Friday, July 11, 2014

In Control ...

Ayala v. Antelope Valley Newspapers, No. S206874 (Cal. June 30, 2014)

Yet again, a trial court gets reversed for denying cert in a wage and hour case. This time, the case involves newspaper delivery persons who claim to have been misclassified as independent contractors, which deprived them of overtime and other employee protections. The trial court focused on the degree of control the paper actually exerted over the workers performance of their duties. Based on the disparate results of its analysis—some were micromanaged while others left to their own devices—it found that common issues didn’t predominate so it declined to certify the class.

The California Supreme Court—in a refreshingly short opinion by Justice Werdegar writing with four justices joining in the opinion and the full court concurring in the result—affirms the court of appeal’s reversal.  The independent contractor/employee distinction primarily turns on the right to control the performance of the work, not the extent of its exercise. If, as is common in many workplace contexts, the workers’ rights and obligations are set out in a form contract or handbook, common questions could predominate even if the control were not uniformly exercised. Thus, as the court explains, “[t]he difficulties with the court‘s ruling on class certification thus lie not in the answers given, but the questions asked.”

The court goes on to discuss the many “secondary factors” beyond the right to control that can be considered in assessing whether someone is an employee or an independent contractor. Some factors are highly important while others are simply types of evidence indicative of the right of control. The significance of any particular factor in a case is context dependent. Thus, in making the class cert determination, the court should take into account how material a factor is to the overall analysis for that particular case and the degree to which it is subject to common proof.

Justice Baxter concurs. He agrees that the trial court erred by focusing on the exercise of control, as opposed to the right to control, and would affirm on that basis. But he doesn’t think the court needed to go any further in the analysis, and for that reason he concurs only in the result. Somewhat oddly, Justice Corrigan, who signed the majority’s opinion, joins him.

Justice Chin also separately concurs, along the same lines as Justice Baxter, albeit somewhat more lengthily. He agrees the trial court erred, but thinks the court’s opinion is somewhat unfair in its characterization of the trial court’s decision. To the extent the trial court considered exercise of control, it appeared to be in the context of the secondary factors that make it relevant. And, although the court’s opinion does not mention it, Justice Baxter says that the trial court did, in fact, consider the contracts between the newspaper and the delivery persons. He also thinks that the court is underplaying the secondary factors and that courts deciding class cert motions ought to be able to get closer to the merits.

Reversed and remanded.

Question: Why did the supreme court grant review in this case? It unanimously affirms the unanimous decision of the court of appeal, doesn’t make new law, and mentions no split in authority on the point. Review gets denied in cases lacking these qualities every day.  Mysteries abound…

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