October 2019 employment law decisions
Temporary employee can hold the contracting company liable.
October 17, 2019, Fourth District Court of Appeal, Elvia Jimenez v. U.S. Continental Marketing, Inc.: Ms. Jimenez brought claims under the Fair Employment and Housing Act (FEHA) against her contracting employer (U.S. Continental Marketing), a company that negotiated with her direct employer, a temporary-staffing agency (Ameritemps). At trial, the jury decided that U.S. Continental Marketing was not Ms. Jimenez’s employer. The Fourth District reversed the jury verdict. Under the FEHA, whether a company is an employer is determined by the totality of the circumstances, including the extent of direction and control possessed and/or exercised by the company over the employee. Undisputed evidence showed that U.S. Continental Marketing exercised considerable direction and control over Ms. Jimenez’s terms, conditions, and privileges of employment and terminated her employment with them.
Remedy for meal and rest break violations is determined by the hourly wage only.
October 9, 2019, Second District Court of Appeal, Jessica Ferra v. Loews Hollwood Hotel, LLC: In this class action for denial of meal and rest breaks, the employees contended that their “premium wage” remedy of one hour of pay for each missed break should be calculated based on their regular rate of pay including nondiscretionary bonus. The Second District disagreed, concluding that the premium wage is determined by the regular rate of compensation, which is the base hourly wage only.
New independent contractor test applies to California Labor Code claims based on wage order violations.
October 8, 2019, Second District Court of Appeal, Francisco Gonzales v. San Gabriel Transit, Inc.: This class action asserted that San Gabriel Transit misclassified drivers as independent contractors, and as a result violated various California wage and hour laws. While this case was pending, the California Supreme Court made its decision (Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903) establishing the “ABC test” for independent contractors for purposes of claims based on California’s wage orders. The court of appeal concluded that the “ABC test” applies retroactively to pending cases; applies to California Labor Code claims that seek to enforce the protections afforded by wage orders; and claims alleging misclassification not directly premised on wage order protections are subject to the “Borello test” (S.G. Borello and Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341).
Gas station employees cannot pursue claims against Shell Oil.
October 8, 2019, First District Court of Appeal, Billy Henderson v. Equilon Enterprises, LLC: Mr. Henderson filed claims for failure to pay overtime and failure to pay for missed break periods against Equilon Enterprises doing business as Shell Oil Products US. The court of appeal agreed with the trial court that Shell was not a joint employer under the “control,” “suffer or permit,” or “engage” tests. The gas station where Mr. Henderson worked and that had a franchise agreement with Shell unilaterally set Mr. Henderson’s wages and was responsibile for payroll and compliance with labor laws. The station’s agreement with Shell provided that the station had the exclusive right to hire and fire and maintain control over its employees’ daily work activities. Finally, Shell never exercised an option to remove an employee from the station.
McDonald’s employees cannot pursue claims against McDonald’s Corporation.
October 1, 2019, Ninth Circuit Court of Appeals, Guadalupe Salazar v. McDonald’s Corp.: Ms. Salazar and other employees brought a class action for denial of overtime premiums, meal and rest breaks, and other benefits, alleging that McDonald’s was their joint employer with the company who contracted with McDonald’s as a franchise. The Ninth Circuit agreed with the trial court that McDonald’s was not a joint employer under the “control,” “suffer or permit,” or “engage” tests. McDonald’s did not have control over the employees’ wages, hours, or working conditions; rather it only controlled its franchisees with respect to quality control. McDonald’s did not suffer or permit the employees to work because McDonald’s did not have the power to hire and fire the employees. Finally, McDonald’s did not engage the employees to work (California common law) because McDonald’s did not have the right to control the manner and means of work performed at its franchises.
Verdict in favor of employee with retaliation claims is reversed.
October 1, 2019, Second District Court of Appeal, Patrick Nejadian v. County of Los Angeles: A jury found that Los Angeles retaliated against Mr. Nejadian for resisting unlawful orders (Labor Code section 1102.5) and reporting conduct that he reasonably believed constituted unlawful discrimination or harassment in the workplace (Government Code section 12940). On appeal, Los Angeles argued that there was insufficient evidence for these findings. The court of appeal agreed. For the unlawful orders claim, the trial court failed to determine whether the orders resisted by Mr. Nejadian would result in a violation of a statute, rule, or regulation. Furthermore, Mr. Nejadian failed to present sufficient evidence to establish that any acts he was asked to perform would result in a violation of a statute, rule, or regulation. As for the other claim, the court gave a jury instruction that allowed the jury to find in Mr. Nejadian even if he did not report any discrimination or retaliation (refusal to participate in activities that would violate statutes, rules, or regulations). Moreover, Mr. Nejadian failed to present evidence from which a reasonable jury could conclude that Los Angeles was motivated by any reporting of discrimination when it took adverse employment actions against him.