The opinion of the court was delivered by: Honorable Christina A. Snyder United States District Judge
I. INTRODUCTION & BACKGROUND
On October 17, 2011, plaintiffs Everardo Carrillo et al., employees at the Mira Loma warehouse facility in Mira Loma, California (the "warehouse"), filed suit against Schneider Logistics, Inc. ("SLI"), Premier Warehousing Ventures, LLC ("PWV"), Rogers-Premier Unloading Services, LLC ("Rogers-Premier"), and Impact Logistics, Inc. ("Impact") alleging violations of the California Labor Code and the Federal Labor Standards Act ("FLSA"). Specifically, plaintiffs alleged improper recordkeeping, inadequate payment for hours worked including overtime, and failure to provide meal and rest breaks as required by law. On October 28, 2011, plaintiffs filed their first Amended Complaint ("FAC") adding Schneider Logistics Transloading and Distribution, Inc. ("SLTD").
The Court issued a temporary restraining order ("TRO") dated October 31, 2011 against PWV, Rogers-Premier and Impact imposing requirements for issuing corrected wage statements. In addition, the Court ordered all defendants to show cause on November 9, 2011 ("November 9 Hearing"), why a Preliminary Injunction should not issue pending trial enjoining them from doing the acts prohibited by the TRO. At the November 9 Hearing, the Court extended the TRO against PWV, Rogers-Premier, and Impact. With respect to SLTD and SLI, the Court ordered SLTD to produce the service contracts between SLTD and PWV and between SLTD and Impact. The Court also instructed defendants SLTD, SLI, and Rogers-Premier to submit arguments as to why they should not be bound by the terms of the Preliminary Injunction. Rogers-Premier filed a memorandum of points and authorities as to why it should not be subject to the Preliminary Injunction on November 21, 2011. SLI and SLTD also filed their joint memorandum of points and authorities as to why they should not be subject to the Preliminary Injunction on November 21, 2011. Plaintiffs filed separate responses on November 28, 2011. After carefully considering the parties' arguments, the Court finds and concludes as follows.
The Court has broad discretion in deciding the scope of a preliminary injunction. As the Ninth Circuit has explained: "The district court has broad powers and wide discretion to frame the scope of appropriate equitable relief." Securities and Exchange Commission v. United Financial Group, Inc., 474 F. 2d 354, 358--59 (9th Cir. 1973); see also International Mfg. Co. v. Landon, Inc., 327 F. 2d 824, 825 (9th Cir. 1964). Of paramount importance in fashioning preliminary injunctive relief is the need to ensure, as both a practical matter and consistent with the scope of Federal Rule of Civil Procedure 65(d), that the injunction will be effective in preventing further irreparable harm to plaintiffs. United States v. Coca-Cola Bottling Co., 575 F. 2d 222, 228 (9th Cir. 1978).
Rogers-Premier argues that it should not be subject to the Preliminary Injunction because it is not the contractual provider of any services at the warehouse. Rogers-Premier Memorandum at 2. Rogers-Premier further contends that it does not employ any of the warehouse workers, but rather that PWV is plaintiffs' employer. Id. at 3.
SLTD first argues that it should not be subject to the Preliminary Injunction because it is not integrated with PWV or Impact. According to SLTD, courts use the "integrated enterprise" test to determine whether there is "sufficient integration of operations" between distinct companies to establish liability for each as a single employer. Memorandum of SLI and SLTD at 8 (citing Maddock v. KB Holmes, Inc., 671 F. Supp. 2d 1226, 1238 (2007) (internal citation omitted) (noting that under the integrated enterprise four factors are considered: (1) the interrelation of operations; (2) common management; (3) centralized control of labor relations; and (4) common ownership or financial control)). SLTD argues that its relationships with PWV and Impact are purely contractual, and that it has no control or access to the payroll systems of Impact and PWV such that it cannot be considered integrated with those entities. Id. at 8. SLTD next argues that it is premature at this stage to make a determination whether a joint employer relationship exists, but that in any event, it is not a joint employer of plaintiffs because it has no control over plaintiffs' wages, hours or working conditions. Id. at 9--10 (citing Martinez v. Combs, 49 Cal. 4th 35, 109 (2010) in which the California Supreme Court articulated that a defendant is an employer if it (1) exercised control over the plaintiff's wages, hours or working conditions or (2) suffered or permitted plaintiff).
SLI contends that it does not have any connection with PWV, Roger-Premier, or Impact such that it cannot be considered "integrated" with those entities. Id. at 12. Further, SLI argues that it is not an integrated enterprise with SLTD because as between SLI and SLTD, there is no interrelation of operation services, no common management, and no centralized control of labor relations. Id.
Finally, SLTD and SLI argue that it is not necessary for them to be subject to the Preliminary Injunction because PWV and Impact have agreed to provide time-keeping systems for their employees at the warehouse such that it would be superfluous for SLTD or SLI to do so. Id. at 13.
With respect to Rogers-Premier, plaintiffs contend that the absence of Rogers-Premier's name in the contracts does not determine whether it should be bound by the Injunction. Plaintiffs' Memorandum in Response to Rogers-Premier at 2. According to plaintiffs, Rogers-Premier may be bound by the Preliminary Injunction either as a party or as a result of its participation and concerted action in the challenged practices at the warehouse. Id.
As to SLI and SLTD, plaintiffs argue that the including those entities in the Preliminary Injunction would more effectively achieve the goal of preventing further irreparable harm to plaintiffs and the public interest. Plaintiffs' Memorandum in Response to SLI and SLTD at 1. According to plaintiffs, SLI and SLTD wield the "economic and contractual power" necessary to secure compliance with the ...