Wage and Hour Case Notes

• Jurisdiction: California,United States
• Author: Nicole R. Roysdon
• Citation: Vol. 37 No. 5
• Publication year: 2023

WAGE AND HOUR CASE NOTES

AUTHOR^*

Nicole R. Roysdon

TERMINATION FROM TEMP ASSIGNMENT NOT A 'DISCHARGE'

Young v. RemX Specialty Staffing, 91 Cal. App. 5th 427 (2023)

Vanessa Young was employed by a temporary staffing company and assigned to work at a bank. After the company discharged Young from her assignment, it paid her in accordance with its regular payroll schedule. Young did not have any other work assignments for the company.

Young later sued the staffing company under the Private Attorneys General Act (PAGA) based on an alleged failure to timely pay final wages to a discharged employee under California Labor Code section 201.3(b)(4). That provision states: "If an employee of a temporary services employer is assigned to work for a client and is discharged by the temporary services employer or leasing employer, wages are due and payable immediately."

The trial court granted summary judgment in favor of the employer, finding Young had not been discharged from her employment with the temporary staffing company, but rather only from her assignment with the client, and thus the employer had not violated section 201.3(b)(4) when it paid her in accordance with its regular payroll schedule.

On appeal, Young argued that her discharge from the temporary bank assignment constituted a "discharge" under section 201.3(b)(4), entitling her to immediate payment of wages. The court of appeal rejected this argument, reasoning that a "discharge" requires the end of an employment relationship. In the temporary staffing context, an employee has an employment relationship with the temporary services employer, not the client. Indeed, in its definition of "client" and "customer," section 201.3(a)(4) specifically provides that individuals who provide services to the client are "employed by the temporary services employer."

Because there was no dispute of fact as to whether Young was discharged from her employment with the temporary staffing company, the court held that summary judgment was proper.

MARKETERS NOT LIABLE FOR WAGES AS CLIENT EMPLOYER

Morales-Garcia v. Better Produce, Inc., 70 F.4th 532 (9th Cir. 2023)

After three strawberry growers stopped paying the workers they hired to pick strawberries, the workers filed a class action lawsuit against not only the growers, but also the companies that cooled and distributed the strawberries after they were harvested, referred to as "marketers."

The marketers held master leases to the farmlands and subleased them to the growers. Pursuant to the marketers' yearly marketing and sublease agreements with the growers, the growers could only use the farmland to grow strawberries; the marketers retained the exclusive right to sell them to retail customers. The growers conducted the actual farming operations and were responsible for preparing and cultivating the land and for supervising and controlling the workers, who picked the fruit and packed it into containers with the marketers' labels on them.

The marketers communicated with the growers about the quantity produced and retained the right to enter the farmland to conduct inspections of the strawberries—including food safety compliance audits required by their customers. The marketers also retained the right to enter the lands if the growers became insolvent, stopped growing the strawberries, or failed to comply with customary growing practices. Once the workers harvested and packed the berries, the marketers cooled them on premises separate

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from the farms and sold them to their customers, then provided a portion of the sale proceeds to the growers.

The workers asserted several theories of liability against the strawberry marketers—including that they were joint employers under California and federal law and were "client employers" under California Labor Code section 2810.3. Under section 2810.3(a)(1)(A), a "client employer" is an entity "that obtains or is provided workers to perform labor within its usual course of business from a labor contractor." Section 2810.3(a)(6) explains that "usual course of business" means "the regular and customary work of a business, performed within or upon the premises or worksite of the client employer." The purpose of the statute is to make a client employer responsible for paying the workers it uses in its business.

After a bench trial, the district court entered judgment in the marketers' favor. In addition to finding they were not liable as joint employers under California and federal law, the district court concluded the marketers were not liable as client employers under section 2810.3. The court focused on the definition of "usual course of business," which requires the work being performed to be the "regular and customary work" of the client employer and to take place on the client employer's "premises or worksite."

First, the district court rejected the workers' argument that harvesting strawberries is within the marketers' "regular and customary work" because the workers needed to pick the berries before the marketers could sell them. The court found this theory was too broad and potentially could create liability for every entity involved in the sale of the fruit, including supermarkets.

Second, the district court examined the legislative intent and reasoned that the legislature required the work to be performed on the client employer's premises because it intended to confer liability on those who could...