32 F.4th 811
9th Cir.2022Background
- Bijon Hill modeled in ten Walmart-organized photo shoots in San Francisco from July 2016 to August 2017, totaling 15 days in one- or two-day increments.
- Hill was booked and paid through Scout Talent Management; Walmart contracted to pay Scout a daily flat rate and Scout remitted payment to Hill; the Walmart–Scout contract labeled Scout and its personnel as independent contractors.
- Hill sued under Cal. Lab. Code § 203, seeking waiting-time penalties for alleged failures to pay immediately after each shoot (over $540,000).
- The district court found material fact disputes on the employee/independent-contractor issue but granted summary judgment to Walmart on the ground that Walmart raised an objectively reasonable good-faith dispute about Hill’s status.
- The Ninth Circuit affirmed: it held (1) a good-faith mistake about employment status is a defense to § 203 penalties, (2) Borello’s common-law multi-factor test governed here (not the Dynamex/ABC test), and (3) Walmart’s reliance on factors such as sporadic short-term engagement, Hill’s work for others, lack of W-2, flat daily payment, and agency intermediation made Walmart’s independent-contractor argument objectively reasonable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Availability of good-faith defense to §203 penalties | Hill: Walmart cannot invoke a good-faith dispute when it does not deny wages are due; only timing is disputed. | Walmart: If it had reasonable grounds to think Hill was not an employee, then there was a good-faith dispute that no “wages” (to an employee) were due. | Held: Good-faith mistake about employment status is a valid defense to §203; an objectively reasonable legal/factual defense that no wages are due precludes penalties. |
| Proper legal test to determine employment | Hill: (implicitly) employment status should be determined under tests favoring employee protections. | Walmart: Borello common-law multi-factor test applies because Hill did not invoke IWC wage orders. | Held: Borello governs here; Dynamex/ABC applies only to wage-order claims (and was not pleaded). |
| Reasonableness of Walmart’s good-faith dispute (merits) | Hill: Walmart exercised significant control (directions on hair, wardrobe, poses), and model cases support employee status. | Walmart: Other Borello factors (distinct occupation, paid through agency, no W-2, worked for others, short/episodic engagements) supported a reasonable belief Hill was an independent contractor. | Held: On undisputed facts and prevailing law in 2016–2017, Walmart had reasonable grounds to treat Hill as a contractor; no evidence of subjective bad faith. |
Key Cases Cited
- S. G. Borello & Sons, Inc. v. Dep’t of Indus. Relations, 769 P.2d 399 (Cal. 1989) (establishes common-law multi-factor employment test; control is primary factor)
- Martinez v. Combs, 231 P.3d 259 (Cal. 2010) (describes IWC definitions of employment and the framework that leads to ABC test)
- Dynamex Operations W., Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018) (adopts ABC test for the IWC "suffer or permit" standard)
- Smith v. Superior Court (L’Oréal), 137 P.3d 218 (Cal. 2006) (defines when an employee is "discharged" for §203 purposes)
- Amaral v. Cintas Corp. No. 2, 163 Cal. App. 4th 1157 (Cal. Ct. App. 2008) (reasonable legal ambiguity can support a good-faith defense to waiting-time penalties)
- Zaremba v. Miller, 113 Cal. App. 3d Supp. 1 (Cal. App. Dep’t Super. Ct. 1980) (modeling facts showing control; persuasive but not binding authority)