California Civil Jury Instructions (CACI) (2017)

3704. Existence of "Employee" Status Disputed

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3704.Existence of “Employee” Status Disputed
[Name of plaintiff] must prove that [name of agent] was [name of
defendant]’s employee.
In deciding whether [name of agent] was [name of defendant]’s employee,
the most important factor is whether [name of defendant] had the right
to control how [name of agent] performed the work, rather than just the
right to specify the result. One indication of the right to control is that
the hirer can discharge the worker [without cause]. It does not matter
whether [name of defendant] exercised the right to control.
In deciding whether [name of defendant] was [name of agent]’s employer,
in addition to the right of control, you must consider the full nature of
their relationship. You should take into account the following additional
factors, which, if true, may show that [name of defendant] was the
employer of [name of agent]. No one factor is necessarily decisive. Do
not simply count the number of applicable factors and use the larger
number to make your decision. It is for you to determine the weight
and importance to give to each of these additional factors based on all
of the evidence.
(a) [Name of defendant] supplied the equipment, tools, and place of
work;
(b) [Name of agent] was paid by the hour rather than by the job;
(c) [Name of defendant] was in business;
(d) The work being done by [name of agent] was part of the regular
business of [name of defendant];
(e) [Name of agent] was not engaged in a distinct occupation or
business;
(f) The kind of work performed by [name of agent] is usually done
under the direction of a supervisor rather than by a specialist
working without supervision;
(g) The kind of work performed by [name of agent] does not require
specialized or professional skill;
(h) The services performed by [name of agent] were to be performed
over a long period of time; [and]
(i) [Name of defendant] and [name of agent] believed that they had an
employer-employee relationship[./; and]
(j) [Specify other factor].
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New September 2003; Revised December 2010, June 2015, December 2015
Directions for Use
This instruction is primarily intended for employer-employee relationships. Most of
the factors are less appropriate for analyzing other types of agency relationships,
such as franchisor/franchisee. For an instruction more appropriate to these kinds of
relationships, see CACI No. 3705, Existence of “Agency” Relationship Disputed.
Secondary factors (a)–(i) come from the Restatement Second of Agency, section
220. (See also Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522,
532 [173 Cal.Rptr.3d 332, 327 P.3d 165]; Rest.3d Agency, § 7.07, com. f,) They
have been phrased so that a yes answer points toward an employment relationship.
Omit any that are not relevant. Additional factors have been endorsed by the
California Supreme Court and may be included if applicable. (See S. G. Borello &
Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 354–355
[256 Cal.Rptr. 543, 769 P.2d 399].) Therefore, an “other” option (j) has been
included.
Sources and Authority
• Principal-Agent Relationship. Civil Code section 2295.
Rebuttable Presumption that Contractor Is Employee Rather Than Independent
Contractor; Proof of Independent Contractor Status. Labor Code section 2750.5.
• “[S]ubject to certain policy considerations, a hirer . . . cannot be held
vicariously liable for the negligence of his independent contractors.” (Blackwell
v. Vasilas (2016) 244 Cal.App.4th 160, 168 [197 Cal.Rptr.3d 753].)
• “Whether a common law employer-employee relationship exists turns foremost
on the degree of a hirer’s right to control how the end result is achieved.”
(Ayala, supra, 59 Cal.4th at p. 528.)
• “However, the courts have long recognized that the ‘control’ test, applied rigidly
and in isolation, is often of little use in evaluating the infinite variety of service
arrangements. While conceding that the right to control work details is the
‘most important’ or ‘most significant’ consideration, the authorities also endorse
several ‘secondary’ indicia of the nature of a service relationship.” (S. G.
Borello & Sons, Inc.,supra, 48 Cal.3d at p. 350, internal citations omitted.)
