Noe v. Superior Court

237 Cal. App. 4th 316, 187 Cal. Rptr. 3d 836, 80 Cal. Comp. Cases 534, 2015 Cal. App. LEXIS 478
CourtCalifornia Court of Appeal
DecidedJune 1, 2015
DocketB259570
StatusPublished
Cited by70 cases

This text of 237 Cal. App. 4th 316 (Noe v. Superior Court) 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
Noe v. Superior Court, 237 Cal. App. 4th 316, 187 Cal. Rptr. 3d 836, 80 Cal. Comp. Cases 534, 2015 Cal. App. LEXIS 478 (Cal. Ct. App. 2015).

Opinion

Opinion

ZELON, J. —

AEG and Levy filed motions for summary judgment arguing in part that they were entitled to summary adjudication of plaintiffs’ Labor Code section 226.8 claim because the undisputed evidence showed Canvas was the entity that had classified the vendors as independent contractors. Although the trial court denied the motions for summary judgment, it agreed that plaintiffs could not pursue a section 226.8 claim against AEG or Levy because neither entity had made the alleged misclassification decision.

Plaintiffs filed a petition for writ of mandate and we issued an order to show cause. In their return to the writ, AEG and Levy argued for the first time that even if the trial court erred in interpreting Labor Code section 226.8, we should deny the writ because the statute does not provide a private right of action. We now deny plaintiffs’ petition. We conclude that, contrary to the trial court’s interpretation, section 226.8 is not limited to employers who make the misclassification decision, but also extends to any employer who is aware that a coemployer has willfully misclassified their joint *320 employees and fails to remedy the misclassification. However, we further conclude that section 226.8 cannot be enforced through a direct private action and deny the plaintiffs’ writ on that basis.

FACTUAL AND PROCEDURAL BACKGROUND

A. Summary of Plaintiffs’ Lawsuit

AEG and its related entities 1 (collectively AEG) own several entertainment venues located throughout Southern California, including Staples Center, Home Depot Center, Nokia Center and Citizens Arena. AEG contracted with Levy Premium Foodservice to provide food and beverage services at each venue. Levy then entered into a labor agreement with Mark Saranoff and his affiliated companies Canvas Corporation, Canvas Vending and iCandy (collectively Canvas) to provide vendors who sold food and beverage items to event spectators.

In 2013, several former vendors who had been hired by Canvas to sell food at AEG’s venues filed a wage and hour class action against AEG, Levy and Canvas, contending that each defendant qualified as their “joint employer.” Plaintiffs alleged numerous violations of the Labor Code, including failure to pay minimum wage (Lab. Code, §§ 1194, 1194.2, 1197, 1197.1), 2 failure to pay wages upon termination (§§ 201, 202, 203), and failure to furnish accurate wage statements and maintain accurate payroll records (§§ 226, 226.3, 1174, 1174.5, 2810.5).

Plaintiffs also sought recovery under section 226.8, which imposes civil penalties on any person or employer who “engage[s] in” the act of “voluntarily and knowingly misclassifying [an] individual as an independent contractor.” (§ 226.8, subds. (a) & (i)(4).) Plaintiffs alleged that each defendant had “misclassified [class members] as ‘independent contractors’ rather than employees knowing that the [class members] should lawfully be classified as an ‘employee.’ ” Plaintiffs additionally asserted claims under the Labor Code Private Attorneys General Act of 2004 (PAGA) (§ 2698 et seq.) and the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.) predicated on the defendants’ alleged violations of state and federal labor laws. 3

*321 B. AEG’s and Levy’s Motions for Summary Judgment or Summary Adjudication

1. Summary of AEG’s and Levy’s motions for summary judgment

AEG and Levy (collectively defendants) filed motions for summary judgment, or in the alternative summary adjudication, arguing that they were not the plaintiffs’ “joint employer” and therefore could not be held liable for any of the Labor Code violations set forth in the complaint. Defendants contended that the undisputed evidence showed Canvas was solely responsible for hiring and paying plaintiffs, setting their schedules, maintaining their employment records and ensuring they were properly compensated. Defendants further asserted that whatever “limited oversight” they exerted over plaintiffs “fell short of the ‘control’ required to find a joint employment relationship.”

Defendants alternatively argued that “even if the court were to find that disputed issues of material fact exist on the joint employer issue,” plaintiffs’ claim for civil penalties under section 226.8 “fail[edj” because the statute only applies to the employer who “actually made the decision to classify workers as independent contractors.” Defendants contended that, in this case, the evidence demonstrated the decision to classify plaintiffs as independent contractors and to pay them on “a commission basis only” had been “made exclusively by Canvas.”

Defendants raised similar arguments regarding plaintiffs’ penalty claims for willfully failing to pay wages due upon termination (§ 203), willfully failing to maintain payroll records (§ 1174.5) and knowingly and intentionally failing to provide itemized wage statements (§ 226, subd. (e)). Specifically, defendants argued that plaintiffs had identified no evidence showing AEG or Levy had acted either willfully or intentionally because Canvas was the entity responsible for paying plaintiffs, preparing their wage statements and maintaining their payroll records.

2. Summary of plaintiffs’ opposition

In their opposition, plaintiffs argued that that the terms of the contractual agreements between AEG, Levy and Canvas demonstrated there were triable issues of fact whether defendants qualified as the joint employers of the vendors that Canvas had provided to them. Plaintiffs contended the contracts showed defendants exerted substantial control over the vendors’ working conditions, dictating “what [the vendors] s[old], where they [worked], the price [of the products they sold], their appearance, their dress and even what they [could] say when they [we]re selling products.”

Plaintiffs also argued there were triable issues of fact whether defendants were liable for civil penalties under section 226.8. Plaintiffs contended that *322 the statute was not limited to employers who made the actual decision to knowingly misclassify their workers, but rather extended to any employers who had “engaged in” that activity. According to plaintiffs, the evidence showed defendants had “engaged in” the act of willful misclassification because they were aware that their coemployer (Canvas) had improperly classified their joint employees.

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Cite This Page — Counsel Stack

Bluebook (online)
237 Cal. App. 4th 316, 187 Cal. Rptr. 3d 836, 80 Cal. Comp. Cases 534, 2015 Cal. App. LEXIS 478, Counsel Stack Legal Research, https://law.counselstack.com/opinion/noe-v-superior-court-calctapp-2015.