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Who is an Employer?

The California Supreme Court last week decidedMartinez v. Combs, which clarified the definition of “employer” under California labor law.  Plaintiffs were seasonal agricultural workers who had been hired by a strawberry farming company, now bankrupt.  Lacking a remedy for their wage and hour claims against the owner, plaintiffs also named as defendants the merchants through which the growers sold their strawberries.  Plaintiffs contended that these merchants could be deemed their “employers” because they advanced payments for Munoz’s strawberries, and because they “supervised” the plaintiffs to the extent that they sent representatives to the fields to inspect the crops and to instruct the workers in how they should be packed.  (slip opin. at 5-6)

Although the Court upheld the findings of the lower court that these merchants did not exercise sufficient control over the plaintiffs to qualify as their employer, because they were not responsible for the hiring and firing decisions, in the course of doing so the California Supreme Court made clear that it would pay deference to the definitions in the applicable Industrial Welfare Commission’s (IWC) wage orders.  (Defendants had argued, in reliance on a prior California Supreme Court decision in Reynolds v. Bement, 36 Cal.4th 1075 (2005), that “employer” should be defined by common law.) In the case of agricultural workers, wage order 14 defines “employ” as “to engage, suffer, or permit to work,” and “employer” as a person who “employs or exercises control over the wages, hours, or working conditions of any person.”  In this case, the defendants were found not to have engaged or suffered or permitted the plaintiffs to work, because Munoz had exclusive control over hiring and firing decisions, and the defendants had no power to prevent the plaintiffs from working.  (slip opin. at 43)

While the decision went against the employees in this case, the Court’s analysis could in different circumstances permit a broader definition of employer than that established by common law, because of the Court’s deference to the IWC definitions.  Therefore even greater attention must be paid to the definitions in the applicable wage orders in order to ascertain the potential responsibility of the parties who exercise control over employees’ activities.

(photo from Typar Landscape Products website)

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