Caruso v. Gordon Tullett Logistics CA3
C089375M
| Cal. Ct. App. | Jan 18, 2022Background
- Philip Caruso, a truck driver, filed a Labor Commissioner claim against Gordon Tullett Logistics (GTL) for unpaid wages, unreimbursed expenses, and a Labor Code penalty; the hearing officer awarded Caruso $84,441.68.
- GTL appealed to Yolo County Superior Court under Labor Code section 98.2, which affords a trial de novo; the Labor Commissioner appointed counsel to represent Caruso on appeal.
- Before trial, the superior court granted GTL’s motion in limine excluding Industrial Welfare Commission Wage Order No. 9-2001 and the Labor Commissioner’s hearing officer order.
- At a jury trial, the court instructed on the multi-factor Borello test for employee versus independent contractor status; the jury found Caruso was not GTL’s employee.
- GTL moved for attorney’s fees and costs under Labor Code section 218.5; the trial court denied fees, concluding GTL had not shown Caruso brought the wage action in bad faith.
- Both parties appealed: Caruso challenged the exclusion of the wage order and hearing officer award; GTL cross-appealed the denial of attorney’s fees. The Court of Appeal affirmed both the judgment and the denial of fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Exclusion of Wage Order No. 9-2001 and hearing officer’s order | Exclusion made it impossible to present his case and validate his wage claim | The wage order and commissioner’s findings were irrelevant and prejudicial on a de novo trial under §98.2 | Affirmed: trial court did not abuse discretion; commissioner’s findings carry no weight in de novo trial and the wage order would have conveyed those findings to the jury |
| Proper scope of de novo review under §98.2 (admissibility of commissioner’s findings) | Caruso argued he could reference labor laws and evidence from Commissioner proceedings | GTL argued de novo review looks to underlying facts, not commissioner's decision, so findings are inadmissible | Affirmed: de novo trial allows admission of underlying evidence, but not the commissioner's findings as authoritative; the court did not misapply §98.2 |
| Entitlement to attorney’s fees under Lab. Code §218.5 where defendant (nonemployee) prevails | Caruso: trial court properly denied fees because GTL did not establish bad faith | GTL: as prevailing party (nonemployee), it should recover fees without further showing because plaintiff lost | Affirmed: a prevailing nonemployee may recover fees only upon a judicial finding that the employee brought the action in bad faith; GTL failed to prove bad faith |
Key Cases Cited
- Post v. Palo/Haklar & Associates, 23 Cal.4th 942 (de novo appeal under Labor Code §98.2 provides a new trial and the commissioner’s decision is not entitled to weight)
- S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, 48 Cal.3d 341 (establishes multi-factor test for employee vs. independent contractor)
- Dynamex Operations W. v. Superior Court, 4 Cal.5th 903 (adopted the ABC test for independent contractor status)
- Eicher v. Advanced Business Integrators, Inc., 151 Cal.App.4th 1363 (plaintiff in §98.2 trial may present evidence from the Labor Commissioner and new evidence)
- Sales Dimensions v. Superior Court, 90 Cal.App.3d 757 (commissioner’s findings are not entitled to weight in de novo trial)
- Kirby v. Immoos Fire Protection, Inc., 53 Cal.4th 1244 (section 218.5 is a two-way fee-shifting statute for wage actions)
- Dane Elec Corp., USA v. Bodokh, 35 Cal.App.5th 761 (discusses 2013 amendment to §218.5 limiting fee awards to prevailing nonemployees unless bad faith shown)
- Tudor Ranches, Inc. v. State Compensation Insurance Fund, 65 Cal.App.4th 1422 (error in excluding evidence is reversible only if it is reasonably probable a more favorable result would have occurred)
- Arias v. Kardoulias, 207 Cal.App.4th 1429 (clarifies that a §98.2 appeal nullifies the commissioner’s decision and the superior court conducts a new trial)
- Petrosyan v. Prince Corp., 223 Cal.App.4th 587 (recognizes exclusion of evidence that a Labor Commissioner awarded plaintiff unpaid wages may be appropriate to avoid prejudice)