Vaynberg v. Chevron Products CA1/2 ( 2013 )

Filed 3/14/13 Vaynberg v. Chevron Products CA1/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION TWO
MOYSEY VAYNBERG,
Plaintiff and Appellant,
A131126
v.
CHEVRON PRODUCTS COMPANY, (Contra Costa County
Super. Ct. No. MSC0801216)
Defendant and Respondent.
I. INTRODUCTION
Appellant Moysey Vaynberg worked for respondent Chevron Products Company
(Chevron) through an employment agency for nine years, from August 1999 through
April 2008. For the last eight of those years, appellant worked through Value Added
Consulting Group (Value Added). Appellant sued Value Added1 and Chevron for wage
and hour violations, primarily the failure to pay him overtime. At trial, there was no
dispute that Value Added was appellant’s employer; the main issue was appellant’s
employment relationship with Chevron. Appellant contended that he was also an
employee of Chevron, i.e., that Value Added and Chevron were appellant’s “joint” or
“dual” employers. Chevron maintained that appellant was an independent contractor.
The jury returned a verdict for Chevron and the trial court denied appellant’s motion for
judgment notwithstanding the verdict.
1
A default was entered against Value Added. It is not a party to this appeal.
1
On appeal, appellant contends the trial court prejudicially misinstructed the jury on
the common law test for an employment relationship and also erred in excluding
evidence. Finding no reversible error, we will affirm.
II. FACTUAL AND PROCEDURAL BACKGROUND
Appellant sued Value Added and Chevron, alleging that he was employed by
Value Added and that Chevron was his co-employer. He pleaded causes of action for (1)
failure to pay overtime (Lab. Code, §§ 510, 1194), (2) failure to pay wages (Lab. Code,
§§ 204, 218; Cal. Code Regs., tit. 8, § 11040), (3) failure to timely pay wages due upon
termination (Lab. Code, §§ 201, 203, 218; Cal. Code Regs., tit. 8, § 11040), (4) failure to
reimburse reasonable expenses (Lab. Code, § 2802), and (5) unfair, unlawful, and
fraudulent business practices (Bus. & Prof. Code, § 17200 et seq.).
The case was tried to a jury. At trial, the following testimony was adduced.
Appellant initially worked at Chevron through Analysts International, an
employment agency. When he left that agency, he asked Chevron to hire him as an
employee. Chevron declined to hire him, but gave him the names of other agencies it
used to staff its computer analyst positions. Appellant continued his work at Chevron as
a Production Support Technical Analyst through Value Added.
In 2004, Chevron and Value Added entered into a Master Services Agreement (the
Agreement). Pursuant to the Agreement, Value Added was to provide “Consulting
Services” to Chevron, including Computer Programming, System Design, and
Acceptance Testing services and personnel for Chevron’s CAROL system.2 Consultants
were required to be proficient in the COBOL language used by the CAROL system.
Chevron considered Value Added to be a third-party vendor. The Agreement
provided: “Contractor is performing the Services as an independent contractor.
2
CAROL was Chevron’s internal system that controlled all purchase transactions
at all Chevron stations and ran the transactions from the point of sale through posting the
purchase on the customer’s Chevron credit card, other credit card, or debit card account.
It also reconciled all payments made by customers to their Chevron-brand credit card
accounts.
2
Contractor shall retain all authority to direct the supervision of its employees while
providing Services under this Agreement. Contractor, its employees, agents and
representatives are not employees or agents of Company [Chevron] or its affiliates. None
of the Contractor’s personnel shall be entitled to receive any compensation, benefits or
other incidents of employment from Company or its Affiliates. Nothing in this
Agreement shall be deemed to constitute a partnership or joint venture between Company
(and its Affiliates) and Contractor.”
At trial, appellant admitted that he was “aware at all times while [he was] working
for Value Added that when [he was] assigned to the Chevron facility [he was] working
there under a contract . . . .” He also acknowledged that he was retained for six to twelve
month “assignments,” and that he requested that his service order with Chevron be
extended at the expiration of each assignment. When the service order came up for
renewal, appellant understood that his Value Added supervisor, Peter Ngo, was working
with Chevron to extend the service agreement. In renewing appellant’s services, Chevron
would contact Ngo by email, requesting Ngo’s approval of the extension of the contract.
The terms of the renewal identified appellant as a “contractor,” Value Added as his
“agency,” the “contract dates,” the hourly rate Chevron would pay Value Added for
appellant’s services (usually $75 per hour), the fixed extension duration (a period of
months, usually from six to twelve), and the number of budgeted hours for appellant’s
work. Ngo would approve the terms and inform appellant of the renewal.
Appellant was paid by Value Added, which determined the amount and terms of
his compensation. Value Added required appellant to record all of his time on time cards
that he submitted to Value Added. The time cards identified Chevron as the “Client,”
Value Added as the “Agency,” and listed the CAROL “project” and the number of hours
appellant worked on each date. Value Added used these records to bill Chevron by the
hour for its contractors’ services.
Value Added paid appellant a monthly salary and a bonus based on billed hours.
Value Added issued appellant his paychecks, paystubs, deducted payroll taxes, and
provided him with medical and dental insurance. Appellant also later received
3
unemployment insurance from Value Added, not Chevron. Chevron never paid appellant
directly and never provided him any benefits. When appellant wanted a raise, he spoke
with Ngo, not Chevron, about increasing his pay.
Chevron sought contractors with “technical specialist degrees” to perform the
production support team work. Appellant, with a bachelor’s and a master’s degree and
two engineering licenses, met the requirements. Although he knew nothing about the
CAROL system when he was hired, he had experience with COBOL, the language used
by the CAROL system, and “extensive experience working in the computer field . . . .”
Chevron considered the CAROL system a legacy program that was slowly
becoming obsolete and was slated ultimately to be discontinued. COBOL was an
outdated programming language, familiar only to those who had been in the field for a
long time.
Appellant learned the CAROL system by reviewing Chevron’s CAROL
documentation over the course of nearly a year before he was fully capable of performing
his job using CAROL. He never received or required any formal training from Chevron.
