JACKIE ONEAL USHER et al., Plaintiffs and Appellants, v. SHIRLEY WHITE, Defendant and Respondent.
D077133
COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA
Filed 5/28/21
CERTIFIED FOR PUBLICATION; (Super. Ct. No. 37-2014-00038321-CU-OE-CTL)
APPEAL from a judgment of the Superior Court of San Diego County, Kenneth J. Medel, Judge. Affirmed.
Niddrie Addams Fuller and John S. Addams; Hogue & Belong and Jeffrey L. Hogue and Tyler J. Belong, for Plaintiffs and Appellants.
Higgs, Fletcher & Mack, John Morris and Rachel Moffitt Garrard, for Defendant
Plaintiffs Jackie Oneal Usher (Usher) and Eric Leung (Leung), on behalf of themselves and all others similarly situated (sometimes collectively, plaintiffs), appeal the judgment for defendant Shirley White (Shirley). Plaintiffs in 2014 brought a putative wage-and-hour class action lawsuit against defendants White Communications, LLC (White Communications or the company) and DirecTV, LLC (DirecTV). In early 2018, plaintiffs amended their complaint to add Shirley and her son Jeff White (Jeff),1 based on
Under
As we explain, we interpret the words “violates, or causes to be violated” in
The undisputed evidence in this case shows that Shirley was not personally involved in the determination to classify plaintiffs as independent contractors, which purported misclassification forms the basis of their class and subclass allegations and their 10 causes of action; and that she also lacked sufficient participation in the operation and management of White Communications to create a triable issue of material fact that she “cause[d]” the wage and hour violations. We therefore independently conclude the order granting Shirley summary judgment was proper.
Operative Complaint
Usher in November 2014 filed this lawsuit against White Communications and DirecTV. Usher in January 2018 amended the complaint to add Shirley and Jeff as individual defendants under The factual allegations in the operative complaint provided White Communications hired Usher as a service technician in October 2012. It alleged that plaintiffs were service technicians who contracted with White Communications, but who worked exclusively for DirecTV; that White Communications was indirectly controlled by DirecTV; that White Communications was authorized to hire service technicians to install DirecTV‘s satellite systems in customers’ homes and businesses according to DirecTV‘s specification; that White Communications required plaintiffs sign an “Installation Services Agreement” purportedly creating an independent contractor relationship between defendants and plaintiffs; and that while White Communications supervised plaintiffs’ service technicians, that supervision was subject to DirecTV‘s “strict scrutiny.” The operative complaint further alleged DirecTV customers were led to believe that the service technicians were employees of DirecTV, as the technicians dressed in clothing with the DirecTV logo and arrived for appointments in a vehicle bearing that logo; customers called DirecTV for an appointment and once scheduled, White Communications was responsible for dispatching a service technician to that appointment; and the service technicians only installed and repaired DirecTV satellite systems. The operative complaint alleged defendants misclassified plaintiffs as independent contractors in order to force them to routinely work seven days a week, in shifts that sometimes lasted over 10 or 12, but no less than eight, hours; that defendants monitored plaintiffs’ schedules and workload through a handheld device and software they provided; that on average, plaintiffs worked about “55–60 hours,” and sometimes as much as “70–80 hours” a week; and that defendants never paid plaintiffs any overtime wages. Instead, defendants paid plaintiffs by the “job,” and plaintiffs typically earned about $250 to $275 a day. White Communications also had no employee manual. Plaintiffs alleged that defendants therefore had no policy related to overtime or meal and rest breaks; that defendants did not pay plaintiffs “premium wages” for their Plaintiffs also alleged they were unable to take meal and rest breaks because of DirecTV‘s “On Time Guarantee,” which required service technicians to arrive at an appointment on time or face a $50 charge or even suspension for violation of this policy. Because of the “On Time Guarantee” and the scheduling of appointments close in time, service technicians who took meal and rest breaks risked violating this policy. Of particular significance to the issues on appeal, the class allegations of the operative complaint defined the class as “[a]ll current, former, or prospective service technicians or similar type positions that are misclassified as independent contractors of Defendants in the State of California who have not received compensation for all time worked and all overtime worked in violation of the California Plaintiffs asserted 10 causes of action in their operative complaint. In each cause of action, they incorporated the above factual