BIJON HILL V. WALMART INC., No. 21-15180 (9th Cir. 2022)
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Plaintiff appeared in ten photoshoots organized by Walmart for a total of fifteen days, in non-consecutive periods of one or two days. Plaintiff sued Walmart for its failure to pay her immediately after each photoshoot ended, seeking more than $540,000 in penalties. The district court denied summary judgment on Walmart’s defense that Plaintiff was an independent contractor outside the protection of the relevant Labor Code provisions due to disputes of material fact. However, it granted summary judgment on Walmart’s good-faith defense. The district court concluded that there was a good faith dispute about whether Plaintiff was an independent contractor that made it objectively reasonable for Walmart to believe Plaintiff was not an employee.
The Ninth Circuit affirmed the district court’s summary judgment in favor of Walmart. The court rejected Plaintiff’s contention that Walmart was foreclosed from raising a good faith defense based on mistakenly classifying an employee as an independent contractor. The court held that Walmart’s argument that Plaintiff was an independent contractor was a good-faith dispute that any wages are due. The court further held that nothing in the record indicated bad faith on Walmart’s part and that there were some reasonable grounds for Walmart to believe that Plaintiff was an independent contractor.
Court Description: California Employment Law The panel affirmed the district court’s summary judgment in favor of Walmart in a diversity action brought by a plaintiff who alleged that Walmart owed her penalties pursuant to California Labor Code § 203 because it failed to pay her immediately after several photo shoots. Plaintiff appeared in ten photo shoots organized by Walmart between July 2016 and August 2017 for a total of fifteen days, in non-consecutive periods of one or two days. Plaintiff sued Walmart for its failure to pay her immediately after each photo shoot ended and sought more than $540,000 in penalties. The district court denied summary judgment on Walmart’s defense that plaintiff was an independent contractor outside the protection of the relevant Labor Code provisions due to disputes of material fact. However, it granted summary judgment on Walmart’s good-faith defense. The district court concluded that there was a good- faith dispute about whether plaintiff was an independent contractor that made it objectively reasonable for Walmart to believe plaintiff was not an employee. As a threshold issue, the panel rejected plaintiff’s contention that Walmart was foreclosed from raising a good- faith defense based on mistakenly classifying an employee as an independent contractor. The panel held that Walmart’s argument that plaintiff was an independent contractor was a good-faith dispute that any wages are due. A good-faith HILL V. WALMART 3 mistake about a worker’s employment status was a defense to the imposition of waiting-time penalties pursuant to Cal. Labor Code § 203. The panel turned to the merits of Walmart’s good-faith defense. First, the panel held that nothing in the record suggested bad faith on Walmart’s part. Next, the panel considered whether a reasonable jury could find that Walmart’s independent contractor defense was unreasonable or unsupported by evidence. The panel held that the applicable test for its analysis of the employment relationship was the common law test derived from S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 769 P.2d 399 (Cal. 1989). The panel noted that a second test for employment explained in Martinez v. Combs, 231 P.3d 259 (Cal. 2010), and Dynamex Operations West, Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018), applied only to cases governed by California Industrial Welfare Commission (IWC) wage orders; and held that it did not apply here where plaintiff did not allege that Walmart violated any wage order. The panel next considered the ultimate issue: based on the undisputed material facts, and the state of California employment law in 2016 and 2017, did Walmart have reasonable grounds to believe plaintiff was an independent contractor? Plaintiff put forth evidence that Walmart exercised significant control over her activities. On the other hand, plaintiff arranged for and paid for her own travel; Walmart did not provide plaintiff with a Form W-2; plaintiff provided modeling services for other companies; and the length of time plaintiff was employed argued against employment status. All these facts would have suggested to Walmart that the parties did not believe they were forming an employment relationship – the last Borello factor. The unrebutted facts in the record also suggested that another 4 HILL V. WALMART Borello factor – whether or not the work was a part of the regular business of the principal – weighed against employment status. Consequently, there were some reasonable grounds for Walmart to believe that plaintiff was an independent contractor, which was sufficient for a good- faith dispute. The panel rejected plaintiff’s counterarguments where she cited three cases that she contended supported her position. The panel held that the cases were not enough to render unreasonable Walmart’s belief that plaintiff was a contractor. Because Walmart raised a good-faith dispute as to whether it was plaintiff’s employer and that dispute provided a sufficient defense to plaintiff’s claims, and because plaintiff did not identify a material factual dispute, the panel affirmed the district court’s summary judgment to Walmart.
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