Case 5:05-cv-04181-RMW Document 66 Filed 12/08/2006 Page 1 of 20

KAREN J. KUBIN (SBN 71560) HEATHER BURROR (205803) JILL VIZAS (226984) i AKIN GUMP STRAUSS HAUER & FELD LLP
580 California Street, Suite 1500 San Francisco, CA 94104-1036 Telephone: 415-765-9500 Facsimile: 415-765-9501 5
BRUCE JACOBS (SBN 194114) 6 AKIN GUMP STRAUSS HAUER & FELD LLP
2029 Century Park East, Suite 2400 7 Los Angeles, CA 90067-3012
Telephone: 310-229-1000 8 Facsimile: 310-229-1001

9 Attorneys for Defendant
EGL, INC. 10

11

UNITED STATES DISTRICT COURT

12

NORTHERN DISTRICT OF CALIFORNIA

,

13

SAN JOSE DIVISION

14

15 MOHIT NARAYAN, HANNA RAHAWI, Case No. C 05-04181 RMW

and THOMAS NARAYAN, on behalf of

16 themselves, all others similarly situated, andDEFENDANT EGL, INC.’S

the general public,

MEMORANDUM OF POINTS AND

17

AUTHORITIES IN SUPPORT OF ITS

Plaintiffs,

MOTION FOR SUMMARY JUDGMENT

18

ON PLAINTIFF MOI-IIT NARAYAN’S

INDIVIDUAL CLAIMS

19

EGL, INC., a Texas Corporation; EAGLE Date: January 26, 2007 20 FREIGHT SERVICES, INC.; and DOES 1- Time: 9:00 a.m.

10, inclusive,

Ctrm: 6

21

Defendants. 22

23

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHOR/TIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF MOHIT

NARAYAN’S INDIVIDUAL CLAIMS

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1

TABLE OF CONTENTS

2

Page(s)

3 4 II. 5 6 7 8 9 10 11 III. 12 IV. 13 V. 14 15 16 17 18 19 20 21 22 VI. 23

INTRODUCTION ............................................................................................................... 1 STATEMENT OF FACTS ...................................................................................................1
A. The Parties ...............................................................................................................1
1. Eagle Is A Global Logistics Company Providing Domestic Delivery Services .......................................................................................................1
2. Narayan’s Trucking Business, "MCAC Transfer.". .................................3.... B. The Agreements Entered Into Between Narayan and Eagle Establishing
Narayan’s Independent Contractor Relationship With Eagle ............................3...... C. The Contractor-Customer Relationship Between Narayan And Eagle ..............5..... APPLICABLE LAW ..........................................................................................................7. SUMMARY OF THE ARGUMENT ...................................................................................8 ARGUMENT ......................................................................................................................9 A. Standard for Summary Judgment .........................................................................9... B. Summary Judgment Is Mandated Because Narayan Was An Independent
Contractor. ...............................................................................................................9 1. The Agreements Between Narayan And EGL Establish That Narayan
Was An Independent Contractor. ..............................................................1. 1
2. There Is No Evidence Of Control Outside Of The Agreements Between Narayan And Eagle ...................................................................................1. 3
3. Narayan Was An Independent Contractor Under California Law ........1...6..
C. All Of Narayan’s Claims Fail As A Matter Of Law Because Narayan Was An Independent Contractor .........................................................................................17
CONCLUSION ................................................................................................................. 18

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IDEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

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NARAYAN’S INDIVIDUAL CLAIMS

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1

TABLE OF AUTHORITIES

2

Page(s)

CASES 3

ABF Capital Corp. v. Osley

4

414 F.3d 1061 (9th Cir. 2005) ...........................................................................................7

5 Anderson v. Liberty Lobby, Inc.

477 U.S. 242 (1986) ...................................................................................................... 8, 9

6

Bates v. Industrial Aeeident Comm "n

7

156 Cal. App. 2d 713 (1958) .....................................................................................14, 15

8

Celotex Corp. v. Catrett 477 U.S. 317 (1986) ..........................................................................................................9

9

City of Paris v. Floyd

10

150 S.W.3d 224 (Tex. App. 2004) ..................................................................................1. 2

11

Cook v. Nacogdoches Anesthesia Group 167 S.W.3d 476 (Tex. App. 2005) ..................................................................................1. 2

12 Davis v. EGL Eagle Global Logistics LP

13

2006 WL 2631966, *1 (E.D. La. 2006) ..................................................................... 13, 14

Durbin v. Culbertson County

14

132 S.W.3d 650 (Tex. App. 2004) ............................................................................... 9, 10

15 Farrell v. Greater Houston Tranp. Co. 908 S.W.2d 1 (Tex. App. 1995) .......................................................................................11
16

First National Bank of Arizona v. Cities Service Co.

17

391 U.S. 253 (1968) ..........................................................................................................9

18 Indus. Indem. Exch. v. Southard 160 S.W.2d 905 (Tex. 1942) ..............................................................................................9

19

Klaxon Co. v. Stentor Elec. Mfg. Co.

20

313 U.S. 487 (1941)) .........................................................................................................7

21

Limestone Prods. Distribution Inc. v. McNamara 71 S.W.3d 308 (Tex. 2002) ............................................................................ 10, 12, 14, 15

22 Mary Kay Inc. v. Woolf

23

146 S.W.3d 813 (Tex. App. 20’04) ....................................................................................8.

24

Millsap v. Federal Express Corp. 227 Cal. App. 3d 425 (1991) ...........................................................................................15

25 Mission Insurance Co. v. Workers Compensation Appeals Board

26

123 Cal. App. 3d 211 (1981) ...........................................................................................15

Nedlloyd Lines B. V. v. Super. Ct.

27

3 Cal. 4th 459 (1992) .........................................................................................................7

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1 Newspapers, Inc. v. Love

380 S.W.2d 582 (Tex. 1964) ............................................................................................10

2 Northwinds Abatement, Inc. v. Employers Insurance of Wausau

3

258 F.3d 345 (5th Cir. 2001) ...........................................................................................10

4 Patton v. Cox 276 F.3d 493 (9th Cir. 2002) .............................................................................................7

5 Tamez v. Southwestern Motor Transport, Inc.

6

155 S.W.3d 564 (Tex. App. 2004) .............................................................................11, 14

7

Texas A & M University v. Bishop 156 S.W.3d 580 (Tex. App. 2005) ....................................................................................9.

8 Thompson v. Travelers Indem. Co.

9

789 S.W.2d 277 (Tex. 1990) ......................................................................................10, 12

Weidner v. Sanchez

10

14 S.W.3d 353 (Tex. Ct. App. 2000) ..............................................................................1. 0

11

STATUTES AND REGULATIONS

12 49 C.F.R. § 376.11(c)(1) ..............................................................................................................14

13 49 C.F.R. § 376.12(e) .................................................................................................................. 11

14 49 C.F.R. § 393 ............................................................................................................................11
15 49 C.F.R.§ 376.11(c)(1) ...............................................................................................................11
16 Cal. Bus. & Prof. Code § § 17200 et seq .....................................................................................16
17 Cal. Lab. Code § 221 ...................................................................................................................16
18 Cal. Lab. Code § 223 ...................................................................................................................16 19 Cal. Lab. Code § 226.7 ................................................................................................................16 20 Cal. Lab. Code § § 400 et seq ......................................................................................................16 21 Cal. Lab. Code § 450 ...................................................................................................................16 22 Cal. Lab. Code § 512 ...................................................................................................................16 23 Cal. Lab. Code § 2802 .................................................................................................................16
RULES 24
Fed. R. Civ. P. 56(c) ......................................................................................................................8 25

26

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1 I. 2

INTRODUCTION. Despite operating his own licensed trucking business, MCAC Transfer, which he used to

3 provide delivery services to defendant EGL, Inc. ("Eagle"), plaintiff Mohit Narayan ("Narayan")

4 nevertheless brought this lawsuit asserting five employment law claims, all premised on the theory tha

5 he was misclassified as an independent contractor, rather than an employee. But Narayan’s own

6 deposition testimony and the undisputed facts defeat any claim that Narayan was not properly

7 classified as an independent contractor, and his claims fail. Accordingly, Eagle is entitled to summary 8 judgment on Narayan’s claims.1

9 II. STATEMENT OF FACTS. ’

10

A. The Parties.

11

1. Eagle Is A Global Logistics Company Providing Domestic Delivery Services.

12

Eagle is a global transportation, supply chain management and information

13 services company, providing logistics solutions for customers worldwide. (Declaration of Martha

14 DeLeon-Schmidt ("Schmidt Dec.") filed herewith, ¶ 2.) Eagle provides value-added services beyond

15 those customarily provided by traditional air freight forwarders, ocean freight forwarders and customs

16 brokers to help customers streamline their supply chain, reduce their inventories, improve their 17 logistics information and provide them with more efficient and effective domestic and international 18 distribution strategies in order to enhance their profitability. (Id.) Eagle’s services include air and 19 ocean freight forwarding, customs brokerage, local pick-up and delivery service, materials

20 management, warehousing, trade facilitation and procurement and integrated logistics and supply chain

21 management services. (Id., ¶ 3.) These services are provided through Eagle’s extensive network of 22 approximately 400 facilities, agents and distribution centers located in over 100 countries on six

23 continents. (Id.)

24

25

26

1 The first phase of this litigation deals solely with Plaintiffs’ individual claims. (See Case

Management Order, filed March 16, 2006.) Therefore, this motion for summary judgment is made as 27 to Narayan’s individual claims against Eagle and does not consider the claims alleged by Narayan on

behalf of a putative class.

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1

One of the many areas of Eagle’s business is domestic delivery services. (Schmidt Dec., ¶7 3,

2 4; Deposition of Mohit Narayan ("Narayan Dep."), 62:8-21 .)2 Domestic delivery services may be

3 provided either as part of Eagle’s freight-forwarding operations or for customers requiring local pick-

4 up and delivery services. (Schmidt Dec., ¶ 4.) Eagle maintains a non-asset based philosophy and

5 structure across the board. (ld., ¶ 5.) Accordingly, with some exceptions, Eagle does not generally

6 employ drivers or use Eagle-owned vehicles for pick-up and delivery services. (ld.) Instead, Eagle

7 contracts with trucking businesses, both large and small, to handle their pick-up and delivery services.

8 (ld.) These owner-operators ("Contractors") own, operate and maintain the vehicles used in their work

9 for Eagle, and may perform the services themselves or employ qualified drivers of their choice.

10 (Schmidt Dec., ¶ 6; Narayan Dep., 183:1-5,229:11-230:20.)

11

Eagle and the Contractors benefitfrom a mutual business relationship. (Schmidt Dec., ¶ 6.)

12 They each profit or lose by meeting the delivery demands of Eagle’s customers. (Id.) The Contractor

13 perform this service by obtaining delivery jobs from Eagle. (Id.) Contractors make themselves

14 available at their own discretion. (SclLrnidt Dec., ¶ 8; Narayan Dep., 213:9-21,215:1-217:22.) At

15 certain times of the day, heavier volumes dictate more profitable opportunities than at other times of

16 the day. (Schmidt Dec., ¶ 8.) Contractors receive a percentage of the applicable tariff for each load.

17 (Id., ¶ 7.)

18

Contractors arriving at the dispatch station and seeking business availability go to the dispatch

19 office. (Schmidt Dec., ¶ 9.) Dispatches are offered as a delivery packet that is normally grouped

20 geographically and sometimes includes customer time and delivery specific requirements. (Id.) At

21 times, Contractors will reject a delivery. (Narayan Dep., 101:2-23.) Once a Contractor obtains a

22 packet, he will review the manifests to determine how to route the deliveries in the packet. (Schmidt

23 Dec., ¶ 10; Narayan Dep., 365:23-367:13.) Pursuant to customer demand, the Contractor will attempt

24 to deliver the priority orders first. (Id., ¶ 10.) The Contractor is completely on his own to determin

25 the manner and means by which he will perform the delivery orders. (Id.) After completing a priority

26 2 Excerpts from Narayan’s deposition are attached as Exhibit A to the Declaration of Jill Vizas

27 ("Vizas Dec.") filed herewith. Exhibits to the Narayan deposition are attached as Exhibit B to the

Vizas Declaration.

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1 delivery, Contractors generally inform the station that the delivery is complete to enable Eagle to

2 update customers regarding the status of priority deliveries. (Id., ¶ 11.) Contractors also call the

3 station periodically to find out if there are any pick-up orders in their current vicinity. (ld.)

4

After completing the packet of deliveries, Contractors bring any pick-up orders back to the

5 station. (Schmidt Dec., ¶ 12.) Many Contractors also return to the station to submit their delivery

6 manifests because early receipt of manifests enables Eagle to ensure a quick payment to the

7 Contractors. (Id.) Based on the manifests, Eagle generates settlement reports, which the Contractors

8 review to ensure that the reports prop,erly account for any special charges or specially-negotiated

9 delivery rates. (Id.)

10

2. Narayan’s Trucking Business, "MCAC Transfer."

11

Narayan began his own trucking business at the beginning of 1998. (Narayan

12 Dep., 143:18-25.) Narayan named his trucking business MCAC Transfer, filing a fictitious business

13 name application and obtaining a license to do business under that name. (Id., 29:20-23, 143:18-

14 144:153, 149:20-151:2, 151:13-152:3.) For the next year and a half, Narayan worked as an

15 independent contractor providing delivery services for two companies, Merchant Home Delivery and

16 GeoLogistics, through his trucking business, MCAC Transfer. (Id., 51:1-22, 51:24-52:13, 144:8-

17 145:6.) But in mid-1999, Narayan began looking for new customers, hoping to find customers who

18 would pay more for his services than GeoLogistics did. Narayan met with Eagle’s Sacramento station

19 manager and decided to sign a contract to provide delivery services as an independent contractor to

20 Eagle. (Id., 52:17-53:3, 108:2-3.)

21

B. The Agreements Entered Into Between Narayan and Eagle Establishing Narayan’s

Independent Contractor Relationship With Eagle. 22

23

Narayan and Eagle entered into two Agreements for Leased Equipment and

24 Independent Contractor Services, first on June 14, 1999 (the "Initial Agreement") and again on

25 May 12, 2000 (the "Second Agreement") (collectively, the "Agreements"). (Narayan Dep., 81:13-

26

27

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

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1 82:25, 110:15-112:15; Exs. 298, 299.i3 The Agreements did not guarantee Narayan any amount of

2 work, and Narayan reserved the right to continue to contract with other companies. (Id., 136:11-20.)

3 Under the Agreements, Narayan’s only compensation was a percentage of the tariff charged to a

4 customer by Eagle for each shipment picked up or delivered by Narayan or his employees. (Id., 65:16-

5 21; Ex. 298, § 4.01, Ex. 299, § 4.01.) Narayan understood that because he was an independent

6 contractor, he was responsible for filing tax returns for his business and that Eagle would not withhold

7 any taxes from the delivery rates paid. (Id., 155:1-17; Ex. 298, § 4.07, Ex. 299, § 4.09.)

8

The Agreements established an independent contractor relationship between Narayan and Eagle

9 whereby Narayan, as owner-operator of his trucking business, performed delivery services for Eagle.

10 (Narayan Dep. Exs. 298, 299.) The Initial Agreement stated that Narayan and Eagle intended "to

11 establish a relationship between Contractor and [Eagle] through which Contractor, as an independent

12 contractor, (i) leases a vehicle to [Eagle] and (ii) renders certain related pickup and delivery

13 services ...."’ (Id., Ex. 298, § I.) Similarly, the Second Agreement established Narayan and Eagle’s

14 intention to "create a vendor/vendee relationship between Contractor and [Eagle] through which

15 Contractor, as an independent business person, has the potential to realize a profit or loss by: leasing a

16 truck to [Eagle]; rendering certain pick-up and delivery related services..." (Id., Ex. 299, § I.)

17

Under the Agreements neither Narayan nor anyone who worked for him was to be considered

18 an employee of Eagle or its customers. (Narayan Dep., 84:18-85:5; Ex. 298, § I, Ex. 299, § I.)

19 Narayan also agreed that "if at any time during the term of this agreement [Narayan] is of the opinion

20 that something other than an independent contractor relationship exists between [Narayan] and [Eagle],

21 [Narayan] shall immediately notify the manager of shared resources of Eagle." (Id., 114:25-115:11,

22 115:21-116:6; Ex. 299, § I (in bold).) Narayan did not do so. (Id., 115:21-116:19.)

23

As an independent contractor, Narayan was responsible for supplying the truck and other tools

24 used to provide services to Eagle, such as a pallet jack, hand dolly and lift gate. (Narayan Dep., 184:1-

25 8, 185:7-18, 186:25-187:15; Ex. 298, § 2.05; Ex. 299, § 2.05.) Narayan was responsible for all of the

26

27

3 The Agreements are generally referred to together because they contain largely the same

language.

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN
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1 costs and expenses of maintaining, repairing and operating his truck. (Id., 105: 13-17; Ex. 298,

2 8§ 2.05, 2.06; Ex. 299, §8 2.05, 2.06.) Narayan was also responsible for obtaining insurance policies 3 on his truck and the freight he carried. (Id., Ex. 298, § 3.02, Ex. 299, § 3.02.)

4

Although Eagle retained the right to issue reasonable requirements regarding the results to be

5 accomplished under the Agreements, the Agreements required Narayan to exercise independent

6 discretion and judgment to determine.-the method, manner and means of his performance of his

7 obligations under the Agreements. (Narayan Dep. Ex. 298, § 2.02, Ex. 299, § 2.02.) The Agreements

8 expressly stated that "[C]ontractor shall exercise independent discretion and judgment to determine the

9 method, manner and means of performance of its contractual obligations under this Agreement" and

10 that Eagle would have no right to control Narayan’s vehicle. (ld.) Narayan’s exercise of independent

11 discretion and judgment included whether or not to accept or reject dispatches, the days and times

12 Narayan would operate his vehicle, the routes he would travel, where he would park, and the repair and

13 maintenance of his vehicle. (Id., 101:24-103:7; Ex. 298, § 2.02, Ex. 299, § 2.02.)

14

Narayan understood that many of the provisions in the Agreements were dictated by federal

15 law, and that as the driver of a commercial motor vehicle he would have to comply with applicable

16 U.S. Department of Transportation ("DOT") regulations. (Narayan Dep., 67:11 - 18, 72:13-19; Ex. 298,

17 § 2.07, Ex. 299, § 2.07.) Narayan understood that Eagle’s drug and safety policies were also mandated

18 by the DOT. (Id., 76:17-77:2; Ex. 298, § 2.07, Ex. 299, § 2.07.) Narayan also understood that any

19 drivers he hired to assist him with his business would also be subject to DOT regulations. (Id., 105:25-

20 106:20; Ex. 298, § 2.09, Ex. 299, § 2.09.)

21

C. The Contractor-Customer Relationship Between Narayan And Eagle.

22

Narayan continued to do business as MCAC Transfer and to operate as an independent

23 contractor after he entered into the Agreements with Eagle. (Narayan Dep., 144:8-145:6.) Indeed,

24 Narayan identified himself as the owner-operator of MCAC Transfer, a business providing services to

25 Eagle, on EEO compliance certificates he submitted to Eagle on behalf of MCAC Transfer in 2000 and

26 again in 2002. (Id., 165:8-16, 167:3-19, 168:11-169:5; Exs. 312, 313.) Narayan also placed MCAC

27 Transfer logos on his truck because, in his words, "if you’re supposedly an independent you are

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

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1 supposed to have your name on there, your business name on there. And that’s why I put it on there

2 basically. That was a Department of Transportation telling me that." (Id., 27:14-28:8.)

3

Consistent with his status as an independent contractor, Narayan conducted his business

4 independently, exercising his own independent judgment and discretion to make decisions regarding all

5 aspects of his business. Narayan selected his own trucks and equipment, choosing to lease his trucks

6 but purchasing his other equipment, such as his pallet jack, hand dolly and lift gate, which allowed him

7 to handle lift gate pick-up and deliveries, which paid more. (Narayan Dep., 183:1-5, 184:1-8, 185:12-

8 18, 185:19-186:4.) Narayan also decided how and when he could make deliveries for Eagle, choosing

9 which days and times to make his truck available for them. Narayan’s driver log reflects that he

10 arrived at the station at different times each day, and that some days he did not make himself available

11 to EGL at all. (ld., 204:14-205:1,213:9-21, Ex. 323.) Narayan accepted weekend work between 50

12 and 60 percent of the time it was offered to him. (Id., 215:12-216:12, 216:21-25, 217:1-8.) There w

13 no adverse consequences for declining work. (Id., 216:17-20.) Indeed, some days Narayan called in to

14 see what type of freight was available that day and what the rate was before going to the station and,

15 during the last three years, increasingly decided not to go to the station at all. (ld., 101:2-23, 130:17-

16 21,131:8-23.)

17

When he chose to accept dispatches, Narayan determined how to load his truck based on the

18 shipment priority and the geographic area of the deliveries. (Narayan Dep., 242:16-24, 365:23-

19 367:13.) Narayan also decided the order in which to deliver the shipments. (Id., 365:23-367:13.) If a

20 dispatch contained several priority shipments, Narayan would determine the best way to deliver them

21 all on time. (Id.) Occasionally Narayan determined that he could not deliver all of the priority

22 shipments in time, and asked the dispatcher for a different shipment. (Id.) Narayan also rejected

23 particular deliveries when they were out of his delivery area and would not be as profitable. (ld.,

24 245:11-246:3.)

25

Narayan’s compensation varied with the amount of work he chose to accept. (Narayan Dep.,

26 164:8-17.) Under the Agreements, Narayan was entitled to receive 65% of the tariff rate for each pick-

27 up and delivery that he performed. (ld., 65:16-21, Exs. 298, 299.) Sometimes if there were no other

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1 contractors available for a delivery, Narayan was able to negotiate for more money. (Id., 368:8-12.)

2 Narayan also understood that he could potentially increase his income by hiring another driver or other

3 employees to assist with deliveries, but he chose not to. (ld., 229:2-6, 229:11-230:20.) Eagle reporte

4 the money it paid Narayan on a FormA 099.(/d., 155:1-7.) Narayan never received a Form W-2 from 5 Eagle. (Id., 155:8-10.)

6 III. APPLICABLE LAW.

7

This Court should apply Texas law in interpreting the Agreements and deciding this motion. As

8 noted above, all of Narayan’s claims are premised on the theory that the Agreements misclassified him

9 as an independent contractor. (FAC, ¶ 27.) The Agreements provide that they "shall be interpreted

10 under the laws of the state of Texas." (Narayan Dep., Ex. 298, § 7.03, Ex. 299, § 7.03.)

11

Federal courts apply the choice of law rules of the forum state to determine what substantive

12 law should be used. Patton v. Cox, 276 F.3d 493,495 (9th Cir.2002) (citing Klaxon Co. v. Stentor Elec.

13 Mfg. Co., 313 U.S. 487 (1941). California courts apply "the principles set forth in Restatement section

14 187, which reflect a strong public policy favoring enforcements of such provisions." Lines B. V. v.

15 Super. Ct., 3 Cal.4th 459, 465 (1992). Under this approach, courts first examine whether the chosen

16 state has a substantial relationship to ihe parties or to the transaction, or whether there is another

17 reasonable basis for the parties’ choice of law. Id. at 466. "A substantial relationship exists where one

18 of the parties is domiciled or incorporated in the chosen state." ABF Capital Corp. v. Osley, 414 F.3d

19 1061,1065 (9th Cir. 2005) (cifing Nedlloyd Lines B.V., 3 Cal. 4th at 467. Eagleisdomiciledinthe

20 state of Texas. (Narayan Dep., Exs. 298, 299, § 1.) Thus, there is a reasonable basis for the parties’

21 choice of Texas law.

22

California courts also consider whether the application of another state’s law "is contrary to a

23

policy of California." Nedlloyd Lines B. V., 3 Cal.4th at 466 (emphasis in original). The

24

issue in the present case is whether Narayan was properly classified as an independent

25 contractor. California does not have a fundamental public policy regarding the classification of its

26 contractors. See Mary Kay lnc. v. Woolf, 146 S.W.3d 813, 817 (Tex. App. 2004) (applying Texas law to

27 decide whether a Mary Kay consultant who worked in California was an independent contractor or an

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

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1 employee, where there was a Texas choice of law clause in the contract.) Moreover, Texas law

2 regarding the classification of independent contractors is substantially similar to California law (see

3 Section V.B.3 infra), and thus application of Texas law cannot be contrary to fundamental California

4 policy. Texas law applies.

5 IV. SUMMARY OF THE ARGUMENT.

6

The material facts are undisputed; Eagle is entitled to judgment as a matter of law and its

7 motion for summary judgment should be granted. Narayan’s claims are all premised on the theory that

8 he was misclassified as an independent contractor when he was really an employee of Eagle.

9 Narayan’s theory is flawed.

10

Under Texas law, courts determine independent contractor status by looking to the agreement

11 between the parties. In some instances, courts will look outside of the parties’ agreement to determine

12 whether the alleged employer had the right to control the progress of the work, rather than just the final

13 outcome. As noted above, the Agreements here clearly stated that Narayan was an independent

14 contractor. Moreover, Narayan retained the right to control the progress of his own work, and Eagle

15 only controlled the final outcome. Thus, Narayan was properly classified as an independent contractor

16 and his employment claims fail as a matter of law.

17 V. 18 19

ARGUMENT. A. Standard for Summary Judgment.
Summary judgment is appropriate where "there is no genuine issue as to any material

20 fact and.., the moving party is entitled to a judgment as a matter of law." Anderson v. Liberty Lobby, 21 Inc., 477 U.S. 242, 247 (1986) (quotit~g Fed. R. Civ. E 56(c)). The moving party is entitled to

22 iudgment as a matter of law if the nonmoving party "fails to make a showing sufficient to establish the

23 existence of an element essential to that party’s case, and on which that party will bear the burden of

24 proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). There is no genuine issue unless

25 "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party."

26 Anderson, 477 U.S. at 249 (citing First National Bank of Arizona v. Cities Service Co., 391 U.S. 253,

27 288-89 (1968)). "When the material underlying facts are not in dispute and can give rise to only one

28

8

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF MOHIT

NARAYAN’S INDIVIDUAL CLAIMS

Case 5:05-cv-04181-RMW Document 66 Filed 12/08/2006 Page 13 of 20

1 reasonable conclusion, whether a worker was an employee or an independent contractor is a question

2 of law." Texas A & M University v. Bishop, 156 S.W.3d 580, 584 (Tex. App. 2005) (citing Indus.

3 lndem. Exch. v. Southard, 160 S.W.2d 905,906 (Tex. 1942)).

4

As demonstrated below, Narayan lacks the evidence necessary to prove any of his claims.

5 Accordingly, summary judgment should be granted for EGL.

6

B. Summary Judgment Is Mandated Because Narayan Was An Independent

Contractor.

7

8

All of Narayan’s claims are premised on the theory that he was misclassified as an

9 independent contractor, rather than as an employee. An independent contractor is one "who, in the

10 pursuit of an independent business, undertakes to do a specific piece of work for other persons, using

11 his own means and methods, without submitting himself to their control in respect to all its details."

12 Durbin v. Culbertson County, 132 S.W.3d 650, 658 (Tex. App. 2004) (citations omitted). Courts

13 generally look to the parties’ agreement in determining the relationship between the parties, ld. at 659

14 Here, the Agreements clearly establish that Narayan was an independent contractor. Narayan agreed

15 that he was not an employee of Eagle; he was to provide his own vehicle; he was to control the means,

16 manner and method of making deliveries; he could use his own employees or subcontractors over

17 whom he would exercise exclusive control; he was to be paid by the job; and his Eagle-derived income

18 was to be reported on a Form 1099, with Narayan solely responsible for the payment of income taxes,

19 among other things. (Ex. 298, §§ 1, 2.01, 2.02, 2.05, 2.09, 4.01, 4.07, Ex. 299, §§ 1, 2.01, 2.02, 2.05,

20 2.09, 4.01, 4.09.)

21

Even if this Court looks beyond the Agreements, there can be no doubt that Narayan was

22 correctly classified as an independent contractor. When looking beyond the parties’ contractual

23 agreement to determine whether an independent contractor is correctly classified, courts will examine

24 which party has the right to control the progress, details, and methods of the operations of the work.

