CACI No. 2705. Affirmative Defense to Labor Code, Unemployment Insurance Code, and Wage Order Violations - Plaintiff Was Not Defendant’s Employee (Lab. Code, § 2750.3)

Judicial Council of California Civil Jury Instructions (2020 edition)

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2705.Affirmative Defense to Labor Code, Unemployment
Insurance Code, and Wage Order Violations - Plaintiff Was Not
Defendant’s Employee (Lab. Code, § 2750.3)
[Name of defendant] claims that [he/she/nonbinary pronoun/it] is not liable
for [specify violation(s) of the Labor Code, the Unemployment Insurance
Code, and/or wage order(s), e.g., failure to pay minimum wage] because
[name of plaintiff] was not [his/her/nonbinary pronoun/its] employee, but
rather an independent contractor. To establish this defense, [name of
defendant] must prove all of the following:
a. That [name of plaintiff] is under the terms of the contract and in
fact free from the control and direction of [name of defendant] in
connection with the performance of the work that [name of
plaintiff] was hired to do;
b. That [name of plaintiff] performs work for [name of defendant] that
is outside the usual course of [name of defendant]’s business; and
c. That [name of plaintiff] is customarily engaged in an
independently established trade, occupation, or business of the
same nature as that involved in the work performed for [name of
defendant].
New November 2018; Revised May 2020
Directions for Use
This instruction may be needed if there is a dispute as to whether the defendant was
the plaintiff’s employer for purposes of a claim covered by the Labor Code, the
Unemployment Insurance Code, or a California wage order. (Lab. Code, § 2750.3;
see Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903,
913-914, & fn. 3 [232 Cal.Rptr.3d 1, 416 P.3d 1].) The defendant has the burden to
prove independent contractor status. (Lab. Code, § 2750.3; Dynamex, supra, 4
Cal.5th at p. 916.) This instruction may not be appropriate if the defendant claims
independent contractor status based on one of the exceptions listed in Labor Code
section 2750.3(b)-(h). For an instruction on employment status under the Borello
test, see CACI No. 3704, Existence of “Employee” Status Disputed.
The rule on employment status has been that if there are disputed facts, it’s for the
jury to decide whether one is an employee or an independent contractor. (Espejo v.
The Copley Press, Inc. (2017) 13 Cal.App.5th 329, 342 [221 Cal.Rptr.3d 1].)
However, on undisputed facts, the court may decide that the relationship is
employment as a matter of law. (Dynamex, supra, 4 Cal.5th at p. 963.) The court
may address the three factors in any order when making this determination, and if
the defendant’s undisputed facts fail to prove any one of them, the inquiry ends; the
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plaintiff is an employee as a matter of law and the question does not reach the jury.
If, however, there is no failure of proof as to any of the three factors without
resolution of disputed facts, the determination of whether the plaintiff was
defendant’s employee should be resolved by the jury using this instruction. If the
court concludes based on undisputed facts that the defendant has proved one or
more of the three factors, that factor (or factors) should be removed from the jury’s
consideration and the jury should only consider whether the employer has proven
those factors that cannot be determined without further factfinding.
Sources and Authority
• Worker Status: Employees and Independent Contractors. Labor Code section
2750.3.
• “The ABC test presumptively considers all workers to be employees, and permits
workers to be classified as independent contractors only if the hiring business
demonstrates that the worker in question satisfies each of three conditions: (a)
that the worker is free from the control and direction of the hirer in connection
with the performance of the work, both under the contract for the performance
of the work and in fact; and (b) that the worker performs work that is outside
the usual course of the hiring entity’s business; and (c) that the worker is
customarily engaged in an independently established trade, occupation, or
business of the same nature as that involved in the work performed.” (Dynamex,
supra, 4 Cal.5th at pp. 955-956.)
• “A business that hires any individual to provide services to it can always be said
to knowingly ‘suffer or permit’ such an individual to work for the business. A
literal application of the suffer or permit to work standard, therefore, would
bring within its reach even those individuals hired by a business - including
unquestionably independent plumbers, electricians, architects, sole practitioner
attorneys, and the like - who provide only occasional services unrelated to a
company’s primary line of business and who have traditionally been viewed as
working in their own independent business.” (Dynamex, supra, 4 Cal.5th at pp.
948-949.)
