Mattei v. Corporate Management Solutions

CourtCalifornia Court of Appeal
DecidedJuly 14, 2020
DocketB291377
StatusPublished

This text of Mattei v. Corporate Management Solutions (Mattei v. Corporate Management Solutions) 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
Mattei v. Corporate Management Solutions, (Cal. Ct. App. 2020).

Opinion

Filed 6/22/20; Modified and certified for pub. 7/14/20 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

ALYOSHA MATTEI et al., B291377

Plaintiffs and Appellants, (Los Angeles County Super. Ct. No. BC650798) v.

CORPORATE MANAGEMENT SOLUTIONS, INC., et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of Los Angeles County, Dalila Corral Lyons, Judge. Reversed and remanded. Harris & Ruble, Alan Harris, David Zelenski and Min Ji Gal for Plaintiffs and Appellants. Rosen Saba, Ryan D. Saba, Elizabeth L. Bradley and Tyler C. Vanderpool for Defendants and Respondents. ______________________ Alyosha Mattei, Greg Jensen, Scott Todd and Janos Csoma, all members of the International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts (IATSE), sued Corporate Management Solutions, Inc. and its owner and president, Anthony Low (collectively CMS), for wage- and-hour violations under the California Labor Code incurred in the 2016 production of a television commercial for Ulta Beauty, Inc., which operates a chain of beauty stores. The superior court granted CMS’s motion for summary judgment on the ground it was not an employer of the four IATSE members. We reverse. FACTUAL AND PROCEDURAL BACKGROUND Mattei and his colleagues are lighting technicians who belong to Local 728 of IATSE and have worked on numerous television commercial productions. The production of television commercials has traditionally been governed by a series of collective bargaining agreements between IATSE and the Association of Independent Commercial Producers, Inc. (AICP): The Ulta Beauty commercial was produced in June 2016 under the 2016 Commercial Production Agreement (CPA or Agreement). CMS is a member of AICP and a signatory to the CPA. The CPA, among other provisions, bars IATSE members from working on non-union television commercial productions. The Ulta Beauty commercial was developed by MullenLowe U.S., Inc., an advertising agency, which hired Diktator US, LLC to produce the commercial. Because Diktator was not a CPA signatory, Diktator paid CMS $2,000 to borrow CMS’s signatory status to enable it to hire union crewmembers.1 According to

1 The written contract between CMS and Diktator was not produced for reasons not disclosed in the record. Low described

2 Low, this practice is common in the industry and is a large part of CMS’s business.2 When hired to provide signatory services, CMS does not set the wages, hours or working conditions for the employees on the production (most of which are already set by the CPA), hire or fire them or provide the location or any instrumentalities for the production. CMS is not a payroll company and does not issue payroll. Instead, the non-signatory production company submits timecards to the payroll service (selected by the client), which generates a “payroll edit” listing all calculations for wages, payroll taxes and benefits that is sent to both CMS and the non-signatory production company. The non- signatory production company reviews those documents; and, once approved, CMS sends the company an invoice for the exact amount of the approved payroll invoice, plus CMS’s fee. The non- signatory production company then remits payment to CMS. Upon receipt, CMS notifies the payroll company, which

CMS’s typical agreement in his deposition: Generally, the terms require CMS to administer the below-the-line crew payroll (including all union payroll and pension and health care contributions, payroll taxes, workers’ compensation and processing fees) once the crew is engaged to render services on the production until the crew is paid its final wages. The non- signatory production company agrees to adhere to the terms and conditions of all applicable collective bargaining agreements, including the AICP-IATSE CPA, and to pay CMS a fee for its services. Diktator paid CMS $2,000 for its signatory services. 2 CMS also provides production services when requested. In those situations, CMS assists the production company in paying bills and managing production funds and by providing financial, accounting and insurance services to the production company. CMS did not provide those services to Diktator.

3 withdraws the wages from CMS’s account and pays the employees. In the case of the Ulta Beauty commercial, this process failed because MullenLowe, Diktator’s client, did not pay Diktator on time for the costs of the production. Diktator, in turn, could not deposit funds for the wages with CMS. Seeking payment, Low spoke with several representatives of Diktator but ultimately declined to advance the wages due on the production.3 The employees were forced to wait several weeks past the due date, prescribed by Labor Code sections 201.5 and 204, for the wages they had earned on the production. Mattei and his colleagues sued MullenLowe, Diktator and CMS for various Labor Code violations, including late payment of wages.4 They contend CMS, as a signatory to the CPA, was defined as an employer and bound by the CPA’s terms to pay its employees on a timely basis, even if Diktator did not provide it

3 Low acknowledged CMS had advanced payment for some clients in the past, including Paramount Pictures, but he was not familiar with Diktator and did not want to advance funds he did not know would be repaid. 4 The operative first amended complaint asserts causes of action for violations of Labor Code sections 203, 510 and 1194 for failure to pay timely minimum wages and overtime, section 226 for failure to provide a proper wage statement identifying the legal name of the employer and section 2698 for civil penalties on behalf of the plaintiffs individually and as representatives of the State of California and all aggrieved employees, as permitted by PAGA, the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.). Low was added as a defendant in the first amended complaint. MullenLowe, Diktator and other individual defendants are not parties to this appeal.

4 with the necessary funds. From the employees’ perspective, both CMS and Diktator were listed as the production companies on their call sheets; and CMS was listed as the customer of the payroll company on their payroll stubs.5 Mattei stated he understood CMS to be a union signatory producer responsible for payment of wages under the CPA. Low knew CMS was listed as one of the production companies on the call sheets. CMS’s director of business affairs, Cathryn Hacker, acknowledged it is routine to list employers at the top of the call sheet.6 Low also admitted that CMS, by lending its signatory status to Diktator, stood in for Diktator with respect to the CPA. Based on these facts, the superior court determined that CMS was not an employer within the meaning of the applicable Industrial Welfare Commission (IWC) wage order7 or under

5 The payroll stub also lists the payroll company as the “employer of record,” which Low acknowledged was common. Payroll companies are not joint employers under well-established case law. (See Futrell v. Payday California, Inc. (2010) 190 Cal.App.4th 1419, 1435; see also Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 821-822 [independent payroll services company not liable to employees of client on claims of third-party contract beneficiary, negligence and negligent misrepresentation].) 6 In her role as director of business affairs Hacker “administrates the signatory division of CMS.” 7 IWC wage order No. 12-2001 governs the motion picture industry, including the production of television commercials. (See Cal. Code Regs., tit. 8, § 11120, subd. (2)(K).) In its ruling the superior court incorrectly identified IWC wage order

5 common law.

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