25 Thompson v. Travelers lndem. Co., 789 S.W.2d 277, 278 (Tex. 1990) (citing Newspapers, lnc. v. Love,

26 380 S.W.2d 582, 585-90 (Tex. 1964)). To measure the right to control, courts consider the following

2’7 five factors: (1) the independent nature of the contractor’s business; (2) the contractor’s obligation to

28

9

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHOR/TIES IN

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NARAYAN’S INDIVIDUAL CLAIMS

Case 5:05-cv-04181-RMW Document 66 Filed 12/08/2006 Page 14 of 20

1 fumish necessary tools, supplies, and materials to perform the job; (3) the contractor’s right to control

2 the progress of the work except about final results; (4) the time for which the contractor is employed;

3 and (5) the method of payment, whether by unit of time or by the job. Limestone Prods. Distribution

4 Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002) (citations omitted). As will be shown below, an

5 analysis of these five factors demonstrates that Eagle did not exert a "right to control" over Narayan

6 and that he was properly classified as an independent contractor.

7

1. The Agreements Between Narayan And EGL Establish That Narayan Was

An Independent Contractor.

8

9

In determining whether a party is an independent contractor, courts will first

10 look to whether the party has described itself as an independent contractor under the applicable

11 agreement. "[G]enerally, an agreement providing that a person shall be an independent contractor and

12 providing for no right of control is controlling in determining the relationship between the parties."

13 Durbin, 132 S.W.3d at 659 (citations omitted) (agreement that "Independent Contractor stipulates and

14 agrees that he shall not be deemed an agent, servant or employee of the COUNTY" controlling). "A

15 written contract that expressly provides for an independent contractor relationship is determinative of

16 the parties’ relationship in the absence of extrinsic evidence indicating that the contract was a

17 subterfuge, that the hiring party exercised control in a manner inconsistent with the contract provisions

18 or if the written contract has been modified by a subsequent agreement, either express or implied."

19 Northwinds Abatement, Inc. v. Employers Insurance of Wausau, 258 F.3d 345,351 (5th Cir. 2001)

20 (citing Weidner v. Sanchez, 14 S.W.3d 353 (Tex. Ct. App. 2000) (applying Texas law in deciding that

21 contract stating that Wausau was an independent contractor and not an agent was controlling)).

22

As shown above, the Agreements established an independent contractor relationship between

23 Narayan and Eagle whereby Narayan, as owner-operator of the trucking business MCAC Transfer,

24 performed delivery services for Eagle. The Agreements unambiguously state that Narayan is an

25 independent contractor, and that "neither contractor nor any of its employees or agents shall be

26 considered to be employees of EFS or of EFS customers at any time under any circumstances for any

27

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUM.MARY JUDGMENT ON PLAINTIFF MOHIT NARAYAN’S INDIVIDUAL CLAIMS

Case 5:05-cv-04181-RMW Document 66 Filed 12/08/2006 Page 15 of 20

1 purpose whatsoever." (Ex. 298, § I, Ex. 299, § I.) Accordingly, Narayan was an independent

2 contractor under the Agreements.

3

Further, Eagle did not have the right to control Narayan under the Agreements. To the contrary,

4 the Agreements required Narayan to "exercise independent discretion and judgment to determine the

5 method, manner and means of performance" of the contractual obligations under the Agreement. (Ex.

6 298, § 2.02, Ex. 299, § 2.02.)

7

Although Narayan complains that Eagle exercised control over him through several provisions

8 in the Agreements, such requirements are necessary to comply with applicable law. For example,

9 Narayan complains that the Agreements required his vehicle to be marked to identify EGL as a

10 licensed motor cartier. But, this requirement is necessary to comply with federal regulations

11 promulgated under the Motor Cartier ,Safety Improvement Act of 1999. See 49 C.F.R. § 376.11 (c)(1). 12 Similarly, the provisions specifying that the Contractor is responsible for certain costs and expenses

13 relating to the leased vehicle and that any such payments advanced by Eagle shall be deducted from

14 the Contractor’s compensation are also required by federal regulation. See 49 C.F.R. § 376.12(e) 15 i (requiring a clear specification of responsibility for certain costs and expenses); 49 C.ER. § 376.12(h)

16 (requiting a clear specification of all items that may be initially paid for by a motor cartier and then

17 deducted from the contractor’s compensation). Likewise, the provision allowing Eagle to remove a

18 vehicle from service if it is not in compliance with these and other federal or state requirements is also

19 mandated by federal regulation. See 49 C.F.R. § 393 (prohibiting motor carriers from allowing drivers 20 ’to operate commercial motor vehicles that are not in compliance).

21

Requiring a driver to comply with regulations "does not have any impact on the type of

22 relationship that exists between the carrier-lessee and the contractor-lessor." Tamez v. Southwestern

23 Motor Transport, lnc., 155 S.W.3d 56~4 (Tex. App. 2004); see also Farrell v. Greater Houston Transp.

24 Co., 908 S.W.2d 1 (Tex. App. 1995) (finding a taxicab driver an independent contractor even though a

25 city ordinance provided that the permit holder was responsible for anyone operating the taxicabs).

26 Here, the Agreements clearly established an independent contractor relationship between Narayan and

27 Eagle, and the mere fact that the Agreements required Narayan to comply with applicable law is not

28

11

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF MOHIT

NARAYAN’S INDIVIDUAL CLAIMS

Case 5:05-cv-04181-RMW Document 66 Filed 12/08/2006 Page 16 of 20

1 inconsistent with his independent contractor status under Tamez. Accordingly, summary judgment

2 should be granted for Eagle.

3

2. There Is No Evidence Of Control Outside Of The Agreements Between

Narayan And Eagle. 4

5

Even if this Coiart looks outside the Agreements, there is no evidence that Eagle

6 controlled the progress of Narayan’s work. Before Eagle may be considered Narayan’s employer,

7 Eagle’s "exercise of control must be so persistent and the acquiescence therein so pronounced as to 8 I raise an inference that, when the incident occurred, the parties by implied consent had agreed that the

9 principal had the right to control the details of the work." City of Paris v. Floyd, 150 S.W.3d 224, 227

10 (Tex. App. 2004). "An employer controls not merely the end sought to be accomplished, but also the

11 means and details of its accomplishment." Cook v. Nacogdoches Anesthesia Group, 167 S.W.3d 476,

12 481 (Tex. App. 2005) (citing Thompson, 789 S.W.2d at 278 (finding that an anesthesiologist who had

13 discretion in how to conduct his job and was provided equipment by the hospital and not the group he

14 contracted with was an independent contractor, despite the fact that the group told him when to be at

15 the hospital for his anesthesia services)).

16

Addressing a similar situations the Texas Supreme Court recently concluded that a contract

17 driver was an independent contractor as a matter of law. See Limestone Prods. Distribution lnc., 71

18 S.W.3d 308. In Limestone, the court utilized the five-factor test described above to determine whether

19 a truck driver was an employee or an independent contractor, ld. at 312. As here, the contractor

20 owned his own truck, could drive any route he wished, was only required to deliver the load on time,

21 had his income reported on a Form 1099, and had to pay his own taxes and expenses, ld. at 312-313.

22 The Limestone court concluded that the truck driver was an independent contractor:

23

Limestone supplied no tools or equipment to Mathis. Instead, Mathis owned and

used his own truck for deliveries, and he paid for his truck’s gasoline, repairs and

24

insurance. Limestone paid Mathis by the load he delivered, and he received no

pay if there was no work. Limestone reported Mathis’s income on a 1099 form,

25

not a W-2 form. Also, Limestone did not pay Mathis for vacation, sick leave, or

holidays. And Mathis paid his own social security and federal income taxes. 26

[T]he summary-judgment evidence establishes that Limestone merely controlled

27

the end sought to be accomplished--determining where and when to deliver the

28

12

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF MOHIT

NARAYAN’S INDIVI.DUAL CLAIMS

Case 5:05-cv-04181-RMW ~ocument 66 Filed 12/08/2006 Page 17 of 20

1

load--whereas Mathis controlled the means and details of accomplishing the

work.

2

3 Indeed, in a case against Eagle involving effectively the same agreement as that at issue here,

4 the U.S. District Court for the Eastern District of Louisiana just this year applied Limestone to hold

5 that an owner-operator under contract with Eagle was properly classified as an independent contractor

6 and was not an employee. See Davis v. EGL Eagle Global Logistics LP, 2006 WL 2631966, * 1 (E.D.

7 La. 2006). The court explained:

8

He was not guaranteed a certain amount of work and was free to serve other

9

carriers. He could, as he saw fit, employ drivers and control the aspects of their

work. It was Davis’ decision to accept or reject dispatches offered by EGL. He

10

had the right to control the prrgress of the work, including that he could generally

choose the day and time of day to make deliveries. He could choose the routes

11

traveled and the parking sites most suitable to accomplish his task. He could

arrange for repair of his vehicle, which he leased to EGL. This control exercised

12

by Davis was not undermined by the Agreement’s qualification of this right to

control, which provided merely that he "fully and efficiently perform his

13

obligation under the Agreement."

14 Id. at *3-*4. Other factors on which the court relied in reaching this conclusion in Davis were that the

15 plaintiff was compensated per delivery rather than paid on an hourly or salaried basis, he was not

16 entitled to receive any benefits or compensation beyond the 60% of the tariff of each shipment picked

17 up and delivered, and Eagle did not withhold income or social security taxes; rather, he was

18 responsible for paying his own taxes, ld.

19 The facts here are the same as in Limestone and Davis, and the same analysis applies. Narayan,

20 like the drivers in those cases, was required to fumish his own truck, the major tool of his trade, as well

21 as his own pallet jack, hand dolly and’lift gate. (Narayan Dep., 183:1-5, 184:1-8, 185:19-186:4.)

22 Narayan was also responsible for the costs of operating and maintaining his vehicle, including

23 gasoline, repairs and insurance. (Id., 105:13-17; Exs. 298, 299, § 2.05.) Narayan was not guaranteed

24 any amount of work and was free to do business with other companies. (ld., 136:11-20.) Narayan was

25 paid a percentage of the tariff Eagle received for the loads he carried, and he received no pay if there

26 was no work. (Id., 65:16-21.) Narayan received a Form 1099 from Eagle, not a W-2, and he paid his

27 own taxes. (Id., 155:1-17.) Additionally, Narayan operated under the business name MCAC Transfer,

28

13

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF MOHIT

NARAYAN’S INDIVIDUAL CLAIMS

Case 5:05-cv-04181-RMW Document 66 Filed 12/08/2006 Page 18 of 20

1 a separately licensed business, and he was free to hire others to assist him with his business. (Id.,

2 29:20-23,229:11-230:20.) Narayan did not have to show up at the station on a regular schedule, and

3 indeed, there were many days when he chose not to show up at all. (Id., 204:14-205:1,213:9-21.)

4 Narayan also chose his own route and was free to reject deliveries, which he routinely did. (Id., 131:8-

5 23, 101:24-103:7.) Eagle merely controlled the end sought to be accomplished---delivering freight in

6 accordance with customer specifications--whereas Narayan controlled the means and details of 7 accomplishing the work.4

8

In sum, all of the factors set forth in Limestone and applied in Davis compel the conclusion

9 Narayan was properly classified as an independent contractor and his claims against Eagle cannot

10 stand. Summary judgment is mandated.

11

3. Narayan Was An Independent Contractor Under California Law.

12

Even if California law applied, Narayan was properly classified as an

13 independent contractor. California law is substantially similar to Texas law regarding classification of

14 an independent contractor; under both, a "right to control" test is used to determine whether an

15 independent contractor is properly classified. Compare Limestone Prods. Distribution Inc., 71 S.W.3d

16 at 312 (right to control the progress, details, and methods of the operations of the work) with Bates v.

17 Industrial Accident Comm ’n, 156 Cal. App. 2d 713, 718 (1958) (independent contractor relationship

18 will not be considered employment relationship unless the alleged employer has the right "to exercise

19 complete and authoritative control of the mode and manner in which the work is performed").

20

21

4 Narayan contends that Eagle exercised control over him by requiring him to place an Eagle

22 logo on his truck and to wear an Eagle uniform (an Eagle shirt and security badge) when making deliveries. But, as shown above, motor carrier identifying information is required by federal
23 regulation. See 49 C.F.R. § 376.11 (c)(1) (requiring leased vehicles to be marked with the motor
carrier’s identifying information); see also Tamez v. Southwestern Motor Transport, Inc., 155 S.W.3d 24 564 (Tex. App. 2004) (requiring driver to comply with federal or state regulations "does not have any
impact on the type of relationship that exists between the carrier-lessee and the contractor-lessor"). 25 Moreover, Narayan admits that the Eagle logo did not stop him from using his truck to make deliveries

for others and that he could have cove, red the logo, but chose not to do so. (Narayan Dep., 24:19-22, 26 25:6-21, 38:22-24.) Further, Narayan admits Eagle’s security concerns, which necessitated the use of
security badges to enter the station, were legitimate. (See tar., 19:18-20:8.) Examining such 27 requirements in Davis, the court held that they did not "create a factual dispute" and were "not at all

inconsistent with independent contractor status." Davis, 2006 WL 2631966, at *3-*4.

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF MOHIT NARAYAN’ S INDIVIDUAL CLAIMS

Case 5:05-cv-04181-RMW Document 66 Filed 12/08/2006 Page 19 of 20

1

As discussed above, Texas courts analyze the "right to control" by considering: (1) the

2 independent nature of the contractor’s business; (2) the contractor’s obligation to furnish necessary

3 tools, supplies, and materials to perform the job; (3) the contractor’s right to control the progress of the

4 work except about final results; (4) the time for which the contractor is under contract; and (5) the

5 method of payment, whether by unit of time or by the job. Limestone Prods. Distribution Inc., 71

6 S.W.3d at 312. California courts consider similar factors in determining the "right to control." For

7 example, in Millsap v. Federal Express Corp., 227 Cal. App. 3d 425, 430-33 (1991), the court held that

8 a package delivery driver was an independent contractor, not an employee, based on the parties’ written

9 agreement, which provided for an independent contractor relationship, as well as other factors, such as

10 the driver’s obligation to provide his own vehicle, gas and liability insurance and to pay for vehicle

11 maintenance and repair costs. The court also noted that the driver was paid on a "per route" basis

12 (rather than by the hour), and that the driver retained the right to control the progress of his work.

13 "Other than to say ’be careful’ or to give him directions to a particular location, or possibly tell him to

14 deliver the packages in the order received, [the carrier] did not instruct [the driver] as to how to make

15 the deliveries or how to drive his car." ld. at 431.

16

The court considered similar factors in Bates, 156 Cal. App. 2d 713, holding that the driver of a

17 catering truck was an independent contractor, not an employee: the driver controlled the day-to-day

18 operation of his route, was obligated to provide insurance and maintenance for his truck, and did not

19 receive an hourly wage. Id. at 718-19; see also Mission Insurance Co. v. Workers Compensation

20 Appeals Board, 123 Cal. App. 3d 211 ’(1981) (security alarm service provider an independent

21 contractor, not an employee, based on the parties’ agreement, the independent nature of the contractor’s

22 business, the contractor’s obligation to furnish his own vehicle and pay his own expenses, and the

23 method of payment). Thus, even under California law, Narayan was properly classified as an

24 independent contractor.

25

26

27

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHOR/TIES IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF MOHIT

NARAYAN’S INDIVIDUAL CLAIMS

Case 5:05-cv-04181-RMW Document 66 Filed 12/08/2006 Page 20 of 20

1

Co

All Of Narayan’s Claims Fail As A Matter Of Law Because Narayan Was An

Independent Contractor.

2

3

All of the provisions of the California Labor Code and Wage Order on which Narayan

4 bases his First through Fourth Causes of Action apply only to employees, not to independent 5 contractors. 5 See Cal. Lab. Code §§ 221,223,226.7, 400-410, 450, 512, 2802; IWC Wage Order No.

6 9; see also FAC, ¶ 44, 45, 46, 47, 54 & 57. As demonstrated above, Narayan was an independent

7 contractor, not an employee. Thus, the Labor Code and Wage Order provisions on which he relies do

8 not apply to him, and his First through Fourth Causes of Action fail. And, because Narayan’s Ninth 9 Cause of Action for violation of California’s Unfair Competition Law, Cal. Bus. & Prof. Code §§

10 17200 et seq., is wholly based on the violations alleged in his First through Fourth Causes of Action,

11 the Ninth Cause of Action fails with them.

12 VI. CONCLUSION

13

Narayan’s own deposition testimony amply demonstrates that he was properly classified as an

14 independent contractor, and his claims against Eagle fail. No material facts are in dispute, and Eagle is

15 entitled to judgment as a matter of lawF.or all the foregoing reasons, Eagle’s motion for summary

16 iudgment should be granted.

17

December 8, 2006

Respectfully submitted,

18

AKIN GUMP STRAUSS HAUER & FELD LLP

19

By /~~ 20
/ - - ~J I(aren J. Kubin

21 Attorneys for Defendant

22

EGL, INC.

23

24

25

26

27

5 Narayan did not join in the Fifth through Eighth Causes of Action contained in the First

Amended Complaint.

28

16

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN
SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF MOHIT NARAYAN’S INDIVIDUAL CLAIMS

 
 Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 1 of 19

1 KAREN J. KUBIN (SBN 71560) HEATHER BURROR (205803)
2 JILL VIZAS (226984) AKIN GUMP STRAUSS HAUER & FELD LLP
3 580 California Street, Suite 1500 San Francisco, CA 94104-1036
4 Telephone: 415-765-9500 Facsimile: 415-765-9501
5
BRUCE JACOBS (SBN 194114) 6 AKIN GUMP STRAUSS HAUER & FELD LLP
2029 Century Park East, Suite 2400 7 Los Angeles, CA 90067-3012
Telephone: 310-229-1000 8 Facsimile: 310-229-1001

9 Attorneys for Defendant
EGL, INC. 10

11

UNITED STATES DISTRICT COURT

12

NORTHERN DISTRICT OF CALIFORNIA

13

SAN JOSE DIVISION

14

15 MOHIT NARAYAN, HANNA RAHAWI, Case No. C 05-04181 RMW

and THOMAS HEATH, on behalf of

16 themselves, all others similarly situated, andDEFENDANT EGL, INC.’ S

the general public,

MEMORANDUM OF POINTS AND

17

AUTHORITIES IN SUPPORT OF ITS

Plaintiffs,

MOTION FOR SUMMARY JUDGMENT

18

REGARDING THE INDIVIDUAL

CLAIMS OF PLAINTIFF HANNA

19

EGL, INC., a Texas Corporation; EAGLE

20 FREIGHT SERVICES, INC.; and DOES 1- Date: January 26, 2007

10, inclusive,

Time: 9:00 a.m.

21

Ctrm: 6

Defendants.

22

23

24

25

26

27

28
DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 2 of 19

1

TABLE OF CONTENTS

2

Page(s)

3 TABLE OF CONTENTS .............................................................................................................I

4 TABLE OF AUTHORITIES .....................................................................................................I.I

5 I. INTRODUCTION ...........................................................................................................1

6 II. STATEMENT OF FACTS ................................................................................................1

7

A. The Parties ...........................................................................................................1

8

1. Eagle Is a Global Logistics Company Providing Domestic Delivery

Services ....................................................................................................1

9

2. Rahawi’s Trucking Business .................................................................3.... 10

B. The Agreements Entered Into Between Rahawi And Eagle Establishing

11

Rahawi’s Independent Contractor Relationship With Eagle ...........................3.......

12

C. The Contractor-Customer Relationship Between Rahawi And Eagle ..............5......

13 III. APPLICABLE LAW ........................................................................................................6

14 IV. SUMMARY OF THE ARGUMENT ...............................................................................7.

15 V. 16

ARGUMENT ..................................................................................................................7. A. Standard For Summary Judgment ......................................................................7...

17

B. Summary Judgment Is Mandated Because Rahawi Was An Independent

Contractor. ...........................................................................................................8

18

1. The Agreements Establish That Rahawi Was An Independent Contractor..9 19

2. There Is No Evidence Of Control Outside Of The Agreement Between

20

Rahawi And Eagle ................................................................................1..0

21

3. Rahawi Was An Independent Contractor Under California Law .........1..3...

22

C. All of Rahawi’s Claims Fail As A Matter of Law Given That Rahawi Was An

Independent Contractor. ....................................................................................1. 4

23

VI. CONCLUSION .............................................................................................................14 24

25

26

27

28

i

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 3 of 19

1

TABLE OF AUTHORITIES

2

Page(s)

CASES 3

ABF Capital Corp. v. Osley

4

414 F.3d 1061 (9th Cir. 2005) .......................................................................................6

5 Anderson v. Liberty Lobby, lnc.

477 U.S. 242 (1986) .................................................................................................. 7, 8

6

Bates v. Industrial Accident Comm " n

7

156 Cal.App.2d 713 (1958) .........................................................................................13

8

Celotex Corp. v. Catrett 477 U.S. 317 (1986) ...................................................................................................... 8

9 City of Paris v. Floyd

10

150 S.W.3d 224 (Tex. App. 2004) ...............................................................................10

11

Cook v. Nacogdoches Anesthesia Group 167 S.W.3d 476 (Tex. App. 2005) ...............................................................................10

12 Davis v. EGL Eagle Global Logistics LP

13

2006 WL 2631966, *1 (E.D. La. 2006) ..................................................................11, 12

14

Durbin v. Culbertson County 132 S.W.3d 650 (Tex. App. 2004) ............................................................................. 8, 9

15 First National Bank of Arizona v. Cities Service Co. 391 U.S. 253 (1968) ...................................................................................................... 8
16

lndus, lndem. Exch. v. Southard

17

160 S.W.2d 905 (Tex. 1942) .......................................................................................... 8

18 Klaxon Co. v. Stentor Elec. Mfg. Co.

313 U.S. 487 (1941) ...................................................................................................... 6

19

Limestone Prods. Distribution lnc. v. McNamara

20

71 S.W.3d 308 (Tex. 2002) .................................................................................9, 10, 13

21

Mary Kay lnc. v. Woolf 146 S.W.3d 813 (Tex. App. 2004) ................................................................................. 7

22 Millsap v. Federal Express Corp.

23

227 Cal. App. 3d 425 (1991) .......................................................................................13

24

Mission lns. Co. v. Workers Compensation Appeals Board 123 Cal. App. 3d211 (1981) .......................................................................................14

25 Nedlloyd Lines B. V. v. Super. Ct.

26

3 Cal. 4th 459 (1992) ....................................................................................................6

Newspapers lnc. v. Love

27

380 S.W.2d 582 (Tex. 1964) .......................................................................................... 9

28

ii

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHOR/TIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 4 of 19

1 Northwinds Abatement, lnc. v. Employers lns. of Wausau

258 E3d 345 (5th Cir. 2001) .........................................................................................9

2

Patton v. Cox

3

276 E3d 493 (9th Cir. 2002) .........................................................................................6

4

Tamez v. Southwestern Motor Transport, lnc. 155 S.W.3d 564 (Tex. App. 2004) ...............................................................................12

5 Texas A & M University v. Bishop

6

156 S.W.3d 580 (Tex. App. 2005) ................................................................................. 8

7

Thompson v. Travelers lndem. Co. 789 S.W.2d 277 (Tex. 1990) .................................................................................... 9, 10

8 Weidner v. Sanchez

9

14 S.W.3d 353 (Tex. Ct. App. 2000) ..............................................................................9

10

STATUTES

Cal. Bus. &Prof. Code § 17200 etseq ....................................................................................14 11
Cal. Lab. Code §§ 221 ............................................................................................................ 14 12
Cal. Lab. Code §§ 223 ............................................................................................................ 14 13
Cal. Lab. Code §§ 226.7 .........................................................................................................14 14
Cal. Lab. Code §§ 2802 ..........................................................................................................14 15
Cal. Lab. Code §§ 400-410 ..................................................................................................... 14 16
Cal. Lab. Code §§ 450 ............................................................................................................14
17 Cal. Lab. Code §§ 512 ............................................................................................................14

18

RULES

19 Fed. R. Civ. P. 56(c) .................................................................................................................7

20

21

22

23

24

25

26

27

28

iii

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING TH~

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 5 of 19

1

INTRODUCTION.

2

Plaintiff Hanna Rahawi ("Rahawi"), owner of an independent tracking business with two

3 trucks, signed two contracts to provide delivery services to Defendant EGL, Inc. ("Eagle") as an 4 independent contractor. Rahawi admits that he did not want to be an employee of Eagle because he 5 made more money operating his own independent trucking business. Nevertheless, Rahawi joined this 6 lawsuit asserting employment law claims against Eagle, all premised on the flawed theory that Rahawi

7 was misclassified as an independent contractor, rather than an employee. But the undisputed facts

8 demonstrate that Rahawi was at all times during his relationship with Eagle an independent contractor, 9 just as his contract states. Accordingly, Eagle is entitled to summary judgment on Rahawi’s claims. 1

10 I1. STATEMENT OF FACTS.

11

A. The Parties.

12

1. Eagle Is a Global Logistics Company Providing Domestic Delivery Services.

13

Eagle is a global transportation, supply chain management and information

14 services company, providing logistics solutions for customers worldwide. (Declaration of Martha

15 DeLeon-Schmidt ("Schmidt Dec.") filed herewith, ¶ 2.) Eagle provides value-added services beyond

16 those customarily provided by traditional air freight forwarders, ocean freight forwarders and customs

17 brokers to help customers streamline their supply chain, reduce their inventories, improve their

18 logistics information and provide them with more efficient and effective domestic and international

19 distribution strategies in order to enhance their profitability. (Id.) Eagle’s services include air and

20 ocean freight forwarding, customs brokerage, local pick-up and delivery service, materials 21 management, warehousing, trade facilitation and procurement and integrated logistics and supply chain

22 management services. (ld., ¶ 3.) These services are provided through Eagle’s extensive network of

23 approximately 400 facilities, agents and distribution centers located in over 100 countries on six

24 continents. (Id.) 25

26

1 The first phase of this litigation deals solely with Plaintiffs’ individual claims. (See Case

Management Order, filed March 16, 2006.) Therefore this motion for summary judgment is made as to 27 Rahawi’s individual claims against Eagle and does not consider the claims alleged by Rahawi on

behalf of a putative class.

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

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Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 6 of 19

1

One of the many areas of Eagle’s business is domestic delivery services. (Schmidt Dec., ~13,

2 4.) Domestic delivery services may be provided either as part of Eagle’s freight-forwarding operations

3 or for customers requiring local pick-up and delivery services. (ld., ¶ 4.) Eagle maintains a non-asset

4 based philosophy and structure across the board. (ld., ¶ 5.) Accordingly, with some exceptions, Eagle

5 does not generally employ drivers or use Eagle-owned vehicles for pick-up and delivery services. (ld.)

6 Instead, Eagle contracts with trucking businesses, both large and small, to handle its pick-up and

7 delivery services. (ld.) These owner-operators ("Contractors") own, operate and maintain the vehicles

8 used in their work for Eagle, and may perform the services themselves or employ qualified drivers of

9 their choice. (Id., ¶ 6; Deposition of Hanna Rahawi ("Rahawi Dep."), 192:17-193:2, 199:4-7, 200:15-

10 19, 195:8-12.)2

11

Eagle and its Contractors benefit from a mutual business relationship. (Schmidt Dec., ¶ 6.)

12 They each profit or lose by meeting the delivery demands of Eagle’s customers. (ld.) The Contractor

13 perform this service by obtaining delivery jobs from Eagle. (Id.) Contractors make themselves

14 available at their own discretion. (Id., ¶ 8; Rahawi Dep., 161:15-163:12.) At certain times of the day

15 heavier volumes dictate more profitable opportunities than at other times of the day. (Schmidt Dec.,

16 ¶ 8.) Contractors receive a percentage of the applicable tariff for each load. (ld., ¶ 7.)

