In an entertaining twist, Kirby, et al. v. Immoos Fire Protection, Inc. holds that nobody gets fees under 226.7

As a general rule, the law lacks a sense of humor.  Because of that substantial absence of levity, it is up to us to find amusement in unexpected places.  Sometimes a court authors a witty opinion that is entertaining as a form of sharp commentary.  Other times, the humor is relegated to commentary on current legal news.  But that doesn't exhaust our options.  Today, in Kirby, et al. v. Immoos Fire Protection, Inc. (April 20, 2012), the California Supreme Court demonstrated that humor exists in the law when a case outcome is contrary to all expectations.  When asked to decide whether the plaintiff alone, or any prevailling party, is entitled to attorney's fees for alleged violations of Labor Code § 226.7, the Court chose Answer C, none of the above.

The plaintiffs brought a wage & hour class action.  Certification was denied.  The plaintiffs dismissed the case with prejudice.  Defendant Immoos moved for fees as the prevailing party on claims for meal and rest break violations.  Plaintiffs argued that, because section 226.7 claims require payment of wages for the violation of the statute in a manner that is tantamount to a minimum wage obligation, the one-way fee-shifting statute applicable to section 1194 applies.  Defendant Immoos argued that the action was for the "non-payment of wages," thereby brining the action within the two-way fee provision of section 218.5.  Breaking its task down, the Supreme Court said:

In resolving the case before us, we must initially ask whether a section 226.7 claim is a claim for which attorney's fees could be awarded to a prevailing employee under section 1194. If so, then IFP may not be awarded fees under section 218.5 even though it prevailed on the rest period claim in this case. If not, then we must separately examine whether section 218.5 authorizes a fee award to IFP on plaintiffs' section 226.7 claim.

Slip op., at 6.  The Court immediately rejected the argument that any statutory or administrative compensation requirement is a "legal minimum wage."  Instead, the Court supplied a common sense reading to the meaning of section 1194, finding that it created a minimum hourly rate of pay, and not a one-way fee shifting provision for every form of statutory or administrative compensation.  Based on this construction, the Court concluded that section 226.7 claim is not a claim for which attorney's fees could be awarded to a prevailing employee under section 1194.

Nonpayment of wages is not the gravamen of a section 226.7 violation. Instead, subdivision (a) of section 226.7 defines a legal violation solely by reference to an employer's obligation to provide meal and rest breaks. (See § 226.7, subd. (a) [“No employer shall require any employee to work during any meal or rest period mandated by an applicable order of the Industrial Welfare Commision.”].) The “additional hour of pay” provided for in subdivision (b) is the legal remedy for a violation of subdivision (a), but whether or not it has been paid is irrelevant to whether section 226.7 was violated. In other words, section 226.7 does not give employers a lawful choice between providing either meal and rest breaks or an additional hour of pay. An employer's failure to provide an additional hour of pay does not form part of a section 226.7 violation, and an employer's provision of an additional hour of pay does not excuse a section 226.7 violation. The failure to provide required meal and rest breaks is what triggers a violation of section 226.7. Accordingly, a section 226.7 claim is not an action brought for nonpayment of wages; it is an action brought for non-provision of meal or rest breaks.

Slip op., at 13-14.  Thus, since section 226.7 is not an action for nonpayment of wages, section 218.5 does not apply either.  The Court followed with this observation:

It is no answer to say that a section 226.7 claim is properly characterized as an action brought for (i.e., on account of) nonpayment of wages because if a defendant employer had provided the additional hour of pay remedy, presumably the plaintiff would not have brought the action at all. Such a characterization is a departure from the way we conventionally distinguish between the legal basis for a lawsuit and the remedy sought. Consider a typical lawsuit that alleges unlawful injury and seeks compensatory damages. We may say that the suit is an action brought for violation of some legal duty. But we do not say that the suit is an action brought for nonpayment of damages — even though the action would not have been brought had the defendant paid the damages for the plaintiff's injury.

Slip op., at 14.  So that's that.  No fees for prevailing party under section 226.7 for either side.

Meanwhile, note again this little morsel:  "In other words, section 226.7 does not give employers a lawful choice between providing either meal and rest breaks or an additional hour of pay."  Oops.  Even if the employer pays the money, it isn't excused from the violation.  But, since attorney's fees aren't available directly, the chances of an action for injunctive relief are diminished.  That leaves 1021.5 or other fee-shifting bases, which are far from guaranteed.

Decision forthcoming in Kirby, et al. v. Immoos Fire Protection, Inc.

