Noe v. Super. Ct. (June 1, 2015) 237 Cal.App.4th 316

Anschutz Entertainment Group (AEG) contracted with Levy Premium Foods (Levy) to manage food and beverage services at AEG sporting and entertainment venues in Southern California. Levy subcontracted with Canvas Corporation (Canvas) to provide the food and beverage vendors. Four vendors filed a class action for failure to pay minimum wage, derivative claims of failure to provide accurate wage statements or keep accurate payroll records as well as waiting time penalties, and recovery under Labor Code section 226.8, which provides in relevant part, “It is unlawful for any person or employer to engage in…Willful misclassification of an individual as an independent contractor.” Plaintiffs alleged AEG, Levy, and Canvas were joint employers and that liability under Section 226.8 should be extended to any employer who “engaged” in the act of willful misclassification, and that awareness of the conduct of another joint employer was sufficiently “engaged” for purposes of enforcing the statute. Plaintiffs further alleged that the statute imposed a duty on AEG and Levy to ensure all employees were properly classified.

Defendants moved for summary judgment. In support of their joint employment theory, Plaintiffs offered the contractual agreements between the entities to show AEG and Levy exerted substantial control over the vendors’ working conditions, including “what [the vendors] s[old], where they [worked], the price [of the products they sold], their appearance, their dress and even what they [could] say when they [we]re selling products.” With respect to the 226.8 allegation, Plaintiffs provided emails from a Levy human resources representative showing Levy was aware that Canvas paid the vendors on a commission-only basis and that Levy openly questioned Canvas whether the pay practice violated wage and hour law. Plaintiffs also presented evidence that Levy had directly hired vendors for AEG and had classified those workers as employees.