In Ayala v. Antelope Valley Newspapers, ___ Cal.4th ___  (June 30, 2014), the California Supreme Court reversed the order of the Los Angeles County Superior Court (Judge West), denying class certification to plaintiff employees, and upheld its subsequent reversal by the California Court of Appeal.

Plaintiffs were individual carriers who delivered the newspaper to subscribers of defendant, a newspaper publisher.  Although defendant contracted with plaintiffs individually as independent contractors for this service, plaintiffs claimed that they were actually employees and therefore, filed a class action for wage and hour violations, including unpaid overtime, unlawful deductions, failure to provide meal and rest breaks, failure to reimburse for business expenses, and unfair competition based on these violations.  Accordingly, one of the plaintiffs sought class certification, arguing that the central question in establishing liability – whether carriers are employees – could be resolved through common proof, including but not limited to the contents of the standard contract entered into between Antelope Valley and its carriers. Defendant opposed, arguing that individual variations in how carriers performed their work prevented the question of employee status from being resolved on a common basis. Defendant further argued that even if the carriers were employees, some of the causes of action presented additional unmanageable individual issues that should nevertheless preclude certification. The trial court agreed with defendant and found that individual issues predominated over common ones and would necessitate numerous unmanageable individual inquiries into the extent to which each carrier was afforded discretion in his or her work.  Plaintiffs appealed.

The appellate court reversed in part. Although it agreed with the trial court that plaintiff had not shown how her overtime, meal break, and rest break claims could be managed on a class-wide basis, it disagreed that proof of employee status on the remaining claims would necessarily entail a host of individual inquiries, as such evidence would not convert the critical question of defendant’s right to control over plaintiffs from a common one to an individual one requiring mini-trials.

The Supreme Court agreed with the Court of Appeal.  First, the court noted that the question of whether an employer-employee relationship existed in this circumstance could be resolved by applying the common law test, which turns foremost on the degree of a hirer’s right to control how the end result is achieved, not the actual control asserted.  In other words, the key question was whether there was a common way to show defendant possessed essentially the same legal right of control with respect to each of its carriers.

“The trial court lost sight of this question. Its order reveals the denial of certification ultimately rested on two related determinations: (1) the record reflected considerable variation in the degree to which [defendant actually] exercised control over its carriers; and (2) the putative class as a whole was not subject to pervasive control as to the manner and means of delivering papers. Neither of these considerations resolves the relevant inquiry. Whether [defendant] varied in how it exercised control does not answer whether there were variations in its underlying right to exercise that control that could not be managed by the trial court. Likewise, the scope of [defendant]‘s right to control the work does not in itself determine whether that right is amenable to common proof.”

The court then briefly discussed the secondary factors of the common law test, noting that “[t]he proper course, if there are individual variations in parts of the common law test, is to consider whether they are likely to prove material.”