17

Contractors arriving at the dispatch station and seeking business availability go to the dispatch

18 office. (Schmidt Dec., ¶ 9.) Dispatches are offered as a delivery packet that is normally grouped

19 geographically and sometimes includes customer time and delivery specific requirements. (Id.) Once

20 a Contractor obtains a packet, he will review the manifests to determine how to route the deliveries in

21 the packet. (Id., ¶ 10.) Pursuant to customer demand, the Contractor will attempt to deliver the

22 priority orders first. (Id.) The Contractor is completely on his own to determine the manner and

23 xteans by which he will perform the delivery orders. (Id.) At’ter completing a priority delivery,

24 Contractors generally inform the station that the delivery is complete to enable Eagle to update

25

26

z Excerpts from Rahawi’s deposition are attached as Exhibit A to the Declaration of Jill Vizas

27 ("Vizas Dec.") Ned herewith. Exhibits to Rahawi’s deposition Rahawi are attached as Exhibit B to the

Vizas Declaration.

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 7 of 19

1 customers regarding the status of priority deliveries. (ld., ¶ 11.) Contractors also call the station

2 periodically to find out if there are any pick-up orders in their current vicinity. (ld.)

3

After completing the packet of deliveries, Contractors bring any pick-up orders back to the

4 station. (Schmidt Dec., ¶ 12.) Many Contractors also return to the station to submit their delivery

5 manifests because early receipt of manifests enables Eagle to ensure a quick payment to the

6 Contractors. (ld.) Based on the manifests, Eagle generates settlement reports, which the Contractors

7 review to ensure that the reports properly account for any special charges or specially-negotiated

8 delivery rates. (ld.)

9

2. Rahawi’s Trucking Business.

10

Rahawi purchased a Mitsubishi truck and began his own truck driving business

11 in 1993 or 1994. (Rahawi Dep., 30:15-32:20.) Shortly thereafter he signed an independent contractor

12 agreement to provide delivery services for Cal State Express. (Rahawi Dep., 30:15-32:20.) Sometime

13 in 2000, Rahawi decided to expand his business to make more money by taking on weekend work. 14 (Id., 44:9-46:25.) Another driver suggested that Eagle needed contractors to handle weekend 15 deliveries. (ld.) Rahawi began providing delivery services for Eagle on the weekends, and continued

16 providing delivery services for Cal State Express during the week. (Id., 44:9-46:25, 54:14-55:4, 60:1-

17 7.) Rahawi understood that he was an independent contractor for Eagle, not an employee. (Id., 54:14-

18 55:4.) Indeed, Rahawi did not want to become an employee because he could make more money

19 operating his own trucking business. (ld., 68:17-23.) Although Rahawi later started providing delivery

20 services for Eagle during the week as well, he understood that he would continue to be an independent

21 contractor operating an independent trucking business, not an employee. (ld., 62:20-64:2.)

22

B. The Agreements Entered Into Between Rahawi And Eagle Establishing Rahawi’s

Independent Contractor Relationship With Eagle.

23

24

Rahawi and Eagle entered into two Agreements for Leased Equipment and Independent

25 Contractor services, first on May 11, 2000 and again on July 15, 2000 (collectively, the 26 "Agreements").3 (Rahawi Dep. Exs. 203,204.) The Agreements did not guarantee Rahawi any

27 3 The Agreements are referred to together because they contain virtually identical language.

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 8 of 19

1 amount of work, and Rahawi reserved the right to continue to contract with other companies, which he

2 did. (Id., Ex. 204, § I, p.2; 44:9-46:25, 60:1-7, 188:23-189:2, 189:11-17.) Under the Agreements,

3 Rahawi would receive 60 percent of the amount charged to a customer by Eagle for each shipment

4 picked up or delivered by Rahawi or his employees, although he negotiated special rates for certain

5 deliveries. (Id., Ex. 204, § 4.01; 94:4-13,243:3-244:24.) Rahawi understood that because he was an

6 independent contractor, he was responsible for filing tax returns for his business and that Eagle would

7 report his income on a Form 1099 and would not withhold any taxes from the delivery rates paid. (Id.,

8 206:10-16, 245:5-9, 245:21-252:25; Ex. 204, § 4.09.) Rahawi also understood that, other than these

9 delivery rates, neither he nor his employees would receive benefits or any other form of compensation

10 from Eagle. (Id., Ex. 204, § 4.09; 97:18-98:4, 188:2-6.)

11

The Agreements established an independent contractor relationship between Rahawi and Eagle

12 whereby Rahawi, as owner-operator of a trucking business, performed delivery services for Eagle.

13 (Rahawi Dep., 187:2-8, Exs. 203,204, § I pp. 1-2.) The Agreements stated Rahawi and Eagle’s

14 intention to "create a vendor/vendee relationship between Contractor and [Eagle] through which 15 Contractor, as an independent business person, has the potential to realize a profit or loss by: leasing a

16 truck to [Eagle]; rendering certain related pick-up and delivery services..." (Id., Exs. 203,204, § I.)

17 The Agreements could be terminated by either party after a notice period or upon breach of the

18 Agreements. (Id., 214:13-215:7.) Because the Agreements did not obligate Rahawi to provide

19 delivery services on any given day, Rahawi was also free to put his contractual relationship with Eagle

20 on hold whenever he chose. (Id., 283:18-285:19.) For example, Rahawi temporarily stopped

21 providing delivery services to Eagle to help his wife open a cell phone business, but reactivated his

22 contract a month later for income reasons. (Id.)

23

Under the Agreements neither Rahawi nor anyone who worked for him was to be considered an

24 employee of Eagle. (Id., Exs. 203,204, § I pp. 1-2.) Rahawi also agreed that "if at any time during the

25 term of this agreement [Rahawi] is of the opinion that something other than an independent contractor

26 relationship exists between [Rahawi] and [Eagle], [Rahawi] shall immediately notify the manager of

27

28

4

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 9 of 19

1 shared resources of Eagle." (ld., Exs. 203,204, p. 2; 188:11-18.) Rahawi never did so. (ld., 170:9-

2 171:4.)

3

As an independent contractor, Rahawi was responsible for supplying the truck and other tools

4 used to provide services to Eagle. (Rahawi Dep., Ex. 204, §§ 2.01, 2.02.) Rahawi was responsible for

5 all of the costs and expenses of maintaining, repairing and operating his truck, including any damage

6 or depreciation. (Id., Ex. 204, §§ 2.01, 2.02; 200:15-19, 206:6-9.) Rahawi was also responsible for

7 obtaining insurance policies on the truck and the freight he carried. (ld., Ex. 204, § 3.02; 206:1-5,

8 274:25-275:6, 275:20-276:16.)

9

Although Eagle retained the right to issue reasonable requirements regarding the results to be

10 accomplished under the Agreements, the Agreements required Rahawi to exercise independent

11 discretion and judgment to determine the method, manner and means of his performance of his

12 obligations under the Agreements. (Rahawi Dep., Ex. 203, 204, pp. 1-2; 187:9-21 .) The Agreements

13 expressly stated that "[C]ontractor shall exercise independent discretion and judgment to determine the

14 method, manner and means of performance of its contractual obligations under this Agreement." (ld.,

15 Exs. 203 & 204, § I, pp. 1-2.)Accordingly, Rahawi controlled the operation of his vehicle, and was

16 responsible for complying with applicable federal and state regulations. (ld., Ex. 204, §§ 2.03, 2.07;

17 192:17-193:2, 199:4-7, 200:20-201:2.) Eagle did not have any control over Rahawi’s vehicle, or over

18 any employees or subcontractors Rahawi chose to employ. (Id., Ex. 204, §§, I, 2.01, 2.09; 195:8-12.)

19

C. The Contractor-Customer Relationship Between Rahawi And Eagle.

20

Rahawi continued to conduct his trucking business after he entered into the Agreements

21 with Eagle, and identified himself as a small business concern on the EEO compliance certificates he

22 completed for Eagle. (Rahawi Dep., 255:3-258:5, 259:10-260:24; Exs. 228,229, 230.) Rahawi owned

23 two trucks, and continued providing delivery services to Cal State Express by hiring a subcontractor to

24 drive his second truck. (ld., 340:21-341:17.) Cal State Express paid Rahawi 25% of the amount

25 charged to the customer, and Rahawi paid his subcontractor half of what he received from Cal State

26 Express. (ld., 341:23-342:18.)

27

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

,Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 10 of 19

Although Rahawi initially asked Eagle for a specific geographic area to which he could make

deliveries each day, alter delivering to Dublin/Livermore and Oakland he realized he could make more

money if he was willing to make deliveries anywhere, which he started to do instead. (ld., 70:9-19,
II72:5-15, 76:20-78:1.) Rahawi also negotiated with Eagle regarding the deliveries he made to

5 maximize his profit. (ld., 243:3-244:24.) Rahawi knew he could hire a subcontractor to drive for him

6 if he chose, but he chose not to do so. (ld., 201:21-202:5.) Rahawi also knew he could expand his

7 trucking business by putting a third truck into service for Eagle (his second truck was already

8 committed to servicing the Cal State Express contract), but he chose not to expand his business in that

9 way. (ld., 202:10-23.)

10 lll. 11

APPLICABLE LAW. This Court should apply Texas law in interpreting the Agreements and deciding this motion. As

12 noted above, all of Rahawi’s claims are premised on the theory that the Agreements misclassified him

13 as an independent contractor. (FAC, ¶ 27.) The Agreements provide that they "shall be interpreted

14 under the laws of the state of Texas." (Rahawi Dep., Ex. 204, § 7.03.)

15

Federal courts apply the choice of law rules of the forum state to determine the substantive law

16 that should be used. Patton v. Cox, 276 E3d 493,495 (9th Cir. 2002) (citing Klaxon Co. v. Stentor

17 Elec. Mfg. Co., 313 U.S. 487 (1941)). California courts apply "the principles set forth in Restatement

18 section 187, which reflect a strong public policy favoring enforcement of such provisions." Nedlloyd

19 Lines B.V.v. Super. Ct., 3 Cal. 4th 459, 465 (1992). Under this approach, courts first examine whether

20 the chosen state has a substantial relationship to the parties or to the transaction, or whether there is

21 another reasonable basis for the parties’ choice of law. /d. at 466. "A substantial relationship exists

22 where one of the parties is domiciled or incorporated in the chosen state." ABF Capital Corp. v. Osley,

23 414 E3d 1061, 1065 (9th Cir. 2005) (citing NedlloydLines B. V., 3 Cal.4th at 467). Eagle is domiciled

24 in the state of Texas. (Exs. 203,204 p. 1.) Thus, there is a reasonable basis for the parties’ choice of

25 Texas law.

26

California courts also consider whether the application of another state’s law "is contrary to a

27 fundamental policy of California." NedlloydLines B. V., 3 Cal.4th at 466 (emphasis in original). The

28

6

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 11 of 19

1 threshold issue in the present case is whether Rahawi was properly classified as an independent

2 contractor. California does not have a fundamental public policy regarding the classification of its

3 contractors. See Mary Kay Inc. v. Woolf, 146 S.W.3d 813,817 (Tex. App. 2004) (applying Texas law to

4 decide whether a Mary Kay consultant who worked in California was an independent contractor or an

5 employee, where there was a Texas choice of law clause in the contract). Moreover, Texas law

6 regarding the classification of independent contractors is substantially similar to California law (see

7 Section V.B.3 infra), and thus application of Texas law cannot be contrary to fundamental California

8 policy. Texas law applies.

9 IV. SUMMARY OF TIlE ARGUMENT.

10

The material facts are undisputed; Eagle is entitled to judgment as a matter of law and its

11 motion for summary judgment should be granted. Rahawi’s claims are all premised on the theory that

12 he was misclassified as an independent contractor when he was really an employee of Eagle. Rahawi’s

13 theory is flawed.

14

Under Texas law, courts determine independent contractor status by looking to the agreement

15 between the parties. In some instances, courts will look outside of the parties’ agreement to determine

16 whether the alleged employer had the right to control the progress of the work, rather than just the final

17 outcome. As noted above, the Agreements here clearly stated that Rahawi was an independent

18 contractor. Moreover, Rahawi retained the right to control the progress of his own work, and Eagle

19 only controlled the final outcome. Thus, Rahawi was properly classified as an independent contractor

20 and his employment claims fail as a matter of law.

21 IIv.

22

A. Standard For Summary Judgment.

23

Summary judgment is appropriate where "there is no genuine issue as to any material

24 fact and.., the moving party is entitled to a judgment as a matter of law." Anderson v. Liberty Lobby,

25 Inc., 477 U.S. 242, 247 (1986) (quoting Fed. R. Civ. P. 56(c)). The moving party is entitled to

26 judgment as a matter of law if the nonmoving party "fails to make a showing sufficient to establish the

27 ’ existence of an element essential to that party’s case, and on which that party will bear the burden of

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-O4181-RMW Document 71 Filed 12/08/2006 Page 12 of 19

1 proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). There is no genuine issue tmless

2 "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party."

3 Anderson, 477 U.S. at 249 (citing First National Bank of Arizona v. Cities Service Co., 391 U.S. 253,

4 288-89 (1968)). "When the material underlying facts are not in dispute and can give rise to only one

5 reasonable conclusion, whether a worker was an employee or an independent contractor is a question

6 of law." TexasA &M University v. Bishop, 156 S.W.3d 580, 584 (Tex. App. 2005)(citing lndus.

7 Indem. Exch. v. Southard, 160 S.W.2d 905,906 (Tex. 1942)).

8

As demonstrated below, Rahawi lacks the evidence necessary to prove any of his claims.

9 Accordingly, summary judgment should be granted for Eagle.

10

B. Summary Judgment Is Mandated Because Rahawi Was An Independent

Contractor. 11

12

All of Rahawi’s claims are premised on the theory that he was misclassified as an

13 independent contractor, rather than as an employee. An independent contractor is one "who, in the

14 pursuit of an independent business, undertakes to do a specific piece of work for other persons, using

15 his own means and methods, without submitting himself to their control in respect to all its details."

16 Durbin v. Culbertson County, 132 S.W.3d 650, 658 (Tex. App. 2004) (citations omitted). Courts

17 generally look to the parties’ agreement in determinxn" g the relationship between the parties. Id., at

18 659. Here, the Agreements clearly establish that Rahawi was an independent contractor. Rahawi

19 agreed that he was not an employee of Eagle; he was to provide his own vehicle; he was to control the

20 means, manner and method of making deliveries; he could use his own employees or subcontractors

21 over whom he would exercise exclusive control; he was paid by the job; and his Eagle-derived income

22 was to be reported on a form 1099, with Rahawi solely responsible for the payment of income taxes,

23 among other things. (Ex. 204, §§ I, 2.01, 2.02, 2.05, 2.09, 4.01, 4.09.)

24

Even if this Court looks beyond the Agreements, there can be no doubt that Rahawi was

25 correctly classified as an independent contractor. When looking beyond the parties’ contractual

26 agreement to determine whether an independent contractor is correctly classified, courts will examine

27 which party has the right to control the progress, details, and methods of the operations of the work.

28

8

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 13 of 19

1 Thompson v. Travelers Indem. Co., 789 S.W.2d 277, 278 (Tex. 1990) (citing Newspapers lnc. v. Love,

2 380 S.W.2d 582, 585-90 (Tex. 1964)). To measure the right to control, courts consider the following

3 five factors: (1) the independent nature of the contractor’s business; (2) the contractor’s obligation to

4 furnish necessary tools, supplies, and materials to perform the job; (3) the contractor’s right to control

5 the progress of the work except about final results; (4) the time for which the contractor is employed;

6 and (5) the method of payment, whether by unit of time or by the job. Limestone Prods. Distribution

7 lnc. v. McNamara, 71 S.W.3d 308,312 (Tex. 2002) (citations omitted). As will be shown below, an

8 analysis of these five factors demonstrates that Eagle did not exert a "right to control" over Rahawi and

9 he was properly classified as an independent contractor.

10

1. The Agreements Establish That Rahawi Was An Independent Contractor.

11

In determining whether a party is an independent contractor, courts will first

12 look to whether the party has described itself as an independent contractor under the applicable 13 agreement. "[G]enerally, an agreement providing that a person shall be an independent contractor and

14 providing for no right of control is controlling in determining the relationship between the parties."

15 Durbin, 132 S.W.3d at 659 (citations omitted) (agreement that "Independent Contractor stipulates and

16 agrees that he shall not be deemed an agent, servant or employee of the COUNTY" controlling). "A

17 written contract that expressly provides for an independent contractor relationship is determinative of

18 the parties’ relationship in the absence of extrinsic evidence indicating that the contract was a

19 subterfuge, that the hiring party exercised control in a manner inconsistent with the contract provisions,

20 or if the written contract has been modified by a subsequent agreement, either express or implied."

21 NorthwindsAbatement, Inc. v. Employerslns. of Wausau, 258 F.3d 345,351 (5th Cir. 2001) (citing

22 Weidner v. Sanchez, 14 S.W.3d 353 (Tex. Ct. App. 2000) (applying Texas law in deciding that contract

23 stating that Wausau was an independent contractor and not an agent was controlling)).

24

As shown above, the Agreements established an independent contractor relationship between

25 Rahawi and Eagle whereby Rahawi, as owner-operator of a trucking business, performed delivery

26 services for Eagle. (Rahawi Dep., 94:22-95:2; Ex. 203,204, § I.) The Agreements established Rahawi

27 and Eagle’s intention to "create a vendor/vendee relationship between Contractor and [Eagle] through

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 14 of 19

1 which Contractor, as an independent business person, has the potential to realize a profit or loss by: 2 leasing a truck to [Eagle]; rendering certain pick-up and delivery related service"s’..(..ld., Exs. 203,

3 204, § I.) Moreover, the Agreements unambiguously state that "neither contractor nor any of its

4 employees or agents shall be considered to be employees of [Eagle] or of [Eagle] customers at any

5 time under any circumstances for any purpose whatsoever." (ld.) Eagle exercised no right of control

6 over Rahawi; as stated in the contract: "Contractor shall exercise independent discretion and judgment

7 to determine the method, manner and means of performance of its contractual obligation under this

8 Agreement." (ld., Exs. 203, 204, § I pp. 1-2.) Accordingly, Rahawi was an independent contractor

9 under the Agreements.

10

2. There Is No Evidence Of Control Outside Of The Agreement Between

Rahawi And Eagle.

11

12

Even if this Court looks outside the Agreements, there is no evidence that Eagle

13 controlled the progress of Rahawi’s work. Before Eagle may be considered Rahawi’s employer,

14 Eagle’s "exercise of control must be so persistent and the acquiescence therein so pronounced as to

15 raise an inference that, when the incident occurred, the parties by implied consent had agreed that the

16 principal had the right to control the details of the work." City of Paris v. Floyd, 150 S.W.3d 224, 227

17 (Tex. App. 2004). "An employer controls not merely the end sought to be accomplished, but also the

18 means and details of its accomplishment." Cook v. Nacogdoches Anesthesia Group, 167 S.W.3d 476,

19 481 (Tex. App. 2005) (citing Thompson, 789 S.W.2d at 278 (finding that an anesthesiologist who had

20 discretion in how to conduct his job and was provided equipment by the hospital and not the group he

21 contracted with was an independent contractor, despite the fact that the group told him when to be at

22 the hospital for his anesthesia services)).

23

Addressing a similar situation, the Texas Supreme Court recently concluded that a contract

24 driver was an independent contractor as a matter of law. Limestone Prods. Distribution Inc., 71

25 S.W.3d at 312. In Limestone, the court utilized the five factor test described above to determine

26 whether a truck driver was an employee or an independent contractor, ld. As here, the contractor

27 owned his own truck, could drive any route he wished, was only required to deliver the load on time,

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 15 of 19

1 had his income reported on a Form 1099, and had to pay his own taxes and expenses. /d at 312-313.

2 The Limestone court concluded that the truck driver was an independent contractor:

3

Limestone supplied no tools or equipment to Mathis. Instead, Mathis

4

owned and used his own truck for deliveries, and he paid for his truck’s gasoline, repairs and insurance. Limestone paid Mathis by the load he

5

delivered, and he received no pay if there was no work. Limestone

reported Mathis’s income on a 1099 form, not aW-2 form. Also,

6

Limestone did not pay Mathis for vacation, sick leave, or holidays. And

Mathis paid his own social security and federal income taxes. 7

8

[T]he summary-judgment evidence establishes that Limestone merely controlled the end sought to be accomplished - determining where and

9

when to deliver the load - whereas Mathis controlled the means and details

of accomplishing the work.

10

11

12

Indeed, in a case involving virtually the same agreement as that at issue here, the U.S. District

13 Court for the Eastern District of Louisiana just this year applied Limestone to hold that an owner-

14 operator under contract with Eagle was properly classified as an independent contractor and not an

15 employee. Davis, 2006 WL 2631966, *1 (E.D. La. 2006). The court explained:

16

He was not guaranteed a certain amount of work and was fi:ee to serve

other carriers. He could, as he saw fit, employ drivers and control the

17

aspects of their work. It was Davis’ decision to accept or reject dispatches

offered by EGL. He had the right to control the progress of the work,

18

including that he could generally choose the day and time of day to make

deliveries. He could choose the routes traveled and the parking sites most

19

suitable to accomplish his task. He could arrange for repair of his vehicle,

which he leased to EGL. This control exercised by Davis was not

20

undermined by the Agreement’s qualification of this right to control,

which provided merely that he "fully and efficiently perform his

21

obligation under the Agreement."

22 ld. at *3-*4. Other factors that the court relied on in reaching this conclusion were that the plaintiff

23 was compensated per delivery rather than paid on an hourly or salaried basis, he was not entitled to

24 receive any benefits or compensation beyond the 60% of the tariff of each shipment picked up and

25 delivered, and Eagle did not withhold income or social security taxes; rather, he was responsible for

26 paying his own taxes. Id.

27

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

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1

The facts here are the same as Limestone and Davis, and the same analysis applies. Rahawi,

2 like the drivers in those cases, was required to furnish and operate his own truck, the major tool of his

3 trade. (Rahawi Dep., 192:17-193:2.) Rahawi was also responsible for the costs of operating and

4 maintaining his vehicle, including gasoline, repairs and insurance. (Id., Ex. 204, § 2.05; 206:1-9,

5 274:25-275:6, 275:20-276:16.) Rahawi was not guaranteed any amount of work and was free to do

6 business with other companies. (ld., Exs., 203,204, § I, pp. 1-2; 188:23-189:6.) Rahawi’s only

7 compensation was the 60% of the tariffof each shipment he picked up and delivered, and he received

8 no compensation if there was no work. (ld., Ex. 204, § 4.01; 94:4-13.) Rahawi received a Form 1099

9 from Eagle, not a W-2, and he paid his own taxes. (ld., Ex. 204, § 4.09; 246:3-252:10.) Additionally,

10 Rahawi owned two trucks, and hired a subcontractor to drive his second truck and assist him with his 11 trucking business. (ld., 340:21-341:17.) Eagle merely controlled the end sought to be accomplished -

12 delivering freight in accordance with customer specifications - whereas Rahawi controlled the means

13 and details of accomplishing the work.

14

Rahawi contends that Eagle exercised control over him by telling him what time to arrive at the

15 station each day and by requiring him to place an Eagle logo on his truck and to wear an Eagle uniform

16 when making deliveries. But Rahawi’s testimony demonstrates that he did not arrive at the station at

17 the same time each day and that some days he did not show up at all. (Id., 160:15-163:12; 157:15-17.)

18 Moreover, Rahawi admitted that the only adverse consequence of not showing up "on time" was that

19 other drivers would take the freight and there would be little or no freight left for him. (ld., 160:15-

20 163:12.) Further, as shown above, federal regulation requires motor carrier identifying information on

21 the leased vehicle. See 49 C.ER. § 376.1 l(c)(1) (requiring leased vehicles to be marked with the

22 motor carrier’s identifying information); see also Tamez v. Southwestern Motor Transport, lnc., 155

23 S.W.3d 564 (Tex. App. 2004) (requiring driver to comply with federal or state regulations "does not

24 have any impact on the type of relationship that exists between the carrier-lessee and the contractor-

25 lessor"). Examining such requirements in Davis, the court held that they did not "create a factual

26 dispute" and were "not at all inconsistent with independent contractor status." Davis, 2006 WL

27 2631966, at *3-*4.

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 17 of 19

1

3. Rahawi Was An Independent Contractor Under California Law.

2

Even if California law applied, Rahawi was properly classified as an

3 independent contractor. California law is substantially similar to Texas law regarding classification of

4 independent contractors; under both, a "right to control" test is used to determine whether an

5 independent contractor is properly classified. Compare Limestone Prods. Distribution Inc., 71 S.W.3d

6 at 312 (right to control the progress, details, and methods of the operations of the work) with Bates v.

7 Industrial Accident Comm’n, 156 Cal.App.2d 713,718 (1958) (independent contractor relationship

8 will not be considered employment relationship unless the alleged employer has the right "to exercise

9 complete and authoritative control of the mode and manner in which the work is performed.").

10

As discussed above, Texas courts analyze the "right to control" by considering: (1) the

11 independent nature of the contractor’s business; (2) the contractor’s obligation to furnish necessary

12 tools, supplies, and materials to perform the job; (3) the contractor’s right to control the progress of the

13 work except about final results; (4) the time for which the contractor is employed; and (5) the method

14 of payment, whether by unit of time or by the job. Limestone Prods. Dist~bution Inc., 71 S.W.3d at

15 312. California courts consider similar factors in determining the "right to control". For example, in

16 Millsap v. Federal Express Corp., 227 Cal. App. 3d 425,430-33 (1991), the court held that a package

17 delivery driver was an independent contractor, not an employee, based on the parties’ written

18 agreement, which provided for an independent contractor relationship, as well as other factors, such as

19 the driver’s obligation to provide his own vehicle, gas and liability insurance and to pay for vehicle

20 maintenance and repair costs. The court also noted that the driver was paid on a "per route" basis

21 (rather than by the hour), and that the driver retained the right to control the progress of his work.

22 "Other than to say ’be careful’ or to give him directions to a particular location, or possibly tell him to

23 deliver the packages in the order received, [the carrier] did not instruct [the driver] as to how to make

24 the deliveries or how to drive his car." Id. at 431.

25

The court considered similar factors in Bates, 156 Cal.App.2d at 713, holding that the driver of

26 a catering truck was an independent contractor, not an employee: the driver controlled the day-to-day

27 operation of his route, was obligated to provide insurance and maintenance for his truck, and did not

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 18 of 19

1 receive an hourly wage. Id. at 718-719; see also Mission Ins. Co. v. Workers Compensation Appeals

2 Board, 123 Cal. App. 3d 211 (1981) (security alarm service provider an independent contractor, not an

3 employee, based on the parties’ agreement, the independent nature of the contractor’s business, the

4 contractor’s obligation to fumish his own vehicle and pay his own expenses, and the method of

5 payment.) Thus, even under Ca/ifomia law, Rahawi was properly classified as an independent

6 contractor.

7

C. All of Rahawi’s Claims Fail As A Matter of Law Given That Rahawi Was An

Independent Contractor.

8

9

All of the provisions of the California Labor Code and Wage Order on which Rahawi

10 bases his First, Second, Third and Fourth Causes of Action apply only to employees, not contractors.4

11 See Cal. Lab. Code §§ 221,223,226.7, 400-410, 450, 512, 2802; IWC Wage Order No. 9; FAC ¶ 44,

12 45, 46, 47, 54 & 57. As demonstrated above, Rahawi was an independent contractor, not an employee.

13 Thus, the Labor Code and Wage Order provisions on which he relies do not apply to him, and his First

14 through Fourth Causes of Action fail. And, because Rahawi’s Ninth Cause of Action for violation of

15 California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq., is wholly based on the

16 violations alleged in his First through Fourth Causes of Action, the Ninth Cause of Action fails with

17 them.

18 VI, CONCLUSION.

19

Rahawi’s own deposition testimony defeats any claim that he was not properly classified as an

20 independent contractor, and his claims against Eagle fail. No material facts are in dispute, and Eagle is

21

22

23

24

25

26

27

4 Rahawi did not join in the Fifth, Sixth, Seventh and Eighth Causes of Action contained in the

First Amended Complaint.

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE
INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

Case 5:05-cv-04181-RMW Document 71 Filed 12/08/2006 Page 19 of 19

1 entitled to judgment as a matter of lawF.or all the foregoing reasons, Eagle’s motion for summary 2 judgment should be granted.

