Becerra v. Expert Janitorial, LLC

• Decision Date: 07 August 2014
• Docket Number: No. 89534–1.,89534–1.
• Citation: 181 Wash.2d 186,332 P.3d 415
• Court: Washington Supreme Court
• Parties: Carolina Becerra BECERRA, Julio Cesar Martinez Martinez, Orlando Ventura Reyes, Alma A. Becerra, and Adelene Mendoza Solorio, Respondents, and Heriberto Ventura Saturnino, Jose Luis Coronado, and Moises Santos Gonzalez, Plaintiffs, v. EXPERT JANITORIAL, LLC dba Expert JMS, and Fred Meyer Stores, Inc., Petitioners, and All Janitorial, LLC, Sergey Chaban, All American Janitorial LLC, Raul Campos, and Janitorial Maintenance & Supply, LLC, dba JMS, Defendants.

181 Wash.2d 186

332 P.3d 415

Carolina Becerra BECERRA, Julio Cesar Martinez Martinez, Orlando Ventura Reyes, Alma A. Becerra, and Adelene Mendoza Solorio, Respondents,andHeriberto Ventura Saturnino, Jose Luis Coronado, and Moises Santos Gonzalez, Plaintiffs,

v. EXPERT JANITORIAL, LLC dba Expert JMS, and Fred Meyer Stores, Inc., Petitioners,andAll Janitorial, LLC, Sergey Chaban, All American Janitorial LLC, Raul Campos, and Janitorial Maintenance & Supply, LLC, dba JMS, Defendants.

No. 89534–1.

Supreme Court of Washington, En Banc.

Aug. 7, 2014.

Jeffrey Bennett Youmans, Melissa Kimberly Mordy, Davis Wright Tremaine LLP, Francis L. Van Dusen Jr., Tara O'Hanlon, Miller Nash LLP, Seattle, WA, for Petitioner.

David N. Mark, Attorney at Law, William Joel Rutzick, Schroeter Goldmark & Bender, Seattle, WA, for Respondents.

Kristopher Ian Tefft, Washington Self–Insurers Association, Olympia, WA, Amicus Curiae on behalf of Association of Washington Business, National Federation of Independent Business, Small Business Legal Center, International Franchise Association and Washington Retail Association.

Rebecca A. Smith, Diego Alonso Rondon Ichikawa, Seattle, WA, Amicus Curiae on behalf of Centro De Ayuda Solidaria a Los Amigos (CASA) LATINA, National Employment Law Project, Faith Action Network, Service Employees International Union-local 6, Washington State Labor Council, Latina/0 Bar Association of Washington and Afl-cio.

Toby James Marshall, Marc Cote, Terrell Marshall Daudt & Willie PLLC, Jeffrey Lowell Needle, Seattle, WA, Amicus Curiae on behalf of Washington Employment Lawyers Association.

GONZÁLEZ, J.

¶ 1 The plaintiffs before us worked as night janitors for subcontractors in various Puget Sound Fred Meyer grocery stores. They allege that they regularly worked well over 40 hours per week without being paid either minimum wage or overtime as required by Washington's Minimum Wage Act (MWA), chapter 49.46 RCW. The merits of their action are not currently at issue. Rather, at issue is whether Fred Meyer Stores Inc. and Expert Janitorial LLC are joint employers of the janitors for purposes of the act. The MWA is based on the federal Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. §§ 201–219, and we look to FLSA jurisprudence in interpreting it. While this court has never specifically held that the “joint employer” doctrine is a viable theory under the MWA, consistent with the interpretations of the FLSA, liability under minimum wage laws may extend to “joint employers” even when there is no formal employment relationship. The trial court dismissed the plaintiffs' joint employer claims against Fred Meyer and Expert, a middleman, at summary judgment. We find that summary judgment was improperly granted on this record and remand for further proceedings consistent with this opinion.

Facts

¶ 2 The plaintiffs in this case, Carolina Becerra Becerra, Julio Cesar Martinez Martinez, Orlando Ventura Reyes, Alma A. Becerra, and Adelene Mendozo Solorio, all did janitorial work in Puget Sound Fred Meyer stores mostly while the stores were closed and locked at night. None of the plaintiffs were formally employed by either Fred Meyer or Expert. Until 2004, Fred Meyer had employed its own, mostly unionized janitors in its Pacific Northwest grocery stores. In 2004, Fred Meyer began to outsource much of this work.

¶ 3 In 2007, Expert acquired the management contract to provide Fred Meyer with outsourced facility maintenance services. At the time, Expert had no janitorial employees itself but would instead “typically subcontract with independent janitorial companies, called ‘Service Providers,’ who provide, manage, and supervise the workers who clean the customers' stores.” Clerk's Papers (CP) at 1924.¹ Expert and Fred Meyer agreed on the specific work the janitors would do and the specific price Fred Meyer would pay Expert “for completing the work to Fred Meyer's reasonable satisfaction.” Id. at 1925. Representatives from Expert would visit the stores about once every two weeks, typically during the daytime when Fred Meyer's store directors were at work.

¶ 4 Between 2007 and 2010, Expert subcontracted with at least nine different second-tier subcontracting service providers, including All Janitorial LLC and All American Janitorial LLC,² to fulfill its contract with Fred Meyer. All of the plaintiffs worked for one or both of these two second-tier service providers during the relevant time. It appears that neither contractor hired janitors who were fluent in English. Id. at 703; Resp'ts' Suppl. Br. at 2.

