working for another police

department, or anywhere else, for that matter.

3. Oakland improperly withheld Hassey’s final

paycheck.

Although we have concluded that Oakland was

permitted to seek reimbursement for training

expenses, the question remains whether it was

permitted to withhold Hasse,’s final paycheck in order

satisfy Hassey’s debt. We conclude that Oakland was

not permitted to do so. As Hassey correctly notes, the

FLSA mandates that employers such as Oakland pay

their employees at least. the statutory federal minimum

wage. (29 U.S.C. § 206(a)(1); Leder, supra, 295 F.3d at

p. 779.) An employee is “entitled to keep any

compensation that the FLSA specifies as a statutory

floor below which no contract may go.” (Heder, at p.

779.) That means, quite simply, that Hassey was

entitled to at least the statutory minimum wage for the

19a

final pay period he worked."” (Jbid.; see also 29 C.F.R.

§ 531.35 (2007) [wage requirements of FLSA will not

be met where employee “ ‘kicks-back’” whole or part of

the wage delivered to the employee].) Heder recognized

this principle when it held that although the city was

permitted to seek reimbursement of training costs from

a firefighter, it had to pay that firefighter his or her

wages and then seek to collect any residue as an

ordinary creditor. (Heder, at p. 779;'' see also Calderon

v. Witvoet (7th Cir. 1993) 999 F.2d 1101, 1107

[employer may not reduce wage below statutory

min'mum to collect a debt to the employer]; Brennan v.

* This is consistent with a recent order granting Oakland's motion

to dismiss (Fed. Rules Civ. Proc., rule 12(b)(6), 28 U.S.C.) a

separate lawsuit in federal court involving the same

reimbursement agreement at issue here. (Gordon v. City o/

Oakland (N.D.Cal. May 16, 2008, No. C08-01543 WIIA) 2008 WL

2095510.) Respondents filed a request for judicial notice of the

order, which we hereby grant. (Evid. Code, §§ 452, subd. (d), 159,

subd. (a).) In Gordon, the plaintiff alleged that the withholding of

a portion of her final paycheck violated the FLSA. The court

rejected this argument, noting that the plaintiff still earned “well

above the minimum wage established by FLSA’ for her final pay

period. Here, by contrast, it is undisputed that Oakland withheld

Hassey’s entire final paycheck, which, as he notes in his opening

brief, left him with “a zero income” for the pay period covered by

the check

' Oakland points to language in Heder that employees may strike

agreements with thei: employers to be paid less than “‘in full’ as

required by Wisconsin law and claimsthat this authorized the city

to withhold Hassey's entire final paycheck. (Heder, supra, 295

F.3d at p. 783.) Although Heder recognized that an emplover may

‘

withhold some amount from a final paycheck by agreement, it

specifically held that the amount withheld could not reduce an

employee's paycheck so that he was being paid less than the

federaliy mandated minimum wage. (/d. at pp. 782-783.)

20a

Veterans Cleaning Service, Inc. (5th Cir. 1973) 482 F.2d

1362, 1369-1370 [same].)

This conclusion 1s consistent with the rule in

California that “an employer is not entitled toa setoff

of debts owing it by an employee against any wages

due that employee.” (Barnhillv. Robert Saunders & Co.

(1981) 125 Cal.App.3d 1, 6 [177 Cal. Rptr. 863]

(Barnhill) [employer not permitted to deduct from final

paycheck balance due on a promissory note].) Such

collection of a debt violates the absolute exemption

that wages have from levies of attachment. (/bid.,

citing Code Civ. Proc., § 487.020, subd. (c); see also

California State Employees’ Assn. v. State of California

(1988) 198 Cal.App.3d 374, 377 [243 Cal.Rptr. 602]

fattachment and wage garnishment laws “provide

substantial protection for wages against both pretrial

attachments and enforcement of judgments’ ].) As the

court explained in Barnhill, “fundamental due process

considerations underlie the prejudgment exemption

Permitting [an cmployer] to reach jan employee’s|

wages by setoff would let it accomplish what neither it

nor any other creditor could do by attachment and

would defeat the legislative policy underlying that

exemption.” (Barnhill, supra, 125 Cal.App.3d at p. 6.)

“Waves of workers in California have long been

accorded a special status generally beyond the reach of

claims by creditors including those of an employer.”

(Kerr’s Catering Service v. Department of Industrial

Relations (1962) 57 Cal.2d 319, 325 [19 Cal. Rptr. 492,

369 P.2d 20] (Kerr’s Catering); see also Hudgins ov.

Neiman Mareus Group, Inc. (1995) 34 Cal. App.4th

1109, 1112 [41 Cal. Rptr.2d 46] [employers not entitled

to setoft of debts owed by emplovees against wages due

21a

to employees upon termination].)

Under the FLSA, the prohibition against

withholding money due under a debt to an employer

applies whether or not the employee agreed in writing

to the withholding. (Brennan v. Veterans Cleaning

Service, Inc., supra, 482 F.2d at p. 1370, citing

Brooklyn Bank v. O’Neil (1945) 324 U.S. 697

fampermissible to waive by agreement statutory

protections of FLSA]; Mayhue’s Super Liquor Stores,

Inc. v. Hodgson (5th Cir. 1972) 464 F.2d 1196, 1197,

1199 [employee’s agreement to repay employer

shortages in money entrusted to him violates FLSA to

the extent it reduces pay below minimum wage and is

invalid.) “The voluntariness of an assignment of wages

to the employer is inherently suspect. When the

employer is the creditor, payment may not be made by

paycheck deductions which reduce net pay below

minimum wage, even where the employee apparently

consents to such ar-arrangement.” (Brennan, supra, at

p. 1370.) The only evidence that Hassey “consented” to

the withholding of any check was the provision in the

MOU authorizing deductions from final paychecks to

cover reimbursement for training costs. The

conditional offer, reimbursement agreement, and

repayment agreement signed by Hassey stated that he

was obligated to repay training expenses if he left the

police department before the end of five years, but they

did not refer to deductions from his paycheck. In fact,

the repayment agreement he signed when he left the

police department stated, “The total amount owed to

the City of Cakland is $8,000, minus the amount of my

final paycheck in the amount of $0, leaving a balance

of $8,000.00.” (Italics added.) In short, we disagree

with the trial court’s conclusion that Hassey made no

showing that Oakland effectively paid him less than

minimum wage, at least with respect to the pay period

covered by his final paycheck.

Although we have concluded that Oakland was

not permitted to withhold Hassey’s final paycheck, it

does not follow that the trial court erred in denying

Hassey’s motion for summary judgment on Oakland’s

complaint. It 1s true, as Hassey argues, that courts

permit defendants to raise defenses that would be

barred if raised as affirmative relief. (Styne v. Stevens

(2001) 26 Cal.4th 42, 47, 51 [109 Cal.Rptr.2d 14, 26

P.3d 343].) “The rule applies in particular to contract

actions. One sued on a contract may urge defenses that

render the contract unenforceable, even if the same

matters, alleged as grounds for restitution after

rescission, would be untimely.” Ud. at pp. 51-52, italics

added.) Here, Oakland sued on the repayment

agreement, in which Hassey agreed he would

reimburse Oakland for training costs, anagreement we

already have concluded was valid. Whether Hassey

could seek affirmative relief for Oakland’s withholding

his check to collect on its otherwise valid agreement

with Hassey is a separate inquiry, which we address

below.

B. Triable Issues As to Some Causes of Action in Cross-

Complaint.

The trial court granted summary judgment as to

Hassey’s entire cross-complaint against respondents.

We review the trial court’s decision granting summary

judgment de novo. (Yanowitz v. L'Oreal USA, Inc.

23a

(2005) 36 Cal.4th 1028, 1037.) We separately address

the nine causes of action in the cross-complaint.

1. Summary adjudication proper as to first cause

of action.

The first cause of action in Hassey’s cross-

complaint alleged that the conditional offer, as well as

the seizure of his final check, deprived him of his civil

rights, in violation of title 42 United States Code

section 1983.'* In their motion for summary judgment,

respondents argued that this cause of action was

barred by the one-year statute of limitations set forth

in former Code of Civil Procedure section 340,

subdivision (3). (McDougal v. County of Imperial (9th

Cir. 1991) 942 F.2d 668, 673 [statute of limitations in

§ 1983 actions filed in California is governed by

limitations period that applies to personal injury

actions (former Code Civ. Proc., § 340 subd. (3))].)’®

'? Title 42 United States code section 1983 provides in part, “Every

person who, under color of any statute, ordinance, regulation,

custom, or usage, of any State ... , subjects, or causes to be

subjected, any citizen of the United States or other person within

the jurisdiction thereof to the deprivation of any rights, privileges,

or immunities secured by the Constitution and laws, shall be

liable to the party injured in an action at law, suit in equity, or

other proper proceeding for redress... .”

° On January 1, 2003, the statute of limitations period for

personal injury actions was expanded to two years following the

Legislature’s enactment of Code of Civil Procedure section 335.1,

which governs actions “for assault, battery, or injury to, or for the

death of, an individual caused by the wrongful act or neglect of

another.” (Krupnick vu. Duke Energy Morro Bay (2004) 115

Cal.App.4th 1026, 1028 [9 Cal.Rptr.3d 767].) The expanded

limitations period does not apply toclaims that were already time-

24a

In its order granting respondents’ motion for

summary judgment, the trial court stated that “all of

the Causes of Action in the Complaint and the Cross-

Complaint are disposed of on the grounds set forth

herein.” The trial court did not specifically address

Hassey’s first cause of action; however, the quote above

clearly indicates that the court intended to grant

summary judgment as to the first cause of action.

On appeal, neither side raises the trial court’s

failure to address Hassey’s civil rights claim.

Respondents renew their argument that the claim is

barred by the statute of limitations, and we agree. The

failure of the trial court to state reasons for granting

summary judgment as to this cause of action (Code Civ.

Proc., § 437c, subd. (g)) was harmless “ ‘since “ ‘[iJt is

the validity of the ruling which is reviewable and not

the reasons therefore.” ’ [Citation.}” (Byars v. SCME

Mortgage Bankers, Inc. (2003) 109 Cal.App.4th 1134,

1146 [135 Cal.Rptr.2d 796] [trial court’s failure to

address cause of action on summary judgment was

harmless error where appellant failed to present

evidence to raise a triable issue of fact].) This is

especially true in light of the fact that although Hassey

argued in his opening brief that he had a valid claim

under title 42 United States Code section 1983, he

dropped this argument in his reply brief.

2. Trial court erred in granting summary

adjudication on FLSA cause of action as to

Oakland, but not Word.

barred when the new law went into effect, which was the case

here. (/d. at pp. 1028, 1030.)