and class allegations. Plaintiffs’ causes of action and their request for damages were therefore premised on being misclassified as independent contractors, which in turn caused the alleged In February 2019, Shirley moved for summary judgment/summary adjudication. Shirley argued she was not personally liable under Shirley declared that she had no recollection of ever interacting with any “outside service technicians“; that she did not participate in the decision to classify technicians as independent contractors, nor was she consulted about that decision; that she neither drafted nor contributed to the drafting of any of the independent contractor agreements between White Communications and service technicians, including those who worked in California; that she did not sign any of those agreements; and that she never hired any service technician, determined their payment plans, prepared or issued any schedules, or arranged for equipment to be made available. Nor did she personally pay any service technician from her individual account. Jeff also filed a declaration under penalty of perjury in support of Shirley‘s motion. Jeff declared he formed White Communications in 2007, the company was headquartered in Bloomfield, Iowa, and it stopped doing business in September 2016. At one point, White Communications provided services to DirecTV in 12 states, including California. Jeff confirmed that when he formed the company Shirley was identified as White Communications’ Secretary Treasurer; that despite such designation, she “never participated in the day-to-day affairs of the company nor was she involved with managerial/operational decisions,” as he handled those responsibilities; and that while Shirley was listed as a signator on the company bank account, she “never actually prepared or processed checks distributed to service technicians.” According to Jeff, a prospective service technician could seek to contract with White Communications using the online contract request system posted on the company website. If qualified, White Communications would provide an applicant with an independent contractor agreement that described the nature of the relationship, the compensation structure, and the scope of services to be performed by the technician. Attached to Jeff‘s declaration were copies of various independent contractor agreements White Communications used from 2010 through September 2016; and copies of the independent contractor agreements separately signed by Usher and Leung. Jeff signed the agreements with Usher and Leung on behalf of White Communications. Jeff declared Usher began working in Greenville, Mississippi as an independent contractor of the company. Usher became a “traveling” service In their opposition to Shirley‘s motion, plaintiffs argued there was “no need to establish a direct causal connection” between Shirley and the purported This included evidence that Shirley registered White Communications to conduct business in California; signed paperwork that led to the cessation of company business in California; represented to service technicians she owned White Communications, including on the company website which showed a picture of her and her late husband Jack White (Jack) and describing them as owners; electronically signed the paychecks of plaintiffs; sent, received, and forwarded work-related e-mails from the official “Whitecomm@yahoo.com” address; and attended a training meeting in Iowa for service technicians. Plaintiffs’ opposition included a portion of the deposition transcript of Usher. Usher declared he recognized Shirley as a result of seeing her picture in the Greenville, Mississippi office during a training session, before he came to work in California. Usher, however, never met Shirley in person. He also recalled seeing Shirley in 2019 on a social media page linked to White Communications. Lodged as exhibits in support of the opposition were a series of paychecks made payable to Usher when he lived in Mississippi that were electronically signed, “Shirley J. White.” A portion of Leung‘s deposition was also included in the opposition. Leung declared he met Shirley during a training session in Iowa. Leung, however, could not recall when he met Shirley, but estimated it was 2012 or 2013. He further declared that he knew Shirley was an owner of White Communications; that he had spoken to her during work hours by phone, although he could not recall when they spoke or what they spoke about other then it was for “work“; and that he could not recall if he spoke with her during his “second stint” with the company. Finally, Shirley in her reply noted that plaintiffs did not oppose summary judgment based on the argument she was their “employer,” as opposed to a “person acting on behalf of an employer” under After the parties’ briefing was completed, Shirley‘s was deposed in Iowa, just days before the summary judgment hearing. She testified she signed a Statement of Information that had been filed with the California Secretary of State on December 