After the pandemic began in March 2020, the Board of Trustees of the California State University (CSU) mandated remote instruction. Patrick Krug, a biology professor at CSU Los Angeles, followed CSU’s direction to teach remotely. Since he was denied access to his workplace office to retrieve his CSU-provided computer and printer, he absorbed the cost of replacing these items himself. But CSU denied his request for reimbursement.
California Labor Code section 2802 obligates an employer to “indemnify [an] employee for all necessary expenditures…incurred… in direct consequence of the discharge of his or her duties.”
Krug filed a class action complaint against CSU to seek section 2802 reimbursements for home-office expenses for himself and other CSU employees. Krug alleged that he incurred necessary business expenses for electricity, postage, internet service charges, use of personal phones for work related purposes, computers, and office supplies and furniture. CSU claimed that Labor Code section 2802 did not apply because the law infringed on its sovereign powers.
The Superior Court sustained CSU’s demurrer without leave to amend, reasoning that as a governmental agency, CSU was exempt from Labor Code section 2802 because that section did not expressly apply to public employers. Krug appealed.
The California Court of Appeal affirmed, holding that Labor Code section 2802 did not obligate CSU to reimburse employees for work-related expenses. The Court of Appeal found nothing in the law or its legislative history that indicates that section 2802 applies to public employers. The court also noted that applying Labor Code section 2802 to CSU would infringe on its sovereign powers under the Education Code to set its own equipment reimbursement policies.
The California Supreme Court granted review and remanded the case for reconsideration in light of its 2024 decision in Stone v. Alameda Health System. The Stone decision generally holds that public entities are not subject to Labor Code provisions unless the provision expressly applies to public entities.
The Court of Appeal concluded that the Legislature intended to exclude government employers from the terms of section 2802, based on its legislative history and a later amendment. Also, the court found that no prior case had applied the section 2802 reimbursement obligations to a public employer. Thus, the Court concluded that Labor Code section 2802 does not obligate public employers like CSU to reimburse employees for work-related expenses.
Patrick Krug v. Board of Trustees of the California State University, 2025 Cal.App. LEXIS 209 (April 1, 2025).