3 Dated: December 8, 2006 4 5

Respectfully submitted, AKIN GUMP STRAUSS HAUER & FELD LLP

6

By

/ "1 " Q.J- Karen’J. Kubin 7

Attorneys for Defendant

8

EGL, INC.

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT REGARDING THE

INDIVIDUAL CLAIMS OF PLAINTIFF HANNA RAHAWI

 
 Case 5:05-cv-04181-RMW Document 61 Filed 12/08/2006 Page 1 of 21

1 KAREN J. KUBIN (SBN 71560)
HEATHER BURROR (205803) 2 JILL VIZAS (226984)
AKIN GUMP STRAUSS HAUER & FELD LLP 3 580 California Street, Suite 1500
San Francisco, CA 94104-1036 4 Telephone: 415-765-9500
Facsimile: 415-765-9501 5
BRUCE JACOBS (SBN 194114) 6 AKIN GUMP STRAUSS HAUER & FELD LLP
2029 Century Park East, Suite 2400
7 Los Angeles, CA 90067-3012
Telephone: 310-229-1000
8 Facsimile: 310-229-1001

9 Attomeys for Defendant
EGL, INC. 10

11

UNITED STATES DISTRICT COURT

12

NORTHERN DISTRICT OF CALIFORNIA

13

SAN JOSE DIVISION

14

15 MOHIT NARAYAN, HANNA RAHAWI, Case No. C 05-04181 RMW

and THOMAS HEATH, on behalf of

16 themselves, all others similarly situated, and

the general public,

DEFENDANT EGL, INC.’S

17

MEMORANDUM OF POINTS AND

Plaintiffs,

AUTHORITIES IN SUPPORT OF ITS

18

MOTION FOR SUMMARY JUDGMENT

ON THE INDIVIDUAL CLAIMS OF

19

PLAINTIFF THOMAS HEATH

EGL, INC., a Texas Corporation; EAGLE

20 FREIGHT SERVICES, INC.; and DOES 1- Date: January 26, 2007

10, inclusive,

Time: 9:00 a.m.

21

Ctrm: 6

Defendants.

22

23

24

25

26

27

28
DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON THE INDIVIDUAL CLAIMS OF PLAINTIFF THOMAS HEATH

Case 5:05-cv-04181-RMW Document 61 Filed 12/08/2006 Page 2 of 21

1

TABLE OF CONTENTS

2

Page(s)

3 4 5 6 7 8 9 10 11 III. 12 IV. 13 V. 14 15 16 17 18 19 20 21 22 VI. 23

INTRODUCTION ............................................................................................................... 1
STATEMENT OF FACTS ........................................................................... ........................ 1 A. The Parties ...............................................................................................................1
1. Eagle Is A Global Logistics Company Providing Domestic Delivery Services .......................................................................................................1
2. Heath’s Trucking Business, "Tom’s Express." ......................................3......
B. The Agreements Entered Into Between Heath And Eagle Establishing Heath’s Independent Contractor Relationship With Eagle ...............................................4....
C. The Contractor-Customer Relationship Between Heath And Eagle ..................5.....
APPLICABLE LAW ..........................................................................................................8.
SUMMARY OF THE ARGUMENT. ..................................................................................9
ARGUMENT. ...................................................................................................................10
A. Standard For Summary Judgment .......................................................................1.. 0
B. Summary Judgment Is Mandated Because Heath Was An Independent Contractor. ............................................................................................................. 11
1. The Agreement Entered Into Between Heath And Eagle Establishes That Heath Was An Independent Contractor. ..................................................1..2
2. There Is No Evidence Of Control Outside Of The Agreements Between Heath And Eagle .......................................................................................1. 3
3. Heath Was An Independent Contractor Under California Law .............1..6..
C. All Of Heath’s Claims Fail As A Matter Of Law Given That Heath Was An Independent Contractor. ........................................................................................17
CONCLUSION ................................................................................................................. 19

24

25

26

27

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON THE INDIVIDUAL

CLAIMS OF PLAINTIFF THOMAS HEATH

Case 5:05-cv-04181-RMW Document 61 Filed 12/08/2006 Page 3 of 21

1

TABLE OF AUTHORITIES

2

Page(s)

3

CASES

ABF Capital Corp. v. Osley

4

414 F.3d 1061 (9th Cir. 2005) ...........................................................................................8

5 Anderson v. Liberty Lobby, Inc.

477 U.S. 242 (1986) ........................................................................................................10 6

Bates v. Industrial Accident Comm ’n

7

156 Cal. App. 2d 713 (1958) .....................................................................................15, 16

8 Celotex Corp. v. Catrett

477 U.S. 317 (1986) ........................................................................................................10

9 City of Paris v. Floyd

10

150 S.W.2d 224 (Tex. App. 2004) ..................................................................................1. 2

11

Cook v. Nacogdoches Anesthesia Group 167 S.W.3d 476 (Tex. App. 2005) ..................................................................................1. 3

12 Davis v. EGL Eagle Global Logistics LP

13

2006 WL 2631966, * 1 (E.D. La. 2006) ..........................................................................13

14

Durbin v. Culbertson County 132 S.W.3d 650 (Tex. App. 2004) ....................................................................... 10, 11, 12

15 First National Bank of Arizona v. Cities Service Co.

16

391 U.S. 253 (1968) ........................................................................................................10

Indus. Indem. Exch. v. Southard

17

160 S.W.2d 905 (Tex. 1942) ............................................................................................10

18 Klaxon Co. v. Stentor Elec. Mfg. Co.

313 U.S. 487 (1941) ..........................................................................................................8

19

Limestone Prods. Distribution Inc. v. MeNamara

20

71 S.W.3d 308 (Tex. 2002) .................................................................................. 11, 13, 15

21 Mary Kay Inc. v. Woolf 146 S.W.3d 813 (Tex. App. 2004) ....................................................................................9.

22 Millsap v. Federal Express Corp.

23

227 Cal. App. 3d 425 (1991) ...........................................................................................15

24

Mission Insurance Co. v. Workers Compensation Appeals Board 123 Cal. App. 3d 211 (1981) ...........................................................................................16

25 Nedlloyd Lines B. V. v. Super. Ct.

26

3 Cal. 4th 459 (1992) .....................................................................................................8, 9

Newspapers Inc. v. Love

27

380 S.W. 2d 582 (Tex. 1964) ........................................................................................... 11

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON THE INDIVIDUAL

CLAIMS OF PLAINTIFF THOMAS HEATH

Case 5:05-cv-04181-RMW Document 61 Filed 12/08/2006 Page 4 of 21

1 Northwinds Abatement, Inc. v. Employers Insurance of Wausau

258 F.3d 345 (5th Cir. 2001) ........................................................................................... 12 2

Patton v. Cox

3

276 F.3d 493 (1992) ..........................................................................................................

8

4 Texas A &M University v. Bishop 156 S.W.3d 580 (Tex. App. 2005) ................................................................................... 10

5 Thompson v. Travelers Indem. Co.

6

789 S.W.2d 277 (Tex. 1990) ...................................................................................... 11, 13

7

Weidner v. Sanchez 14 S.W.3d 353 (Tex. Ct. App. 2000) ...............................................................................

12

8

STATUTES

9 Cal. Bus. & Prof. Code §§ 17200 etseq .....................................................................................

16

10 Cal. Lab. Code § 1174 .................................................................................................................

16

11 Cal. Lab. Code § 1174.5 ..............................................................................................................

16

12 Cal. Lab. Code § 1194 .................................................................................................................

16

13 Cal. Lab. Code § 201 ...................................................................................................................

16

14 Cal. Lab. Code § 202 ...................................................................................................................

16

15 Cal. Lab. Code § 203 ...................................................................................................................

16

16 Cal. Lab. Code § 221 ...................................................................................................................

16

17 Cal. Lab. Code § 223 ...................................................................................................................

16

18 Cal. Lab. Code § 226 ...................................................................................................................

16

19 Cal. Lab. Code § 226.3 ................................................................................................................

16

20 Cal. Lab. Code § 226.7 ................................................................................................................

16

21 Cal. Lab. Code § 2802 .................................................................................................................

16

22 Cal. Lab. Code § 400-410 ...........................................................................................................

16

23 Cal. Lab. Code § 450 ...................................................................................................................

16

Cal. Lab. Code § 510 ...................................................................................................................

16

24

RULES 25

Fed. R. Civ. P. 56(c) ....................................................................................................................

10

26

27

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

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CLAIMS OF PLAINTIFF THOMAS HEATH

Case 5:05-cv-04181-RMW Document 61 Filed 12/08/2006 Page 5 of 21

1 I.

INTRODUCTION.

2

Plaintiff Thomas Heath ("Heath") admits that he was an independent contractor during the

3 entire time that he, through his trucking business, Tom’s Express, performed delivery services for

4 defendant EGL, Inc. ("Eagle"). Nevertheless, Heath joined this lawsuit and asserted a laundry list of

5 employment law claims against Eagle, all premised on the flawed theory that he was misclassified as

6 an independent contractor, rather than an employee. But Heath’s own admissions belie his claims, and

7 the undisputed facts demonstrate that Heath was, at all times during his relationship with Eagle, an

8 independent contractor, just as his contract states. Accordingly, Eagle is entitled to summary judgment

9 on all of Heath’s claims.

10 II. STATEMENT OF FACTS.

11

A. The Parties.

12

1. Eagle Is A Global Logistics Company Providing Domestic Delivery Services.

13

Eagle is a global transportation, supply chain management and information

14 services company, providing logistics solutions for customers worldwide. (Declaration of Martha

15 DeLeon-Schmidt ("Schmidt Dec.") filed herewith, ¶ 2.) Eagle provides value-added services beyond

16 those customarily provided by traditional air freight forwarders, ocean freight forwarders and customs

17 brokers to help customers streamline their supply chain, reduce their inventories, improve their

18 logistics information and provide them with more efficient and effective domestic and international

19 distribution strategies in order to enhance their profitability. (Id.) Eagle’s services include air and

20 ocean freight forwarding, customs brokerage, local pick-up and delivery service, materials

21 management, warehousing, trade facilitation and procurement and integrated logistics and supply chain

22 management services. (ld., ¶ 3.) These services are provided through Eagle’s extensive network of

23 approximately 400 facilities, agents and distribution centers located in over 100 countries on six

24 continents. (ld.)

25

One of the many areas of Eagle’s business is domestic delivery services. (Schmidt Dec., ¶¶ 3,

26 4.) Domestic delivery services may be provided either as part of Eagle’s freight-forwarding operations

27 or for customers requiring local pick-up and delivery services. (ld., ¶ 4.) Eagle maintains a non-asset

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON THE INDIVIDUAL

CLAIMS OF PLAINTIFF THOMAS HEATH

Case 5:05-cv-04181-RMW Document 61 Filed 12/08/2006 Page 6 of 21

1 based philosophy and structure across the board. (ld., ¶ 5.) Accordingly, with some exceptions, Eagle

2 does not generally employ drivers or use Eagle-owned vehicles for pick-up and delivery services. (ld.)

3 Instead, Eagle contracts with trucking businesses, both large and small, to handle its pick-up and

4 delivery services. (Id.) These owner-operators ("Contractors") own, operate and maintain the vehicles

5 used in their work for Eagle, and may perform the services themselves or employ qualified drivers of 6 their choice. (ld. ¶ 6; Deposition of Thomas Heath ("Heath Dep."), 67:4-68:19, 119:2-18, 207:7-9.)1

7

Eagle and the Contractors benefit from a mutual business relationship. (Schmidt Dec., ¶ 6.)

8 They each profit or lose by meeting the delivery demands of Eagle’s customers. (Id.) The Contractor

9 perform this service by obtaining delivery jobs from Eagle. (Id., ¶ 6; Heath Dep., 106:25-107:2.)

10 Contractors make themselves available at their own discretion. (Schmidt Dec., ¶ 8; Heath Dep.,

11 194:22-25, 175:19-25, 183:16-18, 186:21-187:3, 189:25-190:9.) At certain times of the day, heavier

12 volumes dictate more profitable opportunities than at other times of the day. (Schmidt Dec., ¶ 8.)

13 Contractors receive a percentage of an applicable tariff for each load. (ld., ¶ 7.)

14

Contractors arriving at the dispatch station and seeking business availability go to the dispatch

15 office. (Schmidt Dec., ¶ 9.) Dispatches are offered as a delivery packet that is normally grouped

16 geographically and sometimes includes customer time and delivery specific requirements. (ld.) Once 17 a Contractor obtains a packet, he will review the manifests to determine how to route the deliveries in 18 the packet. (Id., ¶ 10; Heath Dep., 109:23-110:6.) Pursuant to customer demand, the Contractor will

19 attempt to deliver the priority orders first. (Schmidt Dec., ¶ 10.) The Contractor is completely on his

20 own to determine the manner and means by which he will perform the delivery orders, although 21 dispatch will occasionally contact drivers to relay customer demands. (Schmidt Dec., ¶ 10; Heath 22 Dep., 110:7-19.) After completing a priority delivery, Contractors generally inform the station that the

23 delivery is complete to enable Eagle to update customers regarding the status of priority deliveries.

24 (Schmidt Dec., ¶ 11; Heath Dep., 112:2-113:11 .) Contractors also call the station periodically to find

25

26

1 Excerpts from Heath’s deposition are attached as Exhibit A to the Declaration of Jill Vizas 27 ("Vizas Dec.") filed herewith. Exhibits to the Heath deposition are attached as Exhibit B to the Vizas

Declaration.

28

2

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON THE INDIVIDUAL

CLAIMS OF PLAINTIFF THOMAS HEATH

Case 5:05-cv-04181-RMW Document 61 Filed 12/08/2006 Page 7 of 21

1 out if there are any pick-up orders in their current vicinity. (Schmidt Dec., ¶ 11; Heath Dep., 112:2-

2 113:11,114:11-15.)

3

After completing the packet of deliveries, Contractors bring any pick-up orders back to the

4 station. (Schmidt Dec., ¶ 12.) Many Contractors also return to the station to submit their delivery

5 manifests because early receipt of manifests enables Eagle to ensure a quick payment to the

6 Contractors. (ld.) Based on the manifests, Eagle generates settlement reports, which the Contractors

7 review to ensure that the reports properly account for any special charges or specially-negotiated

8 delivery rates. (/d.)

9

2. Heath’s Trucking Business, "Tom’s Express."

10

Heath leased a truck and began his own trucking business in 1993. (Heath Dep.,

11 30:17-31:25, 35:3-8.) Heath named his trucking business "Tom’s Express," specializing in "hot shots"

12 and other express deliveries because they were more profitable than standard freight. (Id., 30:17-

13 31:25, 38:1-10, 40:13-18.) "Hot shots" are express deliveries where the driver picks up a load and

14 delivers it without picking up or dropping off other loads, providing the customer with "exclusive use

15 of the truck" for urgent freight. (Id., 37:18-25.) Heath had business cards printed with the name of h

16 business, Tom’s Express, and also had several gasoline credit cards in that name. (Id., 40:19-21,

17 41:10-11.)

18

Shortly after Heath started his trucking business, he began to provide delivery services for

19 Roadway Global Air as an independent contractor. (Heath Dep., 30:17-31:6.) After Roadway Global

20 Air went out of business in late 1995, Heath continued his business by providing express delivery

21 services as an independent contractor to several other freight forwarding companies in the Sacramento

22 and San Francisco areas, including Eagle. (Id., 30:12-25, 35:9-25.) Eagle became one of Heath’s "bes

23 customers." (Id., 37:9-15.) But in late 1999, Eagle and another of Heath’s best customers, Mad Dog

24 Express, told Heath they would no longer be using him as much for hot shots and express deliveries.

25 (Id., 38:16-18, 46:11 - 19.) Hearing that Eagle was looking for trucking companies with vans, Heath

26 decided to sell his truck and purchase a van so that he could continue making money by providing

27 delivery services as an independent contractor for Eagle. (Id., 32:4-9, 38:16-18, 46:11-19.)

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON THE INDIVIDUAL

CLAIMS OF PLAINTIFF THOMAS HEATH

Case 5:05-cv-04181-RMW Document 61 Filed 12/08/2006 Page 8 of 21

1

Bo

The Agreements Entered Into Between Heath And Eagle Establishing Heath’s

Independent Contractor Relationship With Eagle.

2

3

Heath and Eagle entered into two Agreements for Leased Equipment and Independent

4 Contractor Services, first on December 21, 1999 (the "Initial Agreement") and again on May 10, 2000

5 (the "Second Agreement") (collectively, the "Agreements"). (Heath Dep., 53:17-54:12, 70:13-71:25; 6 Exs. 253,255.)2 The Agreements did not guarantee Heath any amount of work, and Eagle reserved the

7 right to continue to contract with other companies. (Id., 60:8-12, 62:1-8.) Under the Agreements,

8 Heath would receive 60 percent of the amount charged to a customer by Eagle for each shipment 9 picked up or delivered by Heath or his employees. (Id., 76:12-16.) Hot shots would be paid at $1.75

10 per mile. (Id., 77:10-15.) Heath understood that because he was an independent contractor, he was

11 responsible for filing tax returns for his business and that Eagle would not withhold any taxes from the

12 delivery rates paid. (Id., 69:18-70:1, 214:6-9.) Heath also understood that, other than these delivery

13 rates, neither he nor his employees would receive benefits or any other form of compensation from

14 Eagle. (Id., 59:13-22, 214:6-9; Ex. 253, § 4.06; Ex. 255, § 4.08.)

15

The Agreements established an independent contractor relationship between Heath and Eagle

16 whereby Heath, as owner-operator of a trucking business, performed delivery services for Eagle.

17 (Heath Dep., 56:16-57:7, 72:11-20.) The Initial Agreement stated that Heath and Eagle intended "to

18 establish a relationship between Contractor and [Eagle] through which Contractor, as an independent 19 contractor, (i) leases a vehicle to [Eagle] and (ii) renders certain related pick-up and delivery 20 services ...." (Id., 56:16-23; Ex. 253, § I.) Similarly, the Second Agreement established Heath and

21 Eagle’s intention to "create a vendor/vendee relationship between Contractor and [Eagle] through 22 which Contractor, as an independent business person, has the potential to realize a profit or loss by: 23 leasing a truck to [Eagle]; rendering certain pick-up and delivery related service"s .(.I..d., 73:15-74:4,

24 Ex. 255, § I.)

25

26

27

2 The Agreements are generally referred to together because they contain largely the same

language.

28

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DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

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CLAIMS OF PLAINTIFF THOMAS HEATH

Case 5:05-cv-04181-RMW Document 61 Filed 12/08/2006 Page 9 of 21

1

Under the Agreements neither Heath nor anyone who worked for him was to be considered an

2 employee of Eagle. (Heath Dep., 57:8-12, 74:5-18; Ex. 253, § 2.09; Ex. 255, § 2.09.) Heath also

3 agreed that "if at any time during the term of this agreement [Heath] is of the opinion that something

4 other than an independent contractor relationship exists between [Heath] and [Eagle], [Heath] shall

5 immediately notify [Eagle]." (ld., 77:21-78:2, Ex. 255, p. 2.) Heath never did so. (Id., 78:5-9.)

6 Indeed, Heath testified that at all times he believed he was an independent contractor. (ld., 142:25-

7 144:8.)

8

As an independent contractor, Heath was responsible for supplying the van and other tools used

9 to provide services to Eagle, such as a hand truck and straps to secure his loads. (Heath Dep., 119:2-

10 18.) Heath was responsible for all of the costs and expenses of maintaining, repairing and operating

11 his van, including any damage or depreciation. (ld., 67:14-21, 69:2-5.) Heath was also responsible for

12 obtaining insurance policies on the van and the freight he carried. (Id., 68:20-69:1 .)

13

Although Eagle retained the right to issue reasonable requirements regarding the results to be

14 accomplished under the Agreements (Heath Dep., 59:8-12; Exs. 253,255, § I), the Agreements

15 required Heath to exercise independent discretion and judgment to determine the method, manner and

16 means of his performance of his obligations under the Agreements. (ld., 58:2-59:7, 65:15-66:11 .) The

17 Agreements expressly stated that "[C]ontractor shall exercise independent discretion and judgment to

18 determine the method, manner and means of performance of its contractual obligations under this

19 Agreement." (Exs. 253,255, § I.) Heath’s exercise of independent discretion and judgment included

20 whether or not to accept or reject dispatches, the days and times Heath would operate his vehicle, the

21 routes he would travel, where he would park, and the repair and maintenance of his vehicle. (Id.,

22 66:12-23.) Under Section 2.02 of the Agreements, Heath also controlled the operation of his vehicle.

23 (ld., 65:17-23.)

24

C. The Contractor-Customer Relationship Between Heath And Eagle.

25

Heath continued to conduct his business as Tom’s Express after he entered into the

26 Agreements with Eagle, and considered himself an independent businessman who was trying to make

27 as much money as possible. (Heath Dep., 45:7-14, 151:5-20.) Both before and after he entered into

28

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1 the Agreements with Eagle, Heath believed that he was an independent contractor and not an employee

2 of Eagle. (ld., 140:16-23, 143:11-18.) Indeed, Heath identified himself as a small business concern

3 under his business name Tom’s Express on the EEO compliance certificates he completed for Eagle.

4 (ld., 149:14-150:5, 151:15-152:10, 152:11-24, Exs. 269, 270.) Even today, Heath still believes that he

5 was an independent contractor during the entire time of his contract with Eagle and that he was never

6 employed by Eagle. (Id., 143:25-144:8.)

7

Consistent with this understanding, Heath conducted his business independently, exercising his

8 own independent judgment and discretion to make decisions regarding all aspects of his business.

9 Heath decided how and when he would conduct his deliveries for Eagle, choosing which days and

10 times to make his van available for deliveries. (Heath Dep., 175:19-25, 183:16-18, 186:21-187:3,

11 189:25-190:9, 194:22-25.) The number of days Heath made himself available each week varied

12 between three and six days per week. (Id., 183:1-18, 186:21-187:3.) He never made himself available

13 seven days a week while he was performing services for Eagle. (Id., 187:4-6.) He generally chose not

14 to take dispatches on Saturdays and Sundays, but occasionally he would choose to make deliveries on

15 the weekend. (Id., 103:2-23.)

16

On the days Heath chose to make his van available to Eagle for deliveries, Heath chose what

17 time to arrive at the Sacramento station. (Heath Dep., 194:22-25.) Although Heath often arrived

18 between 6:30 and 7:00 a.m., some mornings he arrived much earlier to earn more money by handling

19 pick-ups at 5:30 a.m. when the airport opened. (ld., 95:12-20, 194:22-25.) Pick-ups that required the

20 driver to pick up freight at the airport counter paid even more, and these higher paying counter pick-

21 ups accounted for about half of Heath’s early morning airport pick-ups. (Id., 95:23-96:13.) On other

22 days,Heath reported to the station for dispatches after 7:00 a.m., such as mornings after he had driven

23 between Sacramento and Los Angeles the night before. (ld., 96:22-98:13, 104:5-20.) Heath chose

24 when to arrive at the station, and there was no penalty for choosing not to arrive between 6:30 and 7:00

25 a.m., or even for choosing not to come at all. (ld., 98:14-16, 106:19-24.)

26

After arriving at the station, Heath was generally offered a dispatch. (Heath Dep., 106:25-

27 107:2.) Although Heath understood that he could decline dispatches that were offered to him, he

28

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1 generally chose to accept the dispatches that were offered to him because he wanted to make more

2 money. (Id., 45:7-21, 67:11-13, 108:9-13.) If no freight was available when Heath arrived at the

3 station, Heath usually chose to stay and wait for freight, again because he wanted to make more

4 money. (ld., 45:7-21,108:14-24.)

5

After accepting a dispatch, Heath determined how to load the freight onto his van. (Heath

6 Dep., 108:4-8.) Heath also chose the order of the deliveries and selected his route. (Id., 109:23-110:6.)

7 After each delivery, Heath called dispatch to advise when the freight was delivered and who signed for

8 it so customers could track their freight. (Id., 112:2-113:8.) Heath also called dispatch when his

9 deliveries were complete to let dispatch know he was available for more loads. (Id., 114:24-115:3.)

10 Heath was not aware of any requirement to call in or continue working after deliveries; he chose to call

11 because he always wanted to work and make more money. (ld., 45:7-21,114:24-115:13.) On busy

12 days, Heath chose not to take breaks and to eat while driving so that he could deliver more freight and

13 make more money. (ld., 208:11-209:4, 110:20-25.) Heath also chose when to end his day. (Id.,

14 111:21-23.)

15

As an independent contractor, Heath exercised independent judgment and discretion in other

16 aspects of his business as well. For example, Heath knew he could expand his business by hiring a

17 second driver and leasing a second truck to Eagle, but he chose not to. (Heath Dep., 207:24-208:7.) He

18 also knew that he could hire an employee to assist him, but again he chose not to expand his business

19 in this way. (Id., 207:7-9, 67:22-68:1 .) Heath understood that anyone hired to assist him would be his

20 employee and not Eagle’s, and that he alone would control employee selection, hiring, firing and

21 compensation. (Id., 67:22-68:19.)

22

Eventually, in July 2002, Heath chose to stop driving for Eagle because he did not think he was

23 making enough money. (Heath Dep., 39:5-10.) Three years later, Heath received a phone call from

24 plaintiff Mohit Narayan, asking Heath to join this lawsuit. (ld., 12:25-13:21.) Despite the fact that

25 Heath always thought of himself as an independent contractor while performing services for Eagle,

26 Heath agreed. (ld., 140:16-142:1.) Plaintiffs’ First Amended Complaint alleges that Eagle

27 misclassified Heath and its other van drivers as independent contractors and asserts a laundry list of

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1 employment-related claims, including allegedly failing to indemnify Heath for employment-related

2 expenses, taking unlawful deductions to cover employment-related expenses, requiring Heath to make

3 purchases from Eagle, failing to provide off-duty meal periods and overtime compensation, failing to

4 maintain payroll records and to accurately report the hours worked by Heath, and failing to pay Heath 5 properly when he terminated his contract with Eagle. (See FAC, ¶¶ 26, 27, 28, 31, 32, 33, 34 and 35.)3

6 But flatly contrary to his claims, Heath believes to this day that he was an independent contractor at all

7 times while performing services for Eagle. (Heath Dep., 143:11-144:8.)

8 III. APPLICABLE LAW.

9

This Court should apply Texas law in interpreting the Agreements and deciding this motion. As

10 noted above, all of Heath’s claims are premised on the theory that the Agreements misclassified him as

11 an independent contractor. (FAC, ¶ 27.) The Agreements provide that they "shall be interpreted under

12 the laws of the state of Texas." (Heath Dep., Exs. 253,255, § 7.03.)

13

Federal courts apply the choice of law rules of the forum state to determine the substantive law

14 :hat should be used. Patton v. Cox, 276 F.3d 493,495 (1992) (citing Klaxon Co. v. Stentor Elec. Mfg.

15 ~’o., 313 U.S. 487, 496 (1941)). California courts apply "the principles set forth in Restatement section

16 187, which reflect a strong public policy favoring enforcement of such provisions." Nedlloyd Lines

17 B. V. v. Super. Ct., 3 Cal. 4th 459, 465-466 (1992). Under this approach, courts first examine whether

18 the chosen state has a substantial relationship to the parties or to the transaction, or whether there is

19 another reasonable basis for the parties’ choice of law. Id. at 465. "A substantial relationship exists

20 where one of the parties is domiciled or incorporated in the chosen state." ABF Capital Corp. v. Osley,

21 414 F.3d 1061, 1065 (9th Cir. 2005) (citingNedlloyd, 3 Cal.4th at 467). Eagle is domiciled in the state

22 of Texas. (Exs. 233,255, § 7.09.) Thus, there is a reasonable basis for the parties’ choice of Texas law.

23

California courts also consider whether the application of another state’s law "is contrary to a

24 ~undamental policy of California." Nedlloyd, 3 Cal.4th at 466 (emphasis in original). The threshold

25

26

3 The first phase of this litigation deals solely with Plaintiff’s individual claims. (See Case

Management Order, filed March 16, 2006.) Therefore this motion for summary judgment is made as to 27 Heath’s individual claims against EGL and does not consider the claims alleged by Heath on behalf of

a putative class.

