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Les Bradley et al v. Networkers International

December 12, 2012

LES BRADLEY ET AL., PLAINTIFFS AND APPELLANTS,
v.
NETWORKERS INTERNATIONAL, LLC, DEFENDANT AND RESPONDENT.



APPEAL from an order of the Superior Court of San Diego County, William R. Nevitt, Jr., Judge. (Super. Ct. No. GIC862417)

The opinion of the court was delivered by: Haller, J.

Opinion on remand from Supreme Court

OPINION ON REMAND F ROM THE CALIFORNIA SUPREME COURT

CERTIFIED FOR PUBLICATION

Reversed and remanded with directions.

Three plaintiffs*fn1 filed a class action complaint against Networkers International, LLC (Networkers), alleging violations of wage and hour laws including those governing overtime pay, rest breaks, and meal breaks. Plaintiffs moved to certify the class, but the court denied the motion, concluding plaintiffs did not meet their burden to show common factual and legal questions would predominate over individual issues. Plaintiffs appealed. In February 2009, we filed an unpublished opinion affirming the trial court's order, concluding the court's ruling was not an abuse of discretion. (Bradley v. Networkers International, Inc. (Feb. 5, 2009, D052365) (Bradley I).)

In May 2009, the California Supreme Court granted plaintiffs' petition for review, and ordered the Bradley I case held pending the high court's decision in Brinker Restaurant Corp. v. Superior Court (2008) 165 Cal.App.4th 25, review granted October 22, 2008, S166350. Three years later, in April 2012, the California Supreme Court issued its Brinker decision. (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 (Brinker).) The court then remanded Bradley I to this court "with directions to vacate its decision and to reconsider the cause in light of Brinker . . . ."

Following the remand, the parties submitted extensive supplemental briefs pertaining to Brinker and other judicial decisions filed after our previous opinion. After reexamining the record in light of Brinker, we conclude the trial court erred in refusing to certify the class with respect to each of plaintiffs' claims except for the claims based on alleged off-the-clock violations. With respect to these claims, we remand for the court to reconsider the certification issues in light of this opinion and Brinker.*fn2

FACTUAL AND PROCEDURAL BACKGROUND

Networkers is a business that provides technical personnel services to the telecommunications industry. In about 2004, Networkers contracted with three telecommunications companies, EXi Parsons Telecom LLC (EXi), Ericsson Inc. (Ericsson), and Telecom Network Specialists, to supply skilled laborers to install and service cell sites in Southern California.*fn3 Each of these contracts provided that the laborers would perform work under the direction of supervisors employed by the telecommunications company and set forth detailed requirements for worker qualifications and the work to be performed. Under these contracts, Networkers was responsible for recruiting and managing the workers, and warranted the work would be performed in a satisfactory manner.

Networkers thereafter retained approximately 140 skilled workers, including the three named plaintiffs, to fulfill these contracts and provide repair and installation services at the cell sites. Most workers were hired to work on cell sites for a particular customer, e.g., some workers were hired and trained to work only on Ericsson/T-Mobile cell sites, and others were hired and trained to work only on EXi sites. Plaintiffs Bradley and Milton worked at Ericsson/T-Mobile cell sites and plaintiff Jennings worked at EXi cell sites.

Networkers required each worker to sign a standard contract, entitled "Independent Contractor Agreement," which stated the worker was an independent contractor rather than an employee. Based on its characterization of the workers as independent contractors, Networkers did not pay premium wages for overtime, compensate the workers for travel or waiting times, or establish a policy requiring meal or rest breaks.

In late 2005 or early 2006, plaintiffs Bradley and Jennings (along with numerous other workers) terminated their relationship with Networkers. Shortly after, Networkers replaced its "Independent Contractor Agreement" with an "Employment" agreement. Networkers began paying overtime wages to these workers, but did not implement a meal or rest break policy. Plaintiff Milton signed the new employment agreement, but left the company soon after.

Within several months, the three plaintiffs filed a class action lawsuit against Networkers, alleging Networkers violated wage and hour laws by failing to pay overtime and provide rest and meal breaks, failing to maintain required employment records, and requiring plaintiffs to underreport their hours. Plaintiffs claimed that although Networkers hired each worker using the standard " 'Independent Contractor Agreement,' " the actual relationship was in fact an employer-employee relationship and therefore Networkers was governed by state wage and hour laws. Plaintiffs sought to represent a class of 140 technical support personnel who worked in California for Networkers at cell sites owned or operated by Networkers' customers.*fn4

Based on these factual allegations, plaintiffs asserted seven causes of action: (1) failure to pay overtime compensation (Lab. Code,*fn5 §§ 510, 1194); (2) failure to provide adequate meal periods (§§ 226.7, 512; Wage Order No. 4); (3) failure to provide rest time (Wage Order No. 4); (4) failure to furnish accurate wage statements (§§ 226, 226.3; Wage Order No. 4); (5) failure to keep accurate payroll records (§§ 1174, 1174.5; Wage Order No. 4); (6) waiting time penalties (§ 201 et seq.); and (7) unfair business practices (Bus. & Prof. Code, § 17200 et seq.).

