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Yvonne Dalton, et al v. Lee Publications

March 22, 2011


The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge


Defendant Lee Publications is a newspaper publishing company. Hector Salgado is one of the lead plaintiffs in a class of newspaper home delivery carriers alleging that they are Defendant's employees, not independent contractors, and are thus entitled to certain benefits under the California labor laws.

Defendant seeks summary judgment as to Mr. Salgado on all of his claims, primarily on the ground that Mr. Salgado is an independent contractor, not an employee. If the Court rejects this basis for summary judgment, Defendant seeks partial summary judgment on individual claims for secondary reasons.

For the reasons that follow, Defendant's motion is GRANTED in part and DENIED in part. There is a genuine issue of material fact as to whether Plaintiff is an employee or independent contractor, and thus Defendant is not entitled to summary judgment as to all claims.

Plaintiff does not contest that Defendant is entitled to partial summary judgment on (1) Mr. Salgado's meal claims for work beyond five daily hours and (2) his rest claims as to non-Sunday deliveries. Partial summary judgment is GRANTED on these non-contested issues. Plaintiff also does not contest that his claims under sections 226, 226.3, 1174.5, and 1197.1 are subject to a one-year statute of limitations. Partial summary judgment is GRANTED for all 226, 226.3, 1174.5, and 1197.1 claims arising more than one year before the complaint was filed on April 18, 2008. Partial summary judgment is also GRANTED as to section 226, 203, and 1174 claims due to Defendant's good faith belief that Plaintiff is an independent contractor and GRANTED as to section 450 claims due to absence of a genuine issue of material fact as to whether Defendant compelled or coerced distributors to purchase items of value from it. Summary judgment is DENIED as to all remaining issues.


Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure if the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute is genuine if a reasonable jury could return a verdict for the nonmoving party. Anderson, 477 U.S. at 248.

A party seeking summary judgment always bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to establish an essential element of the nonmoving party's case on which the nonmoving party bears the burden of proving at trial. Id. at 322-23.

Once the moving party establishes the absence of genuine issues of material fact, the burden shifts to the nonmoving party to set forth facts showing that a genuine issue of disputed fact remains. Celotex, 477 U.S. at 314. The nonmoving party cannot oppose a properly supported summary judgment motion by "rest[ing] on mere allegations or denials of his pleadings." Anderson, 477 U.S. at 256. When ruling on a summary judgment motion, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).


A. Employee v. Independent Contractor Status

Defendant's main argument is that it is entitled to summary judgment on all of Plaintiff's claims because no reasonable jury could conclude that Plaintiff was an employee instead of an independent contractor. Under California law, the most important aspect of the employee-employer relationship is the "right to control the manner and means of accomplishing the result desired." S. G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3d 341, 350 (1989); see also Cristler v. Express Messenger Sys., Inc., 171 Cal. App. 4th 72, 77 (2009) (citing Empire Star Mines Co. v. Cal. Employment Comm'n, 28 Cal. 2d 33, 43-44 (1946), overruled on other grounds by People v. Sims, 32 Cal. 3d 468, 479 n.8 (1982)).

Although control is the primary factor, California courts also consider several secondary factors. "Strong evidence in support of an employment relationship is the right to discharge at will, without cause." Borello, 48 Cal. 3d at 350; Empire Star Mines, 28 Cal. 2d at 43. Other secondary factors include (1) whether the one performing services is engaged in a distinct occupation; (2) the kind of occupation and whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (3) the skill required; (4) whether the principal or the worker supplies the tools and the place of work; (5) the length of time for which the services are to be performed; (6) the method of payment, by time or by job; (7) whether the work is a part of the regular business of the principal; (8) whether the parties believe they are creating an employer-employee relationship; (9) the hiree's degree of investment in his business and whether the hiree holds himself or herself out to be in business with an independent business license; (10) whether the hiree has employees; (11) the hiree's opportunity for profit or loss depending on his or her managerial skill; and (12) whether the service rendered is an integral part of the alleged employer's business. JKH Enterprises, Inc. v. Dep't of Indus. Relations, 142 Cal. App. 4th 1046, 1064 n.14 (2006) (citing Borello, 48 Cal. 3d at 350-55).

These factors "cannot be applied mechanically as separate tests; they are intertwined and their weight depends often on particular combinations." Borello, 48 Cal. 3d at 351. For these reasons, the Ninth Circuit, applying California state law, recently expressed skepticism that the question of employment status can be decided at summary judgment: "[Because] no one factor is decisive, and that it is the rare case where the various factors will point with unanimity in one direction or the other, . . . we cannot readily say that the ultimate conclusion as to whether the workers are employees or independent contractors is one of law." (internal quotations and citations omitted). Narayan v. EGL, Inc., 616 F.3d ...

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