In 2005, Harold Bain filed a Labor Commissioner (LC) action against Tax Reducers, Inc. (TRI). The LC awarded Bain $15,000 in wages, interest, and penalties.
Bain appealed to the Superior Court, and in December, 2006, the parties agreed to settle. In May, 2008, Bain sued TRI to enforce the settlement agreement, for contract damages based on the settlement agreement, and for Labor Code violations. In September, 2010, Bain amended his complaint to name TRI's principal shareholder, Griffin, as a defendant.
The trial court granted summary judgment for Griffin, finding that he was not Bain's employer and was not liable on Bain's claims. After trial, the court awarded Bain $25,000 in unpaid wages, waiting time penalties, liquidated damages, and interest, plus attorney fees and costs. Both sides appealed, and the Court of Appeal affirmed in part and reversed in part, holding:
A three-year statute of limitations applied to Bain's claims for unpaid wages and waiting time penalties. Slip op. at 18-19. However, Bain's claim for liquidated damages under Labor Code 1194.2 was a claim for penalties, and a one-year statute applied. Slip op. at 19-20.
The trial court properly relied on the presumption that every person who performs services for another is an employee. Slip op. at 28-33. Even if the trial court erred in applying such a presumption, it "properly analyzed the evidence according to the multi-factor test from" S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341. Substantial evidence supported the trial court's finding under this analysis that Bain was TRI's employee.
The trial court properly imposed waiting time penalties under Labor Code section 203. Slip op. at 34-39. Analysis of Bain's employment status was not novel and did not involve an unsettled area of law.
The trial court did not err in denying Bain's motion for leave to amend his complaint to name TRI's principal, Griffin, as a defendant. Slip op. at 41-46. After reviewing Reynolds v. Bement (2005) 36 Cal.4th 1075, and Martinez v. Combs (2010) 49 Cal.4th 35, the Court held that Griffin could not be liable as a joint employer:
Bain argues that Griffin meets all three alternative definitions of employer from Martinez because he controlled Bain's hours, working conditions, and whether Bain was paid. However, Bain's contention ignores the court's holdings in Reynolds, which was reaffirmed in Martinez, that the wage orders' definition of “employer” does not impose liability on individual corporate agents acting within the scope of their agency. (Martinez, at p. 75.) In this case, there was no evidence that Griffin acted outside the scope of his agency as an officer and a shareholder of TRI. There is no allegation or evidence that Griffin misappropriated Bain's unpaid wages to himself for his individual advantage. (Reynolds, supra, 36 Cal.4th at p. 1090.) This case is also factually distinguishable from Martinez, because there was no evidence that supported the conclusion that Griffin was a joint employer with TRI.
Slip op. at 45.