Noe v. Superior Court
237 Cal. App. 4th 316
Cal. Ct. App.2015Background
- AEG contracted with Levy to provide food services at venues; Levy contracted Canvas to supply vendors who sold food and beverages. Plaintiffs (former Canvas vendors) brought a wage-and-hour class action against Canvas, Levy, and AEG alleging misclassification as independent contractors and multiple Labor Code violations, including penalties under Lab. Code § 226.8.
- Defendants moved for summary judgment/summary adjudication, arguing Canvas was the entity that made the classification decision and thus AEG and Levy could not be liable under § 226.8; they also argued lack of willfulness for other penalty claims.
- The trial court denied summary judgment on most wage claims (finding triable issues on joint-employer and agency), but granted summary adjudication on the § 226.8 claim, holding § 226.8 applied only to the employer who actually made the misclassification decision.
- Petitioners sought writ review. On appeal the court considered both statutory interpretation of § 226.8 and an alternative argument raised by defendants — that § 226.8 provides no direct private right of action.
- The Court of Appeal held § 226.8 is not limited to the actor who literally made the classification decision and may reach an employer who knowingly participates in or acquiesces to a co-employer’s willful misclassification, but § 226.8 does not provide a direct private cause of action to collect the civil penalties; enforcement is via the Labor Commissioner or PAGA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of § 226.8 — who may be liable | § 226.8’s "engage in" language covers joint employers who knowingly acquiesce or otherwise participate in co-employer misclassification | Liability limited to the employer who actually made the decision to misclassify | § 226.8 not limited to the literal decisionmaker; it reaches employers who knowingly involve themselves in or acquiesce to misclassification |
| Liability of joint employers absent knowledge | Joint-employer status alone creates § 226.8 liability regardless of knowledge | § 226.8 requires voluntary and knowing conduct; mere joint-employer status without knowledge is insufficient | Mere joint-employer status without knowledge does not create § 226.8 liability; the employer must have engaged in the voluntary and knowing misclassification |
| Relationship to other statutes creating joint liability (e.g., § 2753, § 2357) | § 226.8 should impose broad joint liability consistent with other labor provisions | Distinguishing provisions (e.g., § 2753/2357) show Legislature knew how to impose joint liability explicitly | § 226.8’s scope is broad as to those who "engage in" misclassification, but where Legislature intended broader joint liability it did so expressly in other statutes; that supports the court’s construction limiting liability to those who engaged, not imposing blanket joint liability |
| Private enforcement — whether § 226.8 authorizes a direct private right of action | Section 218 and § 226.8’s purpose allow employees to sue directly to recover § 226.8 civil penalties | § 226.8 references civil penalties enforceable by the Labor Commissioner or court and lacks language creating a private cause of action; PAGA, not a direct suit, is the private enforcement route | § 226.8 contains no clear legislative intent to create a private direct cause of action; enforcement is by the Labor Commissioner or via PAGA; the plaintiffs’ direct § 226.8 claim fails |
Key Cases Cited
- Martinez v. Combs, 49 Cal.4th 35 (Cal. 2010) (defines and explains employer liability principles in wage claims)
- Caliber Bodyworks, Inc. v. Superior Court, 134 Cal.App.4th 365 (Cal. Ct. App. 2005) (distinguishes statutory "penalties" recoverable by employees from "civil penalties" enforceable by agencies or PAGA)
- Lu v. Hawaiian Gardens Casino, Inc., 50 Cal.4th 592 (Cal. 2010) (framework for assessing whether a statute creates a private right of action)
- Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (describes PAGA as a vehicle for private enforcement of Labor Code civil penalties)
- Rehmani v. Superior Court, 204 Cal.App.4th 945 (Cal. Ct. App. 2012) (writ-review principles for summary adjudication rulings)