Wilson v. La Jolla Grp.

• Decision Date: 12 March 2021
• Docket Number: D077134
• Citation: 61 Cal.App.5th 897,276 Cal.Rptr.3d 118
• Court: California Court of Appeals Court of Appeals
• Parties: Mosanthony WILSON et al., Plaintiffs and Appellants, v. The LA JOLLA GROUP, Defendant and Respondent.

61 Cal.App.5th 897

276 Cal.Rptr.3d 118

Mosanthony WILSON et al., Plaintiffs and Appellants,

v.The LA JOLLA GROUP, Defendant and Respondent.

D077134

Court of Appeal, Fourth District, Division 1, California.

Filed March 12, 2021

Parris Law Firm, R. Rex Parris, Kitty K. Szeto, John M. Bickford, Ryan A. Crist, and Alexander Wheeler, Lancaster, for Plaintiffs and Appellants.

Manning & Kass, Ellrod, Ramirez, Trester, Kenneth Kawabata, San Diego, Tonya N. Mora, and Ladell Hulet Muhlestein, Los Angeles, for Defendant and Respondent.

GUERRERO, J.

Plaintiffs Mosanthony Wilson and Nancy Urschel brought a putative wage-and-hour class action against defendant The La Jolla Group (LJG). Plaintiffs worked for LJG as signature gatherers on behalf of political campaigns and political action committees. LJG classified them as independent contractors and paid them per signature submitted. In the underlying lawsuit, plaintiffs alleged that LJG misclassified them and, as employees, they were entitled to a minimum wage, overtime pay, meal and rest breaks, expense reimbursement, timely final wage payment, and itemized wage statements. Plaintiffs moved for certification of a class of LJG signature gatherers, which the trial court denied.

Plaintiffs appeal the order denying class certification. They contend the trial court erred by finding common questions did not predominate and the class action procedure was not superior to individual actions. They also contend the court erred by not granting a related motion for reconsideration. We agree on the current record that the trial court erred by declining to certify a class for one cause of action, for failure to provide written and accurate itemized wage statements. We therefore reverse the order denying class certification in part, as to that cause of action only, and remand for reconsideration. Otherwise, we disagree that the trial court erred and affirm.

FACTUAL AND PROCEDURAL BACKGROUND

LJG is a legal and political consulting firm. More than 50 percent of its political work is related to signature gathering. It acts as a broker or intermediary between organizations seeking signatures, typically political campaigns and political action committees, and the signature gatherers themselves. The political organizations generate blank signature sheets and other materials, which LJG provides to the signature gatherers. The political organizations pay for collected signatures, and LJG receives a percentage, typically 10 to 15 percent. LJG may also be paid an up-front fee in some cases.

LJG works with individual signature gatherers, who actually collect the signatures from registered voters. LJG requires the signature gatherers to sign an independent contractor agreement. LJG does not provide training to signature gatherers (except to explain the legal requirement for registered voter signatures) and does not tell them where or when to collect signatures. LJG does not require the signature gatherers to work a certain number of hours or collect a certain number of signatures. The signature gatherers choose which collection efforts to join and how much time to work on them. They call a hotline maintained by LJG to find out if there are any active signature collection efforts. Other brokers maintain their own hotlines.

The signature gatherers return collected signatures to LJG's office. LJG verifies the validity of the signatures and pays the signature gatherer based on the number of signatures, typically when the signature gatherer is next in LJG's office. The signature gatherers do not submit any record of their hours worked, and LJG does not maintain any such records.

The relationship between LJG and the signature gatherers is not exclusive. Signature gatherers may collect signatures for multiple brokers at the same time. And, if multiple brokers are working with the same political campaign or political action committee, a signature gatherer can obtain blank signature sheets from one broker and submit them to a different broker once completed.

Plaintiffs worked with LJG over a period of years. In their complaint, they alleged that LJG was "a for-profit petition drive management firm" and its usual course of business was "collecting signatures from registered voters so [that] a proposed initiative can qualify for placement on the election ballot." LJG hired signature gatherers for this effort, which plaintiffs alleged were misclassified as independent contractors under the "ABC test" for employment. (See Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903, 957, 232 Cal.Rptr.3d 1, 416 P.3d 1 ( Dynamex ).)