Appellant was originally assigned to the production support team by Chevron
supervisor Lori Wong. At first, appellant was one of a team of technical analysts, each of
whom would be on-call every 20 weeks. Chevron determined this rotation was
inefficient, and created a production support group composed of four technical analysts.
Wong chose four technical analysts, including appellant, to be on the production support
team.
The production support team had a rotating on-call system. Each of four team
members would be the primary or “prime” on-call person 24 hours a day for one week
out of every four. In addition, each of the four would serve as the secondary or back-up
on-call person for another week out of every four.
Yvonne Blois, a Chevron employee, was the team leader of the Card Systems
technical team from 2000 to 2003, and again from 2007 onward. As leader of the
technical team, her responsibilities included production support. Brent Boozer, also a
4
Chevron employee, was in charge of the production support team in the intervening
period, from January 2004 to April 2007.
The mainframe on which CAROL operated was not owned by Chevron; it was
owned by a separate company, EDS. Problems with the system went first to the EDS
help desk, which would resolve minor or routine issues. Issues requiring more technical
ability or expertise would be assigned a “ticket” and sent to the production support team.
Joe Brennan, a contractor at Chevron through another agency, was the “de facto
lead” of the production support team and was responsible for assigning “tickets.” In
making the assignments, Brennan would look to see who had the most time available or
most familiarity with the issue, and would assign it to the team member he determined
was best suited for it. Blois had assigned this task to Brennan, and he performed this
function until 2007 when she assigned it to Chevron employee Rich Green. Brennan was
also responsible for the on-call schedule, which he created with input from each of the
contractors regarding their availability.
Appellant spent the majority of his time “working tickets,” i.e., resolving program
glitches with the CAROL system. According to appellant, 95 percent of the production
support team’s job was “ ‘restarting jobs and certain steps’ ” which were “ ‘pretty well
defined from the job docs.’ ” According to Chevron, appellant’s work involved
specialized tasks that were “ ‘extremely complex.’ ” For example, appellant was
responsible for analysis, research, repair, and testing of software; application
development; working on system specifications and performing systems analysis; writing
code, working on code enhancements, and preserving code integrity; and recommending
changes and improvements to the system. In addition, once an issue was resolved, testing
and quality assurance were a “big part” of the work.
Value Added was owned by Peter Ngo and his wife. Ngo was also a contract
worker at Chevron through Value Added; he worked at the Chevron facility in Concord
on the same floor as appellant. Ngo did not direct appellant’s work. He did not provide
appellant with training, did not assign him work, and did not conduct any performance
evaluation. He had no role in scheduling appellant’s work.
5
Value Added paid its employees once a month. It withheld taxes, unemployment,
and social security from appellant’s pay and issued him a W-2. Ngo testified that
appellant was paid an annual salary of $51,000. He also testified that appellant was paid
for every hour he worked. As an example, Ngo testified that if appellant worked 50
hours in a given week, he was paid for 50 hours by Value Added. Appellant worked for
Value Added from 2000 to 2008. During that time, Chevron was the only company with
which he was placed. Value Added terminated appellant’s employment on the same day
his final contract with Chevron expired: April 15, 2008.
Blois, who supervised the production support team for most of the time relevant
herein, testified that she informed contractors of her expectations but did not
micromanage their work. She did not direct them regarding how to perform their
research or analysis; she only stated the results she wanted.
She considered appellant to be highly trained and skilled. He did not have to get
her approval as to how to analyze, research, or fix a problem. If the fix required him to
change data or change code, however, appellant was required to consult with someone
prior to making the change.
Appellant testified that, if he could not resolve a ticket on his own, he would
request help from one of the business analysts, who were Chevron employees. Chevron
directed that if a ticket would require 12 or more hours of work it should not be handled
by production support but rather should be reassigned to the technical team.
From time to time, appellant was assigned tasks that were outside of his normal
production support work. Both Blois and Boozer assigned such tasks or special projects.
Appellant was authorized to charge for the time he spent on such projects, rather than
offset the hours with comp time, as he was otherwise required to do, because these
projects were outside of his normal production support duties. Appellant worked on a
special project known as the “taproot investigation,” which involved a glitch in the
transmission of credit card transaction files that caused duplicate billings. Appellant also
worked on projects involving Proterm, an application that permitted the writing of a
single program to update large amounts of data. Appellant obtained expertise in Proterm
6
while working for Chevron, and was considered the production support team expert on
Proterm.
Blois testified that it was “negotiable” whether appellant had to spend at least
eight hours per day at the Chevron facility. She said there was no minimum number of
hours he was required to be on-site. Rather, the only requirement was that he work the
number of hours he billed. Brennan testified that production support team members were
required to be at the Chevron site eight hours per day, 40 hours per week. Boozer
testified similarly, that he expected appellant to work at the Chevron facility during the
three weeks of each month that he was not on-call. He said contractors could
occasionally work from home, but only with his approval.
In 2004, Boozer checked records for a three-month period and noticed that
appellant was on the premises an average of only six hours per day. The number of hours
appellant had billed during that time was not the same as the number of hours he was on-
site. Boozer testified at trial that he was “very concerned” because “the way it looked is
that he was charging us for time that he had not put in . . . .” He confronted appellant
about the issue.
Appellant explained that he had been working with Proterm from home after hours
because of the expense and difficulty of using Proterm during the day; Boozer accepted
his explanation but stated that, going forward, he wanted appellant to work from the
Chevron office. At his deposition, Boozer testified that he did not recall whether
appellant offered an explanation or whether appellant told him he had been working from
home. At trial, Boozer initially testified that he did not think appellant had “any
explanation as to why there was a discrepancy in the hours.” Later he testified, “I can’t
really remember what [appellant] said.”
Following the confrontation, Boozer instructed appellant to be in the office 40
hours per week, and appellant did so. Boozer did not discuss appellant’s hours with Ngo
and did not express to Ngo any concerns with appellant’s job performance.
Production support team members recorded their time worked on Chevron time
sheets and on time sheets for their agency. Prior to November 2004, team members were
7
instructed to report their actual hours worked on Chevron time sheets, but that their
agency time sheets “should always reflect a 40 hour work week.”
