Who is an “Employee” Under California’s Anti-Discrimination Law? « Law Offices of Timothy Bowles | Top Employment Law Firm in Los Angeles

Who is an “Employee” Under California’s Anti-Discrimination Law?

Some Volunteers May be Covered

The California Court of Appeal has decided that the state’s workplace anti-discrimination law did not protect a former Los Angeles Police Department volunteer police reserve officer.  Estrada v. City of Los Angeles, published July 24, 2013.  However, the result would likely be the opposite for a private business in similar circumstances.

Mr. Estrada, although termed under city rules a “volunteer” for his work with LAPD and although he specifically served without compensation, asserted that he should be considered an “employee” under the California Fair Employment and Housing Act (FEHA) since the City of Los Angeles paid to cover him for workers’ compensation insurance.  Mr. Estrada alleged the City of Los Angeles discriminated against him in violation of FEHA due to his physical disability.

If a California business has five or more employees, FEHA protects against any such worker’s termination due to race, national origin, gender, religion, physical or mental disability or any other classification protected from discrimination by that law.

The FEHA statute specifies that “employees” are entitled to such protections but does not actually define what that word means.  Mr. Estrada, although termed under city rules a “volunteer” for his work with LAPD, asserted that he should be considered a FEHA “employee” since the City of Los Angeles paid to cover him for workers’ compensation insurance.

Mr. Estrada had a seemingly strong legal position from prior published California appeals court decisions.  Those cases observed that where an employer chooses to cover a volunteer under workers’ compensation, FEHA protections should extend to that person as well.

However, the court concluded that the City of Los Angeles had a countervailing special right, granted by the California Constitution, to regulate and control its internal affairs, including its role as an employer.  The city’s rules designated persons appointed to the police reserve as “volunteer workers only and … not deemed … employees of the City …” except for workers’ compensation benefits.  The court concluded it could not interfere with the city’s power to define “employee” and “volunteer” in any manner it chose.

Thus, Mr. Estrada only lost his case due to special constitutional rights of “charter cities,” including Los Angeles, as governmental bodies.  On the other hand, the decision indicates that a private business with five or more persons on payroll and which chooses to cover its “volunteers” for workers compensation will also be obligated to comply with FEHA for those persons as well.

This Estrada decision is also a reminder to private businesses to ensure they are only classifying those individuals as volunteers who are truly providing some service or assistance without contemplation or receipt of remuneration.  A court or agency may well conclude that a person labeled “volunteer” is actually an employee if he/she is actually obtaining or expecting to obtain material benefits from the work. The Estrada Court observed: “Even substantial indirect compensation can satisfy the threshold requirement of remuneration for purposes of employee status under [the anti-discrimination law]. If not direct salary, substantial benefits which are not merely incidental to the activity performed, such as health insurance, vacation or sick pay, are indicia of employment status.” (Emphasis in original.)

For more perspective and help on the distinction between employees and volunteers or on FEHA’s application to California employers, please contact our firm’s attorneys Tim Bowles or Cindy Bamforth.

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