• “While the extent of the hirer’s right to control the work is the foremost
consideration in assessing whether a common law employer-employee
relationship exists, our precedents also recognize a range of secondary indicia
drawn from the Second and Third Restatements of Agency that may in a given
case evince an employment relationship. Courts may consider ‘(a) whether the
one performing services is engaged in a distinct occupation or business; (b) the
kind of occupation, with reference to whether, in the locality, the work is
usually done under the direction of the principal or by a specialist without
supervision; (c) the skill required in the particular occupation; (d) whether the
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principal or the worker supplies the instrumentalities, tools, and the place of
work for the person doing the work; (e) the length of time for which the
services are to be performed; (f) the method of payment, whether by the time or
by the job; (g) whether or not the work is a part of the regular business of the
principal; and (h) whether or not the parties believe they are creating the
relationship of employer-employee.’ ” (Ayala,supra, 59 Cal.4th at p. 532.)
• “ ‘Generally, . . . the individual factors cannot be applied mechanically as
separate tests; they are intertwined and their weight depends often on particular
combinations.’ ” (S. G. Borello & Sons, Inc.,supra, 48 Cal.3d at p. 351,
internal citations omitted.)
• “[T]he Restatement guidelines heretofore approved in our state remain a useful
reference.” (S. G. Borello & Sons, Inc.,supra, 48 Cal.3d at p. 354.)
• “We also note the six-factor test developed by other jurisdictions which
determine independent contractorship in light of the remedial purposes of the
legislation. Besides the ‘right to control the work,’ the factors include (1) the
alleged employee’s opportunity for profit or loss depending on his managerial
skill; (2) the alleged employee’s investment in equipment or materials required
for his task, or his employment of helpers; (3) whether the service rendered
requires a special skill; (4) the degree of permanence of the working
relationship; and (5) whether the service rendered is an integral part of the
alleged employer’s business. [¶ ] As can be seen, there are many points of
individual similarity between these guidelines and our own traditional
Restatement tests. We find that all are logically pertinent to the inherently
difficult determination whether a provider of service is an employee or an
excluded independent contractor for purposes of workers’ compensation law.”
(S. G. Borello & Sons, Inc.,supra, 48 Cal.3d at pp. 354–355, internal cross-
reference omitted.)
• “Whether a person is an independent contractor or an employee is a question of
fact if dependent upon the resolution of disputed evidence or inferences.”
(Bowman v. Wyatt (2010) 186 Cal.App.4th 286, 297, fn. 4 [111 Cal.Rptr.3d
787].)
• The burden of proving the existence of an agency rests on the one affirming its
existence. (Burbank v. National Casualty Co. (1941) 43 Cal.App.2d 773, 781
[111 P.2d 740].)
• “The label placed by the parties on their relationship is not dispositive, and
subterfuges are not countenanced.” (S. G. Borello & Sons, Inc.,supra, 48
Cal.3d at p. 342.)
• “It is not essential that the right of control be exercised or that there be actual
supervision of the work of the agent. The existence of the right of control and
supervision establishes the existence of an agency relationship.” (Malloy v.
Fong (1951) 37 Cal.2d 356, 370 [232 P.2d 241], internal citations omitted.)
• “Perhaps the strongest evidence of the right to control is whether the hirer can
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discharge the worker without cause, because ‘[t]he power of the principal to
terminate the services of the agent gives him the means of controlling the
agent’s activities.’ ” (Ayala,supra, 59 Cal.4th at p. 531.)
• “The worker’s corresponding right to leave is similarly relevant: ‘ “An
employee may quit, but an independent contractor is legally obligated to
complete his contract.” ’ ” (Ayala,supra, 59 Cal.4th at p. 531 fn. 2.)
• “A finding of employment is supported where the workers are ‘a regular and
integrated portion of [the] business operation.’ ” (Garcia v. Seacon Logix, Inc.
(2015) 238 Cal.App.4th 1476, 1487 [190 Cal.Rptr.3d 400].)
• “Where workers are paid weekly or by the hour, rather than by the job, it
suggests an employment relationship.” (Garcia, supra, 238 Cal.App.4th at p.
1488.)
• “In cases where there is a written contract, to answer that question [the right of
control] without full examination of the contract will be virtually impossible.
