California Court of Appeal Says No to Class Certification of Independent Contractors

Orrick - Employment Law and Litigation
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The California Court of Appeal has affirmed a trial court’s order denying class certification on the alleged misclassification of independent contractors. The Court of Appeal provides a lengthy analysis of ascertainability and predominance of common issues of law and fact under California’s class action laws. 

In Sotelo v. Medianews Group, Inc., Case No. HG06-278184, the trial court denied certification, holding that the plaintiffs/appellants failed to demonstrate that common issues of law and fact predominated over the proposed class, which included individuals who had been classified as independent contractors and performed tasks like “folding, inserting advertising materials into, bagging, bundling, loading, and/or delivering” for Medianews Group, a conglomerate of California newspaper publishers.

Ascertainability

The trial court found there was no objective means of determining whether an individual was a member of the proposed class, primarily because of the sheer inability to give proper notice to workers who had no recorded relationship with one of the newspapers. The need to have individuals self-identify as class members created significant manageability issues. The court of appeal found no error in the trial court’s decision to determine ascertainability without modifying the definition of the proposed class.

Predominance of Common Issues of Law and Fact

The trial court took issue with plaintiffs/appellants’ almost exclusive focus on whether the proposed class members were employees or independent contractors, thereby failing to address the individual causes of action.

Overtime, Meal Breaks and Rest Breaks

On the overtime and meal and rest break causes of action, the court of appeal determined that the trial court applied the proper criteria in evaluating the plaintiffs/appellants’ evidence. Because they did nothing more than allege misclassification, they failed to adduce sufficient evidence that Medianews Group had uniform practices or policies that could establish widespread liability on these claims.

Employment Status

Evaluating whether common questions predominated on contractor/employment status, the court of appeal agreed that several causes of action hinged on whether the individuals were employees or independent contractors. The opinion provides a useful analysis of the “right to control” test in addition to the 14 secondary elements under the “multi-factor” test. Because the elements of the multi-factor test were more likely to raise disputed issues at trial than the “right to control” test, the court of appeal agreed with the trial court’s focus on the multi-factor test in analyzing predominance. The court of appeal held that the multi-factor test requires that all factors be examined together; in this case, even if some factors could be determined on a class-wide basis, other factors needed to be analyzed individually. Therefore, it was reasonable for the trial court to find that common issues did not predominate on the issue of employee status.

On July 2, the court ordered that the decision be certified for publication. To receive updates on this case, click here.

 

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