25a

Hassey’s second cause of action in his cross-

complaint was for violations of the FLSA; he alleged

that the withholding of money owed to him violated the

FLSA." As we already have concluded, this contention

has merit.’ (Ante, § 11.A.) Summary adjudication was

therefore inappropriate as to this cause of action,

assuming that it was timely. The trial court concluded,

however, that Hassey’s FLSA cause of action was

barred by the two-year limitations period set forth in

title 29 United States Code section 255(a),'®° because

Hassey’s May 19, 2002, cross-complaint was filed more

than two years after Oakland’s allegedly unauthorized

deductions in February and April 1999. In reaching

this conclusion, the trial court erroneously (at least

with respect to Oakland) used the date of the filing of

Hassey’s cross-complaint to determine whether the

‘* The complaint did not distinguish between the withholding of

Hassey’s final paycheck and the withholding of the cash-out of his

retirement. The parties likewise do not offer any legal argument

on appeal as to whether there is a distinction between the

withholding of retirement money (as opposed to wages), but they

are free todo soon remand. We reach no conclusion as to whether

the withholding of the retirement cash-out check violated any laws

or regulations.

'S We disagree with the allegations in Hassey’s cross-complaint

that his original agreement to reimburse Oakland for training

costs violated the FLSA, for the reasons set forth above. (Ante, §

11.A.)

'° Title 29 United States Code section 255(a) provides that any

action for unpaid minimum wages “may be commenced within two

years after the cause of action accrued, and every such action shall

be forever barred unless commenced within two years after the

cause of action accrued, except that a cause of action arising out

of a willful violation may be commenced within three years after

the cause of action accrued.” Hassey therefore actually had up to

three vears to file an FLSA cause of action, depending on factors

we discuss below.

26a

statute of limitations had run. However, it is well

settled that the statute of limitations “ ‘is a bar to the

defendant’s affirmative claim only if the period has

already run when the complaint is filed. The filing of

the complaint suspends the statute during the

pendency of the action, and the defendant may set up

his [or her] claim by appropriate pleading at any time.’

"17 (Luna Records Corp., Inc., v. Alvarado (1991) 232

Cal.App.3d 1023, 1026 [283 Cal.Rptr. 865], italics

added; see also Trindade v. Superior Court (1973) 29

Cal.App.3d 857, 860 [106 Cal.Rptr. 48] [“It has

consistently been held that the commencement of an

action tolls the statute of limitations as to a

defendant’s then unbarred cause of action against the

plaintiff.”].) Hassey’s cress-complaint was therefore

timely if his FLSA cause of action was not time-barred

'’ Hassey raised this issue below in his opposition to respondents’

summary judgment motion, as well as at the hearing on the

motion. Inexplicably, Hassey does not address in his opening brief

the trial court’s conclusion regarding the statute of limitations as

to any cause of action, instead waiting until his reply brief to

address the is sue. We recognize that we therefore have the

discretion to deem the issue waived, as respondents urge. (Tiernan

v. Trustees of Cal. State University & Colleges (1982) 33 Cal.3d

211, 216, fn. 4 [188 Cal.Rptr. 115, 655 P.2d 317]; Campos uv.

Anderson (1997) 57 Cal.App.4th 784, 794, fn. 3 (67 Cal.Rptr.2d

350]: Locke v. Warner Bros., Inc. (1997) 57 Cal.App.4th 354, 368

[66 Cal.Rptr.2d 921] [points raised in reply brief for first time will

not be considered absent good cause].) We decline to do so, in light

of our de novo review and the trial court’s error as to some Causes

of action (with respect to respondent Oakland). “[B]ecause the

court may decide a case on any proper points or theories, whether

urged by counsel or not, there is no reason why it cannot examine

the record, do its own research on the law, or accept a belated

presentation.” (9 Witkin, Cal. Procedure (4th ed. i897) Appeal, §

595, p. 629.)

27a

when Oakland filed its original complaint on October

17, 2001.

The filing of Oakland’s complaint against

Hassey did not toll the statute of limitations with

respect to respondent Word, however.'® “ ‘The principle

underlying the rule that a statute of limitations is

suspended by the filing of the original complaint is that

the plaintiff has thereby waived the claim and

permitted the defendant to make all proper deferses to

the cause of action pleaded. But, where the controversy

is limited to cross-defendants, none of whom has done

any act in the nature of a waiver the reason for the

rule does not exist.’ ” (Boyer v. Jensen (2005) 129

Cal.App.4th 62, 70 [28 Cal.Rptr.3d 124]; see also

Trindade v. Superior Court, supra, 29 Cal.App.3d at p.

860.) Because Word was not a party to Oakland’s

original complaint against Hassey, the statute of

limitations was not tolled. The filing of Hassey’s cross-

complaint against him more than three years after the

withholding of his checks was therefore untimely,

whether any FLSA violations were willful. (bid.)

Summary judgment as to Word on this cause of action

is therefore affirmed.

As to whether the claim was timely as to

Oakland, the FLSA provides that an action may be

commenced within two vears after the cause of action

accrued, except that a cause of action arising out of a

“willful violation” may*be commenced within three

years after accrual. (29 U.S.C. § 255(a); see also

'* Perhaps recognizing this, Hassey statesin his reply brief that he

no longer challenges the dismissal of Word from the cross-

complaint.

28a

McLaughlin v. Richland Shoe Co. (1988) 486 U.S. 128,

129.) We agree with the trial court that Hassey’s

causes of action began to run when he received his

final checks in February and April 1999."" (Biggs v.

Wilson (9th Cir. 1993) 1 F.3d 1537, 1540 [FLSA cause

of action accrues on payday when minimum wages are

unpaid].) Oakland filed its original complaint on

October 17, 2001. That means that Hassey’s FLSA

cause of action was untimely if the two-year statute of

limitations applied, but timely if the three-year statute

of hmitations applied. (Hodgson v. Cactus Craft of

Arizona (9th Cir. 1973) 481 F.2d 464, 467.)

Anemployer has committed a “willful violation”

of the FLSA (triggering the three-year statute of

limitations) where it “either knew or showed reckless

disregard for the matter of whether its conduct was

prohibited under the statute.” (McLaughlin v. Richland

Shoe Co., supra, 486 U.S. at p. 133.) Hassey argued

below in his opposition to respondents’ motion for

summary judgment that Oakland’s conduct was

willful, and that the three-year statute of limitations

applied. The trial court’s order granting respondents’

motion for summary judgment stated, contrary to

Hassey’s opposition brief and a statement made by his

attorney at the hearing on the summary judgment

_

time in his reply brief, that Oakland's attempts to collect on its

debt constitute a “continuing violation” of the FLSA that extend

the statute of limitations, or that the statute of limitations should

be equitably tolled. (Campos v. Anderson, supra, 57 Cal. App.4th

at p. 794, fn. 3.)

29a

motions,~” that Hassey “agreed that the two-year

statute of limitations should be applied.” The court

applied the two-year statute of limitations, apparently

based (at least in part) on the fact that respondents

had not addressed whether Hassey had established a

willful violation of the FLSA. *'In other words, it

apparently did not reach the issue of whether any

violation of the FLSA was “willful.” We presume that

had it done so, it would have concluded that because

there was no violation of the FLSA, there certainly was

no willful violation of the statute.

Having reached the conclusion that withholding

Hassey’s final paycheck did, in fact, violate the FLSA,

we must determine whether there is a question of fact

that the violation was “willful,” triggering the three-

year statute of limitations. “[S]ummary judgment shail

be granted if all the papers submitted show that there

*° Hassey’s counsel argued at the hearing that the three-year

statute of limitations applied, and that Oakland’s complaint was

filed within three years of the accrual of the FLSA cause of action.

He later stated that he agreed with a statement by respondents’

counsel that the two-year statute of limitations applied “unless [he

could] show that there was a willful violation.” (Italics added.)

Counsel did not agree that the two-year statute of limitations, in

fact, applied.

*''The trial court cited respondents’ motion for summary judgment,

which stated that respondents would not address whether Hassey

had established a wil}ful violation of the FLSA, because his cross-

complaint was filed on May L5, 2002, more than three years after

Oakland's alleged wrongful acts. Perhaps recognizing that the

timeliness of Hassey’s claim was tied to the date of the filing of

Oakland's complaint, respondents in fact argued in their reply

briet—as voll as at the hearing on the motions for summary

judgment—that there was no evidence of a willful violation of the

FLSA that tnggered the three-year limitations penod

30a

is no triable issue as to any material fact and that the

moving party is entitled to a judgment as a matter of

law.” (Code Civ. Proc., § 437c, subd. (c).) A defendant

“has met his or her burden of showing that a cause of

action has no merit if that party has shown that...

there is a complete defense to that cause of action.”

(Code Civ. Proc., § 437c, subd. (p)(2).) Only when that

initial burden is met does the burden shift to plaintiff

to show that a triable issue of material fact exists as to

that cause of action or a defense thereto. (Ibid.; see also

Knight v. Hayward Unified School Dist. (2005) 132

Cal.App.4th 121, 128 [33 Cal. Rptr.3d 287].) On appeal,

Oakland argues that Hassey’s complaint is barred by

the two-year statute of limitations, but does not

address the alternative three-year statute of

limitations. Oakland argued below that there was no

evidence of a willful FLSA violation because the MOU

training cost reimbursement provision was negotiated,

and any alleged violation thus “arose out of an open

and fairly negotiated collective bargaining process

communicated to applicants, employees and departing

employees, and was at most negligent.” In light of the

fact that it is impermissible to waive by agreement

statutory protections of the FLSA (Brennan v. Veterans

Cleaning Service, Inc., supra, 482 F.2d at p. 1370;

Mayhue’s Super Liquor Stores, Inc. v. Hodgson, supra,

464 F.2d at pp. 1197, 1199), we are not persuaded that

Oakland established that any violation of the FLSA

was not willful, and that there was therefore a

complete defense to Hassey’s FLSA cause of action.

(Code Civ. Proc., § 437c, subds. (c) & (p)(2).) Oakland

submitted no evidence about what steps, if any, it took

to secure legal advice about its reimbursement policy

(cf. Powell v. Carey Intern., Inc. (S.D. Fla. 2007) 483

31la

F.Supp.2d 1168, 1175 [summary judgment

inappropriate for plaintiff where there was question of

fact as to whether defendant acted with knowledge or

reckless disregard in not paying overtime]), and no

declarations about its state of mind when it instituted

such a policy (cf. Gonzalez v. Rite Aid of New York, Inc.

(S.D.N.Y. 2002) 199 F.Supp.2d 122, 134). Oakland

similarly presented no evidence of whether it had

notice of past FLSA violations (if any) that would have

put it on notice about FLSA requirements. (Cf. Chao v.

A-One Medical Services, Inc. (9th Cir. 2003) 346 F.3d

908, 919 [affirming summary judgment for plaintiff

where testimony of former employees, combined with

evidence of past violations, sufficient to show “willful”

violation].) Because we cannot determine on the record

before us that Oakland was entitled to judgment as a

matter of law (Code Civ. Proc., § 437c, subd. (c)), we

reverse summary judgment on Hassey’s second cause

of action as to Oakland.

