Johnson v. Serenity Transportation, Inc.
3:15-cv-02004
N.D. Cal.May 23, 2017Background
- Plaintiffs (removal technicians) allege Serenity Transportation misclassified them as independent contractors; they sued Serenity and argued SCI and the County of Santa Clara were joint employers.
- The Court previously granted summary judgment to SCI and the County on common-law joint‑employer claims but deferred ruling on whether SCI is liable under Cal. Labor Code § 2810.3.
- Section 2810.3 imposes shared civil liability on a "client employer" for wages of workers "supplied by a labor contractor," except where the client employer is "supplied" five or fewer workers "at any given time."
- Evidence shows Serenity scheduled more than six removal technicians for 24‑hour coverage and SCI relied on Serenity’s on‑call technicians (including instances where six or more technicians were simultaneously dispatched).
- Defendants argued (1) the five‑or‑fewer exemption applies because Serenity did not "supply" six workers "at any given time," (2) SCI is not a client employer because technicians do not work at SCI’s physical office (worksite), and (3) separate SCI affiliates cannot be aggregated.
- The court held there is a genuine dispute of material fact whether Serenity made six or more technicians available to SCI "at any given time," denied SCI’s motion for summary judgment on § 2810.3, and deferred the aggregation issue for later proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 2810.3 exemption for "five or fewer workers supplied ... at any given time" bars liability | Serenity supplied six or more technicians available for SCI’s use (on 24‑hr shifts and sometimes six+ dispatched) | SCI contends fewer than six workers were "supplied at any given time," so exemption applies | Court: viewing evidence for plaintiffs, reasonable trier of fact could find six+ were available; summary judgment denied |
| Meaning of "supplied" and "at any given time" | "Supplied" means made available for use; measure is availability to client employer | SCI urges narrower temporal/positional reading to defeat supply showing | Court adopts common meaning of "supplied" and holds dispute of fact exists about availability at any given time |
| Whether technicians perform labor within SCI’s "usual course of business"/what constitutes "worksite" | Plaintiffs: worksites include locations where technicians perform removals; mobile/ dispatched work is within scope | SCI relies on CFRA/FMLA regulatory "worksite" definition (office of dispatch) to exclude SCI | Court rejects importing CFRA/FMLA definitions and finds statute contemplates mobile workers; genuine dispute remains whether work performed is SCI’s usual and customary work |
| Aggregation of separate SCI entities to reach six‑worker threshold | Plaintiffs treat SCI affiliates together to reach >5 supplied workers | SCI argues legally separate entities cannot be aggregated for § 2810.3 | Court for summary judgment assumed affiliates could be aggregated but leaves legal aggregation question undecided for later proceedings |
Key Cases Cited
- Lares v. West Bank One (In re Lares), 188 F.3d 1166 (9th Cir.) (federal courts follow California statutory construction rules)
- Pineda v. Bank of Am., N.A., 50 Cal.4th 1389 (Cal.) (employment statutes construed broadly to protect workers)
- Noe v. Superior Court, 237 Cal.App.4th 316 (Cal. Ct. App.) (Cal. Labor Code anti‑misclassification provision interpreted pro‑employee)
- Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644 (9th Cir.) (statutory words must be given effect; avoid surplusage)
- People v. Snook, 16 Cal.4th 1210 (Cal.) (plain statutory language controls absent ambiguity)