28

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CLAIMS OF PLAINTIFF THOMAS HEATH

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1 issue in the present case is whether Heath was properly classified as an independent contractor.

2 California does not have a fundamental public policy regarding the classification of contractors. See

3 Mary Kay Inc. v. Woolf, 146 S.W.3d 813, 817 (Tex. App. 2004) (applying Texas law to decide whether

4 a Mary Kay consultant who worked in California was an independent contractor or an employee,

5 where there was a Texas choice of law clause in the contract). Moreover, Texas law regarding the

6 classification of independent contractors is substantially similar to Califomia law (see Section V. B. 3

7 infra), and thus application of Texas law cannot be contrary to fundamental Califomia policy. Texas

8 law applies.

9 IV. 10

SUMMARY OF THE ARGUMENT. The material facts are undisputed; Eagle is entitled to judgment as a matter of law and its

11 motion for summary judgment should be granted. Heath’s claims are all premised on the theory that he

12 was misclassified as an independent contractor when he was really an employee of Eagle. Yet, Heath

13

that he was an independent contractor at all times while performing services for Eagle. The

14 Agreements, which specify that Texas law will govern the Agreements, also make clear that Heath was

15 an independent contractor.

16

Under Texas law, courts determine independent contractor status by looking to the agreement

17 between the parties. In some instances, courts will look outside of the parties’ agreement to determine

18 whether the alleged employer had the right to control the progress of the work, rather than just the final

19 outcome. As noted above, the Agreements here clearly stated that Heath was an independent

20 contractor. Moreover, Heath retained the right to control the progress of his own work, and Eagle only

21 controlled the final outcome. Thus, Heath was properly classified as an independent contractor and his

22 employment claims fail as a matter of law.

23 V. 24 25

ARGUMENT. A. Standard For Summary Judgment.
Summary judgment is appropriate where "there is no genuine issue as to any material

26 fact and.., the moving party is entitled to a judgment as a matter of law." Anderson v. Liberty Lobby,

27 Inc., 477 U.S. 242, 247 (1986) (quoting Fed. R. Civ. P. 56(c)). The moving party is entitled to

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1 judgment as a matter of law if the nonmoving party "fails to make a showing sufficient to establish the

2 existence of an element essential to that party’s case, and on which that party will bear the burden of

3 proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). There is no genuine issue unless

4 "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." 5 Anderson, 477 U.S. at 249 (citing First National Bank of Arizona v. Cities Service Co., 391 U.S. 253,

6 288-89 (1968)). "When the material underlying facts are not in dispute and can give rise to only one

7 reasonable conclusion, whether a worker was an employee or an independent contractor is a question

8 of law." Texas A&M University v. Bishop, 156 S.W.3d 580, 584 (Tex. App. 2005) (citing lndus. Indem.

9 Exch. v. Southard, 160 S.W.2d 905, 906 (Tex. 1942)).

10

As demonstrated below, Heath lacks the evidence necessary to prove any of his claims.

11 Accordingly, summary judgment should be granted for Eagle.

12

B. Summary Judgment Is Mandated Because Heath Was An Independent Contractor.

13

All of Heath’s claims are premised on the theory that he was misclassified as an

14 independent contractor, rather than as an employee. An independent contractor is one "who, in the

15 pursuit of an independent business, undertakes to do a specific piece of work for other persons, using

16 his own means and methods, without submitting himself to their control in respect to all its details."

17 Durbin v. Culbertson County, 132 S.W.3d 650, 658 (Tex. App. 2004) (citations omitted.) Courts

18 generally look to the parties’ agreement to determine the relationship between the parties, ld. at 659.

19 Here, the Agreements clearly establish that Heath was an independent contractor. Heath agreed that he

20 was not an employee of Eagle; he was to provide his own vehicle; he was to control the means, manner

21 and method of making deliveries; he could use his own employees or subcontractors over whom he

22 would exercise exclusive control; he was to be paid by the job; and his Eagle-derived income was to be

23 reported on a Form 1099, with Heath solely responsible for the payment of income taxes, among other

24 things. (Ex. 253, § I, 2.01, 2.02, 2.09, 4.01, 4.07; Ex. 255, § I, 2.01, 2.02, 2.09, 4.01, 4.09.)

25

Even if this Court looks beyond the Agreements, there can be no doubt that Heath was correctly

26 classified as an independent contractor, as he himself has testified. When looking beyond the parties’

27 contractual agreement to determine whether an independent contractor is correctly classified, courts

28

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1 will examine which party has the right to control the progress, details, and methods of the operations of

2 the work. Thompson v. Travelers lndem. Co., 789 S.W.2d 277, 278 (Tex. 1990) (citing Newspapers

3 lnc. v. Love, 380 S.W. 2d 582, 585-90 (Tex. 1964)). To measure the right to control, the courts

4 consider the following five factors: (1) the independent nature of the contractor’s business; (2) the

5 contractor’s obligation to furnish necessary tools, supplies, and materials to perform the job; (3) the

6 contractor’s right to control the progress of the work except about final results; (4) the time for which

7 the contractor has contracted; and (5) the method of payment, whether by unit of time or by the job.

8 Limestone Prods. Distribution Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002) (citations omitted).

9 As will be shown below, an analysis of these five factors demonstrates that Eagle did not exert a "right

10 to control" over Heath and he was properly classified as an independent contractor.

11

1. The Agreement Entered Into Between Heath And Eagle Establishes That

Heath Was An Independent Contractor. 12

13

In determining whether a party is an independent contractor, courts will first

14 look to whether the party has described itself as an independent contractor under the applicable

15 agreement. "[G]enerally, an agreement providing that a person shall be an independent contractor and

16 providing for no right of control is controlling in determining the relationship between the parties."

17 Durbin, 132 S.W.3d at 659 (citations omitted) (agreement that "Independent Contractor stipulates and

18 agrees that he shall not be deemed an agent, servant or employee of the COUNTY" controlling). "A

19 written contract that expressly provides for an independent contractor relationship is determinative of

20 the parties’ relationship in the absence of extrinsic evidence indicating that the contract was a

21 subterfuge that the hiring party exercised control in a manner inconsistent with the contract provisions,

22 or if the written contract has been modified by a subsequent agreement, either express or implied."

23 Northwinds Abatement, lnc. v. Employers Insurance of Wausau, 258 F.3d 345,351 (5th Cir. 2001)

24 (citing Weidner v. Sanchez, 14 S.W.3d 353 (Tex. Ct. App. 2000) (applying Texas law in deciding that

25 contract stating that Wausau was an independent contractor and not an agent was controlling)).

26

As shown above, the Agreements established an independent contractor relationship between

27 Heath and Eagle whereby Heath, as owner-operator of a trucking business, performed delivery services

28

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1 for Eagle, as Heath concedes. (Heath Dep., 56:16-57:7, 72:11-20.) The Initial Agreement stated that

2 Heath and Eagle intended "to establish a relationship between Contractor and [Eagle] through which

3 Contractor, as an independent contractor, (i) leases a vehicle to [Eagle] and (ii) renders certain related

4 pickup and delivery services .."..(Ex. 253, § I; see also Heath Dep., 56:16-23.) Similarly, the Second

5 Agreement established Heath and Eagle’s intention to "create a vendor/vendee relationship between

6 Contractor and [Eagle] through which Contractor, as an independent business person, has the potential

7 to realize a profit or loss by: leasing a truck to [Eagle]; rendering certain pick-up and delivery related

8 services ...." (Ex. 255, § I; see also Heath Dep., 73:15-74:4.) Moreover, the Agreements

9 unambiguously state that "neither contractor nor any of its employees or agents shall be considered to

10 be employees of EFS or of EFS customers at any time under any circumstances for any purpose

11 whatsoever." (Ex. 253, § I; Ex. 255, § I.; id., 57:8-12.) And, the Agreements also expressed that Eagle

12 had no right of control over the method, manner and means by which Heath would perform under

13 them. (Ex. 253, pp. 1-2; Ex. 255, pp. 1-2.) Accordingly, under the clear holding of Durbin, Heath was

14 an independent contractor under the Agreements.

15

2. There Is No Evidence Of Control Outside Of The Agreements Between

Heath And Eagle.

16

17

Even if this Court looks outside the Agreements, there is no evidence that Eagle

18 controlled the progress of Heath’s work. Before Eagle may be considered Heath’s employer, Eagle’s

19 "exercise of control must be so persistent and the acquiescence therein so pronounced as to raise an

20 inference that, when the incident occurred, the parties by implied consent had agreed that the principal

21 had the right to control the details of the work." City of Paris v. Floyd, 150 S.W.2d 224, 227 (Tex.

22 App. 2004). "An employer controls not merely the end sought to be accomplished, but also the means

23 and details of its accomplishment." Cook v. Nacogdoches Anesthesia Group, 167 S.W.3d 476, 481

24 (Tex. App. 2005) (citing Thompson, 789 S.W.2d at 278 (finding that an anesthesiologist who had

25 discretion in how to conduct his job and was provided equipment by the hospital and not the group he

26 contracted with was an independent contractor, despite the fact that the group told him when to be at

27 the hospital for his anesthesia services)).

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1

Addressing a similar situation, the Texas Supreme Court recently concluded that a contract

2 driver was an independent contractor as a matter of law. See Limestone Prods. Distribution Inc., 71

3 S.W.3d at 308. In Limestone, the court utilized the five-factor test described above to determine

4 whether a truck driver was an employee or an independent contractor. Id. at 312. As here, the

5 contractor in that case owned his own truck, could drive any route he wished, was only required to

6 deliver the load on time, had his income reported on a Form 1099, and had to pay his own taxes and

7 expenses. Id. at 312-13. The Limestone court concluded that the truck driver was an independent

8 contractor:

9

Limestone supplied no tools or equipment to Mathis. Instead, Mathis

10

owned and used his own truck for deliveries, and he paid for his truck’s gasoline, repairs and insurance. Limestone paid Mathis by the load he

11

delivered, and he received no pay if there was no work. Limestone

reported Mathis’s income on a 1099 form, not a W-2 form. Also,

12

Limestone did not pay Mathis for vacation, sick leave, or holidays. And

Mathis paid his own social security and federal income taxes. 13

14

[T]he summary-judgment evidence establishes that Limestone merely controlled the end sought to be accomplished - determining where and

15

when to deliver the load - whereas Mathis controlled the means and

details of accomplishing the work.

16

17

18

Indeed, in a case against Eagle involving the same agreement as that at issue here, the U.S.

19 District Court for the Eastern District of Louisiana earlier this year applied Limestone to hold that an

20 owner-operator under contract with Eagle was properly classified as an independent contractor and was

21 not an employee. See Davis v. EGL Eagle Global Logistics LP, 2006 WL 2631966, * 1 (E.D. La.

22 2006). The court explained:

23

He was not guaranteed a certain amount of work and was free to serve

other carriers. He could, as he saw fit, employ drivers and control the

24

aspects of their work. It was Davis’ decision to accept or reject dispatches

offered by EGL. He had the right to control the progress of the work,

25

including that he could generally choose the day and time of day to make

deliveries. He could choose the routes traveled and the parking sites most

26

suitable to accomplish his task. He could arrange for repair of his vehicle,

which he leased to EGL. This control exercised by Davis was not

27

undermined by the Agreement’s qualification of this right to control,

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1

which provided merely that he "fully and efficiently perform his

obligation under the Agreement."

2

3 ld. at "3-’4. Other factors on which the court relied in reaching this conclusion in Davis were that the

4 plaintiff was compensated per delivery rather than on an hourly or salaried basis, he was not entitled to

5 receive any benefits or compensation beyond the 60% of the tariff for each shipment picked up and

6 delivered, and Eagle did not withhold income tax or social security taxes; rather, he was responsible for

7 paying his own taxes. Id.

8

The facts here are the same as in Limestone and Davis, and the same analysis applies. Heath,

9 like the drivers in those cases, was required to furnish his own van - the major tool of his trade - as

10 well as his own hand truck and straps to keep objects from moving in the vehicle. (Heath Dep., 119:2-

11 18.) Heath was also responsible for the costs of operating and maintaining his vehicle, including

12 gasoline, repairs and insurance. (ld., 67:14-21, 68:20-69:5.) Heath was not guaranteed any amount o

13 work from Eagle. (Id., 60:8-12.) Heath was paid either by a rate of 60% of the tariff for the load he

14 was carrying or by mileage when he did a hot shot load, and he received no pay if there was no work.

15 (ld., 76:12-20.) Heath received a Form 1099 from Eagle, not a W-2, and he paid his own taxes. (ld.,

16 69:18-70:1,154:9-22, 154:23-155:9, 155:23-156:13, 156:21-157:11, Exs. 271,272, 273,274.)

17 Additionally, Heath operated as an independent business, Tom’s Express, and he was free to hire others

18 to assist him in his business. (ld., 31:12-25, 67:22-68:19, 151:5-12.) Heath did not have to show up a

19 the station on a regular schedule; he could select his own route and was free to reject deliveries he

20 viewed as undesirable. (Id., 67:11-13, 106:19-24, 109:23-110:6, 175:19-25.) Eagle merely controlled

21 the end sought to be accomplished - delivering freight in accordance with customer specifications 22 whereas Heath controlled the means and details of accomplishing the work.4

23

24

25

4 Although Heath contends that Eagle exercised control over him because the requirements that

he place an Eagle logo on his van precluded him from providing services for other freight carriers, he 26 admitted in his deposition that there were ways to cover the logo but that he never tried to cover it.

(Heath Dep., 60:17-24, 61:13-25.) Examining this same requirement in Davis, the court held that the 27 logo and similar requirements did not "create a factual dispute" and were "not at all inconsistent with

independent contractor status." Davis, WL 2631966 at *3-*4.

28

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1

In sum, all of the factors set forth in Limestone and applied in Davis compel the conclusion t

2 Heath was properly classified as an independent contractor and his claims against Eagle cannot stand.

3 Summary judgment is mandated.

4

3. Heath Was An Independent Contractor Under California Law.

5

Even if California law applied, Heath was properly classified as an independent

6 contractor. California law is substantially similar to Texas law regarding classification of independent

7 contractors; under both, a "right to control" test is used to determine whether an independent contractor

8 is properly classified. Compare Limestone Prods. Distribution lnc., 71 S.W.3d at 312 (right to control

9 the progress, details, and methods of the operations of the work) with Bates v. IndustrialAccident

10 Comm ’n, 156 Cal. App. 2d 713, 718 (1958) (independent contractor relationship will not be considered

11 employment relationship unless the alleged employer has the right "to exercise complete and

12 authoritative control of the mode and manner in which the work is performed").

13

As discussed above, Texas courts analyze the "right to control" by considering: (1) the

14 independent nature of the contractor’s business; (2) the contractor’s obligation to furnish necessary

15 tools, supplies, and materials to perform the job; (3) the contractor’s right to control the progress of the

16 work except about final results; (4) the time for which the contractor is employed; and (5) the method

17 of payment, whether by unit of time or by the job. Limestone Prods. Distribution Inc., 71 S.W.3d at

18 312. California courts consider similar factors in determining the "right to control." For example, in

19 Millsap v. FederalExpress Corp., 227 Cal. App. 3d 425,430-33 (1991), the court held that a package

20 delivery driver was an independent contractor, not an employee, based on the parties’ written

21 agreement, which provided for an independent contractor relationship, as well as other factors, such as

22 the driver’s obligation to provide his own vehicle, gas and liability insurance and to pay for vehicle

23 maintenance and repair costs. The court also noted that the driver was paid on a "per route" basis

24 (rather than by the hour), and retained the right to control the progress of his work. "Other than to say

25 ’be careful’ or to give him directions to a particular location, or possibly tell him to deliver the

26 packages in the order received, [the carrier] did not instruct [the driver] as to how to make the

27 deliveries or how to drive his car." Id. at 431.

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1

The court considered similar factors in Bates, 156 Cal. App. 2d 713, holding that the driver of a

2 catering truck was an independent contractor, not an employee, because the driver controlled the day-

3 to-day operation of his route, was obligated to provide insurance and maintenance for his truck, and

4 did not receive an hourly wage. Id. at 718-719; see also Mission Ins. Co. v. Workers Compensation

5 Appeals Board, 123 Cal. App. 3d 211 (1981) (security alarm service provider an independent

6 contractor, not an employee, based on the parties’ agreement, the independent nature of the contractor’s

7 business, the contractor’s obligation to furnish his own vehicle and pay his own expenses, and the

8 method of payment). Thus, even under California law, Heath was properly classified as an

9 independent contractor and his claims fail.

10

C. All Of l-Ieath’s Claims Fail As A Matter Of Law Given That Heath Was An

Independent Contractor.

11

12

All of the provisions of the Califomia Labor Code and Wage Order on which Heath

13 bases his First through Eighth Causes of Action apply only to employees, not to independent

14 contractors. See Cal. Lab. Code §§ 201,202, 203,221,223,226, 226.3,226.7, 400-410, 450, 510,

15 1174, 1174.5, 1194, 2802; IWC Wage Order No. 9; FAC ¶ 44, 45, 46, 47, 54, 57, 52, 65, 68, 69, 72,

16 75, 76, 77. As demonstrated above, Heath was an independent contractor, not an employee. Thus, the

17 Labor Code and Wage Order provisions on which he relies do not apply to him, and his First through

18 Eighth Causes of Action fail. And, because Heath’s Ninth Cause of Action for violation of California’s

19 Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq., is wholly based on the violations 20 alleged in his First through Eighth Causes of Action, the Ninth Cause of Action fails with them.

21

22

23

24

25

26

27

28

16

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON THE INDIVIDUAL

CLAIMS OF PLAINTIFF THOMAS HEATH

Case 5:05-cv-04181-RMW Document 61 Filed 12/08/2006 Page 21 of 21

1 VI. CONCLUSION.

2

Heath’s own deposition testimony defeats any claim that he was not properly classified as an

3 independent contractor, and his claims against Eagle fail. No material facts are in dispute, and Eagle is

4 entitled to judgment as a matter of law. For all the foregoing reasons, Eagle’s motion for summary

5 judgment should be granted.

6 Dated: December 8, 2006

Respectfully submitted,

7

AKIN GUMP STRAUSS HAUER & FELD LLP

8

9

oy

" " t,J " Karen J. Kubin

10

Attorneys for Defendant

11

EGL, INC.

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17

DEFENDANT EGL, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON THE INDIVIDUAL

CLAIMS OF PLAINTIFF THOMAS HEATH

 
 Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page1 of 29

1 Aaron Kaufmann; Esq., SBN 148580 David Pogrel, Esq., SBN 203787
2 HINTON, ALFERT & SUMNER 1646 N. California Blvd., Suite #600
3 . Walnut Creek, CA 94596 Telephone: (925) 932-6006
4 Facsimile: (925) 932-3412

5 Michael Rubin, SBN 80618 Eve Cervantez, SBN 164709
6 Stacey Leyton, SBN 203827 Matthew Murray, SBN 271461
7 ALTSHULER BERZON LLP 177 Post Street, Suite 300
8 San Francisco, California 94108 Telephone: (415) 421-7151
9 Facsimile: (415) 362-8064

10 Attorneys for PLAINTIFFS Additional Counsel Listed on Following Page
11

12

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA 13

14

MOHIT NARAYAN, HANNA RAHAWI, THOMAS HEATH and UOO IHEONU, on

15

behalf of themselves and all others similarly situated,

16

Plaintiffs,

17

v.

18 EGL, INC., a Texas Corporation; CEVA

19

Freight, LLC, a Delaware Corporation, and DOES 2-10, inclusive,

20

Defendants.

21

22

23

24

25

CLASS ACTION
Case No. C 05-04181 RMW
SECOND AMENDED COMPLAINT (1) REIMBURSEMENT OF BUSINESS
EXPENSES (Labor Code §2802); (2) UNLAWFUL DEDUCTIONS FROM WAGES
(Labor Code §§221, 223, 400-410); (3) COERCED PURCHASES (Labor Code §450); (4) FAaURE TO PROVIDE OFF-DUTY MEAL
PERIODS (Labor Code §§226.7, 512); (5) FAaURE TO PAY MINIMUM WAGE
COMPENSATION (Labor Code §§1182.11, 1182.12, 1194, 1194.2, 1197); (6) FAILURE TO PAY OVERTIME COMPENSATION (Labor Code §§510, 1194); (7) FAaURE TO FURNISH ACCURATE WAGE STATEMENTS (Labor Code §§226, 226.3); (8) FAaURE TO KEEP ACCURATE PAYROLL RECORDS (Labor Code §§1174, 1174.5);

(9) WAITING TIME PENALTIES 26
(Labor Code§§201-203); and

27

(10) VIOLATIONS OF UCL

(Labor Code §17200 et seq.) 28

SECOND AMENDED COMPLAINT - CLASS ACTION - COS-G4181 RMW

- 1-

Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page2 of 29

1 Lorraine Grindstaff, Esq., SBN 112346

PATTEN, FAITH & SANDFORD 2 635 West Foothill Blvd.

3

Monrovia, CA 91016-2038 Telephone: (626) 359-9335

4 Facsimile: (626) 303-2391

5

6

7

8

9

10

11

12

13

14

15

16

17

\

18

19

20

21

22

23

24

25

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28
SECOND AMENDED COMPLAINT - CLASS ACTION • C05-04181 RMW

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page3 of 29

1

1. PLAINTIFFS Mohit Narayan, Hanna Rahawi, Thomas Heath, and Ugo Iheonu

2 allege as follows on behalf of themselves, all others similarly situated, and the general public:

3

I. JURISDICTION

4

2. DEFENDANTS removed this action from the Superior Court of California, Santa

5 Clara County, pursuant to the Class Action Fairness Act of 2005 (CAFA), codified at 28 U.S.C. §§

6 1332(d), 1453, and 1711-1715.

7

II. VENUE AND INTRADISTRICT ASSIGNMENT

8

3. Venue is proper in this district, pursuant to 28 U.S.C. § 1441(a), because the County

9 in which the removed action was originally brought is within this District. A substantial part of the

10 events or omissions giving rise to the claims stated herein arose within this District, and a

11 substantial number of the members of the class on whose behalf this action is brought work or

12 worked for DEFENDANTS in facilities and operations maintained by DEFENDANTS within this

13 District and within the Division and Courthouse to which this action has been assigned.

14

III. INTRODUCTION

15

4. This is an action for relief from defendants' misclassification of their California

16 pick-up and delivery drivers as "independent contractors." Defendant EGL, Inc. dba "EGL Eagle

17 Global Logistics" ("EOL"), CEVA Freight, LLC ("CEVA"), and their affiliates (collectively

18 "DEFENDANTS") are in the freight transport business, relying on PLAINTIFFS and similarly

19 situated drivers for the pick-up and delivery of the freight. DEFENDANTS retain and exercise

20 pervasive control over their freight transport operations, including by exercising such control over

21 PLAINTIFFS and similarly situated drivers, such that the drivers operating in California are in fact

22 DEFENDANTS' employees under California law.

23

5. By misclassifying the drivers as independent contractors, DEFENDANTS have

24 sought to avoid various duties and obligations owed to employees under California's LaborCode

25 and Industrial Welfare Commission ("IWC") wage orders, it:lcluding: the duty to indemnify

26 employees for all expenses and losses necessarily incurred in connection with their employment

27 (Cal. Labor Code §2802; IWC wage order No.9, §§ 8-9); the duty to provide workers'

28 compensation coverage (Cal. Labor Code § 3200 et seq.); the duty to provide off-duty meal periods

SECOND AMENDED COMPLAINT - CLASS ACTION • C05·04181 RMW

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page4 of 29

1 (Cal. Labor Code §§ 512,226.7; IWC wage order No.9, § 11); the duty to pay California

2 minimum wage for all hours worked (Cal. Labor Code §§ 1182.11, 1182.12,1197; Minimum

3 Wage Order; IWC wage order No.9, § 4); the duty to avoid coercion in the purchase of necessary

4 equipment, materials, and services (Cal. Labor Code § 450); the duties to pay overtime premium

5 pay to those drivers operating vehicles with a gross vehicle weight rating ofless than 10,001 .

6 pounds, including but not limited to small step package vans (hereinafter "Van Drivers") and to

7 document those drivers' actual hours worked (Cal. Labor Code §§ 510, 1174,226, 1194; IWC
i
8 wage order No.9, §§ 3, 7); and other legal obligations.

9

6. DEFENDANTS have maintained their unlawful policy and practice of treating their

10 drivers as independent contractors despite acknowledging that "[t]he Internal Revenue Service,

11 state authorities and other third parties have at times successfully asserted that independent

12 owner/operators in the transportation industry, including those of the type we use in connection

13 with your local pick up and delivery operations, are 'employees' rather than 'independent

14 contractors.'" (EGL's 2004 10-K filing with the S.E.C., p. 10.)

15

7. PLAINTIFFS Narayan, Rahawi, Heath, and Iheonu bring their claims individually

16 and as a class action, under Federal Rule of Civil Procedure 23, on behalf of similarly situated

17 pick-up and delivery drivers working from DEFENDANTS' California facilities (collectively

18 hereinafter "Drivers" or "Class Members"). PLAINTIFFS challenge DEFENDANTS' policy of

19 willfully and unlawfully misclassifying their Drivers as "independent contractors" and thereby

20 refusing to indemnify them for employment-related expenses and losses, failing to provide

21 workers' compensation insurance, taking wrongful deductions from their wages, coercing them to

22 purchase necessary services and items, failing to provide off-duty meal periods, failing to pay

23 minimum wage for all hours worked, and failing to pay overtime compensation and to document

24 actual hours worked as required by California law. This misclassification policy has been in effect

25 since at least four years prior to the filing ofthis action.

26

8. PLAINTIFFS Narayan, Rahawi, and Heath, and Iheonu, on behalf of themselves

27 and other current and former Drivers, bring claims for reimbursement of business expenses and

28 losses, reimbursement of deductions wrongfully taken from wages, meal period pay, unpaid

SECOND AMENDED COMPLAINT - CLASS ACTION - C05-04181 RMW

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page5 of 29

1 minimum wage (and liquidated damages), unpaid overtime compensation, statutory and civil

2 penalties, interest, and attorneys' fees and costs, under Cal. Labor Code §§ 203, 218.5, 226.7,

3 1194, 1194.2, and 2802, and Cal. Code of Civil Procedure § 1021.5. PLAINTIFFS also seek relief

4 on behalf of the class and in a representative capacity, pursuant to Cal. Business and Professions

5 Code §§ 17200-17208 (also referred to herein as the "DCL"), including restitution and

6 disgorgement of all benefits DEFENDANTS have obtained from the unlawful practices referenced

7 above and detailed below. These class and representative action claims are brought on behalf of

8 PLAINTIFFS and all current and former similarly situated Drivers employed by DEFENDANTS

9 during the period commencing September 12, 2001 (the "Class Period").

10

IV. PARTIES

11 A. Plaintiffs

12

9. Plaintiff Mohit Narayan resides in Stockton, California (San Joaquin County). He

13 was a full-time EGL pick-up and delivery truck driver for Defendant EGL from approximately July

14 1999 to September 2006. Throughout his tenure as an EGL truck driver he worked out of

15 DEFENDANTS' facilities in Sacramento, California (Sacramento County). Plaintiff Narayan

16 leased a bobtail truck to carry out his duties for DEFENDANTS throughout his tenure as an EGL

17 truck driver.

18

10. Plaintiff Hanna Rahawi resides in Stockton, California (San Joaquin County). He

19 was a full-time EGL pick-up and delivery truck driver for Defendant EGL from late 1998 to

20 October 2005. Starting in approximately May 2003, Rahawi served as a full-time EGL truck driver

21 working out of DEFENDANTS' facilities located in Brisbane, California (San Mateo County).