That rule was changed in November 2004, at which time they were instructed,
going forward, that “[a]gency time sheets [are] to reflect the same number of hours as
reported on Company timesheets.” They were also instructed that the “company rule”
required “the OnCall person to take unpaid time off equal to the actual overtime hours
worked during the OnCall week.”
Chevron did not want team members billing more than 40 hours per week. Boozer
explained that it was important for Chevron to stay within budget for contractors, and, to
do so, Chevron wanted contractors to balance their time out to 40 hours per week. The
production support team manager, either Boozer or Blois, was responsible for
coordinating the equalization of unpaid time off and actual overtime.
Boozer instructed appellant to notify him and everyone on the team when he was
scheduling his comp time. Appellant would send emails indicating when he intended to
take time off. On one occasion, Boozer discovered that appellant had accumulated 42
excess hours. He asked appellant to balance this time out over several weeks. He
testified that he was surprised that appellant had accumulated so much excess time.
Blois also imposed restrictions on appellant’s accumulation of overtime hours and
his taking of comp time. In April 2007, appellant asked to take off the week of May 7.
At trial, Blois testified that appellant did not need her approval, that she had no authority
to prevent him from taking time off. However, by email on April 18, 2007, she replied:
“My inclination is to say no but I have a consult into Brent [Boozer].” Blois was
concerned that appellant was “overbooking” or “padding” his hours. She was concerned
because appellant’s hours were higher than other people’s for doing the same amount of
work, and Chevron had a budget based on 40 hours of work per week.
The next day, on April 19, 2007, Blois instructed appellant: “From here on out,
you will advise me the day of and or the following day when you have accrued any OT
and you will use this time within a 2 week period, and you will tell me when you intend
to utilize this time.” She testified at trial that this was her way of trying to “keep
8
verification” going forward. She wanted to be informed when appellant would not be in
the office so she could keep better track of his hours for budgetary purposes.
Later on the same day, Ngo, the owner of Value Added, emailed Blois seeking her
“permission” to talk to appellant about his plan to take a week off as comp time. Ngo
wrote, “I promise to be very diplomatic and not messing up [sic]. I promise to run to you
for help and I promise to report back to you on what’s the outcome.” Blois replied, “In
theory, he is your employee so you can speak to him as you wish, however, it may be a
good idea if you and I discuss the latest outcomes.”
Thereafter, appellant would customarily advise Blois by email of the overtime
hours he worked and the dates and times he proposed to take comp time to offset them.
Two months later, Blois announced that the entire production support team had to work
to reduce the number of hours of overtime.
According to respondent, Chevron did not establish any work schedule for
appellant. The contractors advised each other and Chevron when they would be
unavailable, working from home, or not on the premises.
According to respondent, appellant also never had to ask Chevron for time off.
“He worked the hours he pleased when he pleased.” Chevron’s interest regarding the
contractors’ availability was ensuring that there were experts on-hand to address any
issues as they arose with the CAROL system. Chevron tracked the contractors’ hours to
ensure that labor costs did not exceed the budgeted or contracted-for amounts, and to
ensure that the contractors were actually working during the time billed to Chevron.
Appellant received training at Chevron when it implemented new versions of
computer programs. Appellant attended weekly, hour-long meetings run by the
production team manager, either Blois or Boozer. Both contractors and Chevron
employees were required to attend. The meetings included members of the production
support team and individuals from other teams, and addressed matters such as happenings
at the company, the tickets team members were working on, and any issues people were
having, “in order to improve . . . cross-communication amongst the different teams.”
9
Chevron also held implementation meetings at least once a month which appellant was
required to attend.
Blois testified that she had the right to discontinue appellant’s services at any time.
Boozer said he never filled out performance reviews for contractors, but that he and his
boss had the option of whether or not to renew the contract of a contractor. In making
that decision, they would take into account the performance of the individual whose
contract was up for extension.
Because the CAROL system contained confidential account information, its
security had to be protected. Chevron provided production support team members with
laptops and a virtual private network to access the system from home. Chevron also
provided pagers to team members to use when they were on-call. Appellant was
reimbursed by Value Added for other work-related expenses such as a printer, paper,
security software, internet, office supplies, car maintenance, and travel expenses.
Appellant never submitted expense requests to Chevron.
According to appellant, although the Value Added payment worksheets prepared
by Ngo apportioned appellant’s gross pay to “salary” and “bonuses,” appellant testified
that he was not on a salary. Appellant was paid by the hour the entire time he worked at
Chevron, and that Ngo’s accounting was “a mystery.” Chevron was the only work
assignment Value Added ever gave him.
During his time with Chevron, appellant was always aware that he was working
under a contract. He was involved with his contract renewals and would ask for his
contract to be extended. He considered himself an independent contractor, not an
employee of Chevron, but understood that the job was “pretty much continuous.” The
term of the contract could not be indefinite, however, so it was usually extended for at
least six months.
Boozer testified that he always considered appellant to be an independent
contractor. He never treated appellant like an employee; he never intended appellant to
be an employee; and appellant never acted like an employee. Blois testified the she never
10
considered appellant to be a Chevron employee, and she never tried to treat appellant as
she would a Chevron employee.
When Chevron announced that it was going to sell its credit card business, it
offered retention bonuses to encourage both contractors and employees to remain on the
job until the credit card business was terminated. It also offered to try to find jobs within
Chevron for contractors and employees who would otherwise lose their positions when
the credit card business ceased operations. Ngo helped appellant with preparing his
resume and tried to find him a new assignment.
After a lengthy trial, the jury found by special verdict that appellant was not an
employee of Chevron. The jury therefore did not reach any of the other issues.
Appellant’s motions for a new trial and for judgment notwithstanding the verdict were
denied.
Appellant filed a timely notice of appeal from the judgment.
III. DISCUSSION
A. Alleged Instructional Error.
1. The Challenged Instruction Did Not Correctly State the Applicable Law.
a. Background.