30, 2016, in which she represented she was an owner of White Communications. She also testified that she along with the other owners of White Communications voted to cease operations in California; that she estimated she talked to her son Jeff about once a week about the company, and possibly some weeks, twice a week; that while Jeff was running White Communications, she was busy working elsewhere full time; and that while they may have discussed company business, she did not recall ever having a discussion with Jeff about “certain employees.” Regarding the e-mail address whitecomm@yahoo.com, Shirley testified the account was set up when the company was first started. She could not recall ever using the e-mail for company business or for personal reasons. She also testified she was certain she did not author or send most, if not all, of the e-mails lodged by plaintiffs in their opposition allegedly to show her involvement in White Communications. Shirley testified as an owner she had access to the company bank account. So too did her husband Jack until he passed away.3 Shirley believed her son Jeff also was a signator on the account, but he typically went to her if “he needed something” from the account. The court at the September 27, 2019 summary judgment hearing announced its tentative was to deny the motion because Shirley signed the paychecks, which the court found “implies the knowledge of what is going [on]” in the business and therefore created a triable issue of fact. After hearing argument from counsel, the court took the matter under submission. Before doing so, counsel agreed the court could read Shirley‘s entire deposition transcript. The court in its October 3, 2019 minute order reversed its tentative and granted summary judgment for Shirley. The court interpreted “The question becomes whether defendant Shirley White met her burden that she not ‘cause the violation?’ The undisputed evidence . . . shows that Ms. White did not cause the alleged “Ms. White never participated in a discussion regarding the classification of the technicians as independent contractors and did not draft or edit the independent contractor agreements, and was not a signatory for any of the contracts. Ms. White did not draft, nor contribute to the drafting of, the independent contractor agreements entered into by White Communications and service technicians in California. [Citations.] Nor did Ms. White sign any independent contractor agreements on behalf of White Communications for service technicians in California.” A court may grant a motion for summary judgment when “all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” ( We review a grant of summary judgment de novo and “exercise our independent judgment in determining whether there are no triable issues of material fact and the moving party thus is entitled to judgment or adjudication as a matter of law.” (Melchior, supra, 106 Cal.App.4th at p. 787.) We ” ’ “consider[ ] all the evidence set forth in the moving and opposing papers except that to which objections were made and sustained.” ’ [Citation.] We liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Yanowitz v. L‘Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037 (Yanowitz).) Our high court has recognized that the “full and prompt payment of wages is of fundamental importance to the welfare of both workers and the State of California. The Legislature has so recognized by crafting extensive remedies to ensure that employees are paid in full, and in penalizing employers that fail to live up to their obligations. This court has so recognized in upholding the Legislature‘s authority to adopt new solutions to combat the problem.” (Voris v. Lampert (2019) 7 Cal.5th 1141, 1162–1163 (Voris).) Effective January 1, 2016, Among other wage-payment regulation, “Senate Bill 588 also targets individual officers who are involved in the failure to pay wages or to satisfy final wage judgments” through enactment of At the outset, it is important to address what is not at issue in this case. As noted, plaintiffs do not allege that Shirley was their “employer.” (See Martinez v. Combs (2010) 49 Cal.4th 35, 64 [concluding “employ” under the definition of the Industrial Welfare Commission means “(a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work, or (c) to engage, thereby creating a common law employment relationship“].) The parties also do not dispute that Shirley qualified as an “other person acting on behalf of an employer” under section subdivision (a) of No Court of Appeal has addressed under what circumstances an “owner, director, officer, or managing agent” of an employer may be held liable under In one case, the district court concluded that to hold an “owner, director, officer, or managing agent” liable under In another case, the district court concluded a plaintiff must allege facts showing an “owner, director, officer, or managing agent” of an employer was engaged in “individual wrongdoing” in order to be liable under In yet another case, the District Court