We conclude, however, that the trial court did

not err in denying Hassey’s motion for summary

judgment onthe cross-complaint. A “cross-complainant

has met his... burden of showing that there is no

defense to a cause of action if that party has proved

each element of the cause of action entitling the party

to judgment on that cause of action.” (Code Civ. Proc.,

§ 437c, subd. (p)(1).) Hassey offered no evidence below

that Oakland's violation of the FLSA was willful and

that the statute of limitations therefore had not

expired when he filed his cross-complaint; he simply

provided argument in his opposition to respondents

motion for summary judgment. Some of this argument

was directed at whether the underlying reimbursement

32a

agreement was lawful, an argument we have

previously rejected. Given the factual questions that

remain regarding the timeliness of Hassey’s cross-

complaint, we cannot conclude on this record that

Hassey is entitled to judgment in his favor.

3. Three-year statute of limitations did not

apply to Hassey’s statutory causes of action

against Oakland.

Hassey’s cross-complaint alleged that the

reimbursement clause in the conditional offer, as well

as the withholding of money he would have otherwise

been paid, violated Labor Code sections 221 and 223

(Hassey’s third and fourth causes of action). It also

alleged that the conditional offer violated Labor Code

sections 432.5 and 450 (Hassey’s fifth and sixth causes

of action). The trial court ruled that the three-year

statute of limitations governing actions “upon a

liability created by statute” (Code Civ. Proc., § 338,

subd. (a)) barred these four causes of action. This was

true with respect to respondent Word, and we therefore

affirm summary adjudication as to all four causes of

action against him. (Boyer v. Jensen, supra, 129

Cal.App.4th at p. 70; Trindade v. Super ior Court,

supra, 29 Cal.App.3d at p. 860.) As we explained

above, however, athree-year statute of limitations does

not bar Hassey’s claims against Oakland, because they

were not time-barred as of the time Oakland filed its

original complaint. (Trindade v. Superior Court, supra,

29 Cal.App.3d at p. 860.)

33a

We next address whether we may affirm

summary adjudication as to these causes of action

against Oakland for other reasons.

4. Trial court erred in granting summary

adjudication as to Hassey’s third and fourth

causes of action (Lab. Code, §§ 221 & 223)

against Oakland.

As set forth above, Labor Code sections 221 and

223 prohibit an employer from receiving from an

employee any part of wages previously paid, and from

secretly paying a lower wage while purporting to pay

the wage designated by statute or contract. As we

concluded above, these sections do not prohibit

Oakland frorm requiring that Hassey repay his training

costs if he leaves the police department before the end

five years. (Ante, § II.A.)

The withholding of Hassey’s final paycheck is

another matter. Labor Code section 221 “and related

provisions in sections 222 through 223 were enacted in

1937 in response to secret deductions or ‘kickbacks’

that made it appear as if an employer was paying

wages in accordance with an applicable contract or

statute, whereas, in fact, the employer was paying less.

(T]he Legislature has recognized the employee's

dependence on wages for the necessities of life and has,

consequently, disapproved of unanticipated or

unpredictable deductions because they impose a special

hardship on employees.” (Hudgins v. Neiman Marcus

Group, Inc., supra, 34 Cal.App.4th at pp. 1118-1119

[department store not permitted to deduct commissions

previously paid for unidentified returns].) We therefor

34a

agree with Hasscy insofar as he argues that summary

adjudication was inappropriate, since there was a

triable issue as to whether the seizure of his final

paycheck violated Labor Code sections 221 and 223.”

We disagree with the trial court’s conclusion

that Kerr’s Catering, supra, 57 Cal.2d 319, is entirely

distinguishable. Kerr’s Catering held that an employer

wus precluded from reducing its employees’ salaries in

the amount of any cash shortages not attributable to

employees’ dishonesty or culpable negligence. (/d. at

pp. 325-326.) Such withholding effectively amounted to

“secret deductions or ‘kick-backs’” prohibited by Labor

Code sections 221-223. (Kerr’s Catering, supra, at pp.

328-329.) Although the deductions at issue in Kerr's

Catering were different from the ones made here, we

agree with Hassey that the underlying policy of

protecting an employee's wages is implicated here. (/d

at p. 326.)

Oakland points to the fact that Hassey agreed in

writing to the repayment term set forth in the

conditional offer, reimbursement agreement, and

repayment agreement. They do not, however, point to

anywhere in the record where Hassey agreed to the

withholding of wages owed to him; indeed, the

agreements he signed do not provide for such

withholdings

Again, the parties do not address whether there ts a distinction

between the withholding of retirement money (as opposed to

wages), but thev are free to do so on remand. (Antes fn. 14.) Our

holding, however, 1s | t] eizure of the paycheck

Sa

The question remains whether, as respondents

argue, Oakland was authorized by the MOU to deduct

amounts owed from Hassey’s final paycheck. The MOU

provided that repayment of training costs owed from

departing employees “shall be due and payable at the

time of separation and the City shall deduct any

amounts owed under this provision from. the

employee's final paycheck.” Citing Labor Code section

1126, which provides that “[a]ny collective bargaining

agreement between an employer and a_ labor

orgamzation shali be enforceable at law or in equity,”

respondents argue that the paycheck deduction

provision was bargained for and enforceable against

Hussey. However, an employer may “withhold or divert

any portion of an employee's wages’ for the benefit of

the employee only when such deduction is expressly

requested and authorized by the employee in writing,

provided that the deduction does not amount to a

rebate or deduction from the standard wage arrived at

by collective bargaining or pursuant to wage

agreement or statute. (Lab. Code, § 224.) Deductions

permitted by law to be made from wages pursuant to

an employee’s written request include insurance

premiums, hospital and medical dues and other items

that are for the benefit of the employee, not the

employer.~’ (8 Ops.Cal.Atty.Gen. 178, 179 (1944).)

counsel pointed to the “for the benefit of the employes

language at oral argument and suggested for

that state law differed trom federal

rmining whether the reimbursement

the withholding of money owed to

federal law looks to whether a facilits

of iT) ¢

1 in the computation of wage

ital rdded; see ante, & LE.A 2.)

36a

The trial court found two cases invalidating

agreements that purportedly waived nonwaivable

rights distinguishable. (Tunkl v. Regents of University

of California (1963) 60 Cal.2d 92, 94 [32 Cal.Rptr. 33,

383 P.2d 441] [hospital’s release from lability for

future negligence invalid as against the public

interest]; Benane v. Internat. Harvester Co. (1956) 142

Cal.App.2d Supp. 874, 875-876, 878-879 [299 P.2d 750]

[union’s agreement that empleyees receive time off

without pay invalid as conflicting with public policy set

forth in Election Code’s requirement that no pay be

deducted for time spent voting}.) We disagree that the

cases are distinguishable, in light of the fact that “‘the

prompt payment of wages due an employee 1s a

fundamental public policy of this state.’ [Citation.]}”

(Phillips v. Gemini Moving Specialists (1998) 63

Cal .App.4th 563, 571 [74 Cal. Rptr.2d 29}.) Indeed, it is

questionable whether employees may enter into

agreements authorizing unlawful deductions. (Hudgins

v. Netman Marcus Group, Inc., supra, 34 Cal.App.4th

at p. 1124, fn. 14 [because unidentified returns

deduction was unlawful, court did not address the

issue of whether employees actually entered into an

enforceable agreement regarding the deductions].)

We conclude that Oakland failed to demonstrate

that it was entitled to judgment as a matter of law on

this issue. We therefore reverse summary adjudication

as to Hassey’s third and fourth causes of action against

Oakland and remand to the trial court. We affirm,

We note that the cited language refers to authorized deductions

from paychecks and does not address the definition of “wages,”

which is defined elsewhere in the Labor Code. (Lab. Code, § 200,

subd. (a).)

5

37a

however, the trial court’s denial of Hassey’s summary

judgment motion on these causes of action, because

Hassey did not meet his burden to show that he was

entitled to summary judgment. (Code Civ. Proc., §

437c, subd. (p)(1).) Again, there is a question of fact

regarding whether Oakland was authorized by the

MOU to deduct amounts owed from Hassey’s final

paycheck.

5. Summary adjudication proper as to Hassey’s

fifth cause of action (Lab. Code, § 432.5) against

respondents.

The fifth cause of action in Hassey’s cross-

complaint alleged that the conditional offer (as opposed

to the withholding of money owed to him) violated

Labor Code section 432.5. As set forth above, the

statute prohibits employers from requiring employees

to agree to any terms or conditions that are prohibited

by law. Again, because there was nothing unlawful

about requiring Hassey to repay his training costs,

there was no violation of this statute. Summary

adjudication was therefore appropriate as to Hassey’s

fifth cause of action against Oakland and Word.

6. Summary adjudication proper as to Hassey’s

sixth cause of action (Lab. Code, § 450) against

respondents.

The sixth cause of action in Hassey’s cross-

complaint alleged that the conditional offer (as opposed

to the withholding of money owed to him) violated

Labor Code section 450. Subdivision (a) of the statute

provides that “[n]o employer ... may compel or coerce

38a

any employee, or applicant for employment, to

patronize his or her employer, or any other person, in

the purchase of any thing of value ” We agree with the

trial court’s conclusion that California State

Restaurant Assn. v. Whiilow (1976) 58 Cal.App.3d 340

[129 Cal.Rptr. 824], the only case upon which Hassey

relies to support his argument regarding this cause of

action, is distinguishable. Whitlow held that an

employer is prohibited from requiring an employee who

makes minimum wage to take meals as part of his

compensation and to have the value of the meals

deducted from the minimum wage without the written

consent of the employee. Ud. at p. 343.)

Here, by contrast, Hassey agreed in writing to

reimburse Oakland for his training costs if he left the

police department in fewer than five years, and the

MOU authorized such an agreement. “[T]he California

Legislature did not intend by section 450 of the Labor

Code to override the provisions of an otherwise lawful

collective bargaining agreement ... A contrary

interpretation would mean that employees are ‘coerced’

or ‘compelled, within the meaning of section 450, by

the terms ofacollective bargaining agreement between

their employer and their duly authorized bargaining

representative, in the absence of any claim that the

representative has breached its duty of representing

them fairly.” (Porter v. Quillin (1981) 123 Cal.App.3d

869, 876 [177 Cal. Rptr. 45].) Summary adjudication as

to Hassey’s sixth cause of action is affirmed.

39a

7. Summary adjudication proper as to seventh

and eighth causes of action against respondents.

