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Employment Law Legal Topics

California Supreme Court Clarifies Definition of “Employer,” but Farmworkers Walk Away Emptyhanded

After languishing on the California Supreme Court’s docket for 6 years, Martinez v Combs (2010) 2010 Cal Lexis 4660 has finally been decided, and it is a historic decision. At the heart of the case is an issue that has not been clarified by the courts for nearly 100 years: Who qualifies as an “employer” under the state Industrial Welfare Commission’s (IWC’s) wage orders?

The plaintiffs in Martinez were agricultural workers trying to recover unpaid minimum wages from the produce merchants who sold the strawberries they picked, after the contractor who hired them went bankrupt.

The supreme court unanimously ruled that it would be inappropriate to hold the produce merchants responsible for the unpaid wages of the workers. The responsible party was the contractor who hired and fired them, trained and supervised them, determined their rate and manner of pay, and set their hours, telling them when and where to report to work and when to take breaks. The fact that the responsible party went bankrupt was just the farmworkers’ bad luck.

The farmworkers’ attorney William Hoerger, Litigation Director for California Rural Legal Assistance and author of the Employment Relationship chapter in CEB’s new Wage and Hour Law and Litigation book, was reported by Law.com to be “immensely disappointed”  for his clients, but “thrilled” that the supreme court reaffirmed the Legislature’s 1913 decision that gave the IWC the unfettered authority to define employer liability in wage cases.

Under the IWC’s definition, employer is defined more broadly than it is under the “economic reality” test that applies under  federal law. The IWC definition reaches situations in which multiple entities control different aspects of the employment relationship, such as when one entity hires and pays workers, but places them with another that actually supervises the work.

For a full discussion of Martinez, see Supreme Court Defines ‘Employer’ Under California Wage Law, an article in the coming issue of CEB’s Business Law Reporter by Steven Pearl, Co-Chair of the Wage and Hour Committee of the California Employment Lawyers Association and an author of  California Wage and Hour Law and Litigation (CEB 2010).

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