On Monday, April 30, 2012, the California Supreme Court will issue its decision in Kirby, et al. v. Immoos Fire Protection, Inc.  The Court of Appeal decision was discussed on this blog here.  The great question, of course, is whether the relatively employee-protective decision in Brinker will be tempered by prevailing party fee concerns.  The California Supreme Court describes the issues under review as follows:

The court limited review to the following issues: (1) Does Labor Code section 1194 apply to a cause of action alleging meal and rest period violations (Lab. Code, § 226.7) or may attorney’s fees be awarded under Labor Code section 218.5? (2) Is our analysis affected by whether the claims for meal and rest periods are brought alone or are accompanied by claims for minimum wage and overtime?

$15 million misclassification class judgment reversed in Duran v. U.S. Bank National Association

Exemption-based misclassification cases are hard to certify.  But when you certify an overtime exemption misclassification case, try it, and win a $15 million verdict, you'd think that the hard times are behind you.  Not so fast.  In Duran v. U.S. Bank National Association (February 6, 2012), the Court of Appeal (First Appellate District, Division One) reversed that verdict, decertified the class, and sent the whole thing back down to the trial court for further consideration of how to resolve the individual break claims in light of Brinker.

The plaintiffs in the case were 260 current and former business banking officers (BBO's) who claimed they were misclassified by USB as outside sales personnel exempt from California‘s overtime laws.  The procedural history was messy.  Exemption defenses were summarily adjudicated.  The defendant moved unsuccessfully to decertify.  The trial included motions about evidentiary exclusions.  It appears from the summary that a substantial amount of evidence the defendant sought to introduce was excluded from the trial.  Significantly, a small survey was conducted and then relied upon by a statistics expert to determine class-wide liability.

The Court issued a number of significant holdings, which all revolve around the propriety of proving liability in a misclassification class action with statistical evidence, as opposed to proving damages once liability is established.  For example, the Court held that use of statistical evidence to prove liability is inconsistent with cases examining such evidence at certification:

USB claims California law precludes class-wide liability determinations based on evidence obtained from a representative sample in employment cases alleging misclassification. USB relies on several state and federal wage and hour class action cases for the proposition that surveying, sampling, and statistics are not valid methods of determining liability because representative findings can never be reasonably extrapolated to absent class members in misclassification claims given that time spent performing exempt tasks may differ between employees. While all the cases cited by USB involve rulings on motions to certify or decertify class actions, they support the conclusion that improper procedures were followed in this case.

Slip op., at 47-48.  The Court also held that statistical sampling for proof of liability is inconsistent with its Bell III decision:

The procedures we approved in Bell III are only superficially similar to the procedures utilized in the present case.  Again, in Bell III we did not have occasion to consider the use of a representative sample to determine class-wide liability, since liability was not an issue on appeal. Accordingly, the only issue we addressed was the damages calculation itself, and not whether the plaintiff employees had a right to recover damages in the first place. And our assessment was based on a record evidencing cooperation and agreement among the parties and their counsel.

Slip op., at 45.  With respect to Bell III, the Court explained that the present case suffered a number of flaws (sample too small, no test studies to set sample size, lack of randomness, and no cooperation between the parties) not found in Bell III.  The Court then said:

Fifth, the restitution award here was affected by a 43.3 percent margin of error, more than 10 percentage points above the margin of error for the double-overtime award we invalidated in Bell III. In absolute terms, the average weekly overtime hour figure could conceivably be as low as 6.72 hours per week, as opposed to the 11.86 hour figure arrived at here. While we again will not set a bright line for when a margin of error becomes so excessive as to be deemed unconstitutional, we are troubled by this result.

Slip op., at 46.

Next, the Court concluded that the exclusion of 78 sworn statements that, if admitted, would have reduced the class size by about one-third, was a prejudicial error that violated the defendant's due process right to present relevant evidence in its defense: "The evidence USB sought to introduce, if deemed persuasive, would have established that at least one-third of the class was properly classified. Thus, this evidence USB sought to introduce is unquestionably relevant and therefore admissible."  Slip op., at 55.

The Court then explained that the fatal flaw in the trial management plan was the exclusion of virtually all means by which the defendant could have defended against class-wide liability:

Fundamentally, the issue here is not just that USB was prevented from defending each individual claim but also that USB was unfairly restricted in presenting its defense to class-wide liability. With that in mind, the cases relied on by plaintiffs are inapposite. Both Long v. Trans World Airlines, Inc. (N.D.Ill. 1991) 761 F.Supp. 1320 [protective order limited discovery of information from plaintiff flight attendants to a representative sample of class members], and In re Antibiotic Antitrust Actions (S.D.N.Y. 1971) 333 F.Supp. 278 [states sought recovery for alleged overcharges in the sale of certain antibiotics], concerned the damages phase of a trial, not the liability phase.