The seventh cause of action in Hassey’s cross-

complaint alleged that the reimbursement clause

contained in the conditional offer was an “unlawful

contract,” in violation of Civil Code sections 1667 and

1668. The eighth cause of action alleged that the

conditional offer was an impermissible restraint on

Hassey’s ability to change jobs, in violation of Business

and Professions Code section 16600. Again, as set forth

above (§ II.A.2.), nothing “restrained [Hassey] from

engaging in [his] lawful trade, business or profession.”

(Kolani v. Gluska, supra, 64 Cal.App.4th at p. 407.)**

Because the seventh and eighth causes of action were

directed solely to the conditional offer, we need not

decide whether any agreement to deduct training costs

from Hassey’s checks violated any statutes.

8. Summary adjudication proper as to ninth

cause of action against respondents.

The ninth cause of action in Hassey’s cross-

complaint alleged that the conditional offer violated

Business and Professions Code section 17200, because

the repayment provision was an unlawful, unfair or

fraudulent business practice. The trial] court granted

summary judgment as to Oakland, concluding that the

city was not a “ ‘person’” as set forth in Business and

7* The trial court also found that the seventh cause of action was

barred by a three-year statute of limitations. We need not address

whether the trial court erred on this point, as the trial court relied

on another, valid ground to grant summary adjudication.

40a

Professions Code section 17201.” The trial court

granted summary judgment as to respondent Word,

concluding that he had been sued “solely in his official

capacity as the Chief of Police.” On appeal, Hassey

does not address these conclusions in his opening brief,

and he states in his reply brief that he “does not desire

to contest on appeal the applicability” of secticn 17200.

Summary adjudication as to this cause of action is

affirmed.

Finally, Hassey argues generally that public

employment is held by statute and not by contract,

that the reimbursement agreement was never adopted

by the city civil service commission, and that Oakland

cannot deal directly with represented employees. He

directs these arguments to no particular causes of

action. Having stated only a vague general legal

principle without directing this court to the portion of

the record which supports his contention, we treat this

issue as waived. (Guthrey v. State of California (1998)

63 Cal.App.4th 1108, 1115 [75 Cal.Rptr.2d 27].)

Respondents raised legal arguments below in

support of their summary judgment motion that the

trial court did not reach. They raise one of them in

passing on appeal (with respect to Oakland) as an

alternate ground to affirm. Citing Government Code

section 818.2, which provides that “[a] public entity is

not liable for an injury ce used by adopting or failing to

adopt an enactment or by failing to enforce any law,”

>’ Business and Professions Code section 17201 provides, “As used

in this chapter, the term perscn shall mean and include natural

persons, corporations, firms, partnerships, joint stock companies,

associations and cther organizations of persons.”

4la

respondents argue that “to the extent that the cross-

claims arise out of alleged injuries resulting from the

City’s adoption (via resolution) and enforcement of the

MOU between it and the [Oakland Police Officers’

Association], it cannot be held hable.” The cited

statutory provision provides immunity only for “

‘legislative or quasi-legislative action, and the

discretion of law enforcement officers in carrying out

their duties.’ ” (Morris v. County of Marin (1977) 18

Cal.3d 901, 916-917 [136 Cal. Rptr.251, 559 P.2d 606],

italics omitted.) Because we have focused on Oakland’s

potential liability with respect to withholding Hassey’s

final paycheck, and not on any legislative or quasi-

legislative action by the city, Government Code section

818.2 does not provide Oakland with immunity.

Respondents also argue in passing that Hassey

cannot represent individuals who were hired by

Oakland as lateral-entry police officers, as he alleged

in his cross-complaint. Although this may be true (and

the argument may certainly be raised again on

remand), this is not a valid alternate basis to affirm

summary judgment, because it would not limit any

relief Hassey would otherwise be entitled to in his

position as a former police officer trainee. Our opinion

does not preclude the filing of a future motion for

summary judgment premised on additional facts or on

legal arguments other than those rejected in this

opinion.

42a

III. DISPOSITION

The judgment ts affirmed in part and reversed in

part. Summary judgme:.t in favor of Oakland on its

complaint against Hassey is affirmed. The denial of

Hassey’s summary judgment motion on Oakland’s

complaint is affirmed. Summary judgment in fuvor of

respondent Word on all of the causes of action in

Hassey’s cross-complaint is affirmed. Summary

adjudication in favor of Oakland as to the first, fifth,

sixth, seventh, eighth, and ninth causes of action in

Hassey’s cross-complaint is affirmed. Summary

adjudication as to the second, third, and fourth causes

of action in Hassey’s cross-complaint against Oakland

is reversed. The denial of Hassey’s summary judgment

motion on his cross-complaint is affirmed. The case is

remanded to the trial court for proceedings consistent

with the views expressed in this opinion. Each side

shall bear its own costs incurred on appeal.

s/

Sepulveda, J.

We concur:

Ruvolo, P. J.

Rivera, J.

Trial Court: Alameda County Superior Court

Trial Judge: Honorable Winifred Y. Smith

Counsel for Appellant: Law Offices of Jon Webster;

Jon Webster, Alexandra Seldin and Michael Devin

Counsel for Respondents: John A. Russo, City

Attorney, Randolph W. Hall, Chief Assistant City

Attorney, Kandis A. Westmore, Deputy City Attorney

43a

APPENDIX B

FILED

ALAMEDA COUNTY

SEP 19 2006

CLERK OF THE SUPERIOR COURT

By s/ Deputy

SUPERIOR COURT OF THE STATE OF

CALIFORNIA

IN AND FOR THE COUNTY OF ALAMEDA

CITY OF OAKLAND, No. 2001-027607

Plaintiff,

VS. ORDER GRANTING

KENNY D. HASSEY, MOTION OF

Defendant PLAINTIFF AND

AND RELATED CRCSS-DEFENDANT

CROSS-COMPLAINT. CITY OF OAKLAND,

AND CROSS-

DEFENDANT

RICHARD WORD,

CHIEF OF POLICE,

FOR SUMMARY

JUDGMENT

The Motion of Plaintiff and Cross-Defendant

City of Oakland, and Cross Defendant Richard Word,

Chief of Police (collectively, "City"), for Summary

Judgment Or Summary Adjudication on the City's

Complaint, dated October 17, 2001, against Defendant

Kenny D. Hassey, and on the Cross-Complaint of

44a

Kenny D. Hassey, Matthew J. DeLorenzo and Chris

Baker against the City and Police Chief Richard Word,

filed on May 10, 2002, was heard on September 14,

2006, at 9:00 a.m., in Department 31. Kandis A.

Westmore, Esq., appeared for the City and Chief Word.

Jon Webster, Esq., appeared for Defendant and

Cross-Complainant Kenny D. Hassey, and

Cross-Complainants Matthew J. DeLorenzo and Chris

Baker. The Court having reviewed the parties' written

submissions and considered the arguments presented

by counsel, HEREBY GRANTS the City's Motion for

Summary Judgment as follows:

The City's Motion for Summary Judgment on

the Complaint against Hassey for breach of contract 1s

GRANTED. There are no genuine disputes concerning

the fact that Defendant Hassey signed the following

agreements: (1) "Conditional Offer of Employment"; (2)

"Reimbursement of Training Expenses"; and (3)

Training Costs Repayment Agreement." Hassey

confirmed in all of these agreements that he would be

obligated to repay some or all of the cost to train him

to become a police officer at the Oakland Police

Academy if he voluntarily left the Police Department

within five years. There is no dispute that Hassey

resigned on February 10, 1999, which was less than a

year after the commencement of his employment in

March 1998. The City deducted $725.28 from Hassey's

final check in February 1999, and $654.80 from the

vacation check in April 1999. The amount due and

owing after these deductions was $6,619.92. Defendant

Hassey does not dispute the City's contention that he

never made any further payments after the above

amounts were deducted by the City.

45a

The City's Motion for Summary Judgment is

GRANTED as to the Second Cause of Action in the

Cross-Complaint as to Hassey because he did not file

his action within the two-year lhmitations period

provided in 29 U.S.C. § 255(a).' Hassey alleges that the

City violated the Fair Labor Standards Act and 29

C.F.R. § 531.35 (final and unconditional payment of

wages) when it made the unauthorized deductions in

February and April 1999. The Cross-Complaint was

filed on May 10, 2002. The City's Motion is also

GRANTED as to Cross-Complainants DeLorenzo and

Baker, because the record clearly shows that the City

never deducted any amounts from their pay or

collected any amounts from them for the training costs

incurred. The record shows that the City made efforts

to collect the amounts owed by DeLorenzo and Baker,

but they have refused to make any payments. During

oral argument, counsel for Cross-Complainants argued

that DeLorenzo and Baker did suffer actual injury

because they did not receive their wages "finaily" and

"unconditionally," as required by 29 C.F.R. § 531.35,

during the entire period of their employment with the

City. The Court rejects Cross-Complainant's

interpretation of 29 C.F.R. § 531.35. The fact that

Cross-Complainants may be required to repay the City

some or all of the cost of their training if they elected

to resign voluntarily within five years does not render

' Cross-Complainants agreed that the two-year statute of

limitations should be applied. The Court notes that the City

invited the Court to apply the longer three-year period because

the Cross-Complaint was filed more than three years after April

1999. Plaintiffs Memo., 8:26-9:1 ("Therefore, defendants [sic] will

not argue the issue of whether he can establish a willful violation

of the Act.").

46a

all of their wages "conditional."

The City's Motion for Summary Judgment is

GRANTED as to the Third, Fourth, Fifth, Sixth and

Seventh Causes of Action as to Hassey because they

are barred by the three-year statute of limitations set

forth in CCP § 338(a). See Aubry v. Goldhor (1988) 201

Cal.App.3d 399, 404. The City's Motion is GRANTED

as to these Causes of Action as to the Cross-Complaint

of DeLorenzo and Baker because they have not

suffered any legally cognizable damages as a result of

the City's alleged statutory violations for the reasons

set forth above.

Finally, the City's Motion for Summary is

GRANTED as to the Seventh and Eighth Causes of

Action. Cross-Complainants have not shown that

triable issues of material fact exist concerning the

validity of the agreements that prospective police

officer trainees were required to sign in the peniod from

1998 to 2000. Indeed, there is legal authority for the

City's position that contracts requiring employees to

reimburse all or some training costs under the

circumstances at issue here are valid under the Fair

Labor Standards Act. See Heder v. City of Two Rivers

(7th Cir. 2002) 295 F.3d 777,782-783.

The City's Motion for Summary Judgment is

GRANTED as to the Ninth Cause of Action for Unfair

Competition. The City is not a "person" within the

definition of Bus.& Prof. Code § 17201. See Trinkle v.

California State Lottery (1999) 71 Cal.App.4th 1198,

1202. The Motion is also GRANTED as to Chief Word

because he is sued solely in his official capacity as the

47a

Chief of Police.

The Court declines to address in this order the

numerous other legal grounds asserted by the City in

support of its Motion for Summary Judgment because

all of the Causes of Action in the Complaint and the

Cross-Complaint are disposed of on the grounds set

forth herein.