At Chevron’s request, the trial court instructed the jury: “Chevron contends that
Mr. Vaynberg was not entitled to overtime pay from Chevron because he was an
employee of Value Added working at Chevron as an independent contractor, not an
employee of Chevron. In deciding whether Mr. Vaynberg was an independent
contractor, you must first decide whether Chevron had the right to completely control the
manner and means by which Mr. Vaynberg performed his work, rather than just the right
to specify or request a desired result. [¶] If Chevron had complete authority to supervise
the specific details of Mr. Vaynberg’s work and to exercise complete control over his
work, as opposed to just giving him suggestions as to the details, then this is one of the
factors you may consider.”
Appellant contends that this instruction is erroneous because, under a dual
employment relationship, as appellant alleged he had with Chevron and Value Added, it
11
is not necessary that Chevron have a right of complete control. The parties both
submitted jury instructions based on the common law definition of employment to assist
the jury in distinguishing between an employee and an independent contractor. The
parties agree that the existence of control is the most important factor, but not the only
one, in making this determination. At trial, appellant contended that, although he was
originally hired by Value Added to work at Chevron as an independent contractor,
Chevron assumed sufficient control over his work and working conditions that his
relationship to Chevron was that of employee to dual employer, with control shared by
Chevron and Value Added. Under these circumstances, appellant argues, the challenged
instruction misled the jury by suggesting or implying that Chevron’s control over
appellant had to be “complete” to satisfy the control factor.
“We review de novo whether a challenged instruction correctly states the law.”
(Bowman v. Wyatt (2010) 186 Cal.App.4th 286, 298 (Bowman), and cases cited therein.)
b. The Law.
The common law pertaining to the distinction between employees and independent
contractors developed largely around workers compensation and unemployment
insurance cases, where liability for misconduct or negligence and/or eligibility for
benefits were primarily at issue. “The ‘seminal case’ [citation] addressing the
employee/independent contractor distinction is Empire Star Mines Co. v. Cal. Emp. Com.
(1946) 28 Cal.2d 33 (Empire Star), overruled on other grounds in People v. Sims (1982)
32 Cal.3d 468, 479-480, footnote 8. That case arose under the Unemployment Insurance
Act, pursuant to which employers were required to pay unemployment insurance taxes
for employees, but not for independent contractors. (Empire Star, at p. 36.) In affirming
the trial court’s determination that the defendant mining company’s lessees were
independent contractors, the Supreme Court identified a number of factors relevant to
distinguishing independent contractors from employees. The most important factor was
‘the right to control the manner and means of accomplishing the result desired. If the
employer has the authority to exercise complete control, whether or not that right is
exercised with respect to all details, an employer-employee relationship exists.’ (Id. at p.
12
43.) The court also identified a series of ‘other factors’ to be taken into consideration:
‘(a) whether or not the one performing services is engaged in a distinct occupation or
business; (b) the kind of occupation, with reference to whether, in the locality, the work is
usually done under the direction of the principal or by a specialist without supervision;
(c) the skill required in the particular occupation; (d) whether the principal or the
workman supplies the instrumentalities, tools, and the place of work for the person doing
the work; (e) the length of time for which the services are to be performed; (f) the method
of payment, whether by the time or by the job; (g) whether or not the work is part of the
regular business of the principal; and (h) whether or not the parties believe they are
creating the relationship of employer-employee. [Citation.]’ (Id. at pp. 43-44.)”
(Bowman, supra, 186 Cal.App.4th at pp. 299-300; see also S.G. Borello & Sons, Inc. v.
Department of Industrial Relations (1989) 48 Cal.3d 341, 350-351 (Borello), and cases
cited therein [explaining that the right of control is the primary factor in determining
whether a worker is an independent contractor or an employee, and that secondary factors
must also be considered].)
Empire Star, Borello, and Bowman all addressed the employee/independent
contractor distinction in the context of a single employer.
Dual employment, of necessity, involves two employers. “The possibility of dual
employment is well recognized in the case law. ‘Where an employer sends an employee
to do work for another person, and both have the right to exercise certain powers of
control over the employee, that employee may be held to have two employers—his
original or “general” employer and a second, the “special” employer.’ (Miller v. Long
Beach Oil Dev. Co. (1959) 167 Cal.App.2d 546, 549.) In Industrial Ind. Exch. v. Ind.
Acc. Com. (1945) 26 Cal.2d 130, 134-135, this court stated that ‘an employee may at the
same time be under a general and a special employer, and where, either by the terms of a
contract or during the course of its performance, the employee of an independent
contractor comes under the control and direction of the other party to the contract, a dual
employment relation is held to exist. [Citations.]’ ” (Kowalski v. Shell Oil Co. (1979) 23
Cal.3d 168, 174 (Kowalski).)
13
In Kowalski, the plaintiff was employed by a maintenance company and was
working at a Shell refinery, operating a radial saw when his hand was amputated. He
brought a personal injury action against Shell, which claimed he was a special employee
under the contract Shell had with the maintenance company and, thus, the plaintiff’s
exclusive remedy was under the workers compensation law. (Kowalski, supra, 23 Cal.3d
at pp. 171-172.) The jury found that Kowalski was not Shell’s special employee.
In determining whether substantial evidence supported the jury’s finding, the
Supreme Court noted that “the courts have looked to a number of factors as evidentiary
indicia of the existence of a special employment relationship. ‘The paramount
consideration appears to be whether the alleged special employer exercises control over
the details of [an employee’s] work. Such control strongly supports the inference that a
special employment exists.’ [Citations.] However, ‘[t]he fact that instructions are given
as to the result to be achieved does not require the conclusion that a special employment
relationship exists.’ [Citations.]” (Kowalski, supra, 23 Cal.3d at pp. 176-177.) In
addition, evidence that the alleged special employer has the power to discharge the
worker is strong evidence of a special employment relationship, while the payment of
wages is not determinative. “Other factors to be taken into consideration are ‘the nature
of the services, whether skilled or unskilled, whether the work is part of the employer’s
regular business, the duration of the employment period, . . . and who supplies the work
tools.’ [Citations.] Evidence that (1) the employee provides unskilled labor, (2) the work
he performs is part of the employer’s regular business, (3) the employment period is
lengthy, and (4) the employer provides the tools and equipment used, tends to indicate the
existence of special employment. Conversely, evidence to the contrary negates existence
of a special employment relationship. [¶] In addition, consideration must be given to
whether the worker consented to the employment relationship, either expressly or
impliedly, and to whether the parties believed they were creating the employer-employee
relationship. [Citation.]” (Id. at pp. 177-178, fn. omitted.)
