When the COVID-19 pandemic struck, the Board of Trustees of the California State University (CSU) directed that instruction be provided remotely. To comply with this directive, Patrick Krug, a biology professor at California State University Los Angeles, incurred expenses for a computer and other equipment and necessities which CSU declined to reimburse.

Krug sued CSU on behalf of himself and similarly situated faculty, alleging Labor Code section 2802 obligated CSU to reimburse its employees for necessary work-related expenses. CSU demurred, arguing that as a department of the state it enjoyed broad exemption from Labor Code provisions that infringe on its sovereign powers. Krug appealed from a judgment of dismissal entered after the trial court sustained CSU’s demurrer without leave to amend.

In August 2023 the Court of Appeal affirmed the trial court in the Published case of Krug v. Board of Trustees of the Cal. State Univ – B320588 (August 2023).

The California Supreme Court granted review of Krug pending its decision in Stone v. Alameda Health System (2024) 16 Cal.5th 1040 (Stone), after which it remanded the matter back to the Court of Appeal for reconsideration in light of its holding in that case.

After reconsideration in light of Stone, the Court of Appeal again affirmed the trial judgment in the second published opinion of Krug v. Board of Trustees of the Cal. State Univ – B320588A (April 2025)

The Stone Court examined the language, structure, and history of the statutes and wage order at issue to determine whether the Legislature intended to impose their requirements on public employers. Using this framework, the Court addressed the text and history of relevant Labor Code and wage order provisions to concluded that the hospital was exempt from the employees’ claims.

On remand from the Supreme Court, the Court of Appeal on re-review of Krug followed Stone’s analytical framework to determine whether the Legislature intended to exclude public entity employers from the employment expense reimbursement obligations at issue here.

It then concluded that the statutory structure evinces positive indicia that the Legislature intended to exclude government employers from the terms of section 2802. The legislative history of section 2802 also supports the conclusion that the Legislature intended to exclude government employers from its terms. Later legislative history was also in accord when section 2802 was amended in 2000 by Senate Bill No. 1305 (SB 1305).

However no case has applied the reimbursement obligations set forth in section 2802 to a public employer.

“In sum, although the language of section 2802 is silent on whether “employer” denotes both public and private entities, the statutory structure and legislative history provide positive indicia of legislative intent to exclude public employers from the provision’s reimbursement obligations.” … “Therefore, we conclude section 2802 does not obligate CSU to reimburse employees for work-related expenses, without the need to resort to interpretive maxims.”