The City shall file and serve a Notice of Entry of

Order. The City shall also prepare a proposed form of

Judgment and to have counsel for Defendant and

Cross- Complainants approve the Judgment as to form.

The proposed Judgment shall be submitted to the

Court no later than October 3, 2006.

ITIS SO ORDERED.

Dated SEP 19 2006

s/

Winifred Y. Smith

Judge of the Superior Court

APPENDIX C

FILED

ALAMEDA COUNTY

SEP 19 2006

CLERK OF THE SUPERIOR COURT

By s/ Deputy

SUPERIOR COURT OF THE STATE OF

CALIFORNIA

IN AND FOR THE COUNTY OF ALAMEDA

CITY OF OAKLAND,

Plaintiff]

VS.

KENNY D. HASSEY

cailiiee Defendant

AND RELATED

CROSS-COMPLAINT

No. 2001-027607

ORDER DENYING

MOTION OF

DEFENDANT AND

CROSS-

COMPLAINANT

KENNY HASSEY,

AND CROSS

COMPLAINANTS

HASSEY, MATTHEW

DELORENZO AND

CHRIS BAKER FOR

SUMMARY

JUDGMENT OR

SUMMARY

ADJUDICATION

9a

The Motion of Defendant Kenny D. Hassey and

Cross-Complainants Hassey, Matthew J. DeLorenzo

and Chris Baker for Summary Judgment or Summary

Adjudication on the Complaint of the City of Oakland

for Breach of Contract, filed on October 17, 2001, and

the Cross-Complaint against the City and Richard

Word, Chief of Police, filed on May 10, 2002, was heard

on September 14, 2006, at 9:00 a.m., in Department 31.

Kandis A. Westmore, Esq., appeared for the City and

Chief Word. Jon Webster, Esq., appeared for Defendant

and Cross-Complainant Kenny D. Hassey, and

Cross-Complainants Matthew J. DeLorenzo and Chris

Baker. The Court having reviewed the parties’ written

submissions and considered the arguments presented

by counsel, HEREBY DENIES the Motion on the

grounds set forth in the Court's separate order

granting the Motion for Summary Judgment of the

City and Chief Word, and for the following additional

reasons:

The Court finds that Cross-Complainants have

not shown that the provision in the Memoranda of

Understanding ("MOU") between the City and the

Oakland Police Officers Association requiring police

officer trainees and police officers. to reimburse sume

or all of the cost of their required training if they

voluntarily resign within 5 years from the date of hire

violates the Fair Labor ae Act (29 U.S § 20)

et seq.), 29 C.F_R. § 531.35, Labor Code §§ 201, 221,

223, 432.5 and 450, Civil ; ‘ode $$ 1667 and aa and

Bus.& Prof. Code §§ 16600 and 17200. See, e.g., Heder

vu. City of Two Rivers (2002) 295 F.3d 777, 782-783

Cross-Complainants' argument that the City

improperly attempts tocircumvent the requirements of

50a

the FLSA and other laws through collective bargaining

and by private contracts with its employees is not

supported by law. The Heder decision clearly holds that

a requirement that employees reimburse certain

training costs if they resign before the employer

receives its intended benefit from the training does not

violate the FLSA.

The parties agree that police officer applicants

without the basic training required under state law for

all peace officers were required to sign two agreements

acknowledging their reimbursement obligations under

the MOU: (1) "Conditional Offer of Employment"; and

(2) "Repayment Acknowledgement." The parties agree

that the reimbursement obligation is conspicuously set

forth in these agreements, and that officers must sign

them in order to join the police department. The City's

requirement that applicants who join the police force

without the basic police training required by state law

sign agreements acknowledging their awareness and

understanding of the reimbursement provision in the

MOU does not violate the Fair Labor Standards Act

provisions with respect to the payment of minimum

wages and the payment of wages without any

requirement of a "kick back." 29 C.F.R. § 531.35.

Cross-Complainants' argument that the City

violates 29 C.F.R. § 531.35 each time it pays its officers

who have signed the reimbursement agreements

because the payments are not "final" or "unconditional"

is not supported by a common sense interpretation of

the provision. The City pays the police officer trainee-

a salary well above the minimum wage during tl

several months of their training, and the officers are

Sla

under no obligation to return any of that salary if they

leave the force for any reason. The statute cited by

Cross-Complaints in support of their claim, 29 U.S.C.

§ 206, only prohibits practices that result in the

payment of wages below the national minimum wage.

Cross-Complainants made no showing that they were

effectively paid less than the minimum wage by the

City. Indeed, Hassey states in the papers that he

earned an hourly wage of $23.39 while employed by the

City from March 1998 to February 1999. During oral

argument, counsel argued that the three United States

Department of Labor opinion letters clearly support

Cross-Complainants' position. Having reviewed the

opinion letters again, the Court does not agree with

counsel's argument. The 1992 and 2005 opinion letters

are not applicable because the alleged policies

challenged therein require police officers to reimburse

the salaries that they were paid during, the period of

their training. The policy of the State of Washington

challenged in the 1999 opinion letter appears to be

similar to the City's reimbursement policy, but it is not

clear from the brief opinion that the employees are

required to reimburse training costs only and not

salary paid during training. Although the Court finds

the opinion letters instructive on the issues presented

by FLSA provisions, they have lhmited value as

precedent because they are based solely on the

representations made by the parties seeking the

opinion. In this case, the Court concludes that the

holding in Heder provides the most pertinent source of

authority.

S2a

Finally, the City's requirement that police

officers reimburse the City some or all of the cost of

their training in the Oakland Police Academy does not

violate public policy or any provision of the California

Labor Code. The Court concludes that the cases cited

by Cross-Complainants in support of their motion, and

in particular the Kerrs' Catering, Benane, Tunkl and

Whitlow cases, are distinguishable. The Court finds

that the City's requirement is not unconscionable.

Although applicants cannot negotiate away the

reimbursement term, they may choose to seek

employment with other law enforcement agencies or

obtain training in another academy certified by the

Commission on Peace Officer Standards of Training

prior to applying for employment. The record clearly

establishes that the City's reimbursement provision

only applies to applicants without the basic training

required of all peace officers under state law.

IT IS SO ORDERED.

Dated SEP 19 2006

s/

Winifred Y. Smith

Judge of the Superior Court

53a

APPENDIX D

JOHN A. RUSSO,

City Attorney - SB #129729

RANDOLPH W. HALL,

Chief Assistant City Attorney - SB #080142

PELAYO A. LLAMS, JR.,

Deputy City Attorney - SB #162046

One Frank H. Ogawa Plaza, 6"" Floor

Oakland, California 94612

Telephone (510) 238-6621 Fax: (510) 238-6500

Attorneys for Plaintiff/Cross-Defendants

CITY OF OAKLAND and RICHARD WORD

FILED BY FAX

ALAMEDA COUNTY

OCTOBER 10, 2006

CLERK OF THE SUPERIOR COURT

By Denise Wells, Deputy

CASE NUMBER:

2001027607

SUPERIOR COURT OF THE STATE OF

CALIFORNIA

COUNTY OF ALAMEDA

UNLIMITED JURISDICTION

CITY OF OAKLAND, a

Municipal Corporation,

Plaintiff,

i

KENNY D. HASSEY

and Does 1 through 10,

inclusive.

Defendants,

KENNY D. HASSEY

on behalf of himself anc

all others. similarly

situated,

Cross-Complainants,

V.

CITY OF OAKLAND,

and RICHARD WORD,

individually and in hig

official capacity as Chief

of the Oakland Police

Department, and ROES

1 through

50, inclusive,

Cross-Defendants|

Case No. 2001027607

NOTICE OF ENTRY

OF JUDGMENT

“BY FAX”

Sa

4)

TO ALL PARTIES IN THE ABOVE-REFERENCED

ACTION:

The Court granted the attached Judgment In

Favor of the City of Oakland on October 5, 2006. A

copy of the judgment is attached hereto as Exhibit A.

DATED: October 10, 2006 JOHN A. RUSSO,

City Attorney

RANDOLPH W. HALL,

Chief Assistant City Attorney

RACHEL WAGNER,

Supervising Trial Attorney

PELAYO A. LLAMA, JR.,

Deputy City Attorney

By: 3/

Attorneys for Plaintiff/Cross-Defendants

CITY OF OAKLAND and RICHARD WORD

56a

JOHN A. RUSSO,

City Attorney - SB #129729

RANDOLPH W. HALL,

Chief Assistant City Attorney - SB #080142

PELAYO A. LLAMS, JR.,

Deputy City Attorney - SB #162046

One Frank H. Ogawa Plaza, 6‘ Floor

Oakland, California 94612

Telephone (510) 238-6621 Fax: (510) 238-6500

Attorneys for Plaintiff/Cross-Defendants

CITY OF OAKLAND and RICHARD WORD

FILED

ALAMEDA COUNTY

OCT 05 2006

CLERK OF THE SUPERIOR COURT

By _s/_ Deputy

SUPERIOR COURT OF THE STATE OF

CALIFORNIA

COUNTY OF ALAMEDA

UNLIMITED JURISDICTION

CITY OF OAKLAND, a Case No. 2001027607

Municipal Corporation,

Plaintiff, JUDGMENT IN

FAVOR OF THE CITY

OF OAKLAND

KENNY D. HASSEY, and

Does 1 through 10,

inclusive.

Defendants.

KENNY D. HASSEY on

57a

behalf of himself and all

other similarly situated,

Cross-Plaintiff,

Vv.

CITY OF OAKLAND,

and RICHARD WORD,

individually and: in his

official capacity as Chief

of the Oakland Police

Department, and ROES 1

through 50, inclusive,

Cross-Defendants.

On September 19, 2006, this Court granted

summary judgment to in favor of Plaintiff City of

Oakland and against Defendant Kenny D. Hassey as to

all claims set forth in the complaint dated October 17,

2001 and found that said Defendant Hassey owes the

amount of Six Thousand, Six Hundred Nineteen

Dollars and Ninety-Two Cents ($6,619.92) to Plaintiff

City of Oakland; and

Furthe:. on September 19, 2006, this Court

granted summary judgment to Cross-Defendants City

of Oakland and Richard Word and_ against

Cross-Complainants Kenny D. Hassey, Mathew J.

Delorenzo, and Chris Ba}.er as to all claims in the

cross-complaint dated May 10, 2002; and

58a

Further, on September 19, 2006, this Court

denied the motion for summary judgment and/or

adjudication brought by Defendant Kenny D. Hassey

on the complaint filed on October 17, 2001; and

Further, on September 19, 2006, this Court

denied the motion for summary judgment and/or

adjudication brought by Cross-Complainants Kenny D.

Hassey, Mathew J. Delorenzo, and Chris Baker as to

all claims in the cross-complaint filed May 10, 2002;

IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED AS FOLLOWS:

1) That judgment is hereby entered in favor of

Plaintiff City of Oakland against Defendant Kenny D.