We observe that there are two different types of special employment, one in which
the general employer relinquishes all control to the special employer, and one in which
14
the general employer relinquishes only partial control. In the former situation, the special
employer becomes solely responsible for the employee’s actions and the general is
relieved of all liability; in the latter, the special and the general employers are dual or
joint employers and share liability “concurrently and simultaneously, jointly and
severally . . . .” (Marsh v. Tilley Steel Co. (1980) 26 Cal.3d 486, 492, 494-495 (Marsh);
see also Brassinga v. City of Mountain View (1998) 66 Cal.App.4th 195, 216 (Brassinga)
[“Marsh itself made clear that relinquishment of ‘all’ control is not necessary for creation
of a special employment relationship.”].)
Marsh, Kowalski, and Brassinga are cases involving personal injury tort and
workers compensation remedies, as are McFarland v. Voorheis-Trindle Co. (1959) 52
Cal.2d 698 (McFarland) and Riley v. Southwest Marine, Inc. (1988) 203 Cal.App.3d
1242, which appellant also cites. These dual employer cases involved a right to control
test where each employer had “ ‘ “some power, not necessarily complete, of direction and
control.” ’ ” (McFarland, supra, 52 Cal.2d at p. 704.)
In Martinez v. Combs (2010) 49 Cal.4th 35, 50, 59, 76 (Martinez), our Supreme
Court had occasion to consider the nature of the employment relationship and alleged
dual employers in the context of wage claims brought under state law. In Martinez,
seasonal agricultural workers brought an action under Labor Code section 1194 to
recover unpaid minimum wages. (Martinez, supra, 49 Cal.4th at p. 42.) The plaintiffs
filed the action against the bankrupt strawberry farm operator who hired them, Munoz,
and two produce merchants, Apio and Combs, who had stopped selling Munoz’s
strawberries. (Id. at pp. 42-43.) There was no question that Munoz employed the
plaintiffs; the produce merchants’ liability turned on whether they were joint employers
with Munoz. (Martinez, supra, 49 Cal.4th at p. 45.) Concluding that, as a matter of law,
the produce merchants did not jointly employ the plaintiffs, the trial court granted the
produce merchants’ motion for summary judgment. The Supreme Court concluded that
the evidence failed to raise a triable issue of fact as to whether the produce merchants
ever supervised or exercised control over the plaintiffs’ working conditions. (Id. at p.
76.)
15
Before addressing the merits, the Supreme Court analyzed the term “employment”
for the first time in the context of state wage and hour violation cases. It held that, in
actions under Labor Code section 1194 to recover unpaid wages, the applicable Industrial
Welfare Commission (IWC) wage order defines the employment relationship and, thus,
who may be held liable as an employer for unpaid wages.3 (Martinez, supra, 49 Cal.4th
at p. 52.) Although the factual situation, procedural posture, and the applicable wage
order here are different, the Martinez court’s consideration of the employment
relationship required for Labor Code wage laws to apply has direct bearing on this case.
The IWC defines employer as “a person who ‘employs or exercises control over the
wages, hours, or working conditions of any person.’ ” The Martinez court observed that,
“phrased as it is in the alternative (i.e., ‘wages, hours, or working conditions’), the
language of the IWC’s ‘employer’ definition has the obvious utility of reaching situations
in which multiple entities control different aspects of the employment relationship, as
when one entity, which hires and pays workers, places them with other entities that
supervise the work. Consistently with this observation, the IWC has explained its
decision to include the language in one modern wage order as ‘specifically intended to
include both temporary employment agencies and employers who contract with such
agencies to obtain employees within the definition of “employer.” ’ ” (Martinez, supra,
49 Cal.4th at p. 59, fns. omitted.)
The court later emphasized this point again: “As we have explained, one of the
reasons the IWC defined ‘employer’ in terms of exercising control was to reach situations
3
The Martinez plaintiffs alleged the applicability of IWC wage order No. 14,
which defines “[e]mploy” as “to engage, suffer, or permit to work”; “[e]mployee” as
“any person employed by an employer”; and “[e]mployer” as “any person as defined in
Section 18 of the Labor Code, who directly or indirectly, or through an agent or any other
person, employs or exercises control over the wages, hours, or working conditions of any
person.” (Cal. Code Regs., tit. 8, § 11140, subd. 2(C), (F), (G) (wage order No. 14);
Martinez, supra, 49 Cal.4th at p. 42.) In the instant case, appellant alleged the
applicability of wage order No. 4, in which the definitions of “[e]mploy,” “[e]mployee,”
and “[e]mployer” are identical to those in wage order No. 14. (Cal. Code Regs., tit. 8, §
11040, subd. 2(E), (F), (H).)
16
in which multiple entities control different aspects of the employment relationship. This
occurs, for example, when one entity (such as a temporary employment agency) hires and
pays a worker, and another entity supervises the work. [Citation.] Supervision of the
work, in the specific sense of exercising control over how services are performed, is
properly viewed as one of the ‘working conditions’ mentioned in the wage order. To
read the wage order in this way makes it consistent with other areas of the law, in which
control over how services are performed is an important, perhaps even the principal, test
for the existence of an employment relationship. (See, e.g., Metropolitan Water Dist. v.
Superior Court [(2004)] 32 Cal.4th 491, 512 [common law]; Tieberg v. Unemployment
Ins. App. Bd. (1970) 2 Cal.3d 943, 946 [(Tieberg)] [unemployment insurance];
McFarland[, supra,] 52 Cal.2d [at p.] 704 [workers’ compensation].)” (Martinez, supra,49 Cal.4th at p. 76.)4
c. Analysis.
Appellant’s theory of the case was that Chevron and Value Added were dual
employers in that they shared control over appellant or, phrased another way, Value
Added relinquished partial control over appellant to Chevron. The challenged
instruction, however, required the jury to decide whether Chevron had the right of
complete control or complete authority over appellant’s work. We agree with appellant
that, in the context of dual employers, the instruction was an incorrect statement of the
law.
