Worker sues employer based on contractual breach, unjust enrichment, trade secret misappropriation
A California court recently ruled in favor of the California Department of Human Resources (CalHR), the agency responsible for the human resource management of state employees, including issues regarding salaries, benefits, job classifications, training, and recruitment.
The case arose from the State’s Employee Suggestion Program, which gave cash awards to state employees who could make suggestions saving state funds. Such an employee would get 20 percent of the cost savings, limited to a maximum of $50,000 per suggestion.
Read more: California Workers’ Comp Board sides with state employee
The plaintiff in this case was an employee of the California Department of Transportation. Through the program, he made three cost-saving suggestions that saved California millions of dollars. The state initially recommended a $50,000 award per suggestion. It later denied the awards after a reevaluation.
The employee raised the matter to the State Merit Award Board, which upheld the denial of the awards. He then filed a government claim, but the state did not address his claim.
Thus, the employee brought a complaint against his employer and the State Merit Award Board. He alleged contractual breach, unjust enrichment, and misappropriation of trade secrets.
CalHR, acting on the award board’s behalf, filed a demurrer. It argued that section 19815.8(a) of California’s Government Code time-barred the employee’s complaint. That provision required a plaintiff to commence a lawsuit based on any law administered by CalHR within a year after the claim arose.
The employee disagreed. He asserted that section 945.6, which was part of California’s Government Claims Act, required him to file a suit against a public entity in California within two years after the claim arose.
The trial court sided with CalHR and dismissed the complaint against the award board. The employee appealed. The trial court applied the wrong limitations period, the employee argued. If the trial court applied the correct period, his complaint would not be barred, the employee added.
Employee’s suit is too late
In the case of Shah v. Department of Human Resources et al., the California Court of Appeal for the Third District affirmed the decision. The trial court correctly found that the one-year period in section 19815.8 time-barred the employee’s complaint, the appellate court said.
First, the appellate court ruled that it would prioritize a specific limitations period over a more general period. Therefore, the appellate court chose to prioritize section 19815.8 because it applied to a specific and smaller subset of government claims, namely claims relating to laws administered by CalHR.
On the other hand, section 945.6 was more general, the appellate court said. This provision was part of the Government Claims Act, which generally required the presentation of a claim against a public entity before the filing of a lawsuit. This law broadly applied to most claims against public entities in California.
Lastly, the appellate court noted that it would generally prioritize a shorter limitations period over a longer one. Thus, the appellate court chose to prioritize section 19815.8, which had a one-year period, over section 945.6, which had a two-year period.