22 Prior to that he worked out of DEFENDANTS' facilities in San Jose, California (Santa Clara

23 County). Plaintiff Rahawi owned the bobtail truck he used to carry out his duties for

24 DEFENDANTS.

25

11. Plaintiff Thomas Heath currently resides in Clio, Michigan. He was a full-time

26 EGL pick-up and delivery van driver for Defendant EGL from late 1999 to approximately July

27 2002. Throughout this time, Heath served as an EGL van driver working out of DEFENDANTS'

28

SECOND AMENDED COMPLAINT - CLASS ACTION - COS-04181 RMW

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page6 of 29

1 Sacramento facilities. Heath owned the GMC Savana one ton cargo van that he used to carry out

2 his duties for DEFENDANTS.

3

12. PlaintiffUgo Iheonu resides in Torrance, California (Los Angeles County). He was

4 a full-time pick-up and delivery truck driver and van driver for DEFENDANTS from 1998 to 2008.

5 Throughout his tenure, Iheonu served as a full-time truck or van driver working out of

6 DEFENDANTS' facilities located in Hawthorne and Torrance, California (Los Angeles County).

7 Plaintiff Iheonu owned the bobtail truck and van he used to carry out his duties for

8 DEFENDANTS.

9 B. Defendants

10

13. Defendant EGL, Inc. is incorporated under the laws of Texas. It is a publicly-traded

11 company (NASDAQ: EAGL) engaged in what it describes as "the business of domestic and

12 international freight transportation, customs brokerage, global logistics, supply chain management

13 and infonnation services for commercial and industrial customers." EGL's corporate headquarters

14 are in Houston, Texas. Defendant EGL is and at all relevant times was an employer covered by the

15 Cal. Labor Code and IWC wage order No.9.

16

14. Upon the filing of the prior complaints, Plaintiffs Narayan, Rahawi and Heath,

17 being ignorant of the true name of the Defendant and having designated the Defendant in the prior

18 complaints by the fictitious name of Doe 1, and having discovered the true name of the Defendant

19 to be CEVA Freight, LLC, Inc. (hereinafter "CEVA") amends the First Amended Complaint by

20' substituting the true name for the fictitious name whenever it appears herein. Defendant CEVA is

21 incorporated under the laws of Delaware and is a wholly-owned subsidiary ofEGL, Inc. CEVA

22 was fonned in August 2007 through the merger ofEGL, Inc. and TNT Logistics. CEVA's

23 corporate headquarters are in Houston, Texas. Defendant CEVA is, and at all relevant times since

24 August 2007 was, an employer covered by the Cal. Labor Code and IWC wage order No.9.

25

15. The true names and capacities, whether individual, corporate, associate, or

26 otherwise, of defendants sued herein as DOES 2 through 10, inclusive, are currently unknown to

27 PLAINTIFFS, who therefore sue defendants by such fictitious names under Cal. Code of Civil

28 Procedure § 474. PLAINTIFFS are informed and believe, and based thereon allege, that each of

SECOND AMENDED COMPLAINT - CLASS ACTION - COS-Q4181 RMW

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page7 of 29

1 the defendants designated herein as a DOE is legally responsible in some manner for the unlawful

2 acts referred to herein. PLAINTIFFS will seek leave of court to amend this Complaint to reflect

3 the true names and capacities of the defendants designated hereinafter as DOES when such

4 identities become known. Hereinafter DEFENDANTS and the DOE defendants shall be referred

5 to collectively as "DEFENDANTS."

.

.

6

16. PLAINTIFFS are informed and believe, and on such information and belief allege,

7 that each defendant acted in all respects pertinent to this action as the agent of the other defendants,

8 carried out a joint scheme, business plan or poiicy in all respects pertinent hereto, and that the acts

9 of each defendant are legally attributable to the other defendants.

10

v. STATEMENT OF FACTS

11

17. DEFENDANTS are a domestic and international freight shipping and delivery

12 operation, using an integrated network of transportation, sorting, warehousing, and communication

13 facilities.

14

18. During the Class Period, DEFENDANTS have employed hundreds of pick-up and

15 delivery truck and van drivers (collectively referred to as "Drivers") in facilities located in

16 California, including in or about Brisbane, Los Angeles, Ontario, Sacramento, San Diego, San

17 Jose, and South San Francisco. These Drivers were integral to the operations of DEFENDANTS ,

18 core business, as they were hired to timely deliver and pick-up packages and other freight based on

19 times, locations, and for amounts detennined by DEFENDANTS.

20

19. DEFENDANTS retain the exclusive right to control the manner and means by

21 which PLAINTIFFS and similarly situated Drivers perfonn their jobs. The Drivers work from

22 DEFENDANTS' terminals, where they are assigned packages for delivery and locations for pick-

23 ups each day. They work shifts that are pre-determined by DEFENDANTS. Some Drivers are

24 assigned pre-detennined routes, in which they service customers within a specific geographic

25 region; while others serve as "floaters," serving whatever area their pick-up and delivery

26 assignments take them. DEFENDANTS employ dispatchers, customer service representatives, and

27 a variety of managerial employees at their terminals who have supervisory responsibility over the

28

SECOND AMENDED COMPLAINT - CLASS AcrION - C05-04181 RMW

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page8 of 29

1 Drivers and those Drivers' daily assignments and paperwork. Drivers interact with

2 DEFENDANTS' personnel on a daily basis.

3

20. DEFENDANTS unilaterally set the compensation to be paid to the Drivers.

4 DEFENDANTS purport to pay the Drivers a percentage of the fees that DEFENDANTS charge

5 their customers.

6

21. DEFENDANTS unilaterally set the prices charged to their customers for the

7 services rendered by the Drivers. The Drivers have no control over the rates charged to

8 DEFENDANTS' customers.

9

22. The Drivers' remuneration depends on their ability to drive their vehicles and to

10 load and un-load freight.

11

23. When Drivers do not follow DEFENDANTS' rules or instructions, they are subject

12 to various types of punishment, some financial and some disciplinary.

13

24. PLAINTIFFS and similarly situated Drivers have provided services that are an

14 integral part of DEFENDANTS' business enterprise. By providing vehicles with required

15 DEFENDANTS' logos and advertising, by reliably serving DEFENDANTS' customers, by

16 following DEFENDANTS' controlled delivery and pick-up routes, by using DEFENDANTS'

17 dedicated web site and mobile equipment to track packages, and in other material ways,

18 PLAINTIFFS and other Drivers have rendered services to DEFENDANTS that are integral to

19 DEFENDANTS' freight transport system.

20

25. Despite DEFENDANTS' pervasive control over all aspects of its freight transport

21 operations, including over the Drivers, DEFENDANTS have uniformly classified and treated all

22 Drivers as "independent contractors."

23

26. Although the nature of the work perfonned by PLAINTIFFS and similarly situated

24 Drivers makes detailed control by management unnecessary, DEFENDANTS retain the right to

25 control arid exercise extensive control over the work ofthe Drivers, and do in fact exercise such

26 control.

27

28

SECOND AMENDED COMPLAINT - CLASS ACTION • C05-04181 RMW

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page9 of 29

1

27. DEFENDANTS' right of control over PLAINTIFFS and similarly situated Drivers

2 is retained and/or exercised by DEFENDANTS as demonstrated by DEFENDANTS' written rules

3 and policies and unwritten practices.

4

28. DEFENDANTS' classification and treatment of PLAINTIFFS throughout the

5 period covered by this lawsuit similarly situated Drivers as "independent contractors" ratht:r than

6 as "employees" is and has been unlawful.

7

29. As a result of DEFENDANTS misclassifying their Drivers as "independent

8 contractors," DEFENDANTS have unlawfully failed to indemnify the Drivers for employment-

9 related expenses, including the costs of providing the leased vehicles; all operation costs associated

10 with the vehicle, including fuel, maintenance, repair, cleaning, and licensing; a portion of the

11 decals and other identifying marks adorning the leased vehicles; liability and other insurance

12 covering work place injuries; cellular telephone and DEFENDANTS' designated text messaging

13 and package-tracking services; unifonn laundry fees; and miscellaneous tools, such as dollies and

14 pallet jacks. PLAINTIFFS are informed and believe and on such infonnation and belief allege that

15 DEFENDANTS have also failed to indemnify the Drivers for employment-related losses, such as

16 cargo loss or damage, bodily and property damage claims, uncollected or lost C.O.D. payments,

17 and "service claims" granted to customers. PLAINTIFFS are infonned and on that basis allege that

18 DEFENDANTS have taken deductions from Drivers' compensation to cover many of these

19 employment-related expenses. Under the Driver Contract, DEFENDANTS reserved the right to

20 and have taken deductions from the compensation of PLAINTIFFS and similarly situated Drivers

21 to cover many of these employment-related expenses.

22

30. As a result of DEFENDANTS misclassifying their Drivers as "independent

23 contractors," DEFENDANTS have regularly failed to provide a timely 30 minute off-duty meal

24 period to PLAINTIFFS and similarly situated Drivers who worked more than five hours in a day.

25

31. As a result of DEFENDANTS misclassifying their Drivers as "independent

26 contractors," DEFENDANTS have regularly failed to provide a second timely 30 minute meal

27 period to PLAINTIFFS and similarly situated Drivers who worked more than 10 hours in a day.

28

SECOND AMENDED COMPLAINT - CLASS ACTION - COS-D4181 RMW

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page10 of 29

1

32. As a result of DEFENDANTS misclassifying their Drivers as "independent

2 contractors," DEFENDANTS have regularly failed to pay Drivers the California minimum wage

3 for all hours worked, including but not limited to waiting time, "show up" time, and time spent in

4 company meetings.

5

33. Plaintiffs Heath and Iheonu and other similarly situated Drivers operate vehicles

6 witlr a gross vehicle weight rating of less than 10,001 pounds, including but not limited to small

7 step package vans. Persons who operate such vehicles are not subject to the maximum hours

8 regulations promulgated pursuant to the Federal Motor Carrier Safety Act and are therefore not

9 exempt from the overtime requirements established by the Cal. Labor Code and IWC wage order

10 No.9.

11

34. DEFENDANTS required and/or knowingly permitted Plaintiffs Heath and Iheonu

12 and have required andlor knowingly permitted similarly situated Van Drivers to work hours

13 considerably in excess of eight hours per day andlor 40 hours a week throughout the period

14 covered by this lawsuit. PLAINTIFFS are informed and believe and on such information and

15 belief allege that it has been DEFENDANTS' policy and practice to require andlor knowingly

16 permit their Van Drivers to work overtime hours without receiving overtime compensation.

17

35. As a result of DEFENDANTS misclassifying their Van Drivers as "independent

18 contractors," DEFENDANTS have willfully and knowingly failed to pay premium overtime

19 compensation to Plaintiffs Heath and Iheonu and similarly situated Van Drivers for hours worked

20 in excess of eight hours per day and 40 hours in a week.

21

36. As a result of DEFENDANTS misclassifying their Drivers as "independent

22 contractors," DEFENDANTS have failed to record the actual hours worked by Plaintiffs and

23 similarly situated Drivers during the Class Period.

24

37. As a result of DEFENDANTS misclassifying their Drivers as "independent

25 contractors," DEFENDANTS have failed to itemize the total hours worked on wage statements

26 furnished to Plaintiff and similarly situated Drivers.

27

38. PLAINTIFFS are informed and on that basis allege that,as a result of

28 DEFENDANTS' misclassifying their Drivers as "independent contractors," DEFENDANTS have

SECOND AMENDED COMPLAINT - CLASS ACTION -COS-Q4181 RMW

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1 not properly maintained payroll records showing the actual hours worked and meal periods taken

2 and missed each day by Drivers, including PLAINTIFFS.

3

39. As a result of DEFENDANTS misclassifying their Drivers as "independent

4 contractors," DEFENDANTS have willfully and knowingly failed to pay PLAINTIFFS, and

5 similarly situated Drivers, upon termination of employment all accrued compensation, including

6 for repayment of all unlawful deductions from wages, payment of missed meal period

7 compensation, minimum wage compensation, and payment of overtime compensation to Van

8 Drivers.

9

VI. CLASS ACTION ALLEGATIONS

10

40. PLAINTIFFS bring this lawsuit as a class action pursuant to Rules of Civil

11 Procedure 23(b)(3) on behalf of themselves and all similarly situated Drivers. The class

12 PLAINTIFFS seek to represent is defmed as:

13

All persons who are or have operated as pick-up and delivery drivers for

DEFENDANTS EGL, Inc. and/or CEVA Freight, LLC in the State of California

14

under an "independent contractor services"contract or similar written contract

(referred to as "Drivers") during the period commencing September 12,2001

15

through trial in this action. This class of Drivers includes a sub-class of those

operating vehicles with a gross vehicle weight rating of less than 10,001 pounds,

16

including but not limited to small step package vans (referred to as "Van Drivers").

17 The claims herein have been brought and may properly be maintained as a class action under
18 Rules of Civil Procedure 23(b)(3) because PLAINTIFFS can demonstrate that all ofthe necessary
19 requirements of Rule 23 are met, as follows:
20 a. Numerosity: The potential members of the class as defined herein are so
21 numerous that joinder would be impracticable. PLAINTIFFS are informed and believe and on
22 such information and belief allege that DEFENDANTS have employed over 300 Drivers in
23 California during the Class Period. The names and addresses ofthe Class Members are available
24 from the DEFENDANTS. Notice can be provided to the Class Members via first class mail using
25 techniques and a form of notice similar to those customarily used in class action lawsuits of this
26 nature.
27

28

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1

b. Commonality and Predominance of Common Questions: Questions of law

2 and fact common to PLAINTIFFS and the class predominate over any questions affecting only

3 individual members of the class. These common questions of law and fact include, without

4 limitation:

5

1.

Whether the Drivers have served DEFENDANTS as employees

6

rather than independent contractors under California law;

7

II. Whether Drivers have necessarily incurred employment-related

8

expenses and losses in carrying out their duties for DEFENDANTS;

9

lll. Whether DEFENDANTS have failed to indemnify Drivers for their

10

necessarily incurred employment-related-expenses and losses, in

11

violation of Cal. Labor Code § 2802;

12

IV. Whether DEFENDANTS have failed to provide Drivers with

13

workers' compensation insurance, in violation of Cal. Labor Code §

14

3200, et seq;

15

v. Whether DEFENDANTS' failure to provide workers' compensation

16

insurance constitutes an unlawful, Unfair, and/or fraudulent business

17

practice, under Cal. Business & Professions Code §17200, et seq;

18

vi. Whether DEFENDANTS' failure to indemnify Drivers for

19

necessarily incurred employment-related expenses and losses

20

constitutes an unlawful, unfair, and/or fraudulent business practice,

21

under Cal. Business & Professions Code § 17200 et seq;

22

Vll. Whether DEFENDANTS have made deductions from the

23

compensation paid to DRIVERS in violation of California law;

24

Vlll. WhetherDEFENDANTS' deductions from Drivers' compensation

25

constitute an unlawful, unfair, and/or fraudulent business practice,

26

under Cal. Business & Professions Code § 17200 ~t seq;

27

lX. Whether DEFENDANTS have coerced or compelled Drivers to

28

patronize DEFENDANTS and/or other companies in the purchase or

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1

lease of uniforms, uniform laundry service, communication

2

equipment, electronic message services, and other items in violation

3

of Cal. Labor Code § 450;

4

x. Whether DEFENDANTS' coercion or compulsion of Drivers to

5

patronize DEFENDANTS and/or other companies constitutes an

6

unlawful, unfair, and/or fraudulent business practice, under Cal.

7

Business & Professions Code § 17200 et seq;

8

xi. Whether DEFENDANTS have failed to provide adequate off-duty

9

meal periods and meal period compensation, in violation of Cal.

10

Labor Code §§ 226.7 and 512 and IWC wage order No.9, § 11;

11

xii. Whether DEFENDANTS' failure to provide adequate off-duty meal

12

periods and meal period compensation constitutes an unlawful,

13

unfair, and/or fraudulent business practice, under Cal. Business &

14

Professions Code § 17200 et seq;

15

xiii. Whether DEFENDANTS have required, encouraged, suffered, or

16

permitted Drivers to performed certain work-related duties without

17

compensation equal to at least the California minimum wage;

18

xiv. Whether DEFENDANTS knew or should have known that their

19

Drivers regularly performed certain work-related duties without

20

compensation equal to at least the California minimum wage;

21

xv. Whether DEFENDANTS violated IWC wage order No.9; § 4, the

22

California Minimum Wage Order, and Cal. Labor Code §§ 1182.11

23

and 1194 by their failure to pay Drivers minimum wage

24

compensation for all hours worked;

25

XVl. Whether DEFENDANTS' failure to pay Drivers minimum wage

26

compensation fOf all hours worked constitutes an unlawful, unfair,

27

and/or fraudulent business practice, under Cal. Business &

28

Professions Code § 17200 et seq.;

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1

xvii. Whether DEFENDANTS have required, encouraged, suffered, or

2

pennitted Van Drivers to work in excess of 40 hours per week and/or

3

eight hours per day;

4

xviii. Whether DEFENDANTS knew or should have known that their Van

5

Drivers regularly worked over 40 hours per week and/or eight hours

6

per day;

7

XIX. Whether DEFENDANTS have failed to pay their Van Drivers

8

overtime wages for time worked in excess of 40 hours per week

9

and/or eight hours per day;

10

xx. Whether DEFENDANTS have employed Van Drivers in a position

11

subject to, and not exempt from, California's overtime pay and other

12

wage and hour requirements;

13

XXI. Whether DEFENDANTS have violated IWC wage order No.9, § 3

14

and Cal. Labor Code §§ 510 and 1194 by their failure to pay Van

15

Drivers overtime compensation;

16

XXll. Whether DEFENDANTS' failure to pay overtime compensation to

17

Van Drivers constitutes an unlawful, unfair, and/or fraudulent

18

business practice, under Cal. Business & Professions Code § 17200

19

et seq.;

20

xxiii. Whether DEFENDANTS knowingly and intentionally failed to

21

provide Drivers with an itemized statement showing total hours

22

worked with each payment of wages, as required by Cal. Labor Code

23

§ 226 and IWC wage order No.9, §7;

24

xxiv. Whether DEFENDANTS' failure to provid.e an itemized statement

25

showing total hours worked with each payment of wages constitutes

26

an unlawful, unfair, and/or fraudulent business practice, under Cal.

27

Business & Professions Code § 17200 et seq.;

28

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1

xxv. Whether DEFENDANTS have violated Cal. Labor Code § 1174 and

2

IWC wage order No.9, § 7 by failing to maintain documentation of

3

the actual hours worked each day by Drivers;

4

XXVI. Whether DEFENDANTS' failure to maintain documentation of the

5

actual hours worked each day by Drivers constitutes an unlawful,

6

unfair, and/or fraudulent business practice, under Cal. Business &

7

Professions Code § 17200 et seq;

8

xxvii. Whether DEFENDANTS have violated Labor Code §§ 201-203, by

9

failing, upon telmination, to timely pay Drivers wages that were due

10

for minimum wage, overtime, missed meal periods, and/or wrongful

11

deductions from wage;

12

xxviii. Whether DEFENDANTS' failure to pay all compensation owed at

13

time oftermination of employment constituted an unlawful, unfair,

14

and/or fraudulent business practice, under Business & Professions

15

Code § 17200 et seq; and

16

xxix. What constitutes the proper formula for calculating restitution,

17

damages, and waiting time and other statutory penalties owed to

18

PLAINTIFFS and the class alleged herein.

19

c. Typicality: PLAINTIFFS' claims are typical of the claims of the class.

20 DEFENDANTS' common course of unlawful conduct has caused PLAINTIFFS and similarly

21 situated Drivers to sustain the same or similar injuries and damages caused by the same practices of

22 DEFENDANTS. PLAINTIFFS' claims are thereby representative of and co-extensive with the

23 claims of the class.

24

d. Adequacy of Representation: PLAINTIFFS are all members of the class,

25 PLAINTIFFS do not have any conflicts of interest with other class members and will prosecute the

26 case vigorously on behalf of the class. PLAINTIFFS will fairly and adequately represent and

27 protect the interests of the class members. PLAINTIFFS' counsel are competent and

28 experienced in litigating employment class actions, including complex wage and hour class actions.

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1

e. Superiority of Class Action: A class action is superior to other available

2- means for the fair and efficient adjudication of this controversy. Because the damages suffered by

3 individual Class Members may be relatively small, albeit significant, the expense and burden of

4 individual litigation make it impractical for most Class Members individually to seek redress for 5 the wrongful conduct alleged. Class action treatment will allow those similarly situated persons to 6 litigate their claims in the manner that is most efficient and economical for the parties and the

7 judicial system.

8

VII. DAMAGES

9

41. As a direct, foreseeable, and proximate result of DEFENDANTS , conduct,

10 DEFENDANTS owe PLAINTIFFS and similarly situated Drivers un-reimbursed business

11 expenses plus interest, repayment of unlawfully deducted wages plus interest, meal period

12 compensation plus interest, minimum wages plus interest and liquidated damages, waiting time

13 penalties under Labor Code § 203, and other statutory penalties in an amount that exceeds $25,000,

14 the precise amount of which will be proven at trial. Plaintiffs Heath and Iheonu and similarly

15 situated Van Drivers are also owed overtime compensatioJ;l plus interest.

16

VIII. CAUSES OF ACTION

17

FIRST CAUSE OF ACTION

REIMBURSEMENT OF BUSINESS EXPENSES

18

(CAL. LABOR CODE § 2802)

19

42. The allegations of Paragraphs 1 through 41 are realleged and incorporated herein by

20 reference, and PLAINTIFFS allege as follows a cause of action on behalf of themselves and the

21 above-described class of similarly situated Drivers employed by DEFENDANTS in California.

22

43. While acting on the direct instruction of DEFENDANTS and discharging their

23 duties for them, PLAINTIFFS and similarly situated Drivers have incurred work-related expenses.

24 Such expenses include but are not limited to the costs of purchase or lease of vehicles; fuel,

25 maintenance, and other vehicle operating costs; vehicle decals and other markings; various forms 26 of insurance; communications equipment; electronic message service; cellular telephones; and

27 uniforms and laundry services. DEFENDANTS have also reserved the right to hold drivers 28 accountable for losses such as cargo loss or damage, bodily and property damage claims,

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1 uncollected or lost C.O.D. payments, and "service claims" granted to customers. PLAINTIFFS

2 and class members necessarily incurred these substantial expenses and losses as a direct result of

3 performing their job duties for DEFENDANTS.

4

44. DEFENDANTS have failed to indemnify or in any manner reimburse PLAINTIFFS

5 and similarly situated Drivers for these expenditures and losses. By misclassifying Drivers as

6 "independent contractors," and further by requiring those employees to pay expenses and cover

7 losses that they incurred in direct consequence of the discharge oftheir duties for DEFENDANTS

8 and/or in obedience to DEFENDANTS' direction, DEFENDANTS have violated and continue to

9 violate Cal. Labor Code § 2802.

10

45. As a direct and proximate result of DEFENDANTS' conduct, PLAINTIFFS and

11 similarly situated Drivers have suffered substantial losses according to proof, as well as pre-

12 judgment interest, costs, and attorney fees for the prosecution of this action.

13

46. PLAINTIFFS, on behalf of themselves and similarly situated Drivers, request relief

14 as described below.

15

SECOND CAUSE OF ACTION

UNLAWFUL DEDUCTIONS FROM WAGES

16

(CAL. LABOR CODE §§ 221, 223, 400-410, IWC. WAGE ORDER NO.9)

17

47. The allegations of Paragraphs 1 through 46 are realleged and incorporated herein by

18 reference, and PLAINTIFFS allege as follows a cause of action on behalf of themselves and the

19 above-described class of similarly situated Drivers employed by DEFENDANTS in California.

20

48. Labor Code § 221 provides: "It shall be unlawful for any employer to collect or

21 receive from an employee any part of wages theretofore paid by said employer to said employee."

22

49. Labor Code § 223 provides: "Where any statute or contract requires an employer to

23 maintain the designated wage scale, it shall be unlawful to secretly pay a lower wage while

24 purporting to pay the wage designated by statute or by contract."

25

50. Labor Code §§ 400-410 ("Employee Bond Law") provide the limited circumstances

26 under which an employer can exact a cash bond from its employees. These provisions are

27 designed to protect employees against the very real danger of an employer taking or

28 misappropriating employee funds held by the employer in trust.

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1

51. IWC wage order No.9, § 8 provides that the only circumstance under which an

2 employer can make a deduction from an employee's wage due to cash shortage, breakage, or loss

3 of equipment is if the employer can show that the shortage, breakage, or loss was the result of the

4 employee's gross negligence or dishonest or willful act.

5

52. These and related statutes, along with California's fundamental public policy

6 protecting wages and wage scales, prohibit employers from subjecting employees to unanticipated

7 or unpredicted reductions in their wages; making employees the insurers of their employer's

8 business losses; otherwise passing the ordinary business losses of the employer onto the employee;

9 taking deductions from wages for business losses unless the employer can establish that the loss

10 was caused by a dishonest or willful act, or gross negligence of the employee; or taking other

11 unpredictable deductions that may impose a special hardship on employees.

12

53. DEFENDANTS have violated Cal. Labor Code §§ 221,223, and 400-410, and IWC

13 wage order No.9, § 8 by unlawfully taking deductions from PLAINTIFFS' and Class Members'

14 compensation to cover certain ordinary business expenses of DEFENDANTS, including but not

15 limited to uniform laundry service, claims for loss or damaged cargo, property damage and bodily

16 injury claims, uncollected or lost C.O.D. amounts, and "service claims" granted to customers.

17

54. Because DEFENDANTS took unlawful deductions from Drivers' compensation,

18 they are liable to PLAINTIFFS and Class Members for the compensation that should have been

19 paid but for the unlawful deductions, pursuantto Cal. Labor Code§§ 221, 223, and 400-410, and

20 IWC wage order No.9, § 8.

21

55. By unlawfully deducting wages and failing to pay PLAINTIFFS and other similarly

22 situated Drivers, DEFENDANTS are also liable for penalties, reasonable attorneys' fees, and costs

23 under Labor Code §§ 218.5 and 1194.

24

56. PLAINTIFFS, on behalf of themselves and similarly situated Drivers, request relief

25 as described below.

26

27

28

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1

THIRD CAUSE OF ACTION

COERCED PURCHASES

2

(CAL. LABOR CODE § 450 ET SEQ.)

3

57. The allegations ofParagniphs 1 through 56 are realleged and incorporated herein by

4 reference, and PLAINTIFFS allege as follows a cause of action on behalf of themselves and the

5 above-described class of similarly situated Drivers employed by DEFENDANTS in California.

6

58. DEFENDANTS have compelled and/or coerced PLAINTIFFS and Class Members

7 to' patronize DEFENDANTS by requiring PLAINTIFFS and Class Members to lease or purchase

8 data communication equipment and services, uniforms, uniform cleaning services, and other items

9 directly from DEFENDANTS and/or other companies in violation of Cal. Labor Code § 450. The

10 violation of Cal. Labor Code § 450 also provides the basis for a claim for penalties, attorneys' fees,

11 and costs under Cal. Labor Code § 2699.

12

59. PLAINTIFFS, on behalf of themselves and similarly situated Drivers, request relief

13 as described below.

14

FOURTH CAUSE OF ACTION

FAILURE TO PROVIDE OFF-DUTY MEAL PERIODS

15

(CAL. LABOR CODE §§ 226.7, 512, IWC WAGE ORDER NO.9)

16

60. The allegations of Paragraphs 1 through 59 are realleged and incorporated herein by

17 reference, and PLAINTIFFS allege as follows a cause of action on behalf of themselves and the

18 above-described class of similarly situated Drivers employed by DEFENDANTS in California.

19

61. PLAINTIFFS and similarly situated Drivers have regularly worked in excess of five

20 (5) hours a day without being afforded at least a half-hour meal period in which they were relieved

21 of all duties, as required by Cal. Labor Code §§ 226.7 and 512, and IWC wage order No.9, §

22 11(A).

23

62. Because DEFENDANTS failed to afford proper and timely meal periods, they are

24 liable to PLAINTIFFS and similarly situated Drivers for one hour of additional pay at the regular

25 rate of compensation for each workday that the proper meal periods were not provided, pursuant to

26 Cal. Labor Code § 226.7(b) and IWC wage order No.9, § 11(B).

27

28

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page20 of 29

1

63. By violating Cal Labor Code §§ 226.7 and 512, and IWC wage order No.9, § 11,

2 DEFENDANTS are also liable for penalties, reasonable attorneys' fees, and costs under Cal. Labor

3 Code §§ 218.5 and 1194.

4

64. PLAINTIFFS, on behalf of themselves and similarly situated Drivers, request relief

5 as described below.