Chevron’s arguments to the contrary are not persuasive. First, Chevron relies on
Empire Star, supra, 28 Cal.2d at page 43, which used the “complete control” language:
“If the employer has the authority to exercise complete control, whether or not that right
4
Although Martinez was issued by the Supreme Court shortly before this matter
went to trial, it does not appear that the parties or the trial court considered it in setting
the jury instructions. Likewise, neither party argues error based on Martinez in this
appeal. Accordingly, we will not consider the issue.
17
is exercised with respect to all details, an employer-employee relationship exists.”5 As
more recent support for this standard, Chevron cites Borello, supra, 48 Cal.3d 341, but
quotes from the dissenting opinion at page 366 (“A material and often conclusive factor
is the right of an employer to exercise complete and authoritative control of the mode and
manner in which the work is performed”) without identifying it as such. (Borello, supra,
48 Cal.3d at p. 366, dis. opn. of Kaufman J.) The majority in Borello does not refer to
“complete control.”
The other cases Chevron relies on as recent authority interpreting the right-to-
control factor merely cite or derive from Empire Star and S.A. Gerrard Co. without
analysis on this point. (See Bowman, supra, 186 Cal.App.4th at p. 299 [quoting Empire
Star, supra, 28 Cal.2d at p. 43: “ ‘If the employer has the authority to exercise complete
control, whether or not that right is exercised with respect to all details, an employer-
employee relationship exists.’ ”]; Toyota Motor Sales U.S.A., Inc. v. Superior Court
(1990) 220 Cal.App.3d 864, 873-874 [same]; Varisco v. Gateway Science & Engineering,
Inc. (2008) 166 Cal.App.4th 1099, 1103 (Varisco) [quoting S.A. Gerrard Co., supra, 17
Cal.2d at p. 414: “ ‘But this rule requires that the right to exercise complete or
authoritative control, rather than mere suggestion as to detail, must be shown.’ ”]; Ali v.
U.S.A. Cab Ltd. (2009) 176 Cal.App.4th 1333, 1347 [attributing the same sentence to
Varisco].) In any event, none of these cases addresses the right-to-control factor in the
context of dual employment.
Chevron also argues that appellant invited the error of which he now complains by
proposing two jury instructions that were based on the common law of employment and
that, according to Chevron, suggested that the right of control must be exclusive or
complete. “The ‘doctrine of invited error’ is an ‘application of the estoppel principle’:
‘Where a party by his conduct induces the commission of error, he is estopped from
5
Chevron’s assertion that the Supreme Court first articulated this test in Empire
Star is incorrect. The test predates Empire Star. (See, e.g., S.A. Gerrard Co. v. Industrial
Acc. Com. (1941) 17 Cal.2d 411, 413-414 (S.A. Gerrard Co.); Moody v. Industrial Acc.
Com. (1928) 204 Cal. 668, 670.)
18
asserting it as a ground for reversal’ on appeal. [Citation.]’ . . . [T]he doctrine
‘prevent[s] a party from misleading the trial court and then profiting therefrom in the
appellate court.” (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 403.) The doctrine
“requires affirmative conduct demonstrating a deliberate tactical choice on the part of the
challenging party.” (Huffman v. Interstate Brands Companies (2004) 121 Cal.App.4th
679, 706.)
The argument is entirely without merit. The record shows that appellant expressly
withdrew both instructions, requested an instruction on joint employment, and
consistently opposed an instruction requiring a right of complete control. There is no
support in the record for a contention that appellant engaged in a deliberate trial strategy
to mislead the trial court or any indication that the trial court was misled as to appellant’s
position.
Attempting to distance this case from Martinez, Chevron contends that “Martinez
did not consider whether, under the common law test, a joint employment relationship
where an employee can recover overtime wages from either employer, can be established
under a lesser right to control standard.” Although Martinez held that the applicable
wage orders, not the common law, properly defined the employment relationship under
Labor Code section 1194, the common law was not irrelevant to its analysis: “This is not
to say that the common law plays no role in the IWC’s definition of the employment
relationship. In fact [and as discussed above], the IWC’s definition of employment
incorporates the common law definition as one alternative.” (Martinez, supra, 49 Cal.4th
at p. 64 [one of the three alternative definitions of “[t]o employ” is “to exercise control
over the wages, hours, or working conditions”].)
We interpret Chevron’s position to be that, although Martinez supports the
applicability of the concept of dual employment in the wage and hour context, Martinez
itself does not stand for the proposition that dual employment may be established by a
showing of partial or shared control. However, as appellant points out, shared control is
“the very essence of a joint or dual employment.” (See, e.g., Service Employees Internat.
Union v. County of Los Angeles (1990) 225 Cal.App.3d 761, 773 [dual or joint
19
employment arises only where both the general employer and the special employer have
the right to control the employee’s activities]; County of Los Angeles v. Workers’ Comp.
Appeals Bd. (1981) 30 Cal.3d 391, 405 [dual employment exists where the general
employer sends an employee to work for the special employer and both have the right to
control the employee’s activities].) Moreover, the central issue in Martinez involved this
precise question: did the plaintiffs show sufficient shared or partial control by the
produce merchants such that they were liable for wages under Labor Code section 1194?
(Martinez, supra, 49 Cal.4th at p. 49.)
Finally, Chevron argues that Martinez questioned the “continued applicability” of
the common law employment factors in the wage and hour context. The Martinez
plaintiffs attempted to compare their case with Borello, supra, 48 Cal.3d 341, in which
the Supreme Court held that workers hired by a large agricultural landowner under
“sharefarmer” agreements were employees, not independent contractors, for purposes of
workers compensation law. The Borello court applied the common law test of
employment in light of the remedial purposes of the workers compensation law, and
concluded that the sharefarmers were workers the law intended to protect. (Martinez,
supra, 49 Cal.4th at p. 73.) The Martinez court distinguished Borello: “Assuming the
decision in [Borello], supra, 48 Cal.3d 341, has any relevance to wage claims, a point we
do not decide, the case does not advance plaintiffs’ argument. Plaintiffs are correct in
that, if Munoz had been Apio’s employee rather than an independent contractor, Munoz’s
employees arguably would also have been Apio’s employees; the determination that a
purported independent contractor is in fact an employee raises the strong possibility,
generally speaking, that the contractor and its employer jointly employ the contractor’s
employees. [Citation.]” (Martinez, supra, 49 Cal.4th at p. 73.) Martinez proceeded to
apply the common law employment factors to Munoz, contrasting his independent
contractor status with that of the Borello sharefarmer-employees. (Ibid.) We disagree
with Chevron that this discussion means any more than the court said it did, i.e., it
addressed the plaintiffs’ argument based on Borello, assuming without deciding the
relevance of that case to wage claims.