Plaintiffs alleged that, as a consequence of this misclassification, LJG did not comply with various provisions of the Labor Code and the applicable Industrial Welfare Commission (IWC) wage order governing the terms and conditions of the signature gatherers' employment. On behalf of themselves and a putative class of LJG signature gatherers, plaintiffs alleged causes of action for (1) failure to pay employees a minimum wage for all hours worked ( Lab. Code, §§ 1194, 1197, 1197.1 ), (2) failure to pay overtime (id. , § 1198), (3) failure to provide meal and rest breaks (id. , § 226.7), (4) failure to timely pay final wages upon termination or resignation (id. , §§ 201, 202), (5) failure to provide written and accurate itemized wage statements (id. , § 226, subd. (a)), and (6) failure to reimburse employees for necessary expenditures (id. , §§ 2800, 2802). They also alleged a cause of action under the Unfair Competition Law (UCL; Bus. & Prof. Code, § 17200 et seq. ) based on these violations. They sought damages, penalties, restitution, and attorney fees, among other relief.

After nine months of litigation, plaintiffs moved to certify a class consisting of all individuals who worked for LJG as signature gatherers in California at any time from September 14, 2014 through the date of class certification. Plaintiffs argued the primary issue in the litigation was the alleged misclassification of signature gatherers as independent contractors, which was common to all class members and could be proved on a classwide basis. They maintained, "Plaintiffs' theory of classwide liability is based solely upon the ‘B’ prong [under Dynamex ]—i.e., whether [LJG] can prove the signature gatherers perform work that is outside the usual course of its business." Resolution of this issue "turns solely on: (1) what the usual course of [LJG's] business is; and (2) whether the signature gatherers perform work that is part of this business. Since all the signature gatherers perform the same work for [LJG]—i.e., ‘circulating, collecting, and turning in petitions’—the court can compare this to [LJG's] usual course of business [to] collectively determine whether the signature gatherers are properly classified."

Plaintiffs supported their motion with declarations from the named plaintiffs. Both named plaintiffs stated that they were paid by LJG based on the number of signatures collected. They asserted that they "only received a fraction of pay for the hours [they] actually spent working," they did not "receive minimum wage or overtime," and they were "not provided with meal or rest breaks, nor any form of payment for not being able to take those breaks."

Plaintiffs also supported their motion with discovery responses served by LJG. In those responses, LJG admitted that it did not pay the signature gatherers a minimum wage or overtime, or provide them with meal breaks, because they were classified as independent contractors. LJG also admitted that it did not provide itemized wage statements or reimburse signature gatherers for expenses.

LJG opposed the motion for class certification. LJG primarily contended that, even if the signature gatherers were employees under Dynamex , their individual circumstances were so variable that plaintiffs could not prove LJG's liability for any wage-and-hour violations on a classwide basis. LJG argued that signature gatherers had no set work days or hours, and they chose when and how long to work. Some worked a few hours per day or week, others worked many hours. Signature gatherers also worked in many different local jurisdictions, with differing minimum wage rates. Thus, in LJG's view, "there is no common proof by which a class-wide violation of overtime or minimum wage laws can be established." Similarly, LJG argued that the signature gatherers were free to stop work for a meal or rest break at any time (or not) and free to purchase supplies for their own use (or not). There was no common proof by which LJG's liability on these claims could be established. LJG also maintained that there was no termination or resignation event that would trigger a final wage payment, since signature gatherers were free to resume collecting signatures at any time.¹

Moreover, as relevant here, LJG contended that the class action procedure was not superior to individual actions. LJG noted that an individual signature gatherer could obtain blank signature forms from multiple brokers and collect signatures for multiple campaigns and committees at the same time. LJG argued, "Plaintiffs here also fail to explain how they will ascertain how long a [signature] gatherer worked in a given day or given week and whether or not he or she worked exclusively for LJG, when the evidence establishes that gatherers are free to sell the signatures they collect to any company working that petition and that gatherers frequently gathered signatures on multiple petitions at a time for multiple companies at a time."

LJG supported its opposition with declarations from a dozen signature gatherers. They confirmed they had no set hours or work locations. They worked for different brokers at the same time and did not have to turn in collected signatures to the same broker they obtained the blank petitions from. Their pay per signature varied wildly, from less than one dollar per signature to 10 or 20 dollars per signature. Many...