18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 257 application of the “ABC” test set forth in Dynamex Operations West, Inc. v. Superior Court 4 Cal. 5th 903 (2018). Defendant argued that Plaintiff’s employment status as employee or independent contractor was governed by S. G. Borello & Sons, Inc. v. Dept. of Industrial Relations 48 Cal. 3d 341 (1989). First, the Court concluded that based on the plain language of the statute, Defendant was a “data aggregator” when it conducted jury research focus groups, including the study in which Plaintiff participated. Id . at *32. The Court held that under both tests, the undisputed evidence established that Plaintiff was an independent contractor, not an employee. The Court ruled that there was no genuine dispute that any controls imposed on jury research study or its participants were social science research tools designed solely to ensure validity of research results. Id . at *34. The Court further explained that Plaintiff volunteered for the research study, and retained independent discretion and judgment with respect to her essential functions as mock juror at all times. The Court reasoned that Plaintiff’s function was to provide her own views and opinions about a personal injury lawsuit that was subject of the focus group. The Court concluded that Plaintiff’s arguments to support her position that she was an employee did not raise a genuine dispute of material fact. For these reasons, the Court granted Defendant’s motion for summary judgement. Haitayan, et al. v. 7-Eleven, Inc., 2021 U.S. Dist. LEXIS 170331 (C.D. Cal. Sept. 8, 2021). Plaintiffs, a group of current and former franchisees, brought a class action alleging that they were employees that Defendant had misclassified as independent contractors in violation of the California Labor Code. Defendant argued that Plaintiffs exercised “extensive control” over their stores and therefore were independent contractors. Id. at *31. The Court denied Plaintiffs’ motion and found for Defendant on all claims. Plaintiffs argued that Defendant’s control over uniform and appearance requirements as well as weekly visits by Defendant’s field consultants equated to the establishment of an employer/employee relationship through supervision. Plaintiffs also asserted that Defendant’s right to terminate a franchisee under its broad policy evidenced an employment relationship equivalent to at-will employment. The Court agreed with Defendant in concluding that Plaintiffs were independent contractors under the right to control test, which considered who had the right of control over the worker. The Court found that Plaintiffs’ control over their stores – including the ability to determine their own work hours; make major product, inventory, and pricing decisions; authority in staffing and scheduling for their employees; as well as the flexibility of Defendant’s uniform policy and lack of discipline for not abiding by it – demonstrated “meaningful discretion” on the part of Plaintiffs. Id . at *32. The Court noted that Defendant’s policy allowed termination “only for good cause and a material breach,” and that the field consultants’ visits were not consequential enough to establish a supervisory relationship as Plaintiffs were not required to follow their advice or even meet with them, which demonstrated an absence of control over Plaintiffs’ franchises by Defendants. Id. at 38-39. Further, the Court considered whether Plaintiff was engaged in a distinct business, and, finding that Plaintiffs met California’s definition of independent businessmen as franchisees, the Court held that this conclusively demonstrated their engagement in a distinct business. The Court also looked at whether a skill was required for a worker to perform his or her job in Plaintiffs’ position, and concluded that Plaintiffs possessed business skills that allowed them to run profitable operations, and that this weighed in favor for Defendant’s argument. The Court therefore determined that Plaintiffs were correctly classified as independent contractors. Henry, et al. v. Central Freight Lines, 2021 U.S. Dist. LEXIS 141132 (E.D. Cal. July 28, 2021). Plaintiff, a truck driver, filed a class action alleging that Defendant misclassified him and other truck drivers as independent contractor and thereby failed to pay overtime compensation and other benefits owed under the California Labor Code and California Wage Orders. The Court previously had granted in part and denied in part Defendant’s motion for summary judgment and denied Plaintiff’s cross-motion for summary judgment. Plaintiff requested reconsideration of the order on the basis that the Court should apply the ABC test, set forth in Dynamex Inc. v. Superior Court, 4 Cal.5th 903 (2018), to Plaintiff’s claims. The Court denied the motion. The Court previously had found that the ABC test only applied to Plaintiff’s claims alleging violations of wage orders. Plaintiff contended that pursuant to the decision in Gonzales v. San Gabriel Transit, Inc. , 40 Cal. App. 5th 1131 (2019), the ABC test should apply to all his claims. The Court noted that in Gonzalez , the California Court of Appeal found that the ABC test applied to Labor Code claims "which are either rooted in one or more wage orders, or predicated on conduct alleged to have violated a wage order." Id . at *6. The Court also agreed with Defendant that the California Courts of Appeal were split on the applicability of the ABC test beyond strict wage order claims. Id . at *6-7. As a result, the Court concluded that Plaintiff could not argue for reconsideration of the