20
The plaintiffs in Martinez also argued that “the right to exercise control over the
manner in which work is performed is sufficient to prove the existence of an employment
relationship, whether or not the right is exercised,” once again relying on S.G. Borello.
(Martinez, supra, 49 Cal.4th at p. 76.) Once again, the Supreme Court assumed, without
deciding, that this rule applied in the wage and hour context, and then concluded the
argument had no merit on the facts. (Ibid.) We again reject Chevron’s contention that
this discussion has any bearing on the quantum of control required to establish a joint or
dual employment.
2. The Instruction Was Not Prejudicial.
Although the instruction was erroneous, “there is no rule of automatic reversal or
‘inherent’ prejudice applicable to any category of civil instructional error, whether of
commission or omission. A judgment may not be reversed for instructional error in a
civil case ‘unless, after an examination of the entire cause, including the evidence, the
court shall be of the opinion that the error complained of has resulted in a miscarriage of
justice.’ [Citation.]” (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 580 (Soule);
see Cal. Const., art. VI, § 13.) The instructional error is harmless if it is not reasonably
probable appellant would have obtained a more favorable result in its absence. (Soule,
supra, 8 Cal.4th at p. 570.)
“In determining whether instructional error was prejudicial, a reviewing court
evaluates ‘ “(1) the state of the evidence, (2) the effect of other instructions, (3) the effect
of counsel’s arguments, and (4) any indications by the jury itself that it was misled” ’ to
determine whether it is ‘reasonably probable’ that erroneous instructions misled the jury.
[Citations.] ‘A “reasonable probability” in this context “does not mean more likely than
not, but merely a reasonable chance, more than an abstract possibility.” [Citations.]’ ”
(Bowman, supra, 186 Cal.App.4th at p. 304.)
a. State of the Evidence.
Here, the evidence regarding the terms and conditions of appellant’s working
relationship with Chevron was largely undisputed. While appellant emphasized certain
aspects of the evidence, such as the amount of control over his work schedule exerted by
21
Blois and Boozer, the length of time he worked continuously at Chevron, and that
Chevron supplied instrumentalities for doing the job, Chevron emphasized other aspects,
such as the expertise required to do the job, the inability of Blois and Boozer to control or
direct the substance of appellant’s work because they did not have the technical expertise,
and the series of contracts and budgets under which appellant was retained.
b. Effect of Other Instructions.
The other instructions pertaining to the employment relationship between
appellant and Chevron state the parties’ basic contentions, and provide guidance on
making the determination whether appellant was Chevron’s employee or an independent
contractor. The jury was instructed that “a primary factor” is “which party has the right
to control the manner and means of accomplishing the result desired. . . . [¶] Thereafter,
even if you decide that Chevron did or did not have the right of control, then you must
consider all the other secondary factors in deciding whether [appellant] was Chevron’s
employee or an independent contractor.” The secondary factors the jury was advised to
consider were: “1. Whether there is a right to discharge at will, without cause. [¶] 2.
Whether or not the one performing services is engaged in a distinct occupation or
business. [¶] 3. Whether the work is usually done under the direction of an employer or
by a specialist without supervision. [¶] 4. The skill required. [¶] 5. Who supplies the
instrumentalities, tools, and place of work of the one performing services. [¶] 6. The
length of time for which the services are to be performed. [¶] 7. The method of payment,
whether by time or by the job. [¶] 8. Whether or not the work is part of a regular
business of the beneficiary of the services. [¶] 9. Whether or not the parties believe they
are creat[ing] a relationship of master and servant. [¶] The most important factor in
whether there is an employer/employee relationship is the right of control; however, no
single factor is dispositive and all should be considered together. If you decide that
22
Chevron is the employer, or one of the employers, then that would be a basis to determine
the liability of Chevron.”6
These instructions made clear that the jury was to consider all of the enumerated
factors: the primary factor of control, all of the secondary factors, and all of the factors
together, in determining whether appellant and Chevron had an employment relationship.
This concept was stated no fewer than five separate times: (1) control is “one of the
factors you may consider;” (2) the right of control is “a primary factor;” (3) the right of
control need not be exercised; if it existed, then appellant “may or may [not] be an
employee;” (4) whether or not Chevron had the right of control, the jury then “must
consider all the other secondary factors;” and (5) “[t]he most important factor . . . is the
right of control; however, no single factor is dispositive and all should be considered
together.”
c. Effect of Counsels’ Argument.
In lengthy closing arguments totaling nearly 100 pages of transcript, both sides
argued the right of control, among various other issues. Appellant’s counsel focused on
the evidence that Chevron had the right to control or exerted control over various aspects
of appellant’s work. Early in his argument, counsel for Chevron stated that, in deciding
whether appellant was an independent contractor or an employee, the jury must first
decide whether “Chevron had the right to—and here are the magic words—completely
control the manner and means by which [appellant] performed his work, rather than just
the right to specify or request a desired result. What that means is they had the right to go
in to tell [appellant] this is how you perform your research, this is how you perform your
analysis, and this is how you do your fix, the very details of the work . . . .” Counsel
argued that “no one at Chevron ever had the right of control to tell [appellant] how to
6
The instructions also stated that the existence of a verbal or written agreement
characterizing the parties’ relationship would be a significant factor in making the
determination, but that it could be ignored if the parties’ actual conduct differed from the
characterization. Finally, the instructions advised the jury that, because of the
presumption in favor of employee status, Chevron had the burden of proving that
appellant was an independent contractor.
23
perform the details of his work.” Thereafter, Chevron’s counsel referred only to
“control” and “the right of control,” not “complete control,” in arguing that appellant was
an independent contractor and not an employee.
