Monday, February 22, 2010

California Supreme Court Limits Reach of Labor Code Section 233 in McCarther v. Pacific Telesis Group

On February 18, 2010, the California Supreme Court concluded in McCarther v. Pacific Telesis Group, __ Cal. 4th __ (2010), that Labor Code section 233 does not apply to paid sick leave policies that provide for an uncapped number of compensated days off.

Section 233 provides, in relevant part, that an employee may use up to ½ of the employee’s accrued compensated sick leave to care for a family member:
Any employer who provides sick leave for employees shall permit an employee to use in any calendar year the employee's accrued and available sick leave entitlement, in an amount not less than the sick leave that would be accrued during six months at the employee's then current rate of entitlement, to attend to an illness of a child, parent, spouse, or domestic partner of the employee.
See Cal. Lab. Code § 233.

As reasoned by the Court, permitting Section 233 to be applied in instances where an employer utilizes a policy affording an unlimited number of compensated sick-days would lead to absurd results, especially where the employer seeks to regulate uncapped sick leave by way of an attendance policy (as this would be prohibited in the family leave context by Section 234):
Our conclusion that the Legislature did not intend section 233 to apply to a sickness absence policy like defendants’ is supported by the Legislature’s addition to the Labor Code of section 234, which prohibits employers from using an absence control policy to “count[] sick leave taken pursuant to Section 233 as an absence that may lead to or result in discipline, discharge, demotion, or suspension … .” As noted above, the only limitation on the amount of compensated time off an ill employee may claim under defendants’ sickness absence policy is defendants’ attendance management policy, which provides a schedule of progressive discipline if an employee is absent eight days or more in a year. Without this limitation, an ill employee could claim an unlimited number of compensated sick days, provided the employee returned to work for at least part of a day every week.
If section 233 required defendants to permit an employee to use a portion of this compensated time for kin care, section 234, by its terms, would prohibit defendants from using its attendance management policy to limit the amount of kin care that an employee could claim. Thus, rather than being entitled to use for kin care half of the amount of compensated time the employee could use as sick time, sections 233 and 234 together would permit an employee to claim as kin care far more compensated time off than the employee would be entitled to claim if personally ill. Such a result would be contrary to the plain intent of section 233, which requires only those employers who provide sick leave in accrued increments to permit employees to use half of that annually accrued amount for kin care.
See Slip Opinion, at 9-10.

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