6

FIFTH CAUSE OF ACTION

7

FAILURE TO PAY MINIMUM WAGE

(CAL. LABOR CODE §§ 1182.11, 1182.12, 1194 ET SEQ., IWC WAGE ORDER NO.9,

8

MINIMUM WAGE ORDER)

9

65. The allegations of Paragraphs 1 through 64 are realleged and incorporated herein by

10 reference, and PLAINTIFFS allege as follows a cause of action on behalf of themselves and the

11 above-described class of similarly situated Drivers employed by DEFENDANTS in California.

12

66. At all times relevant to this complaint, Labor Code §§ 1182.11, 1182.12, and 1197,

13 wage order 9-2001, and t.h.e Minimum Wage Order were in full force and effect and required that

14 DEFENDANTS' California Drivers receive the minimum wage for all hours worked irrespective

15 of whether nominally paid on an hourly, piece rate, or any other basis, at the rate $6.25 per hour

16 commencing January 1,2001, $6.75 per hour commencing January 1,2002, $7.50 per hour

17 commencing January 1,2007, and $8.00 per hour commencing January 1, 2008.

18

67. DEFENDANTS failed to pay PLAINTIFFS and Drivers for all hours worked at the

19 statutory minimum wage rate, as required by law, including for work time being engaged to wait at

20 DEFENDANTS' facilities or at DEFENDANTS' direction arid time spent attending meetings.

21

68. By failing to maintain adequate time records as required by Cal. Labor Code §

22 1174(d) and IWC wage order No.9, § 7(A), DEFENDANTS have made it difficult to calculate the

23 minimum wage compensation due Plaintiffs Heath and Iheonu and the similarly situated Van

24 Drivers.

25

69. As a direct and proximate result of the acts and/or omissions of DEFENDANTS,

26 PLAINTIFFS and other Drivers have been deprived of minimum wages due in amounts to be

27 detennined at trial, and to additional amounts as liquidated damages, pursuant to Lahor Code §§

28 1194 and 1194.2.

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1

70. By violating Cal Labor Code §§ 1182.11, 1182.11 and 1197, IWC wage order No.

2 9, § 4, and the Minimum Wage Order, DEFENDANTS are also liable for reasonable attorneys'

3 fees and costs under Cal. Labor Code § 1194.

4

71. PLAINTIFFS, on behalf of themselves and similarly situated Drivers, request relief

5 as described below.

6

SIXTH CAUSE OF ACTION

FAILURE TO PAY OVERTIME COMPENSATION

7

(CAL. LABOR CODE §§ 510, 1194 ET SEQ., IWC WAGE ORDER NO.9.)

8

72. The allegations of Paragraphs 1 through 71 are realleged and incorporated herein by

9 reference, and Plaintiffs Heath and Iheonu allege as follows a cause of action on behalf of

10 themselves and the above-described sub-class of similarly situated Van Drivers employed by

11 DEFENDANTS in California.

12

73. By failing to pay overtime compensation to Plaintiffs Heath and Iheonu and a sub-

13 class of Van Drivers as alleged above, DEFENDANTS have violated and continue to violate Cal.

14 Labor Code § 510 and IWC wage order No.9, § 3, which require overtime compensation to non-

15 exempt employees.

16

74. By failing to maintain adequate time records as required by Cal. Labor Code §

17 1174(d) and IWC wage order No.9, § 7(A), DEFENDANTS have made it difficult to calculate the

18 overtime compensation due Plaintiffs Heath and Iheonu and the similarly situated Van Drivers.

19

75. As a result of DEFENDANTS' unlawful acts, Plaintiffs Heath and Iheonu and a

20 sub-class of Van Drivers have been deprived of overtime compensation in an amount to be

21 determined at trial, and are entitled to recovery of such amounts, plus interest thereon, attorneys'

22 fees, and costs, under Cal. Labor Code § 1194.

23

76. By violating Cal. Labor Code § 510, DEFENDANTS are liable for civil penalties

24 and attorneys' fees and costs under Cal. Labor Code §§ 558, 1194, and 1197.1.

25

77. Plaintiffs Heath and Iheonu, on behalf of themselves and similarly situated Van

26 Drivers, request relief as described below.

27

28

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1

SEVENTH CAUSE OF ACTION

FAILURE TO FURNISH ACCURATE WAGE STATEMENTS

2

(CAL. LABOR CODE §§ 226 & 226.3; IWC WAGE ORDER NO.9)

3

78. The allegations of Paragraphs 1 through 77 are realleged and incorporated herein by

4 reference, and PLAINTIFFS allege as follows a cause of action on behalf of themselves and the

5 above-described class of similarly situated Drivers employed by DEFENDANTS in California.

6

79. Cal. Labor Code § 226(a) and IWC wage order No.9, § 7(B) require employers

7 semi-monthly or at the time of each payment of wages to furnish each employee with a statement

8 itemizing, among other things, the total hours worked by the employee. Cal. Labor Code § 226(b)

9 provides that if an employer knowingly and intentionally fails to provide a statement itemizing,

10 among other things, the total hours worked by the employee, then the employee is entitled to

11 recover the greater of all actual damages or fifty dollars ($50) for the initial violation and one

12 hundred dollars ($100) for each subseq\lent violation, up to four thousand dollars ($4,000)..

13

80. DEFENDANTS knowingly and intentionally failed to furnish PLAINTIFFS and

14 similarly situated Drivers with timely, itemized statements showing the total hours worked, as

15 required by Cal. Labor Code § 226(a) and IWC wage order No.9, § 7(B). As a result,

16 DEFENDANTS are liable to PLAINTIFFS and similarly situated Drivers for the amounts provided

17 by Cal. Labor Code § 226(b) and for penalties, and attorneys' fees.

18

81. PLAINTIFFS, on behalf of themselves and similarly situated Drivers, request relief

19 as described below.

20

EIGHTH CAUSE OF ACTION

FAILURE TO KEEP ACCURATE PAYROLL RECORDS

21

(CAL. LABOR CODE §§ 1174 & 1174.5; IWC WAGE ORD;ER NO.9)

22

82. The allegations of Paragraphs 1 through 81 are realleged and incorporated herein by

23 reference, and PLAINTIFFS allege as follows a cause of action on behalf of themselves and

24 the above-described class of similarly situated Drivers employed by DEFENDANTS in California.

25

83. DEFENDANTS have violated Cal. Labor Code § 1174 and IWC wage order No.9,

26 § 7(A) by willfully failing to keep required payroll records showing the actual hours worked each

27 day by PLAINTIFFS and similarly situated Drivers. As a direct and proximate result of

28 DEFENDANTS' failure to maintain payroll records, PLAINTIFFS and similarly situated Drivers

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1 have suffered actual economic harm as they have been precluded from accurately monitoring the

2 number of hours worked and thus seeking all accrued minimum wage (and overtime pay for Van

3 Drivers).

4

84. PLAINTIFFS, on behalf of themselves and similarly situated Drivers, request relief

5 as described below.

6

NINTH CAUSE OF ACTION

WAITING TIME PENALTIES

7

(CAL. LABOR CODE §§ 201, 202 & 203)

8

85. The allegations of Paragraphs 1 through 84 are realleged and incorporated herein by

9 this reference, and PLAINTIFFS allege as follows a cause of action on behalf of himself and the

10 above-described class of similarly situated Drivers employed by DEFENDANTS in California.

11

86. Cal. Labor Code § 201 requires an employer who discharges an employee to pay all

12 compensation due and owing to that employee immediately upon discharge.

13

87. Cal. Labor Code § 202 requires an employer to pay all compensation due and owing

14 to an employee who quits within 72 hours of that employee quitting, unless the employee provides

15 at least 72 hours notice of quitting, in which case all compensation is due at the end of the

16 employee's final day of work.

17

88. Cal. Labor Code § 203 provides that if an employer willfully fails to pay

18 compensation promptly upon discharge, as required by § 201 or § 202, then the employer is liable

19 for waiting time penalties in the form of continued compensation of up to 30 work days.

20

89. DEFENDANTS willfully failed and refused to timely pay compensation and wages,

21 including unpaid meal period compensation, minimum wage compensation, overtime

22 compensation to van drivers and sums wrongfully deducted from compensation, to PLAINTIFFS

23 and similarly situated Drivers whose employment terminated. DEFENDANTS further willfully

24 failed and refused to pay unpaid overtime pay to Plaintiffs Heath and Iheonu and the above25 described sub·class of similarly situated Van Drivers.. As a result, DEFENDA~S are liable to

26 PLAINTIFFS and similarly situated Drivers for waiting time penalties, together with interest

27 thereon and reasonable attorneys' fees and costs, under Cal. Labor Code § 203.

28

SECOND AMENDED COMPLAINT - CLASS ACTION
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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page24 of 29

1

90. PLAINTIFFS, on behalf of themselves and similarly situated Drivers, request relief

2 as described below.

3

TENTH CAUSE OF ACTION

VIOLATIONS OF THE UNFAIR COMPETITION LAW (DCL)

4

(CAL. BUSINESS & PROFESSIONS CODE §§ 17200-09)

5

91. The allegations of Paragraphs 1 through 90 are realleged and incorporated herein by

6 this reference, and PLAINTIFFS allege as follows a cause of action on behalf of themselves and

7 the above-described class of similarly situated Drivers and in a representative capacity under Cal.

8 Business and Professions Code § 17204.

9

92. Cal. Business & Professions Code § 17200 prohibits unfair competition in the fonn

10 of any unlawful, unfair, or fraudulent business act or practice.

11

93. Cal. Business & Professions Code § 17204 allows "any person acting for the

12 interests of itself, its members or the general public" to prosecute a civil action for violation of the

13 DCL.

14

94. Beginning at an exact date unlmown to PLAINTIFFS, but at least four years prior to

15 the filing of this action, DEFENDANTS have improperly, fraudulently, and unlawfully classified

16 its Drivers as "independent contractors" and have thereby committed unlawful, unfair, and/or 17 fraudulent business acts and practices as defined by Cal. Bu~iness & Professions Code § 17200, by

18 engaging in the following:

19

a.

failing to indemnify PLAINTIFFS and similarly situated Drivers for

20 emplOYment-related business expenses and losses;

21

b. failing and refusing to provide PLAINTIFFS and similarly situated Drivers

22 with workers' compensation insurance;

23

c. improperly and unlawfully making deductions from Drivers' compensation

24 because of cash shortages, breakage, equipment loss, and other work-related expenses and losses

25 not attributable to the Drivers' dishonest or willful act, or to the gross negligence of the Drivers, as

26 described above;

27

d.

failing and refusing to provide meal periods to PLAINTIFFS and similarly

28 situated Drivers;

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page25 of 29

1

e. failing to pay minimum wage compensation to PLAINTIFFS and similarly

2 situated Drivers;

3

f.

unlawfully deducting money from wages owed to PLAINTIFFS and

4 similarly situated Drivers;

5

g. coercing or compelling PLAINTIFFS and similarly situated Drivers to

6 patronize DEFENDANTS and allied companies;

7

h. failing to pay overtime compensation to Plaintiffs Heath and Iheonu and

8 similarly situated Van Drivers;

9

1.

failing to provide accurate itemized wage statements to PLAINTIFFS and

10 similarly situated Drivers;

11

J.

failing to maintain payroil records showing the actual hours worked each

12 day by PLAINTIFFS and similarly situated Drivers;

13

k. failing to pay all accrued overtime and meal period compensation and failing

14 to repay unlawfully deducted commissions to Drivers upon termination of their employment; and

15

1.

by intentionally, recklessly and/or negligently misrepresenting to

16 PLAINTIFFS and similarly situated Drivers the true nature of their employment status.

17 The violations of these laws serve as unlawful, unfair, and/or fraudulent predicate acts and

18 practices for purposes of Cal. Business and Professions Code § 17200.

19

95. As a direct and proximate result of DEFENDANTS' unlawful, unfair, and/or

20 fraudulent acts and practices described herein, DEFENDANTS have received and continue to hold

21 ill-gotten gains belonging to PLAINTIFFS and class members. As a direct and proximate result of

22 DEFENDANTS' unlawful business practices, PLAINTIFFS and class members have suffered

23 economic injuries including, but not limited to out-of-pocket business expenses, unlawful

24 deductions from compensation, loss of minimum wage compensation, loss of overtime wages (for

25 Van Drivers), compensation for missed meal periods, and waiting time penalties. DEFENDANTS

26 have profited from their unlawful, unfair, and/or fraudulent acts and practices in the amount of

27 those business expenses, improper deductions from compensation,unpaid overtime, minimum

28

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page26 of 29

1 wage, meal period compensation, and interest accrued by PLAINTIFFS and similarly situated

2 Drivers.

3

96. Plaintiff and similarly situated Drivers are entitled to restitution pursuant to Cal.

4 Business & Professions Code §§ 17203 and 17208 for all unpaid business expenses, unlawful

5 deductions from compensation, overtime (for Van Drivers), minimum wage and meal period

6 compensation, and interest since four years prior to the filing of this action.

7

97. PLAINTIFFS and similarly situated Drivers are entitled to enforce all applicable

8 penalty provisions ofthe Cal. Labor Code pursuant to Cal. Business & Professions Code § 17202.

9

98. By all of the foregoing alleged conduct, DEFENDANTS have committed, and are

10 continuing to commit, ongoing unlawful, unfair and fraudulent business practices within the

11 meaning of Cal. Business & Professions Code §17200 et seq.

12

99. As a direct and proximate result of the unfair business practices described above,

13 PLAINTIFFS and other Drivers have all suffered significant losses and Defendants have heen

14 unjustly emiched.

15

100. Pursuant to Cal. Business & Prof. Code §17203, PLAINTIFFS and other Drivers,

16 and member of the general public are entitled to: (a) restitution of money acquired by

17 DEFENDANTS by means of their unfair business practices, in amounts not yet ascertained but to

18 be ascertained at trial; (b) a declaration that DEFENDANTS' business practices are unfair within

19 the meaning of the statute.

20

101. PLAINTIFFS have assumed the responsibility of enforcement of the laws and

21 lawful claims specified herein. There is a financial burden incurred in pursuing this action which is

22 in the public interest. Therefore, reasonable attorneys' fees are appropriate pursuant to Cal. Code

23 of Civil Procedure § 1021.5.

24

102.' PLAINTIFFS, on behalf of themselves and similarly situated Drivers, request relief

25 as described below.

26

IX. REQUEST FOR JURY TRIAL

27

103. PLAINTIFFS request a trial-by jury on behalf of themselves and the above

28 described class of similarly situated Drivers.

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1

x. PRAYER FOR RELIEF

2

WHEREFORE, PLAINTIFFS Narayan, Rahawi, Heath, and Iheonu, on behalf of

3 themselves and the above-described class of similarly situated Drivers, request relief as follows:

4

A. Certification of the above-described class as a class action, pursuant to Federal Rule

5 of Civil Procedure 23(b)(3);

6

B. Class notice be provided to all Drivers who worked for DEFENDANTS in

7 California during the Class Period described above;

8

C. A declaratory judgment that DEFENDANTS have knowingly and intentionally

9 violated the following provisions oflaw:

10

1. Cal. Labor Code § 2802 by failing to indemnify PLAINTIFFS and the class

11 for all necessarily incurred business expenses and losses;

12

2. Cal. Labor Code §§ 221 and 400-410 and IWC wage order No.9, by making

13 unlawful deductions from the compensation paid to PLAINTIFFS and the class for ordinary

14 business expenses and losses without a showing that the expenses and/or losses were due to the

15 Drivers' dishonest or willful act, or to the gross negligence of the Drivers;

16

3. Cal. Labor Code § 450 by coercing or compelling PLAINTIFFS and the

17 class to purchase or lease certain items and services;

18

4. Cal. Labor Code §§ 226.7 and 512, and IWC wage order No.9 by failure to

19 provide off-duty meal periods to PLAINTIFFS and the class;

20

5. Cal. Labor Code §§ 1182.11, 1182.11 and 1197, IWC wage order No.9, and

21 the Minimum Wage Order, by failure to pay at least minimum wage for all hours worked by

22 PLAINTIFFS and the class;

23

6. Cal. Labor Code §§ 510, 1194 et seq. and IWC wage order No.9 by failure

24 to pay overtime compensation to Plaintiffs Heath and Iheonu and the sub-class of Van Drivers;

25

7. Cal. Labor Code § 226 and IWC wage order No.9, § 7(B), by failing to

26 provide PLAINTIFFS and the class of Drivers with itemized statements of total hours worked with

27 each payment of wages;

28

SECOND AMENDED COMPLAINT - CLASS ACTION - COS-Q4181 RMW

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page28 of 29

1

8. Cal. Labor Code§ 1174 and IWC wage order No.9, § 7(A), by failing to

2 maintain payroll records of the actual hours worked each day by PLAINTIFFS and the class of

3 I>rivers;

4

9. Cal. Labor Code §§ 201-203, for willful failure to pay overtime, minimum

5 wage, and meal period compensation and failure to repay unlawfully deducted wages at the time of

6 termination of employment, resulting in unpaid waiting time penalties; and

7

10. Cal. Business and Professions Code §§ 17200-17208, by failing to reimburse

8 I>rivers for necessarily incurred business expenses, by requiring Drivers to indemnify

9 DEFENDANTS for ordinary business losses, by coercing or compelling Drivers to purchase or

10 lease certain items and services from DEFENDANTS or ~fi1iatedcompanies,by failing to provide

11 off-duty meal periods and/or pay meal period compensation to Drivers, by failing to pay at least

12 minimum wage for all hours worked, by failing to pay its Van Drivers overtime compensation, by

13 failing to provide Drivers with itemized wage statements showing all hours worked, by failing to

14 maintain payroll records that document all hours worked by Drivers, and by willfully failing to pay

15 all compensation owed to Drivers upon termination of employment;

16

E. A declaratory judgment that DEFENDANTS' violations as described above were

17 willful;

18

F. An equitable accounting to identify, locate, and restore to all current and former

19 I>rivers the wages that are due;

20

G. An award to PLAINTIFFS and the Class Members of damages in the amount of

21 necessarily incurred business expenses, unpaid overtime, minimum wage compensation (plus

22 liquated damages), meal period compensation and amounts unlawfully deducted from wages,

23 including interest thereon, subject to proof at trial;

24

H. An award to PLAINTIFFS and the Class Members of statutory penalties because of

25 I>EFENI>ANTS' failure to provide PLAINTIFFS and the Class Members with itemized wage

26 statements that comply with the requirements of Cal. Labor Code § 226, subject to proof at trial;

27

1.

An award of payments due to them as waiting time penalties as to those Class

28 Members who have left DEFENI>ANTS' employ, pursuant to Labor Code § 203;

SECOND AMENDED COMPLAINT - CLASS ACTION • C05-04181 RMW

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Case5:05-cv-04181-RMW Document149 Filed02/07/11 Page29 of 29

1

K. An order requiring DEFENDANTS to pay restitution of all amounts owed to

2 PLAINTIFFS and similarly situated Drivers for DEFENDANTS~ failure to pay legally required

3 overtime, minimwn wage, and meal period pay, and interest thereon and DEFENDANTS' failure

4 to repay amounts unlawfully deducted, and interest thereon, in an amount according to proof,

5 pursuant to Business & Professions Code § 17203;

6

L. An award to PLAINTIFFS and the Class Members of reasonable attorneys' fees and

7 costs, pursuantto Cal. Code of Civil Procedure § 1021.5 and Cal. Labor Code §§ 218.5,226, 1194,

8 ,and 2802 and/or other applicable law; and

9

M. An award to PLAINTIFFS and the Class Members of such other and further relief

10 as this Court deems just and proper.

11 DATED: Januaryl.f 2011. 12

HINTON,,, ' FERT & SUMNER ./. c,/,

13

By: -+-~ .4-.:l~~....,.......----------

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

SECOND AMENDED COMPLAINT - CLASS ACTION -COS-0418I RMW

- 27 -

 
 (2007) MOHIT NARAYAN, HANNA RAHAWI, and THOMAS HEATH, on behalf of themselves, all others similarly situated, and the general public, Plaintiffs, v. EGL, INC., a Texas Corporation; EAGLE FREIGHT SYSTEMS, INC.; and DOES 1-10, inclusive, Defendants. No. C-05-04181 RMW.
United States District Court, N.D. California, San Jose Division. July 10, 2007.
ORDER GRANTING DEFENDANT'S MOTIONS FOR SUMMARY JUDGMENT ON PLAINTIFFS' INDIVIDUAL CLAIMS [Docket Nos. 60, 65, 70]
RONALD M. WHYTE, District Judge.
Defendant EGL, Inc. ("EGL") moves for summary judgment on the individual claims[1] of plaintiffs Mohit Narayan ("Narayan"), Hanna Rahawi ("Rahawi"), and Thomas Heath ("Heath"). Plaintiffs oppose EGL's motions. Plaintiffs also object to certain evidence submitted by EGL in support of its motions for summary judgment. The court has read the moving and responding papers and considered the arguments of counsel. For the reasons set forth below, the court GRANTS defendant's motions for summary judgment on plaintiffs' individual claims.
I. BACKGROUND
This action was originally filed in Santa Clara Superior Court and removed to this court on grounds of diversity.[2] Plaintiffs filed their First Amended Complaint ("FAC") alleging nine claims for relief under California labor codes and the California unfair competition law. Plaintiffs make the claims individually, on behalf of a purported class of similarly situated persons, and on behalf of the general public. The present motion deals only with plaintiffs' asserted individual claims.
A. Defendants
Defendant EGL is incorporated under the laws of Texas and is headquartered in Texas. FAC ¶ 10. Defendant Eagle Freight Systems, Inc. ("EFS") is a wholly-owned subsidiary of EGL. Id. ¶ 11. EGL provides global transportation, supply chain management, and information services. Decl. of Martha DeLeon-Schmidt Supp. Def.'s Mot. Summ. J. ("Schmidt Decl.")[3] ¶ 2. Its services include "air and ocean freight forwarding, customs brokerage, local pickup and delivery service, materials management, warehousing, trade facilitation and procurement and integrated logistics and supply chain management services." Id. ¶ 3. EGL operates through a "network of approximately 400 facilities, agents and distribution centers located in over 100 countries." Id. EGL generally contracts with trucking businesses for pick up and delivery services rather than employing its own drivers or EGL-owned vehicles for such services. Id. ¶ 5.[4] EGL refers to these trucking businesses as "owner-operators" or "contractors" who receive delivery jobs from Eagle. Id. ¶ 6. Plaintiffs fall in this category of workers for EGL. They own, operate, and

maintain the vehicles used for the EGL delivery jobs and may either perform the services themselves or employ qualified drivers to assist them. Id. In addition, plaintiffs receive a percentage of an applicable tariff for each load, which may vary based on the particular shipment. Id. ¶ 7.[5]
EGL delivery jobs are obtained by individual truckers from a dispatch station. The contracted truckers make themselves available at their own discretion. Id. ¶ 8[6]; see, e.g., Decl. of Jill Vizas Supp. EGL's Mot. Summ. J. Narayan's Claims ("Vizas Decl. I"), Ex. A (Narayan Depo.) at 215:7-217:22. Accordingly, the contracted truckers with availability go to a dispatch station to receive a "delivery packet," which is generally grouped geographically and may include customer time and delivery specific requirements. Id. ¶ 9. The contracted truckers determine how to route the orders in the assigned delivery packet. Id. ¶ 10. Upon completion of the deliveries, the contracted truckers update delivery status with the dispatch station. Id. ¶ 11. EGL pays the contracted truckers based on submitted delivery manifests. Id. ¶ 12.[7]
B. Plaintiffs
Plaintiffs work as truck drivers for EGL and perform freight pick-up and delivery services for EGL. Id. ¶¶ 2, 7-9. Plaintiffs allege that they and others who perform such services for EGL in California are "employees" of EGL under California law. Id. ¶ 2. Plaintiffs allege that EGL misclassifies its drivers as "independent contractors" in order to avoid various duties and obligations owed to employees under California law. Id. ¶ 3.
1. Mohit Narayan
Plaintiff Narayan started "MCAC Transfer," his own trucking business, in early 1998. Vizas Decl. I, Ex. A (Narayan Depo.) at 143:18-145:6. For approximately the first year and a half, Narayan provided delivery services as an owner-operator or independent contractor for two companies: Merchant Home Delivery and GeoLogistics. Id. at 51:1-52:15. In June 1999 Narayan entered into the Eagle Freight Services, Inc. Agreement for Leased Equipment and Independent Contractor Services (Pick-up & Delivery) with EFS ("Narayan 1999 Agreement"). Id. at 52:1753:3; 81:7-82:25; Vizas Decl. I, Ex. B at EGL000134-EGL000149. In May 2000 Narayan entered into another Eagle Freight Services, Inc. Agreement for Leased Equipment and Independent Contractor Services (Pick-up & Delivery) with EFS ("Narayan 2000 Agreement"). Vizas Decl. I, Ex. A at 110:7-112:15; Vizas Decl. I, Ex. B at P00030-P00051.
These agreements provide, inter alia, that Narayan comply with EGL requirements dictated by safety and other governmental regulations, EGL customer service requirements, and EGL policies and practices. See Vizas Decl. I, Ex. B (Narayan 1999 Agreement & Narayan 2000 Agreement) at EGL000136-EGL000137 § 2.07, EGL000137-EGL000138 § 2.10, EGL000138 § 2.11, P00033 § 2.07, P00034-P00035 § 2.10, P00035 § 2.11. These agreements may be terminated by either party without cause with thirty days' notice. Id. at EGL000145 § 6.03(c), P00042-P00043 § 6.03(c).
2. Hanna Rahawi

Plaintiff Rahawi worked as a pick-up and delivery driver for EGL from "approximately 2000 to October 2005." Decl. of Hanna Rahawi Supp. Opp'n EGL's Mot. Summ. J. ("Rahawi Decl.") ¶ 2. During his first year at EGL, Rahawi continued to work as a truck driver for Cal State Express, his prior employer, during weekdays and worked for EGL on weekends. Decl. of Jill Vizas Supp. EGL's Mot. Summ. J. Rahawi's Claims ("Vizas Decl. II"), Ex. A (Rahawi Depo.) at 62:20-24. Thereafter, he went full-time with EGL upon EGL's request and began driving weekdays and weekends for EGL. Id. at 62:25-63:20. While working for EGL, Rahawi also subcontracted another driver to drive a second truck on his behalf to make deliveries for Cal State Express. Id. at 340:7-341:14. At EGL, Rahawi worked both as a "floater" driving different routes each day depending on EGL's needs and as a "route driver" making pick ups and deliveries in the same general geographic area. Id. ¶ 7. Virtually all of Rahawi's deliveries were within fifty to seventyfive miles of the EGL station he reported to. Rahawi was paid a percentage of the "tariff" EGL charged customers based on the weight of the freight and distance driven, subject to a weight cap. Id. ¶ 30.
In August 2000 Rahawi entered into the Eagle Freight Services, Inc. Agreement for Leased Equipment and Independent Contractor Services (Pick-up & Delivery) with EFS ("Rahawi 2000 Agreement"). Vizas Decl. II, Ex. B at EGL000234-EGL000250. The Rahawi 2000 Agreement provided, inter alia, that Rahawi comply with EGL requirements dictated by safety and other governmental regulations, EGL customer service requirements, and EGL policies and practices. See Vizas Decl. II, Ex. B at EGL000237 § 2.07, EGL000238-EGL000239 § 2.10, EGL000239 § 2.11. The Rahawi 2000 Agreement provides for termination by either party without cause with thirty days' notice. Id. at EGL000246-EGL000247 § 6.03(c).
In October 2005 EGL terminated Rahawi's contract following his suspension from work related to an argument he had with a dispatcher regarding refusal to pick up assignments. Id. ¶ 35.
3. Thomas Heath
Plaintiff Heath began doing business as "Tom's Express" in approximately November 1995, making deliveries. Decl. of Jill Vizas Supp. EGL's Mot. Summ. J. Heath's Claims ("Vizas Decl. III"), Ex. A (Heath Depo.) at 31:11-25. In 1999 he sold his Tom's Express truck. In December 1999 he bought a new van and began working for EGL. Id. at 32:1-13. He worked as a pick-up and delivery driver for EGL from approximately December 1999 to July 2002. Decl. of Thomas Heath Supp. Opp'n EGL's Mot. Summ. J. ("Heath Decl.") ¶ 2. Heath worked out of EGL's Sacramento station. Id. ¶ 4. He worked five days a week plus an occasional Saturday for EGL. Id. ¶ 23. He generally worked over six hours a day for EGL and typically worked approximately twelve hours or more a day for EGL. Id. ¶ 22. Heath was paid a percentage of the "tariff" EGL charged customers based on the weight of the freight and distance driven. Id. ¶ 25. At times Heath was assigned as a "second man" to assist another driver on a job and, on those occasions, was paid hourly by EGL. Id. ¶ 28. On other occasions, EGL assigned Heath a "second man" to assist in deliveries designated as requiring two workers. On those occasions, EGL assigned and paid the worker directly. Id.
In December 1999 Heath entered into the Eagle Freight Services, Inc. Agreement for Leased Equipment and Independent Contractor Services (Pick-up & Delivery) with EFS ("Heath 1999