refused to interpret We independently conclude the words “violates, or causes to be violated” in As such, we further conclude that to be held liable under Determining whether an “owner” “violate[d], or cause[d] to be violated” the enumerated provisions in Turning to the instant case, the undisputed facts show Shirley did not participate in the decision of White Communications to classify plaintiffs as independent contractors, which classification is the basis of plaintiff‘s class and seven sub-class allegations, and 10 causes of action. Indeed, it is undisputed that Shirley was never consulted about, or provided any guidance regarding, the classification of service technicians; played no role in the hiring of technicians; did not create, draft or contribute to the content of any of the independent contractor agreements utilized by White Communications; and did not sign any such agreements on behalf of the company. Moreover, Shirley also proffered evidence to show her involvement in the operation and management of White Communications was extremely limited. This evidence showed that, although Shirley (and her late husband Jack) signed loan documents and helped fund the company, she neither participated in the day-to-day operations of the company nor was she a ” ‘decisionmaker’ in terms of operational/managerial decisions by White Communications.” Instead, that responsibility fell on Jeff and his management team, who ran the company and who also made the decision to classify plaintiffs as independent contractors. Based on this evidence, we conclude Shirley as the moving party satisfied her burden to show plaintiffs have not established, and cannot reasonably expect to establish, the elements of each of their causes of action, which, as we have repeatedly noted, are conditioned on a misclassification theory. (See Mattei, supra, 52 Cal.App.5th at p. 122.) The burden therefore shifted to plaintiffs to show that a triable issue of material fact exists that Shirley “cause[d]” a violation. (See Melchior, supra, 106 Cal.App.4th at pp. 786–787.) Plaintiffs acknowledge Shirley did not directly participate in the decision to classify them as independent contractors and not employees of the company. They nonetheless argue there are triable issues of material fact whether Shirley‘s involvement in the operation and management of White Communications “cause[d]” the violation of one or more of the enumerated provisions. Specifically, plaintiffs rely on evidence Shirley‘s signature electronically appeared on their paychecks, citing McDonald v. Ricardo‘s on the Beach, Inc. (C.D.Cal. 2013) WL 153860 (McDonald) for support. In McDonald, a co-owner individual defendant moved for summary judgment after he, the restaurant, and other owners were sued for various federal and state wage and hour violations. The defendant argued he was an absentee owner and thus could not be held liable under the Fair Labor Standards Act (FLSA) and the Private Attorneys General Act (PAGA). (McDonald, supra, 2013 WL 153860, at *2.) The court denied the motion, finding triable issues of material fact existed whether the defendant qualified as an “employer” under the FLSA based on evidence that he had the power to hire, promote, and fire employees; made decisions regarding the number of hours worked by cooks and pre-cooks; signed the restaurant‘s “compensation and overtime policy“; and maintained “an electronic record of hours worked and wages paid to [restaurant] employees through TLD, another business owned by [the defendant].” (Ibid.) The defendant in McDonald next argued summary judgment was proper because FLSA liability could only be imposed on individuals “who personally and directly engaged in the violative conduct itself.”6 (McDonald, supra, 2013 WL 153860, at *3.) The district court found this argument unpersuasive, noting the evidence showed a triable issue of fact as to whether the defendant owner had ” ‘operational control of significant aspects of the corporation‘s day-to-day functions; the power to hire and fire employees; the power to determine salaries; [and] the responsibility to maintain employment records.’ (Lambert v. Ackerley, 180 F.3d 997, 1012 (9th Cir. 1999).” (Ibid.) The court thus denied the defendant‘s motion on his personal liability under FLSA. The defendant next argued he could not be personally liable under PAGA for a violation of found could We find McDonald inapposite to the facts of our case. Unlike the individual owner in McDonald, here there is no triable issue of material fact that Shirley was plaintiffs’ “employer,” despite her being an owner and member of White Communications. Indeed, plaintiffs do not even make this argument on appeal, as we have noted. Moreover, the evidence is undisputed that Shirley‘s signature appeared electronically on plaintiffs’ paychecks merely because she had signed bank documents when the company was founded in about 2007; that unlike the co-owner defendant in McDonald, she was not responsible for payroll, never personally prepared