Based on our reading of the transcript, it appears that the distinction Chevron
sought to draw with respect to control was between controlling how the actual work of
computer systems analysis, research, and repair was done, on the one hand, and
controlling supervisory tasks such as assigning the work, providing access to secure
systems, and establishing the work schedule, on the other. Chevron emphasized control
of the manner and means of performing the work rather than the quantum of control over
the work having to be complete control. We find no reasonable probability that this
single reference to “complete control” adversely affected the result.
d. Any Indications the Jury Was Misled.
Finally, there is no indication that the jury was misled by the erroneous
instruction. Prior to closing arguments, the court responded to a question from the jury.
The jury asked, “ ‘Please explain why you’re not seeking these damages from Value
Added Consulting Group, Inc. along with or instead of Chevron[.]’ ” The stipulated
answer was, “ ‘The plaintiff Moysey Vaynberg is pursuing Value Added Consulting
Group separately.’ ” This question reflects no confusion on the part of the jury regarding
the right of control factor. The jury asked no other questions before rendering a verdict.
By a vote that was not close (10 to 2), the jury determined that appellant was not an
employee of Chevron during the relevant time period, and there were no inconsistencies
in the verdict that might suggest confusion.
Accordingly, we find that there is no reasonable probability that, in the absence of
the error, appellant would have obtained a more favorable result. (Soule, supra, 8 Cal.4th
at p. 570.) Thus, we conclude that the instructional error was harmless. (Ibid.)
B. Exclusion of Evidence.
Appellant also challenges the trial court’s exclusion of Chevron’s HR Policy 305,
entitled “Services of Former Employees” (HR Policy 305).
24
HR Policy 305 provided, in part: “Contracting directly with a former employee
for professional services is handled the same as with any other independent contractor.
To maintain an independent contractor relationship, the company cannot: [¶] [] directly
supervise the contractor. [¶] [] require compliance with detailed instructions. [¶] []
require prescribed working hours. [¶] [] use a contractor who is solely dependent on the
company for business. [¶] [] impose any other working conditions that directly or
indirectly establish an employer-employee relationship.”
Appellant sought to introduce into evidence two versions of this policy, one in
effect from October 2001 to September 2006, and the other in effect thereafter.
Chevron moved in limine to exclude its internal human resources (HR) policies,
including HR Policy 305, on grounds of irrelevance and Evidence Code section 352.
Chevron argued that the policies would “mislead the jury as to the correct standard for
evaluating Chevron’s purported liability” because its “HR policies are stricter than what
the law provides and requires.” Appellant opposed the motion, arguing that the jury
would understand the difference between instructions on the proper legal standard to
apply when determining liability and a company’s internal policies that “may or may not
invoke different standards.” The court ruled that HR Policy 305 could be used by
appellant only “for impeachment purposes if needed.”
We review a trial court’s decision to exclude evidence for abuse of discretion.
(Thompson v. County of Los Angeles (2006) 142 Cal.App.4th 154, 168; San Lorenzo
Valley Community Advocates for Responsible Education v. San Lorenzo Valley Unified
School Dist. (2006) 139 Cal.App.4th 1356, 1419.) “ ‘ “In the absence of a clear showing
that its decision was arbitrary or irrational, a trial court should be presumed to have acted
to achieve legitimate objectives and, accordingly, its discretionary determinations ought
not [to] be set aside on review.” [Citation.]’ ” (Ajaxo Inc. v. E*Trade Group Inc. (2005)
135 Cal.App.4th 21, 45.) Even where exclusion of the evidence was erroneous, however,
reversal is only proper when there is a reasonable probability that a more favorable result
would have been achieved absent the error. (Tudor Ranches, Inc. v. State Comp. Ins.
Fund (1998) 65 Cal.App.4th 1422, 1431-1432; see also Cal. Const., art. VI, § 13
25
[judgment will not be reversed for improper exclusion of evidence absent the reviewing
court’s opinion that the error has resulted in a miscarriage of justice.].)
Appellant contends HR Policy 305 was relevant to one of the secondary factors to
be considered in determining whether an employment relationship exists under the
common law, i.e., whether the parties believe they are creating the relationship of
employer-employee. (Tieberg, supra, 2 Cal.3d at p. 949; S.G. Borello, supra, 48 Cal.3d
at p. 351.) Appellant argues that HR Policy 305 was evidence of what Chevron believed
were the practices that had to be avoided in order to maintain an independent contractor
relationship and, conversely, to avoid creating an employment relationship.
Further, appellant contends he was prejudiced by the exclusion of the evidence
because Chevron elicited testimony from appellant that he considered himself an
independent contractor, not an employee, of Chevron. In addition, Boozer and Blois
testified that they considered appellant to be an independent contractor; they never
considered him an employee; and they never treated him as an employee. Chevron
argued these points to the jury: “Not one witness testified in this case that Mr. Vaynberg
was an employee of Chevron at any time. [¶] Indeed, even Mr. Vaynberg himself, the
plaintiff in this case, testified that he was not an employee of Chevron. . . . Mr. Vaynberg
admitted to you that at all times while working on assignment at the Chevron facility he
was a contractor of Chevron.”
Appellant’s contentions are unpersuasive. First, the policy on its face applies to
“former employees,” and there is no evidence to suggest that appellant fits this category.
If the policy was applied more broadly by Chevron, there is no evidence to that effect.
Second, although appellant contends the policy is relevant to whether Chevron believed it
was creating an employee-employer relationship with appellant, there is no evidence that
any of the Chevron employees who were allegedly creating this relationship had ever
read the policy or were aware of it. Third, under the trial court’s ruling, appellant was
permitted to use the policy for impeachment purposes, and appellant did in fact use the
policy with one witness. Presumably, he could have attempted to impeach other
witnesses with it as well. Finally, despite the ruling below, appellant read the policy to
26
the jury and published it during opening statements. No abuse of discretion has been
shown.
IV. DISPOSITION
The judgment is affirmed.
_________________________
Haerle, Acting P.J.
We concur:
_________________________
Lambden, J.
_________________________
Richman, J.
27