Ayala v. Antelope Valley Newspapers Case Analysis

In certifying a putative class, the relevant question is not whether a company actually wielded uniform control, but whether or not the company retained the power to wield uniform control.

Those seeking to bring a class action against a company in California would do well to consider whether or not the company had the power to treat potential class members the same, even if the company treated them different. In the case of Ayala v. Antelope Valley Newspapers, Inc., 59 Cal. 4^th 522 (2014), the California Supreme Court held that, for purposes of class certification, the relevant question is whether or not the scope of the Defendant’s control is susceptible to classwide proof and it does not matter if the Defendant actually exercised uniform across the class.

Factual Basis for the Case

The Plaintiffs in this case are or were newspaper carriers for the Defendant, Antelope Valley. The Defendant circulates “The Antelope Valley Press” throughout Los Angeles and Kern Counties. One of the named Plaintiffs sued on behalf of a putative class of other Antelope Valley carriers, complaining that the Defendant treated the Plaintiffs as independent contractors when the carriers were in fact employees. As a result of misclassifying them as independent contractors, the Plaintiffs claimed that the Defendant denied them the wage and hour protections to which they would have been entitled to as employees. The Plaintiffs therefore sued for unpaid overtime, failure to provide breaks, and other violations of the California Labor, Business, and Professional Codes. The named Plaintiff sought class certification, contending that the issue of whether or not the carriers were employees could be resolved through common proof. The Defendant, however, opposed class certification, arguing that the question of employee status could only be answered on an individual, rather than common basis.

The Trial court agreed with the Defendants and denied class certification. The trial court agreed that common issues did not predominate the putative class and would require individual inquiries. The Court of Appeal agreed in part and disagreed in part. It agreed that the claims regarding overtime and breaks could not be managed on a classwide basis. But the Court of Appeal found that classwide proof would be appropriate for the remaining claims. The Supreme Court granted the Defendant’s petition for review.

The Appeal

The sole issue on appeal was whether or not this case could go forward as a class action. The Court found that a party seeking class action must demonstrate three things: (1) a sufficiently numerous class, (2) a well-defined community of interest, and, (3) substantial benefits from certification that render a class action superior to non-class alternatives. The community of interest requirement in turn has three factors: (A) predominant common questions of law or fact; (B) class representatives with claims or defenses typical of the class; and (C) class representatives who can adequately represent the class. Here, the only issue on appeal was A—whether or not there were predominant questions of law or fact.

Here, the central legal question is whether or not the potential class members are employees. In deciding whether the plaintiffs were employees or independent contractors, the Court applied the common law test. The common law provides that an employer is one who “retains all necessary control over its operations.” The biggest indicator that the hirer has retained control is when the hirer has the right to discharge the worker without cause. While the ability to discharge a worker is the biggest indicator, there are others, including:

1. Whether the one performing services is engaged in a distinct occupation or business
2. Whether or not the work is usually done under the direction of a principal or a specialist in the location
3. The skill required
4. Whether the hirer or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work
5. The length of time for which the services are performed
6. The method of payment, whether by hours or by job
7. Whether or not the work is part of the hirer’s regular work or operations
8. Whether or not the parties believe they are creating the relationship of employer-employee

The court found that, under the common law, what is most important is not how much control the hirer actually exercises, but how much control the hirer retains that the hirer could exercise. And here, in order to determine whether the Defendant’s control was sufficiently predominant across the class, the question is whether or not the Defendant’s right of control was sufficiently uniform, so as to justify class certification. In practice, this meant that it did not matter whether or not the Defendant exercised different levels of control over different class members. Instead, for class certification, the only issue was whether or not the Defendant’s had a substantially similar right to exercise control across the class. The Appellate court found that the trial court erred by unduly focusing on how much power the Defendant exercised over each potential member of the class, instead of focusing on whether or not the defendant had a common right to control the class. For this reason, the Court affirm the Court of Appeal and remanded the case to the trial court.

Ayala’s Impact

This case is important, because it clarifies the standard for class action certification. When determining whether or not a putative class are employees, the relevant question is not whether or not the company treats each worker the same. Instead, the question is whether or not the defendant has the power to treat each worker the same. If you have any employment-related dispute and are considering bringing a class action, contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside, and Los Angeles. Call (949) 375-4734.