Sometimes it seems as if you just can’t win. Take the case of this man in southern Brazil, who late last month was attacked by a group of bees while fishing with two friends. The man successfully escaped the bees by jumping into the lake — only to be eaten alive by piranhas.
Employers in California, you know what I mean, right? It seems like any way you turn, the laws of California will get you.
Well today I write with good news. There is still hope.
In a joint employment case brought under California law, the Ninth Circuit Court of Appeals handed Costco a win, ruling that Costco is not a joint employer of the supplier sales reps who ask you to taste that new brand of salsa, even under the strict rules of California Labor Code section 2810.3.
California has two flavors of joint employment: Spicy and Extra Spicy.
Extra spicy is Labor Code section 2810.3. It makes joint employment automatic when a “labor contractor” supplies workers to provides services within the client’s “usual course of business.” The workers at issue here were paid by a staffing agency and sent to Costco locations to offer samples of suppliers’ products on a consignment basis. The Court of Appeals ruled that was not part of the “usual course” of Costco’s business, so section 2810.3 did not apply.
Regular spicy is the Martinez v. Combs test. It says that an entity is a joint employer under California law if it (1) exercises control over wages, hours, or working conditions, or (2) “suffers or permits” the individual to work, or (3) “engages” the individual, meaning creates a common law employment relationship, not that you should have put a ring on it.
The Court gave Costco a pass here too, ruling that it didn’t do any of these three things either.
This case is a good reminder that it’s still possible for a companies to win joint employment claims in California. The key is to structure those relationships correctly and ensure you have robust contracts with suppliers of labor. For contracting tips, remember the Monster with Three Eyes.
All is not lost, even in California. Turns out that even the guy in Brazil might have had a chance. His two fishing buddies made it out of the lake alive.
© 2021 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.