Slip op., at 58.  So, when a defendant asserts that this case stands for the proposition that it gets to defend agasint each individual class member's claim, be sure to remind the defendant and Court that the holding actually criticized the absence of any means to mount a defense, rather than specifying the specific forms that a reasonable opportunity to defend must take:

In sum, the court erred when, in the interest of expediency, it constructed a set of ground rules that unfairly prevented USB from defending itself. These ground rules were the product of the trial court. We do not suggest that the implementation of any particular additional procedural tool would have satisfied due process. We simply hold that the court, having agreed to try this matter as a class action, denied USB the opportunity to defend itself by flatly foreclosing the admission of potentially relevant evidence.

Slip op., at 60.

The Court spent some additional time commenting on the margin of error near 44 percent, which it found to be unacceptably large to form the basis of any reasonable result.  The Court concluded its opus by finding that, under the second motion to decertify, the trial court erred by failing to decertify the class.

I think I can sum all this up by observing that (1) misclassification cases in the exemption context are difficult cases and getting tougher all the time, and (2) defendants will incorrectly claim that this decision stands for a mythical due process right that the defendant gets to challenge each class member's claim.  Can't help with one, and can't stop two, but as to two, you can point out that there are many ways to provide a defendant with a reasonable opportunity to defend against class liability.

In Muldrow v. Surrex Solutions Corp., court holds that commissions need not be strict percentage of sales

Trials of class actions are uncommon.  Here, though, we have an example of a class action that made it through trial (though admittedly a bench trial, which is more like a long and painful, multi-day summary judgment hearing).  In Muldrow v. Surrex Solutions Corp. (January 24, 2012), the Court of Appeal (Fourth Appellate District, Division One) considered "whether the trial court erred in determining that an employer was not required to pay overtime wages (Lab. Code, § 510) to a class of its current and former employees because they were subject to the commissioned employees exemption (Cal. Code. Regs., tit. 8, § 11070, subd. (3)(D))."

The class of employees was comprised of recruiters that located potential employees for clients of Surrex.  Surrex was paid only when an employee was successfully placed with a client.  The class members were paid a percentage of "adjusted gross profit."  The "adjusted gross profit" was calculated by subtracting various costs from the amount clients paid for a placement.

The Court reached two key conclusions that resulted in an affirmance for the trial court.  First, the Court concluded that "sales-related activities" should be viewed more broadly than the time involved in the sale itself:  "We also reject appellants' contention that time spent 'searching on the computer, searching for candidates on the website, cold calling, interviewing candidates, inputting data, and submitting resumes,' may not be considered sales-related activities."  Slip op., at 14.

Second, the Court concluded that "commissions" do not have to equal a fixed percentage of revenues:

We disagree that either the Keyes Motors court or the Ramirez court intended to preclude an employer from calculating commissions based on anything other than a straight percentage of profits. Most importantly, neither the Keyes Motors court nor the Ramirez court had any occasion to address this issue, because in both cases, the employees' commissions were based on a straight percentage of the price charged to the customer. (Keyes Motors, supra, 197 Cal.App.3d at p. 561 [The "mechanic earns a fixed percentage of the hourly rate charged the customer"]; Ramirez, supra, 20 Cal.4th at p. 804 [employee received a "percentage of the price of the bottles of water and related products sold"].) " ' "It is axiomatic that cases are not authority for propositions not considered." ' " (Silverbrand v. County of Los Angeles (2009) 46 Cal.4th 106, 127, citations omitted.) Thus, "the Keyes Motors definition of 'commission' . . . does not control our case." (Areso, supra, 195 Cal.App.4th at p. 1006.)

Slip op., at 17.  The Court then focused on incentives, distinguishing Keyes Motors and Ramirez:

In this case, in contrast, appellants affected not only the revenue that Surrex received, but also the costs that Surrex would bear. Paige Freeman, a senior consulting services manager, testified that consulting service managers negotiated both the rates that Surrex paid candidate/consultants and the rate at which Surrex billed clients for those services. Appellants therefore had an impact on both the revenue (bill rate) that Surrex received and the costs (pay rate) that Surrex incurred. Thus, while in Keyes Motors and Ramirez, a commission system based on the price of the products or services provided employees with an incentive to increase the number of repairs performed (Keyes Motors) or the number of bottles of water sold (Ramirez), in this case, a commission system based solely on revenue or price would fail to reward employees who helped Surrex achieve greater profits by limiting costs. We see nothing in Ramirez or Keyes Motors that requires such a result, particularly since neither court had occasion to consider a compensation system similar to the one at issue in this case.