Hassey in the amount of Six Thousand, Six Hundred

Nineteen Dollars and Ninety-Two Cents ($6,619.92) on

the Complaint filed October 17, 18 2001;

2) That judgment is hereby entered in favor of

Cross-Defendants City of Oakland and Richard Word

and against Cross-Complainants Kenny D. Hassey,

Mathew J. Delorenzo, and Chris Baker as to all claims

in the Cross-Complaint filed May 10, 2002 and that

Cross-Complainants' shall take nothing from

Cross-Defendants; and

3) Defendant and Cross-Complainants shall pay

recoverable costs, disbursements, and expenses as will

be stated in the City of Oakland's Memorandum of

Costs to be filed separately.

59a

DATED: OCT 05 2006

sf

Nal

WINIFRED Y. SMITH

Judge of the Superior Court

Approved as to Form:

S/ 10/2/2006

JON WEBSTER, ESQ.

APPENDIX E

CERTIFIED FOR PUBLICATION

Court of Appeal, First Appellate District

FILED

JUL 15 2008

Diana Herbert, Clerk

IN THE COURT OF APPEAL OF THE STATE OF

CALIFORNIA FIRST APPELLATE DISTRICT

DIVISION FOUR

CITY OF OAKLAND,

Plaintiff, Cross-

defendant and

Respondent,

V.

KENNY D. HASSEY,

Defendant, Cross-

complainant and

Appellant;

RICHARD WORD,

Cross-defendant and

Respondent.

A116360

(Alameda County

Super. Ct. No.

2007027607)

(Alameda County

Super. Ct. No.

2007027607)

ORDER DENYING

REHEARING AND

MODIFYING

OPINION [NO

CHANGE IN

JUDGMENT]

6la

BY THE COURT:

Appellant’s petition for rehearing is denied. The

opinion filed June 17, 2008, is modified as follows:

I

Add, as the last three sentences of the eleventh

paragraph in part II.A.2. of the opinion, “We decline to

address Hassey’s argument, raised for the first time in

his reply brief, that the repayment agreement violates

the Labor Code sections 2802 [employer shall

indemnify employee for all necessary expenditures and

losses] and 2804 [any contract waiving provision

invalid]. (Campos v. Anderson (1997) 57 Cal.App.4th

784, 794, fn. 3 [points raised in reply brief for first time

will not be considered absent good cause].) We note

that Hassey’s answer to Oakland’s complaint did not

rely on Labor Code sections 2802 and 2804, and his

cross-complaint did not allege causes of action basedon

them.”

The above modification does not effect any

change in the judgment.

Dated: JUL 15 2008

_s/ RUVOLO, PJ. PJ.

62a

APPENDIX F

CERTIFIED FOR PUBLICATION

Court of Appeal, First Appellate District

FILED

JUL 17 2008

Diana Herbert, Clerk

IN THE COURT OF APPEAL OF THE STATE OF

CALIFORNIA FIRST APPELLATE DISTRICT

DIVISION FOUR

CITY OF OAKLAND, A116360

Plaintiff, Cross- (Alameda County

defendant and Super. Ct. No

Respondent, 2007027607)

Vv.

ORDER DENYING

KENNY D. HASSEY, REHEARING AND

Defendant, Cross- MODIFYING

complainant and OPINION [NO

Appellant: CHANGE IN

RICHARD WORD, JUDGMENT]

Cross-defendant and

Respondent

‘ellatnnieeiagiinemenasasaananie

63a

BY THE COURT:

The opinion filed June 17, 2008, and modified

July 15, 2008, is further modified as follows:

The following language, added by the July 15,

2008 modification order, is to be inserted as the last

three sentences of the last paragraph starting on page

12 of the filed opinion and ending on page 13 with the

words “are inapplicable.”

“We decline to address Hassey’s

argument, raised for the first time in his reply

brief, that the repayment agreement violates the

Labor Code sections 2802 [employer shall

indemnify employee for all necessary

expenditures and losses] and 2804 [any contract

waiving provision invalid]. (Campos v. Anderson

(1997) 57 Cal.App.4th 784, 794, fn. 3 [points

raised in reply brief for first time will not be

considered absent good cause].) We note that

Hassey’s answer to Oakland’s complaint did not

rely on Labor Code sections 2802 and 2804, and

his cross-complaint did not allege causes of

action based on them.’

The above modification does not effect any

change in the judgment.

Dated: JUL 17 2008

s/ RUVOLO, P..J PJ.

64a

APPENDIX G

SUPREME COURT

FILED

SEP 17 2008

Frederick K. Ohlrich Clerk

Court of Appeal, First Appellate District, Div. 4 -No.

Al16360

S165462

IN THE SUPREME COURT OF CALIFORNIA

En Banc

CITY OF OAKLAND, Plaintiff, Cross-defendant and

Respondent,

V.

KENNY D. HASSEY, Defendant, Cross-complainant

and Appellant;

RICHARD WORD, Cross-defendant and Respondent.

The petition for review is denied.

The request for an order directing depublication of the

opinion is denied.

Kennard, J., is of the opinion the petition should be

granted.

s/ GEORGE

Chief Justice

65a

APPENDIX H

1992 WL 845111

Wage and Hour Division

United States Department of Labor

Opinion Letter

Fair Labor Standards Act (FLSA)

October 21, 1992

BKK

This is in further response to your inquiry

concerning the application of the Fair Labor Standards

Act to a client formerly employed as a police officer by

the Town of

You state that the officer was hired in August

1991 and that he terminated his employment with the

Town approximately six months after completing the

mandated basic police officer training course.

Subsequent to his hiring, the Town entered into a

collective bargaining agreement (CBA) with the Union

representing the police officers. The CBA was made

retroactive to January 1, 1991.

The CBA includes a provision that allows the

Town to recover (on a pro-rata basis) the salary paid to

the employee during the time the employee was

attending the training course if the employee resigns

from the *** Police Department to accept a position

with another law enforcement agency less than four

years after completing the training course. Since your

client resigned less than two years after completing the

66a

basic training course, the CBA allows the employer to

recoup 100 percent of the salary paid during the time

the employee was attending basic training.

You state that the Town has commenced an

action secking return of all wages paid to the employee

for this period pursuant to this provision. In hght of §

206 (minimum wage provisions) of the FLSA, you ask

whether this provision violates the FLSA.

The answer is yes. The FLSA requires that all

covered and nonexempt employees must be paid at

least $4.25 an hour and not less than one and one-half

times their regular rates of pay for all hours worked

over 40 in a workweek. Hours worked under the FLSA

include basic training time. See §553.226(c) of 29 CFR

553 and §§ 785.27 -785.32 of 29 CFR 785.

Wages cannot be considered to have been paid

by the employer and received by the employee unless

they are paid finally and unconditionally or "free and

clear." The wage requirements of the FLSA will not be

met where the employee "kicks-back" directly or

indirectly to the employer or to another person for the

employer's benefit the whole or part of the wage

delivered to the employee. See §531.35 of 29 CFR Part

531.

67a

The United States Supreme Court has held that

an employee may not waive his or her rights to

compensation due under the FLSA. Brooklyn Sayings

Bank v. O'Neil, 328 U.S. 697 (1945). Similarly, in

Barrentine v. Arkansas-Best Freight System, 450 U.S.

728 (1981), the Supreme Court held that a labor

organization may not negotiate a provision that waives

employees' statutory rights under the FLSA.

Consequently, the return to the employer of

compensation due an employee under the FLSA would

violate the Statute.

We trust that the above information is

responsive to your inquiry.

Sincerely,

Daniel F. Sweeney

Deputy Assistant Administrator

1992 WL 845111 (DOL WAGE-HOUR)

68a

APPENDIX I

1999 WL 1788152

Wage and Hour Division

United States Department of Labor

Opinion Letter

Fair Labor Standards Act (FLSA)

September 3, 1999

kkk

This is in response to your letter requesting the

Department's position on the application of the Fair

Labor Standards Act (FLSA) to required

reimbursements for internal training costs. You

specifically ask if it is permissible for an employer to

establish a repayment plan for employee internal

training costs which would require an employee who

leaves employment within an agreed-upon time period

after receiving training to reimburse the employer tor

such training. The repayment plan would include an

agreed upon value of the internal training and would

be signed by the employee prior to receiving the

training.

The Wage and Hour Division of the Department

of Labor administers and enforces the Fair Labor

Standards Act (FLSA), which is the Federal law of

most. general application concerning wages and hours

of work. This law requires that all covered and

nonexempt employees be paid not less than the

minimum wage, $5.15 an hour, effective September 1,

1997, for all hours worked. Overtime pay of not less

69a

than one and one-half times the regular rate of pay is

required for all hours worked over 40 in a workweek.

Hours worked under the FLSA include required

internal training time. See Sections 785.27 through

785.32 of 29 CFR Part 785 (copy enclosed).

Wages cannot be considered to have been paid

by the employer and received by the employee unless

they are paid finally and unconditionally or “free and

clear.” The wage requirements of the FLSA will not be

met where the employee “kicks-back” directly or

indirectly to the employer or to another person for the

employer's benefit the whole or part of the wage

delivered to the employee, if such payments bring the

employee's pay below the required minimum wage or

overtime levels. See Section 731.35 of the enclosed 29

CFR Part 531.

The United States Supreme Court has held that

an employee may not waive his or her rights to

compensation due under the FLSA. Brooklyn Savings

Bank v. O'Neil, 328 U.S. 697 (1945). Similarly, in

Barrentine v. Arkansas-Best Freight System, 450 U.S.

728 (1981), the Supreme Court held that a labor

organization may not negotiate a provision that waives

employees' statutory rights under the FLSA.

Consequently, the return to the employer of

compensation due an employee under the FLSA would

violate the statute. It is our opinion that, where a

repayment plan would result in an employee receiving

less than the wages required by the FLSA, it would

violate the provisions of the FLSA.

70a

This opinion is based exclusively on the facts

and circumstances described in your request and is

given on the basis of your representation, explicit or

implied, that you have provided a full and fair

description of all the facts and circumstances that

would be pertinent to our consideration of the question

presented. Existence of any other factual or historical

background not contained in your request might

require a different conclusion than the one expressed

herein.

We trust that this information is responsive to

your inquiry.

Sincerely,

Daniel F. Sweeney

Office of Enforcement Policy Fair Labor Standards

Team

Enclosures

1999 WL 1788152 (DOL WAGE-HOUR)

71a

APPENDIX J

1999 WL 1788162

Wage and Hour Division

United States Department of Labor

Opinion Letter

Fair Labor Standards Act (FLSA)

September 30, 1999

KKK

This is in response to your letter requesting an

opinion concerning the application of the Fair Labor

Standards Act (FLSA) to the compensability of time

spent on tests for promotion and the legality of training

reimbursement agreements. You represent a number

of law enforcement labor organizations in ***

As you know, the FLSA is the Federal law of

most general application concerning wages and hours

of work. This law requires that all covered and

nonexempt employees be paid not less than the

minimum wage, $5.15 an hour, effective September 1,

1997, for all hours worked. Overtime pay of not less

than one and one-half times the regular rate of pay is

required for all hours worked over 40 in a workweek.