paychecks, did not own and operate a company that prepared payroll or paychecks, and never personally presented the checks to workers; and that also unlike the co-owner in McDonald, she did not create company policy with respect to various wage and hour laws, including overtime pay, and how workers would be paid for overtime (i.e., in multiple checks). Liberally construing the evidence in support of plaintiffs’ opposition to summary judgment and resolving all doubts concerning the evidence in their favor (Yanowitz, supra, 36 Cal.4th at p. 1037), we nonetheless independently conclude evidence that Shirley‘s signature was electronically printed on plaintiffs’ paychecks does not create a triable issue of material fact that she in some way “cause[d]” a violation as a result of her alleged involvement in the company‘s operation and management. To defeat summary judgment, plaintiffs also rely on evidence Shirley‘s name appeared on e-mails sent from the official company address of Whitecomm@yahoo.com. We note the e-mails plaintiffs lodged in their opposition date back to 2010 and 2011, about three years before they filed the instant In addition, it is undisputed Jeff created the Whitecomm@yahoo.com website when the company was first formed, and Shirley then set up the first company e-mail account. Moreover, Shirley‘s name only appears in the “from” field of the e-mail header; she testified with certainty she never used the company e-mail address after she initially set up that account; and her name does not appear in the body of any of the e-mails plaintiffs lodged, supporting the inference they were not actually written or reviewed by her. Thus, even construing this evidence favorably to plaintiffs (Yanowitz, supra, 36 Cal.4th at p. 1037), we independently conclude it does not create a triable issue of material fact that after 2011, Shirley‘s role in the company contributed to the violation of one or more of the enumerated provisions. Plaintiffs primarily relied on the electronic signature and e-mail evidence to create triable issues of material fact that Shirley as “owner” “cause[d]” the violation of one or more of the enumerated provisions. However, plaintiffs also proffered evidence that Shirley signed various documents on behalf of White Communications that were filed with the California Secretary of State, including an Application to Register a Foreign LLC in July 2013; a Statement of Information in December 2016; a Statement of No Change in November 2017; and a Certificate of Cancellation in December 2018. Liberally construing this and the other evidence in plaintiffs’ favor, we independently conclude it does not defeat summary judgment. In each of the first three documents identified above, Shirley identified herself as an “owner” of the company under the heading “[B]usiness Title” or “Title.” In the December 2016 Statement of Information, she also identified herself as a “Member,” but not a “Manager” of White Communications.8 But as we have noted, at all times relevant there is no dispute between the parties that Shirley was an “owner” of White Communications. Therefore, evidence that Shirley signed these documents in this capacity does not support the inference that her role in the company included involvement in its management and operation, including over Jeff who made the classification decision. Lastly, plaintiffs rely on Leung‘s testimony that he once met Shirley in Iowa at a training conducted by White Communications and DirecTV. Leung Leung also testified he spoke with Shirley on the phone about work, although he could not recall what they spoke about. Leung also could not recall when they spoke, including if it was during his second “stint” with the company when he was rehired as an employee and not as an independent contractor. There also is no indication regarding the number of times he spoke with Shirley about work. We conclude Leung‘s testimony that he met Shirley once in Iowa, and at some point spoke to her about work, without regard to when or the number of times, are insufficient—even when considered in light of all the other evidence proffered by plaintiffs—to create a material issue of fact that Shirley‘s role in the company contributed to, and thus “cause[d]” the violations of one or more of the enumerated provisions. “An issue of fact can only be created by a conflict of evidence. It is not created by ‘speculation, conjecture, imagination or guess work.’ [Citation.] Further, an issue of fact is not raised by ‘cryptic, broadly phrased, and conclusory assertions’ [citation], or mere possibilities.” (Sinai Memorial Chapel v. Dudler (1991) 231 Cal.App.3d 190, 196–197.) We thus independently conclude summary judgment was properly granted. In light of our decision, we need not address any other arguments raised by the parties, including Shirley‘s argument that The judgment is affirmed. Shirley to recover her costs of appeal. BENKE, J. WE CONCUR: McCONNELL, P. J. O‘ROURKE, J.Summary Judgment
DISCUSSION
A. Summary Judgment
B. Section 558.1
DISPOSITION