Wage Law

Employers frequently lose determinations of their staffs' independent contractor status. However, in Cristler v. Express Messenger Systems, Inc.  (2009) __ Cal.App.4th __, the employer prevailed at trial, and the Court of Appeal has affirmed the finding that California Overnight's package delivery drivers were bona fide independent contractors.

James W. Cristler, John Purves, James G. Harrod, Sydney Moroff and Mark Lambert, individually and as the representative of a class of similarly situated persons (collectively Cristler), sued a parcel delivery company, Express Messenger Systems, Inc., doing business as California Overnight (Express Messenger).  The lawsuit contained a number of causes of actions, all based on a core contention that Express Messenger improperly classified its employees as independent contractors.  The case was litigated before a jury and, with respect to certain claims, a trial court.  Express Messenger prevailed.

Cristler appeals, contending that the trial court erred in a number of respects.  Cristler argues that the trial court:  (i) abused its discretion by failing to amend the class definition in light of developments subsequent to class certification; (ii) erred in instructing the jury as to both the burden of proof and with respect to the pertinent classification factors that distinguish employees from independent contractors; (iii) applied incorrect legal standards in adjudicating Cristler's unfair and unlawful business practices causes of action; (iv) abused its discretion by allowing the introduction of irrelevant and "inflammatory" evidence as to the relative benefits of independent contractor status; and (v) erroneously permitted Express Messenger to recover costs for the production of exhibits that were not used at trial.  As discussed below, we conclude these contentions are without merit and affirm.

The complaint alleged causes of action for: (1) unfair and unlawful business practices in violation of Business and Professions Code section 17200; (2) failure to pay overtime compensation in violation of Labor Code sections 510, 515, and 1194; (3) failure to provide properly itemized wage statements in violation of section 226; (4) failure to fully compensate for business expenses in violation of section 2802; and (5) wrongful termination in violation of public policy. Each cause of action arose from the claim that the employer's classification of its delivery personnel as independent contractors was improper. The plaintiffs certified a class and tried the case to a jury and, on some equitable issues, the court. The result was a determination that the drivers were independent contractors.

On appeal, the plaintiffs cited various published opinions in which similar groups of workers were found to be employees, rather than independent contractors, essentially arguing that this dictated an identical result for the California Overnight drivers. The Court of Appeal disagreed.

The simple answer to these references is that these cases concerned different circumstances presented to a different finder of fact. Indeed, even if the facts of this case were identical to those in the cases Cristler cites (and they are not), we would not be authorized to overrule the determination of the jury to achieve conformity with other cases — particularly as Cristler does not even argue that the jury's verdict is unsupported by substantial evidence.

The opinion contains an interesting analysis of the jury instructions given on the core issue of independent contractor status. The trial court instructed the jury that "The issue for you to decide is whether or not the Plaintiffs are employees or independent contractors. "The Plaintiffs allege that they . . . were Defendant's employees. "The Defendant . . . claims that the Plaintiffs were independent contractors, and were not employees. "Plaintiffs have the obligation to prove that they were Defendant's employees. The Defendant has the obligation to prove that the Plaintiffs were independent contractors."

Plaintiff contended that these instructions were erroneous because they obscured the fact that California law required Express Messenger to bear the burden of establishing that persons in its service were independent contractors. (Labor Code § 3357: "Any person rendering service for another, other than as an independent contractor, or unless expressly excluded herein, is presumed to be an employee.") However, the Court of Appeal found no error, because the instructions included these:

• "Any person rendering service for another, other than as an independent contractor, is presumed to be an employee."
• "With respect to this challenge, the trial court instructed the jury as follows: "In determining whether the Plaintiffs and other class members ('drivers') were employees or independent contractors, you must consider a number of factors. You will need to weigh all of these factors based on the evidence that you have heard. 1. The most important factor to consider is the extent to which the Defendant has the right to control the details of the work performed. The following additional factors are to be considered: 2. The right to discharge at will without cause; 3. Whether the drivers are engaged in a distinct occupation or business; 4. The skill required in this occupation; 5. Whether the driver or California Overnight pays for vehicles, equipment, and business expenses; 6. The length of time for which the services are to be performed; 7. The method of payment to drivers, whether by the hour or by the job; 8. Whether or not the work done by drivers is part of the regular business of California Overnight; 9. Whether or not the parties believe they are creating an employer-employee relationship; 10. The driver's opportunity for entrepreneurial profit or loss depending upon his/her managerial skill; 11. The drivers' use of helpers/replacements; and 12. The degree of permanence of the working relationship.
• "These individual factors cannot be applied mechanically as separate tests; they are intertwined and their weight depends often upon particular combinations."

In totality, listing these factors appropriately allowed the jury to apply the factors as it saw fit, and the findings were supported by adequate evidence. You can download the full text of the Christler opinion here in Word or PDF.