Hours worked under the FLSA include required

internal training time. See Sections 785.27 through

785.32 of 29 CFR Part 785.

72a

The first issue of your client's concern relates to

the compensability of time spent on tests for promotion

within a police department. Tests for promotion are

administered through the Civil Service Board which

undertakes fairly exhaustive testing including both

written and oral assessment boards. The total testing

process, not including the study preparation time, may

take several hours. Officers who are scheduled for the

normal work shifts may receive release time for

purposes of taking the test and, therefore, would

receive their regular pay. Otherwise, officers receive no

compensation for taking the test. You advised a

member of my staff that while the State of Washington

requires a testing process for a police officer to become

a commissioned police officer, each city/county

establishes and administers its own testing method.

You also advised that employees mayor may not choose

to take the test for promotion (i.e., the test is strictly

voluntary). For those employees who do not wish to be

promoted and do not take the test, they would remain

in their current positions without any adverse impact.

Based on the information presented, it 1s our

opinion that the time spent by employees who

voluntarily spend time on tests for promotion outside

their regular hours of work is for the benefit of these

employees, and is not compensable hours of work

under the FLSA. See section 553.226 of 29 CFR Part

73a

The second issue of your client's concern is the

legality of any reimbursement agreements under the

FLSA by which employees who depart the department

within three years of being hired are expected to pay

back the employer for their training.

Wages cannot be considered to have been paid

by the employer and received by the employee unless

they are paid finally and unconditionally or “free and

clear.” The wage requirements of the FLSA will not be

met where the employee “kicks-back” directly or

indirectly to the employer or to another person for the

employer's benefit the whole or part of the wage

delivered to the employee, if such payments bring the

employee's pay below the required minimum wage or

overtime levels. See section 531.35 of the 29 CFR Part

531.

The United States Supreme Court has held that

an employee may not waive his or her rights to

compensation due under the FLSA. Brooklyn Savings

Bank v. O'Neil, 328 U.S. 697 (1945). Similarly, in

Barrentine v. Arkansas-Best Freight System, 450 U.S.

728 (1981), the Supreme Court held that a labor

organization may not negotiate a provision that waives

employees' statutory rights under the FLSA.

Consequently, the return to the employer of

compensation due an employee under the FLSA would

violate the statute.

It is our opinion that, where a reimbursement

agreement would result in an employee receiving less

than the wages required by the FLSA, it would violate

the provisions of the FLSA.

74a

This opinion is based exclusively on the facts

and circumstances described in your request and is

given on the basis of your representation, explicit or

implied, that you have provided a full and fair

description of all the facts and circumstances which

would be pertinent to our consideration of the question

presented. Existence of any other factual or historical

background not contained in your request might

require a different conclusion than the one expressed

herein. You have also represented that this opinion is

not sought on behalf ofa client or firm which is under

investigation by the Wage and Hour Division, or which

is in litigation with respect to, or subject to the terms

of any agreement or order applying, or requiring

compliance with, the provisions of the FLSA.

We trust that this information is responsive to your

inquiry.

Sincerely,

Danicl F. Sweeney

Office of Enforcement Policy Fair Labor Standards

Team

1999 WL 1788162 (DOL WAGE-HOUR)

75a

APPENDIX K

2005 WL 2086807

Wage and Hour Division

United States Department of Labor

Opinion Letter

lair Labor Standards Act (ILSA)

FILLSA2005-18

May 31, 2005

kkk

This is in response to your letter requesting an

Opinion on the application of the Fair Labor Standards

Act (FLSA) to required reimbursements for internal

training costs.

You state that a police officer employed by the

City of *** (the City) on May 16, 2000, left employment

on October 15, 2000, and has subsequently accepted a

job with the City of the ***. The officer attended

required CLEET training (the basic police course) from

June 4, 2000, until August 4, 2000, and was paid

$3,202.24 in wages during the training period.

The applicable Oklahoma statute, Title 70 O.S.,

Section 3311(M) provides that if an employing law

enforcement agency has paid the salary of a person

while attending a basic police course approved by the

Council, and if that person within (1) year after

certification resigns and is hired by another law

enforcement agency in the same state, the second

employing agency or the person who received the

76a

training must reimburse the original employment

agency for the salary paid to the person who completed

the basic police course. You ask whether the second

employing agency or the officer is required to

reimburse the City the full amount of the salary he

received while in training as required by state statute

or only the amount of the salary in excess of the

applicable minimum wage.

The FLSA is the Federal law of most general

application concerning wages and hours of work. This

law requires that all covered and nonexempt

emplovees be paid not less than the minimum wage for

all hours worked and overtime pay for all hours worked

over 40 in a workweek. Hours worked under the FLSA

include required basic training time, such as the

training hours in this case. See 29 CFR sections 785.27

through 785.32 and section 553.226 (copies enclosed) .

Wages cannot be considered to have been paid

by the employer and received by the employee unless

they are paid finally and unconditionally or "free and

clear". The wage requirements of the FLSA will not be

met where the employee "kicks-back" directly or

indirectly to the employer or to another person for the

employer's benefit the whole or part of the wage

delivered to the employee, if such payments bring the

employee's pay below the required minimum wave or

overtime levels. See Section 531.35 of the enclosed 29

CFR Part 531.

77a

The United States Supreme Court has held that

an employee may not waive his or her rights to

compensation due under the FLSA. Brooklyn Savings

Bank v. O'Neil, 328 U.S. 697 (1945). Similarly, in

Barrentine v. Arkansas-Best Freight System, 450 U.S.

728 (1981), the Supreme Court held that a labor

organization may not negotiate a provision that waives

employees' statutory mghts under the FLSA.

Consequently, the return from the employee to the

employer of compensation due an employee pursuant

to the FLSA minimum wage and/or overtime

requirements would violate the statute.

It is thus our opinion that any reimbursement

paid by the officer that will result in payment of less

than the amount required by the applicable minimum

wage and/or overtime requirements will violate the

"free and clear" provisions of the FLSA. See opinion

letters dated October 21, 1992 and September 30,

1999; Heder v. City of Two Rivers, 295 F.3d 777 (7th

Cir. 2002). Because the FLSA establishes a floor for

required compensation, state or local laws may require

greater amounts but, pursuant to the Supremacy

Clause, may not diminish the protections of the Act.

See 29 U.S.C. § 218 (a); U.S. Constitution, Art. VI, Cl.

2. You asked whether, in the alternative, the second

employing agency could be required to reimburse the

City. The FLSA regulates employee wages, but it docs

not control this arrangement under state law between

the two cities. Thus, the FLSA does not affect any state

law remedy the city may have against the second

agency.

78a

This opinion does not affect the ability of the City to

pursue the recovery from the other agency of any

unpaid amounts due for such cost based upon a state

statute.

This opinion is based exclusively on the facts

and circumstances described in your request and is

given on the basis of your representation, express or

implied, that you have provided a full and fair

description of all the facts and circumstances that

would be pertinent to our consideration of the question

presented. Existence of any other factual or historical

background not contained in your request might

require a different conclusion than the one expressed

herein. You have represented that this opinion is not

sought by a party to a pending private litigation

concerning the issue addressed herein. You have also

represented that this opinion is not sought in

connection with an investigation or litigation between

a client or firm and the Wage and Hour Division or the

Department of Labor. This opinion letter is issued as

an official ruling of the Wage and Hour Division for

purposes of the Portal-to Portal Act, 29 U.S.C. 259. See

29 C.F.R. 790.17(d), 790.19; Hultgren v. County of

Lancaster, Nebraska, 913 F.2d 498, 507 (8th Cir.

1990).

We trust that the above information is responsive to

your inquiry.

79a

Sincerely,

Alfred B. Robinson, Jr.

Deputy Administrator

Enclosures

Note: *** The actual name(s) was removed to

preserve privacy.

80a

APPENDIX L

MEMORANDUM OF UNDERSTANDING

BETWEEN CITY OF OAKLAND AND

OAKLAND POLICE OFFICERS’ ASSOCIATION

Provisions from Pages 31 — 32

Police Officer Trainee Training Costs. The parties

recognize that in the past a substantial number of

persons have accepted the benefit of training at the

Oakland Police Academy and then have voluntarily

separated from service to join other safety agencies or

have decided for personal reasons that police work is

not their preference. The purpose of this provision is to

insure that the recruit either accept 2 commitment of

service to the City or be responsible for costs associated

with Academy training. Thus the parties agree that

any member who, prior to completing five years of

service, voluntarily separates from service’ with the

department shall be responsible for reimbursing the

City, on a full or prorata basis, for the $8,000. cost of

his or her training at the Police Academy. A schedule

'A member shall not be deemed to have voluntarily

separated under this provision if the member can

demonstrate that at the time of separation a personal

emergency or other extreme facts requiring an absence

from service which could not be reasonably

accommodated by either a leave of absence or a request

for re-employment upon cessation of the emergency or

extreme facts. A demonstrated health problem of

member or of a person in the member's immediate

family is an example of such an emergency.

la

of the member's reimbursement responsibility is set

forth as follows:

Length of Service % of Repayment Due

Separation prior to 1 year. 100% repayment of

the $8,000.

Separation after 1 year 80% repayment of

but before completing the the $8,000.

second year

Separation after 2 years 60% repayment of

but before completing the the $8,000.

third year

Separation after 4 years 20 % repayment of

but before completing the the $8,000.

fifth year

Separation after 5 years O% repayment

Repayment shall be due and payable at the time

of separation and the City shall deduct any amounts

owed under this provision from the employee's final

paycheck. If said deduction does not fully reimburse

the City for outstanding costs, the balance shall

thereupon be due and owing.

82a

APPENDIX M

OAKLAND POLICE DEPARTMENT

CONDITIONAL OFFER OF POSITION AS A

POLICE OFFICER TRAINEE

Candidate: Hassey, Kenny D.

Social Security Number: XXX-XX-XXXX

The City of Oakland Police Department hereby notifies

you that you have been selected for a position as a

Police Officer Trainee, subject to the following

conditions: you must pass the required psychological

test(s), medical examination(s), the remainder of the

background investigation, and accept the training

reimbursement provisions as specified below.

Reimbursement provisions: You may be required to

reimburse the City of Oakland for training expenses.

Reimbursement would be required in the event you

voluntarily terminate your employment with the

Oakland Police Department, according to the following

schedule:

Before the end of year 1 - 100% repayment of $8,000.

Before the end of year 2 - 80% repayment of $8,000.