• “A multifactor standard - like the economic reality standard or the Borello
standard - that calls for consideration of all potentially relevant factual
distinctions in different employment arrangements on a case-by-case, totality-of-
the-circumstances basis has its advantages. A number of state courts,
administrative agencies and academic commentators have observed, however,
that such a wide-ranging and flexible test for evaluating whether a worker should
be considered an employee or an independent contractor has significant
disadvantages, particularly when applied in the wage and hour context.”
(Dynamex, supra, 4 Cal.5th at p. 954.)
• “Thus, on the one hand, when a retail store hires an outside plumber to repair a
leak in a bathroom on its premises or hires an outside electrician to install a new
electrical line, the services of the plumber or electrician are not part of the
store’s usual course of business and the store would not reasonably be seen as
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having suffered or permitted the plumber or electrician to provide services to it
as an employee. On the other hand, when a clothing manufacturing company
hires work-at-home seamstresses to make dresses from cloth and patterns
supplied by the company that will thereafter be sold by the company, or when a
bakery hires cake decorators to work on a regular basis on its custom-designed
cakes, the workers are part of the hiring entity’s usual business operation and the
hiring business can reasonably be viewed as having suffered or permitted the
workers to provide services as employees. In the latter settings, the workers’ role
within the hiring entity’s usual business operations is more like that of an
employee than that of an independent contractor.” (Dynamex, supra, 4 Cal.5th at
pp. 959-960, internal citations omitted.)
• “A company that labels as independent contractors a class of workers who are
not engaged in an independently established business in order to enable the
company to obtain the economic advantages that flow from avoiding the
financial obligations that a wage order imposes on employers unquestionably
violates the fundamental purposes of the wage order. The fact that a company
has not prohibited or prevented a worker from engaging in such a business is not
sufficient to establish that the worker has independently made the decision to go
into business for himself or herself.” (Dynamex, supra, 4 Cal.5th at p. 962.)
• “The trial court’s determination of employee or independent contractor status is
one of fact if it depends upon the resolution of disputed evidence or inferences
and, as such, must be affirmed on appeal if supported by substantial evidence.
The question is one of law only if the evidence is undisputed. ‘The label placed
by the parties on their relationship is not dispositive, and subterfuges are not
countenanced.’ ” (Espejo, supra, 13 Cal.App.5th at pp. 342-343.)
• “It bears emphasis that in order to establish that a worker is an independent
contractor under the ABC standard, the hiring entity is required to establish the
existence of each of the three parts of the ABC standard. Furthermore, inasmuch
as a hiring entity’s failure to satisfy any one of the three parts itself establishes
that the worker should be treated as an employee for purposes of the wage order,
a court is free to consider the separate parts of the ABC standard in whatever
order it chooses. Because in many cases it may be easier and clearer for a court
to determine whether or not part B or part C of the ABC standard has been
satisfied than for the court to resolve questions regarding the nature or degree of
a worker’s freedom from the hiring entity’s control for purposes of part A of the
standard, the significant advantages of the ABC standard - in terms of increased
clarity and consistency - will often be best served by first considering one or
both of the latter two parts of the standard in resolving the employee or
independent contractor question.” (Dynamex, supra, 4 Cal.5th at p. 963, italics
added.)
• “An entity that controls the business enterprise may be an employer even if it
did not ‘directly hire, fire or supervise’ the employees. Multiple entities may be
employers where they ‘control different aspects of the employment relationship.’
‘This occurs, for example, when one entity (such as a temporary employment
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agency) hires and pays a worker, and another entity supervises the work.’
‘Supervision of the work, in the specific sense of exercising control over how
services are performed, is properly viewed as one of the “working
conditions” . . . .’ ” (Castaneda v. Ensign Group, Inc. (2014) 229 Cal.App.4th
1015, 1019 [177 Cal.Rptr.3d 581].)
Secondary Sources
3 Witkin, Summary of California Law (11th ed. 2017) Agency and Employment,
§ 29A
Chin et al., California Practice Guide: Employment Litigation, Ch. 11-B, Coverage
and Exemptions - In General, ¶ 11:115 et seq. (The Rutter Group)
Wilcox, California Employment Law, Ch. 250, Employment Law: Wage and Hour
Disputes, § 250.13 (Matthew Bender)
21 California Forms of Pleading and Practice, Ch. 1, Overview of Wage and Hour
Laws, § 1.04 (Matthew Bender)
2706-2709. Reserved for Future Use
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