Plaintiffs then moved to certify the complaint as a class action. In support, they submitted a copy of Networkers' standard Independent Contractor Agreement, and produced evidence that it was signed by each putative class member. The agreement contained numerous provisions reflecting an independent contractor relationship, including that the worker was "responsible for determining when, where and how the Work is performed"; the worker was entitled to delegate the work or designate other individuals to perform the work; the worker could bid for the jobs; and the worker was required to maintain liability, errors and omissions, and workers compensation insurance.

Each named plaintiff also proffered his declaration asserting that Networkers did not adhere to these contractual provisions, and instead treated all of its workers as employees, and these employment policies were uniformly applied to all putative class members. The declarations provided detailed descriptions of the manner in which each plaintiff was hired by Networkers, the work assignment process, and the nature of the job and working conditions. We summarize these declarations below.

In his declaration, plaintiff Milton stated that Networkers hired him in December 2004 as a field technician after being recruited by Networkers employee Pete Wu. Milton signed the standard " 'Independent Contractor Agreement,' " but did not understand he was not an employee entitled to state law employee protections. Despite the express terms of the agreement, Milton was not required to have liability, errors and omissions, or workers' compensation insurance; he was not permitted to delegate the work; he was required to follow specific directions as to the scheduling and priority of the work; he was paid by the hour and did not bid for his employment; there was no negotiation regarding the hourly rate; and he was required to obtain a specific set of tools from Networkers and Networkers deducted money from his paycheck to pay for the tools. Additionally, Milton received introductory job training from Networkers.

With respect to his specific job assignments, Milton said he worked exclusively on cell sites owned by T-Mobile which contained equipment made by Ericsson. Milton was assigned approximately 45 to 50 cell sites and was responsible for maintenance, service, and repair of each of these cell sites. Milton received his daily assignments through the receipt of a "trouble ticket" on his computer email or cell phone, which came from a Networkers switch technician or T-Mobile customer service. Milton said that before starting work each day, "Networkers required me to check my email on my computer at home for the trouble tickets I was to work on that day. I typically had as many as 25-30 trouble tickets. I was required to acknowledge receipt of all trouble tickets immediately."

Once Milton was at the job site, he "was not permitted to leave the site until the problem was fully resolved," which he said "meant that I could not simply stop for lunch or leave after an eight hour shift if the problem was not resolved--in fact doing so would lead to discipline if not immediate termination." Milton said: "If I happened to pass by a fast food restaurant between cell sites, and I was not rushing to a 'Critical' site, I would go through the drive-through and eat in my car while driving to the next cell site destination. . . . [¶] Similarly, because I was not allowed to leave a jobsite until the work was done, I regularly could not take any rest breaks while on site. I believed that I would be fired if I stopped working to take a rest break. Additionally, as Networkers set priority codes for the severity of cell site problems, I was required to arrive at the next cell site as soon as possible. As a result, I regularly did not have time to take a rest break between working on cell sites. [¶] . . . [¶] . . . Once the trouble ticket was resolved, I would email back to the switch techs or to T-Mobile to confirm that it was resolved. If the switch indicated the problem was ongoing, I had to stay and keep working until the problem was fixed. If I could not fix the problem, I would call a Networkers' supervisor or other tech to troubleshoot the problem over the telephone; if there was still a problem, a supervisor or other tech would come to the site in person. . . . Additionally, if a site went back down, the crew would be called back immediately . . . and they would not be allowed to submit the time spent on the call back." Milton also said he was required to travel long distances, but generally was not permitted to record his full travel times, and 12-hour days were "common." Milton was required to be " 'on-call' " at least one week each month. Although a Networkers' supervisor was not always at each cell site location, a Networkers' supervisor was always available by telephone. Milton submitted timesheets to Networkers and also entered his time on the customer's (Ericsson's) computer system.

In December 2005, Networkers informed Milton that it would be reclassifying him from an "Independent Contractor" status to "W2 Employee" status, beginning in January 2006. After the reclassification, Networkers reduced Milton's hourly pay, and paid for overtime hours. The work remained exactly the same, and Networkers did not change its policies regarding rest breaks and restrictive reporting times (off-the-clock, on call, and travel time).

