CACI No. 3704. Existence of “Employee” Status Disputed

Judicial Council of California Civil Jury Instructions (2020 edition)

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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,
November 2018, May 2020
Directions for Use
This instruction is based on 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] and the
Restatement Second of Agency, section 220. It is sometimes referred to as the
Borello test or the common law test. (See Dynamex Operations West, Inc. v.
Superior Court (2018) 4 Cal.5th 903, 934 [232 Cal.Rprt.3d 1, 416 P.3d 1].) It is
intended to address the employer-employee relationship for purposes of assessing
vicarious responsibility on the employer for the employee’s acts. 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 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., supra, 48 Cal.3d
at pp. 354-355.) Therefore, an “other” option (j) has been included.
Borello was a workers’ compensation case. In Dynamex, supra, the court, in holding
that Borello did not control the specific wage order dispute at issue, noted that “it
appears more precise to describe Borello as calling for resolution of the employee or
independent contractor question by focusing on the intended scope and purposes of
the particular statutory provision or provisions at issue.” (Dynamex,supra, 4 Cal.5th
at p. 934.) The court also said that “[t]he Borello decision repeatedly emphasizes
statutory purpose as the touchstone for deciding whether a particular category of
workers should be considered employees rather than independent contractors for
purposes of social welfare legislation.” (Id. at p. 935.) With respondeat superior,
there is no statutory provision or social welfare legislation to be considered. (Cf.
Lab. Code, § 2750.3 [codifying Dynamex for purposes of the provisions of the
Labor Code, the Unemployment Insurance Code, and the wage orders of the
Industrial Welfare Commission, with limited exceptions for specified occupations].)
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
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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 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.)
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• “[A]t common law the problem of determining whether a worker should be
classified as an employee or an independent contractor initially arose in the tort
context - in deciding whether the hirer of the worker should be held vicariously
liable for an injury that resulted from the worker’s actions. In the vicarious
liability context, the hirer’s right to supervise and control the details of the
worker’s actions was reasonably viewed as crucial, because ‘ “[t]he extent to
which the employer had a right to control [the details of the service] activities
was . . . highly relevant to the question whether the employer ought to be
legally liable for them . . . .” ’ For this reason, the question whether the hirer
controlled the details of the worker’s activities became the primary common law
standard for determining whether a worker was considered to be an employee or
an independent contractor.” (Dynamex, supra, 4 Cal.5th at p. 927, internal
citations omitted.)
• “[A]lthough we have sometimes characterized Borello as embodying the
common law test or standard for distinguishing employees and independent
contractors, it appears more precise to describe Borello as calling for resolution
of the employee or independent contractor question by focusing on the intended
scope and purposes of the particular statutory provision or provisions at issue. In
other words, Borello calls for application of a statutory purpose standard that
considers the control of details and other potentially relevant factors identified in
prior California and out-of-state cases in order to determine which classification
(employee or independent contractor) best effectuates the underlying legislative
intent and objective of the statutory scheme at issue.” (Dynamex, supra, 4
Cal.5th at p. 934, original italics, internal citation omitted.)
• “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.
‘ “Even in cases where the evidence is undisputed or uncontradicted, if two or
more different inferences can reasonably be drawn from the evidence this court
is without power to substitute its own inferences or deductions for those of the
trier of fact . . . .” ’ The question is one of law only if the evidence is
undisputed.” (Linton v. DeSoto Cab Co., Inc. (2017) 15 Cal.App.5th 1208, 1225
[223 Cal.Rptr.3d 761].)
• 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.)
• “[A]lthough the Caregiver Contract signed by Plaintiff stated she was an
independent contractor, not an employee, there is evidence of other indicia of
employment and Plaintiff averred in her declaration that the Caregiver Contract
was presented to her ‘on a take it or leave it basis.’ ‘A party’s use of a label to
describe a relationship with a worker . . . will be ignored where the evidence of
the parties’ actual conduct establishes that a different relationship exists.’ ”
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(Duffey v. Tender Heart Home Care Agency, LLC (2019) 31 Cal.App.5th 232,
257-258 [242 Cal.Rptr.3d 460].)
• “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.)
• “ ‘[W]hat matters is whether a hirer has the “legal right to control the activities
of the alleged agent” . . . . That a hirer chooses not to wield power does not
prove it lacks power.’ ” (Duffey, supra, 31 Cal.App.5th at p. 257.)
• “Perhaps the strongest evidence of the right to control is whether the hirer can
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
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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].)
• “[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 (11th ed. 2017) Agency and Employment,
§ 29A
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)
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.25, 100A.34 (Matthew Bender)
1 California Civil Practice: Torts §§ 3:5-3:6 (Thomson Reuters)
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