¶ 5 All Janitorial was owned and principally managed by Sergey Chaban. ³ By contract, the company was paid a flat fee per store by Expert. Chaban testified that All Janitorial could not afford to treat the janitors who worked at the Fred Meyer stores like employees because the contract price was insufficient. CP at 240–41 (“We ran the numbers, and the amount we were getting paid, we couldn't—we would be—we would go negative if we would treat them as employees.”). All Janitorial did not pay plaintiffs overtime, Social Security, or workers' compensation. Nor did it pay minimum wage. The plaintiffs made between $7.36 and $7.75 per hour during a time that the minimum wage in Washington went from $7.93 to $8.55 per hour.

¶ 6 Chaban acknowledged that the janitors began work no later than 11:00 p.m. each night and would often not be signed out by Fred Meyer employees, and thus not able to leave work, until after 8:00 a.m. the next morning. Id. at 1927. Thus, they regularly worked more than eight hours per night. According to plaintiffs' expert John Ezzo, it is common for such second-tier subcontractors to take the risk of misclassifying their employees and not meeting their legal obligations under minimum wage statutes “because they have relatively little to lose; they go out of business when their practices come to light.” Id. at 1060.⁴

¶ 7 The plaintiffs brought suit against the second-tier contractors, Fred Meyer Stores and Expert, for violation of the MWA, among other things. The plaintiffs contended that they were misclassified as independent contractors; that as a matter of economic reality, they were Expert's and Fred Meyer's employees; and that both companies knew the plaintiffs were misclassified and improperlydenied overtime wages. They submitted evidence that such practices were in accord with a common business model where janitorial work is outsourced to a company that in turn contracts with second-tier contractors who provide the janitors, They also submitted evidence that second-tier contractors have been known to fail to abide by minimum wage statutes.

¶ 8 Fred Meyer and Expert moved for partial summary judgment arguing that they were not, as a matter of law, the plaintiffs' employers. The trial judge heard oral argument on both motions separately, starting with Expert's motion in May 2011 and Fred Meyer's motion in September of that year. In a later written order that has not been challenged, the trial court found that the plaintiffs “were scheduled 7 nights a week, with the exception of Christmas Eve. The shift began no later than 11:00 p.m. and was supposed to end at 7:00 a.m., but regularly ran over.” CP at 1927. At least in part, plaintiffs' shifts regularly ran over because they were not to leave until “Fred Meyer supervision signed off on their daily Work Order sheet.” Id. The trial court also found that the plaintiffs were allowed to take a night off only if they could find their own replacement.

¶ 9 In the matter before us, the judge entered a brief written order dismissing the plaintiffs' joint employment claim against Expert “under the test set forth in Bonnette v. California Health and Welfare Agency, 704 F.2d 1465, 1469 (9th Cir.1983).” ⁵ CP at 1961. She later dismissed the plaintiffs' joint employer claims against Fred Meyer in a more detailed oral ruling. The parties proceeded to a bench trial on third-party beneficiary claims, which are not before us. The plaintiffs appealed only the summary judgment orders, and the Court of Appeals reversed. Becerra Becerra v. Expert Janitorial, LLC, 176 Wash.App. 694, 699–700, 309 P.3d 711 (2013).

¶ 10 Fred Meyer and Expert each petitioned for review. The Association of Washington Business, the National Federation of Independent Business, the National Federation of Independent Business Small Business Legal Center, the Washington Retail Association, and the International Franchise Association filed an amicus brief in support of the petition. We granted review. Becerra Becerra v. Expert Janitorial, 179 Wash.2d 1014, 318 P.3d 279 (2014). Centro de Ayuda Solidaria a los Amigos (CASA) Latina, the Faith Action Network, the Latina/o Bar Association of Washington, the National Employment Law Project, the Service Employees International Union Local 6, the Washington Employment Lawyers Association, and the Washington State Labor Council, AFL–CIO, have filed an amicus brief in support of the plaintiffs.

Analysis

“¶ 11 Summary judgment entitles one party to judgment as a matter of law and is reviewed de novo.” Rivas v. Overlake Hosp. Med. Ctr., 164 Wash.2d 261, 266, 189 P.3d 753 (2008) (citing Troxell v. Rainier Pub. Sch. Dist. No. 307, 154 Wash.2d 345, 350, 111 P.3d 1173 (2005)). We view the evidence in the light most favorable to the nonmoving party, in this case, the plaintiffs. Owen v. Burlington N. & Santa Fe R.R., 153 Wash.2d 780, 787, 108 P.3d 1220 (2005) (citing Ruff v. King County, 125 Wash.2d 697, 703, 887 P.2d 886 (1995)). In the joint employment context, summary judgment may be available even if the joint employment factors are split between finding and not finding the relationship exists. Ling Nan Zheng v. Liberty Apparel Co., 355 F.3d 61, 77 (2d Cir.2003) (“[T]he Court need not decide that every factor weighs against joint employment.” (emphasis omitted) (citing Moreau v. Air France, 343 F.3d 1179, 1188–89 (9th Cir.2003))). However, “[b]ecause of the...