Hoover v. American Income Life Insurance

206 Cal. App. 4th 1193, 142 Cal. Rptr. 3d 312, 2012 WL 2126892, 2012 Cal. App. LEXIS 687
CourtCalifornia Court of Appeal
DecidedMay 16, 2012
DocketNo. E052864
StatusPublished
Cited by103 cases

This text of 206 Cal. App. 4th 1193 (Hoover v. American Income Life Insurance) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hoover v. American Income Life Insurance, 206 Cal. App. 4th 1193, 142 Cal. Rptr. 3d 312, 2012 WL 2126892, 2012 Cal. App. LEXIS 687 (Cal. Ct. App. 2012).

Opinion

Opinion

CODRINGTON, J.

I

INTRODUCTION

Martha Hoover, plaintiff and respondent, worked as a sales agent for about four months for American Income Life Insurance Company (AIL), defendant and appellant. ALL appeals from an order denying its petition to compel arbitration of Hoover’s civil action based on various Labor Code statutes. (Code Civ. Proc., § 1294, subd. (a).)

The underlying issue, which we do not resolve in this appeal, concerns whether Hoover was an employee of AIL or an independent contractor. She claims she was an employee, entitled to receive minimum wage, as well as reimbursement for work-related expenses and prompt payment of earned wages due upon termination. (Lab. Code, §§ 203, 1194, 2802.)1 Hoover further contends her statutory labor claims are not subject to arbitration.

[1198]*1198In opposition, AIL counters that Hoover was an independent contractor who was not entitled as an employee to receive minimum wage, reimbursement, or earned wages. Nevertheless, AIL contends Hoover’s statutory labor claims are subject to arbitration as provided in the agent contract, as incorporated by the collective bargaining agreement (CBA).

We disagree with AIL. If Hoover was an employee with viable statutory labor claims, her claims are not subject to arbitration. If Hoover was an independent contractor she cannot assert statutory labor claims as an employee and therefore the question of arbitration seems irrelevant. In either instance, the trial court correctly denied AIL’s petition to compel arbitration. Additionally, AIL’s 15-month delay in petitioning for arbitration constituted a waiver of the right to compel arbitration.2

II

FACTUAL AND PROCEDURAL BACKGROUND

There is little dispute between the parties about the objective facts. Instead, both parties attempt to characterize the facts in a way most favorable to their positions. We attempt to offer a more neutral summary of the record on appeal.

A. Preliminary Facts

AIL is a Texas-based company that sells life insurance policies in California. Hoover worked for AIL from March 2008 to June 2008. Hoover terminated her relationship with AIL voluntarily.

Hoover’s relationship with AIL was partly governed by the CBA between AIL, the Office and Professional Employees International Union, Local 277 (OPEIU Local 277), and the state general agents, like Hoover. The CBA contains the following disclaimer; “Nothing contained herein shall be construed to create the relationship of employer and employee . . . . [f] The agent . . . shall be acting on the agent’s . . . own behalf and not an [1199]*1199employee .... The agent. . . shall refrain from holding themselves out as an employee.” The CBA includes a section on grievance procedures, including discovery proceedings. Article 18 provides for agent compensation: “Compensation of agents shall be in conformity with contract. Agents shall have a written agreement. The agreement shall become part of this Agreement. . . .”

Hoover executed an agent contract which is incorporated into the CBA. The agent contract includes language indicating that the agent is an independent contractor, not an employee of the company: the agent shall be responsible for all expenses and furnish her own means of transportation, office, or place of employment; the agent has no fixed hours and is free to choose the time and manner in which services are performed; the agent is paid solely by commissions “in full satisfaction of all claims upon the Company [on] account of service or expenses under this contract.”

The agent contract also contains an arbitration clause, requiring the parties to arbitrate disputes arising out of or relating to the agent contract if they are unable to resolve their disputes through informal negotiations or the grievance process outlined in the CBA: “In the event of any dispute or disagreement arising out of or relating to this contract, the parties shall use their best efforts to settle such disputes. To this effect, they shall negotiate with each other in good faith to reach a just solution. If the parties do not reach a just solution by negotiations as described above, the Agent agrees to utilize the grievance process as outlined in the OPEIU Local 277 agreement. If the dispute is not settled through the grievance process, then upon written notice by either party to the other, all disputes, claims, questions, and controversies of any kind or nature arising out of or relating to this contract shall be submitted to binding arbitration pursuant to the provisions of the collective agreement with OPEIU. The findings of the arbitrator shall be final and binding on all parties and their beneficiaries, successors, assigns or anyone claiming an interest in the contract.”

B. The Class Action Litigation

In September 2009, plaintiff Hoover and coplaintiff Frances Williams filed a class action complaint against AIL, alleging that AIL had hired them to sell insurance as employees, not as independent contractors, and failed to reimburse them for business expenses and to pay minimum wage during training and earned wages due after termination. The complaint alleges four causes of action against ALL for alleged violations of statutory rights under the Labor Code and for alleged unfair business practices.

The first cause of action is for reimbursement of business expenses, such as auto mileage, under section 2802. The second cause of action is based on [1200]*1200sections 1194 and 1194.2 and on wage order No. 4-2001 from the Industrial Welfare Commission. Plaintiffs allege they were entitled to minimum hourly wages for training periods because they were not exempt under section 1171 as “outside salesm[e]n.” The third cause of action asserts AIL violated section 203 by failing to pay all “earned wages” upon termination of employment with AIL. The fourth cause of action claims AIL engaged in an unfair business practice of misclassifying sales agents as independent contractors and violating the various Labor Code provisions, as well as Business and Professions Code section 17200 et seq.

Between September 2009 and December 2010, the parties conducted active litigation, including two removals to federal court by AIL, ATL’s demurrer, an unsuccessful mediation, discovery disputes, and plaintiffs seeking and AIL opposing a temporary restraining order (TRO).

More specifically, AIL first removed the case to federal court in October 2009. AIL also filed a motion to dismiss the complaint in federal court. The federal district court granted Hoover’s motion to remand the case to state court in December 2009. AIL filed a demurrer in state court in January 2010.

In February 2010, AIL propounded special interrogatories and document requests upon Hoover and noticed her deposition. Hoover propounded a special interrogatory requesting a putative class member contact list. In March 2010, AIL propounded additional special interrogatories as well as form interrogatories, requests for admissions and document requests. On April 5, 2010, AIL filed an answer to the complaint. None of the 22 affirmative defenses allege the existence of an arbitration provision.

In April 2010, the parties agreed to stay all discovery pending mediation.

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Bluebook (online)
206 Cal. App. 4th 1193, 142 Cal. Rptr. 3d 312, 2012 WL 2126892, 2012 Cal. App. LEXIS 687, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hoover-v-american-income-life-insurance-calctapp-2012.