California appeals court upholds judgment in favor of children's hospital in wage dispute

By David Hutton | Dec 20, 2017

SAN DIEGO (Legal Newsline) – A California court of appeals has upheld a lower court’s ruling in a wage case against Rady Children’s Hospital in San Diego, affirming the order for summary judgment.

The Dec. 6 opinion by the Court of Appeal, 4th Appellate District Division 1 was written by Justice William Dato, with justices Judith Haller and Terry B. O’Rourke concurring.

In its opinion, the justices concurred that Skillin's claims were preempted under subdivision (a) of section 514 and plainly preempted under subdivision (e) of that same section.

According to the opinion, David Skillin had filed a lawsuit against his former employer Rady Children's Hospital of San Diego over alleged violations of the California Labor Code.

Skillin, who worked at the hospital from 1997 through December 2014, alleged that Rady made unauthorized payroll deductions from his wages, which resulted in more money being contributed to his retirement plan than he desired, the opinion states.

Skillin also alleged that Rady failed to show the amounts deducted for retirement upon written request from employees.

Prior to 2010, Skillin had a fixed amount of $700 deducted from each pay for his retirement plan. In 2010, Rady informed Skillin it would be deducting 18 percent from his wages per pay period.

However, Skillin asked if he could continue with the fixed-dollar deduction. The opinions he was sent a response from human resources that stated his contribution level should have been set at 11 percent and asked if he would like the amount set at that level instead from his next paycheck.

There was no indication that Skillin ever responded to that request.

The opinion states Rady deducted $1,351.21 from his wages, totaling 18 percent of his earnings beginning in February 2014. Rady continued to deduct 18 percent of his wages from subsequent paychecks, consistently exceeding the $700 amount that Skillin initially requested.

In a lawsuit filed in March 2014, Skillin claimed Rady violated sections 221 to 224 of the California Labor Code when it made deductions from his wages without written authorization.

Skillin also alleged Rady didn’t itemize the portion of wage deductions that were made with his written authorization.

The Superior Court of San Diego County granted summary judgment in Rady's favor, concluding Skillin's claims were preempted by the Employee Retirement Income Security Act of 1974 (ERISA).

“The trial court deemed Skillin's second cause of action ‘wholly derivative’ and preempted in the same manner as his first,” Dato wrote. “That is correct.”

Dato also noted that Skillin's theory is that “although Rady's wage statements accurately listed the total amounts deducted, Rady failed to delineate the portion of the deduction that was based on his written authorization, that is, none.”

The opinion affirmed the superior court’s judgment and entitled Rady to its costs on appeal.

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