• Dean Royer

September and October 2018 employment law decisions

An individual is not an independent contractor unless the employer shows that he was engaged in an independent business.

October 22, 2018, Fourth District Court of Appeal, Jesus Garcia v. Border Transportation Group, LLC: Mr. Garcia filed a lawsuit against his employer, for whom he worked as a taxi driver, and its owner and another employee. Some of his claims were based on Industrial Welfare Commission wage orders (unpaid wages, failure to pay minimum wage, failure to provide meal and rest breaks, and failure to furnish accurate pay statements) and others were not. The trial court dismissed the case (summary judgment) after deciding that Mr. Garcia was an independent contractor, not an employee. On appeal, the Fourth District applied the recent California Supreme Court decision (Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903) to review the dismissal of the claims based on the wage orders. The employer had to demonstrate that Mr. Garcia was customarily engaged in an independently established trade, occupation, or business apart from his work for Border Transportation Group. In other words, that Mr. Garcia independently made the decision to go into business for himself. In addition, the employer could not satisfy this showing with evidence that Mr. Garcia could have engaged in an independent business; rather, that Mr. Garcia was engaged in an independent business. Because Border Transportation Group did not present any evidence that Mr. Garcia in fact provided services for other entities independently of his relationship with them, the Fourth District reversed the dismissal as to the claims based on wage orders. As for the other claims, the Dynamex decision did not apply and the appellate court affirmed the dismissal.

Individuals may be liable for civil penalties for causing violations of overtime or minimum wage laws.

September 28, 2018, Fourth District Court of Appeal, Marco Atempa v. Paolo Pedrazzani: The trial court issued civil penalties against Mr. Pedrazzani for causing violations of California’s overtime and minimum wage laws. On appeal, the issue was whether any individual other than the corporate employer can be liable for such civil penalties where there is no finding that corporate laws have been misused or abused for a wrongful or inequitable purpose (alter ego). The Fourth District reviewed the overtime and minimum wage laws, both of which authorize civil penalties against an employer or other person acting on behalf of the employer who violates or causes to be violated the laws. The appellate court rejected Mr. Pedrazzani’s contention that he cannot be liable for civil penalties because he was merely an individual officer of the corporate employer. The language of the laws are unambiguous that individual liability exists.

Employee can sue religious employer for breach of contract.

September 25, 2018, Third District Court of Appeal, Sarah Sumner v. Simpson University: Ms. Sumner was the dean of a theological seminary who had a written employment agreement. After Simpson University terminated her, she sued for breach of contract and other tort claims. The trial court dismissed the case (summary judgment) on grounds Ms. Sumner’s employment was within the ministerial exception. The United States Supreme Court had previously decided that this exception, which derives from the First Amendment right to free exercise of religion, bars a minister’s employment discrimination suit based the church’s decision to fire her (Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC (2012) 565 U.S. 171) but did not address whether it applies to a breach of contract or tort claim.  The California appellate court first determined that Simpson University is a religious organization. Next is found that Ms. Sumner was a “minister,” which includes nonordained employees with duties functionally equivalent to ministers. The Third District then turned to the question of whether the ministerial exception applies to a contract claim. It decided that it did not because in reviewing the claim the court would not be required to review Ms. Sumner’s religious qualification or performance as a religious leader. That is because the University’s stated reason for termination was insubordination, not religious reasons. Finally, the appellate court concluded that Ms. Sumner’s tort claims (defamation, invasion of privacy, intentional infliction of emotional distress) were barred by the ministerial exception because they were based on the University’s reasons for and process of terminating Ms. Sumner’s employment. Although the reasons were not strictly religious, the First Amendment protects the act of a decision rather than a motivation behind it.

Employee regarded as having a disability.

September 17, 2018, Ninth Circuit Court of Appeals, Herman Nunies v. HIE Holdings, Inc.: Mr. Nunies’s request for a transfer to a part-time, less-physical warehouse job was all set to go through until he told his employer about the reason for his request—a shoulder injury. After HIE terminated him, Mr. Nunies sued under the Americans for Disabilities Act claiming the termination was because of the shoulder injury. The trial court dismissed the case (summary judgment). On appeal, the Ninth Circuit considered whether the trial court properly interpreted the expanded definition of being disabled, which includes being regarded as having a physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity. The appellate court determined that the trial court improperly relied on pre-expansion decisions that required a showing that the employer subjectively believed that the employee was substantially limited in a major life activity.

#Independentcontractors #Disability #Ministerialexception #PAGA #Misclassification #Overtime #Minimumwage

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