. . . [¶] . . . [T]he rights spelled out in a contract may not be conclusive if
other evidence demonstrates a practical allocation of rights at odds with the
written terms.” (Ayala,supra, 59 Cal.4th at p. 535.)
• “[T]he right to exercise complete or authoritative control must be shown, rather
than mere suggestion as to detail. A worker is an independent contractor when
he or she follows the employer’s desires only in the result of the work, and not
the means by which it is achieved.” (Jackson v. AEG Live, LLC (2015) 233
Cal.App.4th 1156, 1179 [183 Cal.Rptr.3d 394].)
• “ ‘[T]he owner may retain a broad general power of supervision and control as
to the results of the work so as to insure satisfactory performance of the
independent contract—including the right to inspect [citation], . . . the right to
make suggestions or recommendations as to details of the work [citation], the
right to prescribe alterations or deviations in the work [citation]—without
changing the relationship from that of owner and independent contractor
. . . .’ ” (Beaumont-Jacques v. Farmers Group, Inc. (2013) 217 Cal.App.4th
1138, 1143 [159 Cal.Rptr.3d 102], quoting McDonald v. Shell Oil Co. (1955) 44
Cal.2d 785, 790 [285 P.2d 902].)
• “Agency and independent contractorship are not necessarily mutually exclusive
legal categories as independent contractor and servant or employee are. In other
words, an agent may also be an independent contractor. One who contracts to
act on behalf of another and subject to the other’s control, except with respect
to his physical conduct, is both an agent and an independent contractor.”
(Jackson, supra, 233 Cal.App.4th at p. 1184, original italics, internal citations
omitted.)
• “[W]hen a statute refers to an ‘employee’ without defining the term, courts have
generally applied the common law test of employment to that statute.” (Arnold
v. Mutual of Omaha Ins. Co. (2011) 202 Cal.App.4th 580, 586 [135 Cal.Rptr.3d
213].)
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• “[A] termination at-will clause for both parties may properly be included in an
independent contractor agreement, and is not by itself a basis for changing that
relationship to one of an employee.” (Arnold, supra, 202 Cal.App.4th at p.
589.)
• Restatement Second of Agency, section 220, provides:
(1) A servant is a person employed to perform services in the affairs
of another and who with respect to the physical conduct in the
performance of the services is subject to the other’s control or right
to control.
(2) In determining whether one acting for another is a servant or an
independent contractor, the following matters of fact, among others,
are considered:
(a) the extent of control which, by the agreement, the master
may exercise over the details of the work;
(b) whether or not the one employed is engaged in a distinct
occupation or business;
(c) the kind of occupation, with reference to whether, in the
locality, the work is usually done under the direction of the
employer or by a specialist without supervision;
(d) the skill required in the particular occupation;
(e) whether the employer or the workman supplies the
instrumentalities, tools, and the place of work for the person
doing the work;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not the work is a part of the regular business of
the employer;
(i) whether or not the parties believe they are creating the
relation of master and servant; and
(j) whether the principal is or is not in business.
Secondary Sources
3 Witkin, Summary of California Law (10th ed. 2005) Agency and Employment,
§§ 2–42
1 Levy et al., California Torts, Ch. 8, Vicarious Liability, § 8.03[2] (Matthew
Bender)
2 Wilcox, California Employment Law, Ch. 30, Employers’ Tort Liability to Third
Parties for Conduct of Employees, § 30.04 (Matthew Bender)
21 California Forms of Pleading and Practice, Ch. 248, Employer’s Liability for
Employee’s Torts, §§ 248.15, 248.22, 248.51 (Matthew Bender)
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37 California Forms of Pleading and Practice, Ch. 427, Principal and Agent,
§ 427.13 (Matthew Bender)
10 California Points and Authorities, Ch. 100A, Employer and Employee:
Respondeat Superior, § 100A.41 et seq. (Matthew Bender)
1 California Civil Practice: Torts §§ 3:5–3:6 (Thomson Reuters)
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