Before the end of year 3 - 60% repayment of $8,000.

Before the end of year 4 - 40% repayment of $8,000.

Before the end of year 5 - 20% repayment of $8,000.

83a

Additionally: Police Officer Trainees shall be

required, on or before the first day of employment, to

reside within a geographic emergency zone that allows

quick response from home to work. Individuals selected

for hire will be required to certify and verify by

declaration, under the penalty of perjury and risk of

removal from consideration for employment, their

knowledge of and compliance with this City of Oakland

policy. (A list of the cities within the established

residency zone is enclosed for your information.)

Signature: s/ Date: 10 DEC 97

Chief of Police

84a

CONDITIONAL OFFER OF POSITION AS A

POLICE OFFICER TRAINEE (CONTINUED)

Candidate: Hassey, Kenny D.

Social Security Number: XXX-XX-XXXX

Please advise whether you accept this conditional

offer:

X Yes, I accept this offer, and understand the

conditions which attach to it.

I am no longer interested in the position of

Police Officer. Trainee.

Signature: s/ Date: 10 DEC 97

Print

Name: s/ HASSEY KENNY D.

(Last Name) (First Name) (Middle Initial)

Keep one copy of this form for your records. Indicate

your response, sign the form and return the signed

original within 7 working days of receipt. Failure to

return the form will be considered a rejection of this

offer and will result in your removal from further

consideration for the position of Police Officer Trainee.

Return the original to:

Personnel Section Commander

455 -7th Street, Room 514

Oakland, CA 94607

8Sa

If you have questions, please contact the Recruiting

and Background Investigations Unit Supervisor at

(510) 238-3339

86a

APPENDIX N

City of Oakland

Police Services Agency

TRAINING COSTS REPAYMENT AGREEMENT

FILE

COPY

Police Services Agency

455 - 7th Street

ATTN: Personnel Section

Oakland, CA 94607

Employee Name: Kenny Hassey

Mailing Address: XXXX XXXXX XXXXXX

City/State/Zip: Richmond, CA 94805

Phone #: (510) XXX-XXXX

Social Security No.: XXX-XX-XXXX

In accordance with the Memorandum of Understanding

between the City of Oakland and the Oakland Police

Officers’ Association, I hereby acknowledge that I am

obligated to repay the City of Oakland for training costs

uncurred while I was employed as a Police Officer

Trainee. The total amount owed to the City of Oakland

is § 8,000, minus the amount of my final paycheck in

the amount of $0, leaving a balance of $8,000.00.

87a

I hereby agree to repay the balance owing in 24

monthly installments of $333.34. Monthly payments

are due on the Ist of the month, commencing with the

month of February, 1999, and shall continue on a

monthly basis until the total debt has been paid. I

further understand that I may repay the remaining

balance at any time prior to the expiration of this

contract. If I fail to make any monthly payment, the

remaining balance will become due and payable

immediately. Payments should be mailed to:

City of Oakland, Central Collections

P.O. BOX 12365, Oakland, CA 94604-2365

ATTN: Mr. Phil Lim

s/

Employee Signature Date

s/ 2/16/99

Police Service Agency Approval Date

88a

APPENDIX O

PETITIONER KENNY D. HASSEY’S FINAL

PAYROLL CHECK FROM THE CITY OF

OAKLAND

TEXT OF PAYROLL STUB FOR CHECK IN THE

NET AMOUNT OF $725.28:

HASSEY, KENNY D. LOC 1043XX

714315 PERIOD ENDING 2/19/99

SOCIAL SECURITY XXX-XX-XXXX

DESCRIPTION HOURS RATE CURRENT YTD

AMT

SFT SWORN

FULL TIME 40.00 23.39400 935.76 6550.32

CTR COMPTIME

EARNED 1.00 23.39000 23.39 292.43

STRAIGHT

| Ee 40.00 935.76 7234.60

FEDERAL

WITHHOLDING

es . 93.34 - 1209.22 -

FICA/MEDICARE

Weene PPO TIONN ........... .. 13.57 - 104.90 -

89a

DESCRIPTION HOURS RATE CURRENT YTD

AMT

STATE

WITHHOLDING

SVU 64.44.04 0. €944-4459 40500 18.57 - 364.69 -

UNION DUES -OPOA ........... 77.00 - 154.00-

UNION - POLICE

WIDOWS /ORPHANS ............5.00- 10.00-

PARKING

SURCHARGE-OPOA ............3.00- 6.00-

714315 NET.......... 40.00 725.28 5367.89

ANNUAL HOURS

WORKED ACCUM 281.50 BALANCE

COMPENSATORY DAY OO BALANCE

COMPENSATORY TIME 59.50 BALANCE

FISCAL YEAR

HOURS ACCUMULATOR 1354.50 BALANCE

LIFE-TO-DATE

HOURS ACCUMULATOR 1383.50 BALANCE

POLICE VACATION 130.00 BALANCE

90a

APPENDIX P

PETITIONER KENNY D. HASSEY’S

RETROACTIVE PAYROLL CHECK FROM THE

CITY OF OAKLAND

TEXT OF PAYROLL STUB FOR CHECK IN THE

AMOUNT OF $654.80:

HASSEY, KENNY D. LOC 10431

739199 PERIOD ENDING 7/10/98

SOCIAL SECURITY XXX-XX-XXXX

DESCRIPTION HOURS CURRENT YTD AMT

RTR

RETROACTIVE

NO RETIREMENT 1012.17 1012.17

RTR

RETROACTIVE

SBJ TO RETIRE 2.25 2.25

GROSS......0.0s0000. 1014.42 9799.28

ALTERATIVE

FEDERAL TAX % 284.04 - 732.85 -

FICA /MEDICARE /

W/H DEDUCTION 14.71- 142.09 -

6% STATE

WITHHOLDING 60.87 - 157.05 -

739199 NET....... 654.80 7023.38

9la

DESCRIPTION HOURS RATE CURRENT YTD

AMT

ANNUAL HOURS

WORKED ACCUM 281.50 BALANCE

COMPENSATORY

DAY 00 BALANCE

COMPENSATORY

TIME 00 BALANCE

FISCAL YEAR

HOURS

ACCUMULATOR 1354.50 BALANCE

LIFE-TO-DATE

HOURS

ACCUMULATOR 1383.50 BALANCE

POLICE VACATION 00 BALANCE

VACATION

92a

APPENDIX Q

TITLE 29, SECTION 531(d)

OF THE UNITED STATES

CODE OF FEDERAL REGULATIONS

Title 29, Section 531(d) of the United States

Code of Fede-al Regulations which states in pertinent

part:

(1) The cost of furnishing “‘facilities" found by the

Administrator to be primarily for the benefit or

convenience of the employer will not be

recognized as reasonable and may not therefore

be included in computing wages.

(2) The following is a list of facilities found by the

Administrator to be primarily for the benefit of

convenience of the employer. The list is intended

to be illustrative rather than exclusive: (i) Tools

of the trade and other materials and services

incidental to carrying on the employer's

business; (11) the cost of any construction by and

for the employer; (111) the cost of uniforms and of

their laundering, where the nature of the

business requires the employee to wear a

uniform.

93a

APPENDIX R

TITLE 29, SECTION 531.32

OF THE UNITED STATES

CODE OF FEDERAL REGULATIONS

Title 29, Section 531.32 of the United States

Code of Federal Regulations which provides in

pertinent part:

(a)

“Other facilities," as used in this section, must

be something like board or lodging. The

following items have been deemed to be within

the meaning of the term: Meals furnished at

company restaurants or cafeterias or by

hospitals, hotels, or restaurants to their

employees; meals, dormitory rooms, and tuition

furnished by a college to its student employees;

housing furnished for dwelling purposes; general

merchandise furnished at company stores and

commissaries (including artic'es of food,

clothing, and household effects); fue! (including

coal, kerosene, firewood, and lumber slabs),

electricity, water, and gas fur nished for the

noncommercial personal use of the employee;

transportation furnished employees between

their homes and work where the travel time

does not constitute hours worked compensable

under the Act and the transportation is not an

incident of and necessary to the employment.

94a

It should also be noted that under Sec.

531.3(d)(1), the cost of furnishing ~‘facilities"

which are primarily for the benefit or

convenience of the employer will not be

recognized as reasonable and may not therefore

be included in computing wages. Items in

addition to those set forth in Sec. 531.3 which

have been held to be primarily for the benefit or

convenience of the employer and arc not

therefore to be considered facilities" within the

meaning of section 3(m) include: Safety caps,

explosives, and miners' lamps (in the mining

industry); electric power (used for commercial

production in the interest of the employer);

company police and guard protection; taxes and

insurance on the employer's buildings which are

not used for lodgings furnished to the employee;

““dues" to chambers of commerce and other

organizations used, for example, to repay

subsidies given to the employer to locate his

factory in a= particular community;

transportation charges where’ such

transportation is an incident of and necessary to

the employment (as in the case of maintenance-

of-way employees of a railroad); charges for

rental of uniforms where the nature of the

business requires the employee to wear a

uniform; medical services and hospitalization

which the employer is bound to furnish under

workmen's compensation acts, or similar

Federal, State, or local law. On the other hand,

meals are always regarded as primarily for the

benefit and convenience of the employee.

95a

APPENDIX S

TITLE 29, SECTION 531.35

OF THE UNITED STATES

CODE OF FEDERAL REGULATIONS

Title 29, Section 531.35 of the United States

Code of Federal Regulations which states:

Whether in cash or in facilities, "wages"

cannot be considered to have been paid by

the employer and received by the

employee unless they are paid finally and

unconditionally or "free and clear." The

wage requirements of the Act will not be

met where the employee "kicks-back"

directly or indirectly to the employer or to

another person for the employer's benefit

the whole or part of the wage delivered to

the employee. This is true whether the

"kick-back” is made in cash or in other

than cash. For example, if it is a

requirement of the employer that the

employee must provide tools of the trade

which will be used in or are specifically

required for the performance of the

employer's particular work, there would

be a violation of the Act in any workweek

when the cost of such tools purchased by

the employee cuts into the minimum or

overtime wages required to be paid him

under the Act. See also in this connection,

§§ 531.32(c).

96a

APPENDIX T

TITLE 29, SECTION 778.104

OF THE UNITED STATES

CODE OF FEDERAL REGULATIONS

Title 29, Section 778.104 of the United States

Code of Federal Regulations which states:

The Act takes a single workweek as its

standard and does not permit averaging

of hours over 2 or more weeks. Thus, if an

employee works 30 hours one week and

50 hours the next, he must receive

overtime compensation for the overtime

hours worked beyond the applicable

maximum in the second week, even

though the average number of hours

worked beyond the applicable maximum

is the 2 weeks is 40. This is true

regardless of whether the employee works

ona standard or swing-shift schedule and

regardless of whether he is paid on a

daily, weekly, biweekly, monthly or other

basis.