The declaration of plaintiff Bradley, who worked for Networkers as a field technician from December 2004 through December 2005, was essentially identical to Milton's declaration in most respects. As with Milton, Bradley was recruited to work for Networkers by employee Pete Wu; worked exclusively at T-Mobile cell sites servicing Ericsson equipment; signed the Independent Contractor Agreement; was paid hourly; was required to have a specific tool set; was provided with introductory training; was assigned work under the "trouble ticket" system; sometimes travelled long distances to the sites; and was not provided meal or rest beaks during the work day (including that he believed he would be "fired" if he took a rest break while at a cell site and he would sometimes eat in his vehicle while travelling to the next cell site job). The primary difference in the declarations is that Bradley terminated his relationship with Networkers before Networkers converted its independent contractor agreement into an employment agreement. Additionally Bradley, unlike Milton, stated he understood that Networkers did not consider him to be an employee, but Bradley believed this classification was legally erroneous.

The declaration of the third plaintiff (Jennings) contained substantially similar information as the other two declarations, except that he was assigned to work on EXi cell sites and had more direct customer supervision at the sites. As with Milton, Jennings said he signed the Networkers' standard Independent Contractor Agreement, but did not consider himself an independent contractor "as I had always been treated as an employee for the same or similar type of work . . . ." He did not bid on the employment contract or negotiate any of its terms, and Networkers required him and all the other workers to purchase a complete set of tools and then deducted the cost from the workers' paychecks.

With respect to his specific EXi work, Jennings said he was trained by Networkers and EXi on basic tasks specific to the equipment being installed, maintained, and repaired. He then "worked on various sites decommissioning, installing, and re-commissioning equipment . . . ." Jennings said "[t]he travel time to the sites varied and could be as little as 15 minutes or as long as 2 [to] 3 hours. I would learn where the installation site was by email or phone call from a supervisor or whomever was the lead installer for that day. I did not determine where or when I would install a cell site. I would work side by side with other employees to compete the installation." Jennings was required to submit timesheets to Networkers through a computer timekeeping source, and all of the time "had to be submitted to my supervisor for approval." He was not paid premium wages for overtime work, even though he "regularly worked over 40 hours a week and regularly worked more than 8 hours a day . . . ." He said that "[o]n days when the installation took a long time, we were not able to take any meal or rest breaks at all." Jennings also said he "felt pressured by my supervisor to shave my time on certain projects," and was "asked to enter less time for particularly time-consuming tasks. At the end of the day, we would ask the lead how many hours we should all put down for that day's work and whatever he said, we put down, even when that was less than the total amount of time we had actually spent working."

In explaining his daily work, Jennings said: "We were forbidden to leave the site once we started working on the equipment. . . . [¶] . . . Sometimes, a site that we installed that we had got up and running would go back down. When that happened, we were required to . . . return to the site immediately to get it up and running again. Typically, we were not allowed to put down the hours we spent on the call-back work on the site. [¶] . . . [¶] . . . Networkers employed supervisors, alongside EXi supervisors, to manage employees in the field working on cell sites. While supervisors may not be at each cell site location, a supervisor was always available by telephone should I need assistance with a cell site problem."

Plaintiffs also submitted the declarations of two putative class members, Ernie Garcia and Shane Pinkston, each of whom worked as Networkers field technicians in 2005, and primarily worked at T-Mobile/Ericsson cell sites. Their declarations were similar to the plaintiffs' declarations, reflecting the same form of recruitment, work assignment process, working hours and conditions, and supervision levels. As with Bradley, these individuals terminated their relationship with Networkers before Networkers recharacterized its workers as employees. As with Milton, both stated they did not fully understand the distinction between an independent contractor and an employee. Identical to each plaintiff, Garcia and Pinkston each asserted he was not given meal or rest breaks, and believed he would be "fired" if he took rest breaks while at a cell site and would sometimes eat in his vehicle on the way to the next cell site destination.

Plaintiffs additionally submitted the declaration of their counsel, who said the three plaintiffs were chosen to represent the class because their claims were typical of the claims of all workers employed under the same Independent Contractor Agreement, each of whom performed similar technical work and were subject to identical management policies. In addition, plaintiff Milton "was chosen to represent those persons who Networkers reclassified in January 2006 from 'independent contractor' to 'employee' even though their job duties did not in any way change." Counsel said that 98 of the 140 putative class members worked exclusively under the Independent Contractor Agreement, and the remaining class members were in the same position as Milton, i.e., initially hired under the Independent Contractor Agreement and then signed a new agreement in January 2006 converting the worker's status to an employee position.

In opposing plaintiffs' class certification motion, Networkers argued the class action was inappropriate because there were numerous individualized issues regarding: (1) the number of "trouble tickets" or job assignments performed by each class member; (2) the level of supervision of each class member; and (3) the different job responsibilities performed for different clients. In ...


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