Slip op., at 18.  This is all very interesting, but the Court cites no authority in support of its power to define commissions so as to apply the incentives that it views as, in some manner, "better."  Instead, the Court falls back to Black's Law Dictionary for its definition of commission.  Maybe someone has some regulatory history materials handy to check and see whether the Court has the right of what the IWC intended when it created this exemption.

Peremptory challenges by different plaintiffs in two PAGA suits held valid in Pickett v. Superior Court

In my experience, there is a good deal of confusion about what is meant by the "one challenge per side" rule governing peremptory challenges to assigned trial judges under Code of Civil Procedure section 170.6.  In Pickett v. Superior Court (February 22, 2012), the Court of Appeal (Second Appellate District, Division Five) reduced at least some of that confusion, upholding the right of the plaintiff in a second, related action to exercise a peremptory challenge after the plaintiff in the earlier-filed action had already done so.

Pickett’s action that included a Private Attorney General Act (Lab. Code, § 2698 et seq.) (PAGA) claim.  It was deemed related to a prior-filed PAGA action brought by Eugina Bright, against the same defendant, 99¢ Only Stores, on similar allegations.  The two action sought somewhat different remdies.  Pickett’s action was reassigned to the all-purpose judge in the prior-filed action, but not consolidated with that first action.  Pickett timely filed a peremptory challenge to the trial judge pursuant to Code of Civil Procedure section 170.6.

The trial court struck the challenge as improper.  It determined that Pickett’s action was identical to and a continuation of the action brought by Bright, who had already used her one peremptory challenge in the matter after remand following a successful appeal.  The Court of Appeal concluded that under section 170.6 and the authorities applying it, Pickett’s action is not a continuation of Bright’s action, nor is Pickett on the same “side” as Bright in one action, and therefore Pickett’s peremptory challenge should have been accepted.

An interesting extra detail is that in the Notice of Related Cases, Pickett described her claims as "identical" to Bright's.  Despite that characterization, one that the defendant sought to turn to its advantage, the Court of Appeal determined that the right to exercise a peremptory challenge should be determined by the nature of the cases and identity of the parties, not the characterization by a party in a Notice of Related Cases.

Aleman v. Airtouch Cellular confirms what we already suspected regarding reporting time pay and split shift wages

While this case ostensibly addresses issues of first impression in California, like many such decisions it was only a matter of time.  In Aleman v. Airtouch Cellular (December 21, 2011), the Court of Appeal (Second Appellate District, Division Two) examined claims for reporting time pay and split shift premiums.  The case was brought by former employees of AirTouch. The plaintiffs worked mostly as retail sales representatives or customer service representatives at AirTouch stores and kiosks.  Plaintiffs alleged that AirTouch did not properly pay its nonexempt employees for attending mandatory store meetings.

On the reporting time claim, the Court concluded that the plaintiffs were not entitled to receive "reporting time pay" for attending meetings at work, because all the meetings were scheduled and they worked at least half the scheduled time.  This issue stems from the argument that reporting time pay should be based on a two-hour minimum.  Thus, goes the argument, if you are called into a meeting one day for two hours, you should get two hours of pay, even if the meeting last 90 minutes.  This theory is dead.  If a meeting is scheduled, and the meeting lasts at least half the scheduled time, that is good enough.

On the split shift differential claim, the Court concluded, consistent with at least one treatise to examine the issue, that the split shift differential is intended only to protect the minimum wage law.  Thus, if your pay for the hours worked is enough to satisfy the split shift premium of one extra hour of pay at minimum wage, then no further pay need be supplied.

On the plus side, the Court explicitly held that an award of attorney's fees was improper, since both reporting time pay and split shift pay were governed by Labor Code section 1194, governing payment of minimum wages.  Since the one-way fee shifting statute controls the claims, defendant could not recover fees.  Phew.

What procedures must a Court follow when a plaintiff settles, leaving a "headless" putative class action?

