©2024 Seyfarth Shaw LLP www.seyfarth.com 2024 Cal-Peculiarities | 257 break policies. The gas station owner could ask the operating company to “remove” an employee from a station “for good cause shown,” but the operating company had sole authority to discharge employees.490 It was immaterial that the gas station owner provided operation manuals and conducted station inspections that were given to the operator. The Court of Appeal concluded that (1) the operating company had sole control over the plaintiff’s wages and hours, (2) the gas station owner had no right to fire him and no role in either allowing him to work or preventing him from working, and (3) the gas station owner lacked the right to control the manner and means by which the plaintiff did his work.491 ABC test not extended to joint employer issue. The Supreme Court, in the context of whether a worker hired by a company is its employee or independent contractor, has adopted an “ABC test” that heavily tilts toward employee status. (See § 19.6.) Both the Court of Appeal and the Ninth Circuit have rejected plaintiffs’ efforts to apply the ABC test to issues of joint employment. In 2019 the Court of Appeal stated: “the ABC test in Dynamex does not fit analytically with and was not intended to apply to claims of joint employer liability.”492 Similarly, the Ninth Circuit stated that Dynamex “has no bearing here, because no party argues that Plaintiffs are independent contractors.”493 Thus, while a defendant must satisfy the ABC test to defend its classification of a worker as an independent contractor, it need not satisfy the ABC test in resisting a claim that it is a joint employer. The California Supreme Court thus far has declined to address this issue. In Vasquez v. Jan-Pro Franchising International, the high court rebuffed the plaintiff’s effort to expand the review of whether the Dynamex ruling is retroactive to the further question of whether Dynamex’s ABC test governs issues of joint employment.494 “Client employers.” The Legislature has created special liability for “client employers.” A client employer is an entity that obtains workers from a labor contractor to work within the entity’s usual course of business—for example, payroll, temporary staffing, and employee leasing agencies. Client employers share with their labor contractors “all civil legal responsibility and civil liability for all [nonexempt] workers supplied by that labor contractor,” in connection with the payment of wages and the securing of workers’ compensation coverage.495 Thus, if a client employer’s labor contractor fails to pay all wages or fails to procure sufficient workers’ compensation coverage for the contractor’s own nonexempt employees, the client employer can also be liable for these failures. The statute defines “wages” expansively, by reference to Labor Code section 200, to include incentive compensation, bonuses, and vacation pay.496 Client employers also have non-delegable responsibilities for worksite occupational health and safety. Of course, client employers can seek contractual indemnity against labor contractors that create liability for the client employer. Payroll companies. The Court of Appeal stemmed the tide toward expanding notions of joint employment in Goonewardene v. ADP, LLC, where a plaintiff suing for unpaid wages, wrongful termination, and inadequate wage statements sued her employer’s payroll company on a theory that the payroll company was her joint employer.497 The Court of Appeal, citing prior authority,498 rejected the plaintiff’s contention that the payroll company was her joint employer, because the payroll company did not control her wages or her working conditions.499 The Supreme Court took review of the decision but not on the issue of joint employment. The Supreme Court instead granted review of the Court of Appeal’s decision to let the lawsuit proceed against the payroll company on various theories of liability (contract, negligent representation, and professional negligence), and in a 2019 decision determined that none of these theories was viable.500 (See § 16.3.7). The Court of Appeal addressed a production company’s joint employer status in a 2020 case, reversing a summary judgment in favor of a firm that agreed to stand in the place of a television production company
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