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Kelly Gola and members of the class she represents were adjunct faculty – part-time university professors engaged to teach on a semester-by-semester basis – at the University of San Francisco.

Adjunct faculty at the University, of whom there are more than 600, are represented by a labor organization: the USF Part Time Faculty Association which had a Collective Bargaining Agreement (CBA) with the employer.

The University’s practice with respect to adjunct faculty was to hire them to teach individual classes on a semester-by-semester basis. For each semester, the University would issue appointment letters offering employment to prospective adjunct professors during a specified assignment period that ran from the first day of that semester’s classes to the end of the semester.

Gola filed a lawsuit against the University. Among other theories of recovery, as a first cause of action, the operative complaint alleged a claim for unpaid wages on behalf of Gola and a class of similarly situated adjuncts. According to this claim, the assignment letters set out the terms of an employment contract only for the period specified in the letters, i.e., the teaching semester, and set a salary for that period only.

Yet adjunct faculty were required to work outside that period to prepare syllabi and course materials before classes started, and to grade exams and submit final grades after classes ended, and they were not paid for their time outside the assignment period.

As a second cause of action, the operative complaint alleged that the University failed to issue wage statements in compliance with Labor Code section 226(a) because adjuncts’ wage statements did not include the total hours worked during the pay period and the effective hourly rate.

Finally, Gola asserted a derivative claim under the Private Attorneys General Act (PAGA) (§ 2698 et seq.) seeking civil penalties for the Labor Code violations asserted in counts one through three.

As an affirmative defense, the University asserted that Gola’s claims were preempted by The federal Labor Management Relations Act (LMRA) (29 U.S.C. § 141 et seq.). which preempts all state-law claims that require interpretation of a CBA.

This affirmative defense was bifurcated and tried to the court. Following the bench trial, the trial court issued a statement of decision holding that Gola’s first and third causes of action were indeed preempted because these claims could not be resolved without interpreting the CBA.

With respect to Gola’s second cause of action, the wage statement claim, the trial court determined this claim was not preempted by federal law. The wage statement claim proceeded to a bench trial on the merits. The trial court found that the wage statements the University issued to adjunct faculty did not include the “total hours worked by the employee” or the employee’s effective hourly rate. The trial court calculated statutory damages of $1,621,600 and PAGA penalties of $545,235. The trial court later issued an order awarding Gola $1,307,225.95 in attorneys’ fees and $21,510.23 in costs.

The University timely appealed the judgment, and Gola cross-appealed. The Court of Appeal affirmed the judgment in the published case of Gola v University of San Francisco – SF-A161477 (April 2023).

After the trial court issued its statements of decision and judgment, however, the Legislature enacted Labor Code section 515.7, which provides that faculty at nonprofit higher education institutions “shall be exempt” from the provisions of Labor Code section 226, subdivision (a)(2) and (9), provided they are employed in a professional capacity as defined in the statute, and provided they are paid a salary that meets at least one of three tests for minimum compensation (salary tests).

Among the various issues raised on appeal, the University contends that newly enacted Labor Code section 515.7 should be applied retroactively to this case. If it is so applied, the University contends, Gola’s section 226 claims must fail because Gola and the subclass will be classified as exempt for the relevant period.

The Court of Appeal noted that Labor Code Section 515.7 is plainly intended to create a pathway to accord adjunct faculty exempt professional status and relieve nonprofit universities of hour and pay reporting requirements for adjuncts, provided adjuncts’ pay meets one of the three salary tests. But the statute does not directly speak to whether it reaches back to hour and pay reporting obligations incurred before September 9, 2020 when it was adopted as an urgency measure, and thus taking effect that day.

The Court concluded “This silence in itself strongly indicates prospective application. Moreover, we find in the text of the statute itself an additional indication of prospective application…”