I've faced a species of this issue myself.  But it turns out that the answer to this question involves more potential twists and turns than one might first believe.  Seems there's more than one way to skin this headless cat.  And, in a most interesting twist, the appellate division tackling this question is very same division that decided Parris v. Superior Court, 109 Cal. App. 4th 285 (2003) [pre-certification communications with class members], Belaire-West Landscape, Inc. v. Superior Court, 149 Cal. App. 4th 554 (2007) [discovery of putative class member identity and contact information], and Lee v. Dynamex, Inc., 166 Cal. App. 4th 1325 (2008) [discovery of putative class member identity and contact information], so one might say that this division has a certain expertise regarding this prickly area.

In Pirjada v. Superior Court (December 12, 2011), the Court of Appeal (Second Appellate District, Division Seven) issued an order to show cause but ultimately denied the petition for a writ of mandate brought by the plaintiff following the denial of a discovery motion.  The plaintiff settled his individual claim through direct negotiations with defendant's CEO.  The trial court granted leave to amend the complaint to name a new class representative but denied the motion to compel precertification discovery to identify a suitable class representative.

What will ultimately happen in this case remains unclear.  But this opinion does identify key decisions that might have changed the result, though that is hard to say with certainty.

The Court began its discussion by restating existing standards.  First, class member rights are protected, even pre-certification.  Second, court approval is not needed to communicate with putative class members, but when a court's assistance is solicited, a court can consider the potential for abuse.  Third, class member contact information is "generally discoverable."  Fourth, lead plaintiffs, who are unqualified to serve as a class representative may, "in a proper case," move for discovery to find a new representative.  However, the Court also noted that precertification discovery is not a matter of absolute right.

Next, citing La Sala v. American Savings & Loan Assn., 5 Cal. 3d 864  (1971) and Kagan v. Gibraltar Sav. & Loan Assn., 35 Cal. 3d 582 (1984) (disapproved in part on another ground in Meyer v. Sprint Spectrum L.P., 45 Cal.4th 634 (2009)), the Court emphasized the trial court's obligation, as also stated in Rule 3.770, to consider carefully any request to dismiss a class action and evaluate whether notice is necessary.

Then, after noting that the standard of review is the abuse of discretion standard, the Court explained why the writ must be denied. Petitioner first argued, as a matter of discovery law, that because defendant failed to respond to document requests, it waived any objection. Absent a finding that the failure was the result of mistake, inadvertence or excusable neglect, Petitioner argued that it was an abuse of discretion to deny the motion to compel. Second, as a matter of the procedural law governing class actions, Petitioner argued that the court abused its discretion in declining to authorize notice to potential class members about the need for a substitute representative. The Court found the first contention to be incorrect and the second premature.

Interestingly, though the Court ultimately rejected the challenge to the discovery order, it was highly critical of defendant's behavior:

Outside the context of representative and class actions it may well be, as Pacific National observes, “a matter of common knowledge and common sense” that once a plaintiff settles his or her case any discovery responses not yet due no longer need to be served. Because the lawsuit against Pacific National was filed as a class action, however, and the individual settlement with Pirjada was made without the participation or consent of his lawyer, the experienced employment law attorneys representing Pacific National should have either objected to the still-outstanding discovery as moot, moved for a protective order or taken steps to ensure that the settlement agreement between their client and Pirjada included a provision withdrawing any remaining discovery requests.

Slip op., at 12.  The Court then observed that the trial court could have crafted a number of alternative orders designed to locate a suitable representative.  Here's where things get interesting.  The trial court first considered and denied a motion to give notice to the class.  That order was not challenged, though the Court telegraphed its opinion of the Order:

Although the court's decision to deny Westrup Klick's motion for notice to the class was based largely on a distinction between consumer and employee class actions, a distinction we implicitly rejected in Belaire-West Landscape, Inc. v. Superior Court, supra, 149 Cal.App.4th 554, the propriety of that ruling is not before us. Westrup Klick did not seek writ review of the court's May 26, 2011 order. Instead, it elected to proceed by way of a motion to compel.

Slip op., at 13.  The Court then concluded that the trial court's decision to deny the motion to compel after giving time to find a new representative was not arbitrary or capricious.

As to the second, premature argument, the Court also seemed to be hinting that the trial court should proceed with caution:

Whether or not the superior court's initial decision not to notify potential class members that Pirjada now lacks standing to represent the class was correct, the court will necessarily revisit that question when it hears its order to show cause regarding dismissal. Counsel's declaration in support of the petition for writ of mandate indicates a new class representative cannot be identified by the informal means authorized in Parris, supra, 109 Cal.App.4th 285, and discussed by the superior court during the May 26, 2011 hearing. Assuming that remains the case, Westrup Klick will have an opportunity to demonstrate to the court that some form of notice is required to avoid prejudice to absent class members. It would be inappropriate for us to prejudge the outcome of that hearing or to restrict the superior court's discretion by attempting to outline the factors it should weigh in deciding how to comply with the requirements of La Sala, Kagan and Rule 3.770.

Slip op., at 14-15.  Riiiiiight.  Good thing they didn't give the trial court a look at their cards.

So now you know, at a minimum, that when the representative suddenly hits the eject button, class counsel needs to walk carefully through the dismissal process so as to seek the best possible methods for locating replacement representatives and/or obtaining notice to the putative class.

Common law test for employment governs claim by "licensed agent" challenging independent contractor classification

Test pilots who push the envelope either go on to walk on the moon and serve as legislators or die in fiery crashes.  Either way, they go out in a big way.  Cases that push the envelope don't have such dramatic finishes, but they often clarify the law, and not necessarily in a good way.  In Arnold v. Mutual of Omaha Insurance Company (December 30, 2011), the Court of Appeal (First Appellate District, Division One) reviewed the trial court's decision to grant summary judgment in favor of defendant on the claim that a non-exclusive insurance agent was improperly classified as an independent contractor.  A key aspect of the Court's decision concerned the issue of whether the trial court applied the correct test for employment to claims alleging failure to reimburse expenses and failure to timely pay wages.

On appeal, the plaintiff argued that the trial court erred in applying the common law test for employment that was enunciated in S. G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3d 341 (1989).  Instead, the plaintiff contended that Labor Code section 2750 supplied a statutory definition of employee that is broader than the common law test and controls the definition of employee applicable to section 2802.  I note here, parenthetically, that this argument seems somewhat similar to an discussion of this issue I presented some years ago on this blog.  At least now I don't have to wonder how a court would react to this analysis.

In any event, the Court cited approvingly to Estrada for its conclusion that the Labor Code does not define "employee" for purposes of section 2802:

One reviewing court has recently held the Labor Code does not expressly define “employee” for purposes of Labor Code section 2802, and therefore, the common law test of employment applies to that section. (Estrada v. FedEx Ground Package System, Inc. (2007) 154 Cal.App.4th 1, 10 (Estrada).) That court went on to cite the “principal” and “additional factors” of the common law test as articulated by the Supreme Court in Borello, supra, 48 Cal.3d 341, and summarized above. (Estrada, supra, at p. 10.)

Slip op., at 6-7.  While the Court noted that Estrada may not have explicitly considered the argument about section 2750, the Court  went on to hold that the common law test must apply, or section 2750 would conflict with the statutes immediately following 2750.

Having settled on the common law test for employment as the correct test, the Court then considered whether the evidence supported the trial court's decision to grant summary judgment.  While it is impossible to know what evidence was submitted, the Court's summary of key evidence suggests that the defendant had the better of it:

The salient evidentiary points established Arnold used her own judgment in determining whom she would solicit for applications for Mutual's products, the time, place, and manner in which she would solicit, and the amount of time she spent soliciting for Mutual's products. Her appointment with Mutual was nonexclusive, and she in fact solicited for other insurance companies during her appointment with Mutual. Her assistant general manager at Mutual's Concord office did not evaluate her performance and did not monitor or supervise her work. Training offered by Mutual was voluntary for agents, except as required for compliance with state law. Agents who chose to use the Concord office were required to pay a fee for their workspace and telephone service. Arnold's minimal performance requirement to avoid automatic termination of her appointment was to submit one application for Mutual's products within each 180-day period. Thus, under the principal test for employment under common law principles, Mutual had no significant right to control the manner and means by which Arnold accomplished the results of the services she performed as one of Mutual's soliciting agents.

Slip op., at 9-10.

It's easy to armchair quarterback, but the factual record described by the Court does not seem like the optimal factual record on which to test this issue.  Then again, when I appealed Alvarez, I'm sure many people said the same thing...  Good thing the Supreme Court bailed me out years after the fact in another case.

NLRB issues decision in D.R. Horton protecting employees from arbitration agreements barring class actions

Fairly hot off the presses, we have the National Labor Relations Board's decision in D.R. Horton, Inc.  The decision addresses, among other things, whether a mandatory arbitration agreement that bars class or collective actions violates certain employee rights under the National Labor Relations Act.  Hint: it does.  Very important for certain wage & hour cases.

Full disclosure: I contributed an amicus brief in response to the NLRB's invitation for such briefs, as noted in footnote 1.