Agreement"). Vizas Decl. III, Ex. B at EGL000324-EGL000338. In May 2000 Heath entered into another Eagle Freight Services, Inc. Agreement for Leased Equipment and Independent Contractor Services (Pick-up & Delivery) with EFS ("Heath 2000 Agreement"). Id. at P00812P00832. These agreements provided, inter alia, that Heath comply with EGL requirements dictated by safety and other governmental regulations, EGL customer service requirements, and EGL policies and practices. See Vizas Decl. III, Ex. B at EGL000326 § 2.07, EGL000327EGL000328 § 2.10, EGL000328 § 2.11, P00815-P00816 § 2.07, P00816-P00817 § 2.10, P00817 § 2.11. These agreements could be terminated by either party without cause with thirty days' notice. Id. at P00824-P00825 § 6.03(c).[8]
For convenience the Narayan 1999 Agreement, Narayan 2000 Agreement, the Rahawi 2000 Agreement, the Heath 1999 Agreement, and the Heath 2000 Agreement shall collectively be referred to in this order as the Services Agreements unless otherwise specified.
II. ANALYSIS
A. Summary Judgment
Summary judgment is proper when the pleadings, discovery, and affidavits show that there is "no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Material facts are those which may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Id. In a motion for summary judgment, the court draws all reasonable inferences that may be taken from the underlying facts in the light most favorable to the nonmovant. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Central to plaintiffs' claims is whether plaintiffs' status with EGL is that of employees or that of independent contractors.
B. Choice of Law
EGL argues that this court should apply the laws of the state of Texas to interpret the Services Agreements and to determine whether plaintiffs were employees or independent contractors of EGL based on the choice-of-law provision in the Services Agreements. Plaintiffs contend that California law should be applied notwithstanding the choice-of-law provisions because (1) plaintiffs' claims do not arise from the Services Agreements, but from California's Labor Code and (2) Texas law does not provide "the fundamental worker protections that California law does" and, therefore, is "contrary to a fundamental public policy of California." See Pl. Narayan's Opp'n EGL's Mot. Summ. J. at 12:2-16.
1. Scope of Choice-of-Law Provision
Plaintiffs' first argument appears to be that their claims fall outside the scope of the choice-oflaw provision in the Services Agreements. "In determining the enforceability of arm's-length contractual choice-of-law provisions, California courts shall apply the principles set forth in Restatement section 187, which reflects a strong policy favoring enforcement of such provisions." Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459, 464-65 (1992). However, an

initial issue is whether the choice-of-law provision at issue is broad enough to encompass the claims before the court. Wash. Mut. Bank, FA v. Superior Court, 24 Cal. 4th 906, 916 (2001) ("the trial court should first examine the choice-of-law clause and ascertain whether the advocate of the clause has met its burden of establishing that the various claims of putative class members fall within its scope").
The scope of a choice-of-law provision is ordinarily determined under the law designated in the contract between the parties. Wash. Mut. Bank, 24 Cal. 4th at 916 n.3; Nedlloyd, 3 Cal. 4th at 469 n.7. Here, the choice-of-law provision in the Services Agreements provides: "This Agreement shall be interpreted under the laws of the State of Texas." Vizas Decl. I, Ex. B at EGL000146 § 7.03, P00045 § 7.03; Vizas Decl. II, Ex. B at EGL000249 § 7.03; Vizas Decl. III, Ex. B at EGL000335 § 7.03, P00827 § 7.03. The scope of the choice-of-law provision under Texas law must, therefore, be considered. Under Texas case law, a provision such as the one in the Services Agreements applies to claims that concern the interpretation and enforcement of the contract provisions. See Stier v. Reading & Bates Corp., 992 S.W.2d 423, 424 (Tex. 1999). Texas case law establishes that whether a party is an independent contractor when the contract between the parties establishes an independent contractor relationship is determinative, unless there is extrinsic evidence indicating the contract was a sham or cloak designed to conceal the true legal relationship between the parties. Bell v. VPSI, Inc., 205 S.W.3d 706, 713-14 (Tex. App. 2006) (citations omitted). Here, because plaintiffs' claims necessarily turn on the issue of whether plaintiffs were or were not independent contractors, their claims concern the interpretation and enforcement of the provisions in their contracts with EGL. Accordingly, plaintiffs' claims fall within the scope of the Texas choice-of-law provision.
2. Enforceability of Choice-of-Law Provision
"In determining the enforceability of arm's-length contractual choice-of-law provisions, California courts shall apply the principles set forth in Restatement section 187, which reflects a strong policy favoring enforcement of such provisions." Nedlloyd Lines B.V., 3 Cal. 4th at 46465. Restatement (Second) of Conflicts of Law § 187(2) provides in part:[9]
The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.
Here, it is not disputed that the first prong—whether the chosen state has a substantial relationship to the parties or transaction—is met as EGL is incorporated and headquartered in Texas.[10] See Nedlloyd Lines, 3 Cal. 4th at 467 (finding that a substantial relationship is clearly established where one of the parties is incorporated and has a registered office in the chosen country).

At issue is the second prong—whether application of Texas law in the present case would be contrary to a fundamental policy of the State of California. Under the second prong, if there is a fundamental conflict with California law, "the court must then determine whether California has a materially greater interest than the chosen state in the determination of the particular issue." Id. at 466 (internal citation and quotation marks omitted). If so, the choice of law provision is not enforced. Id.
Plaintiffs argue that application of Texas law in this case would be contrary to California law because Texas law does not provide the fundamental worker protections that California law does. In support, plaintiffs cite several California cases which hold that California policy seeks to protect workers' wages and welfare, to avoid employees from suffering expenses in direct consequences of doing their jobs, and to protect against fraud and deceit in the employment relationship. See Kerr's Catering Serv. v. DIR, 57 Cal. 2d 319, 326 (1962); Phillips v. Gemini Moving Specialists, 63 Cal. App. 4th 563, 574 (1998); Grissom v. Vons Cos., 1 Cal. App. 4th 52, 59-60 (1991); Hudgins v. Neiman Marcus Group, 34 Cal. App. 4th 1109, 1118-19 (1995). However, the cases cited by plaintiffs discuss fundamental policies protecting employees, such as prompt payment of wages due employees, see Kerr's Catering, 57 Cal. 2d at 326, protection of an employee's wage, see Phillips, 63 Cal. App. 4th at 574, protection of an employee from suffering expenses in direct consequence of doing their jobs, Grissom, 1 Cal. App. 4th at 59-60, and protection "against fraud and deceit in the employment relationship," Hudgins, 34 Cal. App. 4th at 1118-19. These policies are reflected in statutory provisions for the protection of employees. See, e.g., Grissom, 1 Cal. App. 4th at 60 (noting that the rights that Cal. Labor Code § 2802 creates are statutory, not contractual); Hudgins, 34 Cal. App. 4th at 1118-19 (noting that the policy stems from Cal. Labor Code §§ 222 and 223). Plaintiffs' reliance upon California's policies protecting employees presupposes that plaintiffs are employees of EGL. However, for purposes of determining the enforceability of the choice-of-law provision, the issue before this court is whether plaintiffs were employees or whether they were independent contractors.
Plaintiffs argue that application of Texas law would contradict California policies protecting employees and employee wages because, according to plaintiffs, there is a lower threshold for classifying a worker as an independent contractor rather than an employee under Texas law. For example, plaintiffs contend that California law presumes employee status under its wage and hour laws but Texas law does not, and Texas law gives significant weight to the parties' contractual characterization of a contractor relationship while California law gives little weight to the contractual classification if the actual conduct support an employment relationship. Plaintiffs' argument fails for two reasons.
First, the classification of a worker as an independent contractor rather than as an employee does not contradict fundamental California policy. The California Labor Code expressly recognizes a worker's classification as an independent contractor. Cal. Labor Code § 3353. In Sistare-Meyer v. Young Men's Christian Ass'n of Metropolitan Los Angeles, 58 Cal. App. 4th 10, 16-17 (1997), the court held that the two classifications represent competing policy interests:
[T]he longstanding distinction between employees and independent contractors presents important competing policy concerns. California common and statutory law distinguishes independent contractors from employees, and their statuses, though both rooted in contract, are

significantly different. Independent contractors typically have greater control over the way in which they carry out their work than employees, and businesses assume fewer duties with respect to independent contractors than employees. Thus, the independent contractor status provides the hiring party and the worker with an alternative relationship that gives each more freedom and flexibility than the employer-employee relationship.
(citing S.G. Borello & Sons, Inc. v. Dep't of Indus. Relations, 48 Cal. 3d 341, 349-54 (1948)). In Sistare-Meyer, the court addressed whether an independent contractor stated a claim for wrongful discharge in violation of the public policy in article I, section 8 of the California Constitution against racism in the employer-employee relationship. Id. at 14. The court concluded that the policy stated in article I, section 8 does not reach beyond the employeremployee relationship to encompass independent contractors. Id. at 17. The court reasoned "the uncertainties concerning the balance of competing public interests bar us from finding that the policy asserted by California Constitution, article I, section 8 supports appellant's Tameny claim." Id.
Second, with respect to whether a choice-of-law provision should be disregarded because of conflicts with fundamental policy, the comments to Restatement (Second) of Conflicts § 187 state:
The forum will not refrain from applying the chosen law merely because this would lead to a different result than would be obtained under the local law of the state of the otherwise applicable law. Application of the chosen law will be refused only (1) to protect a fundamental policy of the state which, under the rule of § 188, would be the state of the otherwise applicable law, provided (2) that this state has a materially greater interest than the state of the chosen law in the determination of the particular issue.
Restatement (Second) of Conflicts § 187, cmt. g. Here, although plaintiffs argue that California wage and hour laws presume employee status, see Pls.' Opp'n at 13:9-10, it is unclear what case law plaintiffs cite in support of such a proposition. It does not appear that California law generally presumes employee status rather than independent contractor status. See Plute v. Roadway Package Sys., Inc., 141 F. Supp. 2d 1005, 1009 ("Under California law, `[t]he principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.'") (citing S.G. Borello & Sons, 48 Cal. 3d at 350); cf. An Independent Home Support Serv., Inc. v. Superior Court, 145 Cal. App. 4th 1418, 1428-29 (2006) (holding that although the Workers' Compensation Act must be liberally construed and includes a "general presumption that any person `in service to another' is a covered `employee,'" an independent contractor is not covered) (citations omitted). Indeed, the same test applies under both Texas and California law. Compare Plute, 141 F. Supp. 2d at 1009 ("Under California law, `[t]he principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.'") (citation omitted) with Limestone Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002) (per curiam) (holding that under Texas law, "[t]he test to determine whether a worker is an employee rather than an independent contractor is whether the employer has the right to control the progress, details, and methods of operations of

the work.") (citations omitted). Therefore, Texas law will be applied to determine whether the plaintiffs are employees or whether they are independent contractors of EGL.
C. Classification as Employee or Independent Contractor
Under Texas law, "[t]he test to determine whether a worker is an employee rather than an independent contractor is whether the employer has the right to control the progress, details, and methods of operations of the work." Limestone, 71 S.W.3d at 312. The employer controls not merely the end sought to be accomplished, but also the means and details of its accomplishment. Id. (citations omitted). The right to control is measured by considering: "(1) the independent nature of the worker's business; (2) the worker's obligation to furnish necessary tools, supplies, and materials to perform the job; (3) the worker's right to control the progress of the work except about final results; (4) the time for which the worker is employed; and (5) the method of payment, whether by unit of time or by the job." Id. (citations omitted).
In Limestone, the court considered whether a truck driver for Limestone Products Distribution ("Limestone") was an employee or an independent contractor in a personal injury suit naming Limestone as a defendant liable for the acts of the truck driver. 71 S.W.3d at 309. The court concluded: "When we apply the right-to-control test to the summary-judgment evidence here, we hold that it conclusively shows that Mathis was an independent contractor when the accident occurred." Id. at 312. The court concluded that the undisputed facts support that the truck driver was an independent contractor as a matter of law. Id. The court reasoned that summary judgment was appropriate because "[a]lthough some of these factors may not, alone, be enough to demonstrate a worker's independent-contractor status, together they provide conclusive summary-judgment evidence that Mathis was an independent contractor and not Limestone's employee when the accident occurred." Id. at 313.
In reaching its conclusion that the truck driver was an independent contractor rather than an employee, the court relied upon several aspects of the relationship between the driver and Limestone. First, Mathis, the driver, was paid by the job—he received no pay if there was no work. Id. Second, although Limestone told Mathis where to pick up and drop off loads, and Mathis had to turn in his load tickets to get paid, he nevertheless had broad discretion in how to do everything else. Id. For example, he was free to drive any route he wished when delivering for Limestone as long as he timely delivered the load. Id. Third, Mathis did not work regular hours and did not have to visit the office on a regular basis, although he went there to pick up assignments or turn in load tickets. Id. Fourth, Limestone did not supply any tools or equipment needed and used for the deliveries. Rather, Mathis owned and used his own truck for deliveries, and paid for his truck's gasoline, repairs, and insurance. Id. Finally, the driver's income was reported on IRS Form 1099 rather than a form W-2 and Limestone did not pay the driver for vacation, sick leave, or holidays or withhold for social security and federal income taxes. Id. at 312-13.
Here, the circumstances of plaintiffs' work relationship with EGL are very similar to the relationship at issue in Limestone. Plaintiffs own, operate, and maintain the vehicles used for the EGL delivery jobs and may either perform the services themselves or employ qualified drivers to assist them. In addition, plaintiffs receive a percentage of an applicable tariff for each load,

which may vary based on the particular shipment. They are not paid hourly or based on salary. Although plaintiffs argue that they have been reminded that they need to submit vacation requests in writing, plaintiffs admit in depositions that they do not always make vacation requests and make themselves available at their own discretion. When they have availability they go to a dispatch station to receive a "delivery packet," which is generally grouped geographically and may include customer time and delivery specific requirements. Plaintiffs also determine how to route the orders in the assigned delivery packet. Upon completion of the deliveries, plaintiffs update delivery status with the dispatch station. Plaintiffs must submit delivery manifests to EGL in order to get paid. Id. ¶ 12.[11] Based on Limestone, these facts support a showing that plaintiffs were independent contractors.
Plaintiffs further argue that EGL's assignment practices show that plaintiffs were employees regardless of the independent contractor contracts they signed with EGL. Specifically, plaintiffs assert that (1) EGL determined what deliveries and pick ups to assign plaintiffs, where and when the assignments would be performed, and what price would be charged the customer; (2) EGL provided detailed instructions such as special handling and what to do at the delivery site; (3) EGL required plaintiffs to document their work using EGL forms and EGL's electronic tracking system (eMAD); and (4) EGL "stayed in near constant contact with plaintiff as he progressed through his work assignments." Pl. Narayan's Opp'n at 15:9-21. However, as the Limestone court stated, it is control over the means and details of accomplishment, and not merely control over the end result, that could give rise to an employment relationship. 71 S.W.3d at 312, 313. That EGL dictated the location of deliveries, the price to charge customers, and the adherence to special handling and delivery instructions shows only control over the ends to be achieved—that is, EGL sought to ensure that customers received deliveries timely and in accordance with special handling or delivery instructions. Similarly, the requirement to use EGL forms and its tracking system does not raise a triable fact that EGL has the right to control the details of how plaintiffs completed their specific assignments.
Plaintiffs also assert that EGL controlled the appearance of the drivers and their trucks by requiring, inter alia, uniforms, drivers' logs, daily vehicle inspections, accident and incident reporting, drug tests, road tests, and vehicle decaling. Decl. of Fritz Kahn Supp. Pls.' Opp'n ("Kahn Decl.") ¶¶ 11-20. EGL issued directives to its drivers to, for example, follow special delivery instructions, review special instructions requested by customers and comply with such requests "fully and completely," and work to ensure customer satisfaction. Narayan Decl. ¶ 40, Ex. 9. Plaintiffs were required to attend an initial orientation and information sessions regarding EFS's business, its policies, operational procedures, service offerings and pick-up and delivery techniques." Vizas Decl. I, Ex. B at EGL 000138 § 2.11; Vizas Decl. II, Ex. B at EGL000239 § 2.11; Vizas Decl. III, Ex. B at EGL000328 § 2.11.
In Bell, the court concluded that facts showing that the contract between the employer and the driver required the driver to keep the van clean, buy gas only from major name-brand service stations, comply with recommended or required maintenance service at approved service stations, obtain advance authorization for repairs over a specific amount, refrain from driving the vehicle outside a certain mile radius, and otherwise operate the vehicle in accordance with all laws, ordinances, rules and regulations did not constitute evidence that the employer controlled the details of how the worker performed his job. 205 S.W.3d at 714-15. The court reasoned that

the contractual provisions requiring that the van be kept clean and mandating maintenance, service, and repairs did not constitute anything more than what was required for an ordinary lease or bailment and are not otherwise inconsistent with the provision that the driver was an independent contractor. Likewise, here, although the facts show that EGL exercised authority to ensure compliance with regulatory and safety requirements and general company policies, they do not amount to control over the specific tasks to be carried out by plaintiffs for their assignments and are not otherwise inconsistent with the contractual provision that plaintiffs are independent contractors.
Finally, plaintiffs point to the contractual provisions between EGL and plaintiffs that provide that EGL may terminate the drivers with 30 days' notice for no cause and immediately for failure to follow EGL instructions. However, this provision also fails to support that plaintiffs were employees rather than independent contractors. See id. at 714 ("The right to terminate an agreement as to a worker is not evidence that details of the work are subject to the principal's control.") (citation omitted).
Taken together the facts do not show that EGL exercised control over the means and details of the tasks to be accomplished by plaintiffs pursuant to the independent contractor agreements with EGL. At best, the facts show that EGL controlled the end results. Under Texas law, this is insufficient to give rise to an employer-employee relationship.[12] Moreover, "[a] contract between the parties that establishes an independent contractor relationship is determinative of the parties' relationship in absence of extrinsic evidence indicating that the contract was a `sham or cloak' designed to conceal the true legal relationship of the parties or that despite the contract terms, the true agreement vested the right of control in the principal." Id. at 713-14 (citations omitted). Here, as discussed above, the contract provisions in the Services Agreements are not inconsistent with plaintiffs' status as independent contractors and plaintiffs have offered no extrinsic evidence that the actual relationship between the parties indicate that the independent contractor designation in the contract is a sham or cloak designed to conceal the true legal relationship. Indeed, the record shows that during the relationship the parties believed there to be an independent contractor relationship, see, e.g., Vizas Decl. III, Ex. A (Heath Depo.) at 143:1124 (deposition testimony by Heath that he believed his relationship with EGL to be one of independent contractor).[13]
III. ORDER
For the foregoing reasons, the court GRANTS defendant's motions for summary judgment on plaintiffs' individual claims.
[1] Phase I of this litigation deals with the claims of individual plaintiffs and not any claims made on behalf of the putative class.
[2] Plaintiffs purport to bring the action as a class action. FAC ¶ 36. Plaintiffs' action has not been certified as a class action. Although the FAC was filed after the action was removed to federal court, plaintiffs' FAC allege that their claims may be properly maintained as a class action under Cal. Code Civ. P. § 382.

[3] According to her declaration, Ms. DeLeon-Schmidt is employed by EGL Global Logistics LP, a wholly owned subsidiary of EGL, in the capacity of Director of Safety and Compliance. She represents that she is responsible for, inter alia, EGL's business relationship with owner operators in California.
[4] Plaintiffs' objection to the these facts on the grounds of lack of foundation, improper opinion, and relevance are overruled. These facts, as stated in the Schmidt Decl., are consistent with plaintiffs' own deposition testimony. Background information about EGL's business is relevant to the present action and the court is satisfied that a director level employee is familiar with the general operations of the company. The testimony appears to be from personal knowledge.
[5] Plaintiffs' objection on grounds of lack of foundation and improper opinion are overruled for the reasons set forth in n.4, supra.
[6] Plaintiffs' objection on grounds of lack of foundation and improper opinion are overruled for the reasons set forth in n.4, supra.
[7] Plaintiffs' objection on grounds of lack of foundation and improper opinion are overruled for the reasons set forth in n.4, supra.
[8] The copy of the Heath 1999 Agreement set forth in Vizas Decl. III, Ex. B is missing the page of the agreement containing the particular termination provisions. Therefore, the court cites only to the provision in the Heath 2000 Agreement.
[9] Section 187(1) provides: "(1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue." However, defendant does not appear to assert that the choice of law provision should be given effect on this basis. See Def.'s Mot. Summ. J. Narayan's Claims at 7:15-8:4 (arguing that the court looks first to whether the chosen state has a substantial relationship to the parties or the transaction and then considers whether the application of Texas law is contrary to a fundamental policy of California).
[10] It is also undisputed that California law would apply under the rule of § 188 absent an effective choice of law provision.
[11] Plaintiffs' objection on grounds of lack of foundation and improper opinion are overruled for the reasons set forth in n.4, supra.
[12] The result would be no different if California law governed. As noted in supra § B.2, California law and Texas law set forth the same test for determining whether a worker is classified as an independent contractor or as an employee. Plaintiffs argue that the recent case of Air Couriers Int'l v. Employment Dev. Dep't, 150 Cal. App. 4th 923 (2007), supports their position that under California law they were employees, not independent contractors. However, in Air Couriers, the drivers did not have written contracts, as here, expressly acknowledging that they were independent contractors. Id. at 938. Further, in Air Couriers, the drivers drove regular

routes, worked regular schedules, and were paid on regularly scheduled paydays. Id. at 939 n.3. In the instant case, the drivers were not required to work regular schedules, were paid on a per job basis, and determined their own routes.
[13] Plaintiffs' objection to this testimony as improper legal conclusion or otherwise improper testimony is overruled. Heath may testify as to his own belief, which is relevant to the test of his independent contractor status.

 
 Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 1 of 24
ADRMOP,CLOSED,E−Filing
U.S. District Court California Northern District (San Jose) CIVIL DOCKET FOR CASE #: 5:05−cv−04181−RMW

Narayan et al v. EGL, Inc. et al Assigned to: Hon. Ronald M. Whyte Referred to: Magistrate Judge Howard R. Lloyd Case in other court: Superior Court of California, Santa Clara
County, 105CV048739
USCA, 12−80175 Cause: 28:1441 Petition for Removal− Labor/Mgmnt. Relations
Plaintiff

Date Filed: 10/14/2005 Date Terminated: 02/25/2016 Jury Demand: None Nature of Suit: 790 Labor: Other Jurisdiction: Federal Question

Mohit Narayan on behalf of themselves, all others similarly siutated, and the general public

represented by Aaron D. Kaufmann Leonard Carder, LLP 1330 Broadway, Suite 1450 Oakland, CA 94612 510−272−0169 Fax: 510−272−0174 Email: akaufmann@leonardcarder.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jules Sandford Patten Faith and Sandford 635 W. Foothill Blvd. Monrovia, CA 91016−2097 626−359−9335 Fax: 626−303−2391 Email: jsandford@pfslaw.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lorraine Grindstaff Patten Faith and Sandford 635 West Foothill Blvd Monrovia, CA 91016−2097 626−359−9335 Fax: 626−303−2391 Email: lgrindstaff@pfslaw.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

David Philip Pogrel Leonard Carder LLP 1330 Broadway Suite 1450 Oakland, CA 94612 510−272−0169 Fax: 510−272−0174 Email: dpogrel@leonardcarder.com ATTORNEY TO BE NOTICED

Eve Hedy Cervantez Altshuler Berzon LLP 177 Post Street, Suite 300 San Francisco, CA 94108 (415) 421−7151 Fax: 415−362−8064 Email: ecervantez@altshulerberzon.com ATTORNEY TO BE NOTICED

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 2 of 24

James M. Finberg Altshuler Berzon LLP 177 Post Street Suite 200 San Francisco, CA 94108 415−421−7151 Fax: 415−362−8064 Email: jfinberg@altshulerberzon.com ATTORNEY TO BE NOTICED

Matthew J. Murray Atshuler Berzon LLP 177 Post Street Suite 300 San Francisco, CA 94108 415−421−7151 Fax: 415−362−8064 Email: mmurray@altshulerberzon.com ATTORNEY TO BE NOTICED

Michael Rubin Altshuler Berzon LLP 177 Post Street Suite 300 San Francisco, CA 94108 415/421−7151 Fax: 415−362−8064 Email: mrubin@altshulerberzon.com ATTORNEY TO BE NOTICED

Plaintiff
Hanna Rahawi on behalf of themselves, all others similarly siutated, and the general public

represented by Aaron D. Kaufmann (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jules Sandford (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lorraine Grindstaff (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

David Philip Pogrel (See above for address) ATTORNEY TO BE NOTICED

Eve Hedy Cervantez (See above for address) ATTORNEY TO BE NOTICED

James M. Finberg (See above for address) ATTORNEY TO BE NOTICED

Matthew J. Murray (See above for address) ATTORNEY TO BE NOTICED

Michael Rubin (See above for address)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 3 of 24

ATTORNEY TO BE NOTICED

Plaintiff
Thomas Heath on behalf of themselves, all others similarly siutated, and the general public

represented by Aaron D. Kaufmann (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jules Sandford (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Lorraine Grindstaff (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
David Philip Pogrel (See above for address) ATTORNEY TO BE NOTICED
Eve Hedy Cervantez (See above for address) ATTORNEY TO BE NOTICED
James M. Finberg (See above for address) ATTORNEY TO BE NOTICED
Matthew J. Murray (See above for address) ATTORNEY TO BE NOTICED
Michael Rubin (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Ugo Iheonu on behalf of themselves and all others similarly situated

represented by Aaron D. Kaufmann (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jules Sandford (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Lorraine Grindstaff (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
David Philip Pogrel (See above for address) ATTORNEY TO BE NOTICED
Eve Hedy Cervantez (See above for address) ATTORNEY TO BE NOTICED
James M. Finberg (See above for address)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 4 of 24
ATTORNEY TO BE NOTICED
Matthew J. Murray (See above for address) ATTORNEY TO BE NOTICED
Michael Rubin (See above for address) ATTORNEY TO BE NOTICED

V.
Defendant
EGL, Inc. a Texas Corporation

represented by Bruce Mitchell Jacobs Akin Gump Strauss Hauer & Feld, LLP 2029 Century Park East Suite 2400 Los Angeles, CA 90067 310−229−1000 Fax: 310−229−1001 Email: bjacobs@akingump.com TERMINATED: 01/29/2014 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Fraser Angus McAlpine Jackson Lewis P.C. 50 California Street 9th Floor San Francisco, CA 94111−4615 415−394−9400 Fax: 415−394−9401 Email: fraser.mcalpine@jacksonlewis.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Karen Joyce Kubin Morrison & Foerster LLP 425 Market Street San Francisco, CA 94105 415−268−7000 Fax: 415−268−7522 Email: kkubin@mofo.com TERMINATED: 10/20/2010 LEAD ATTORNEY ATTORNEY TO BE NOTICED
H. Allison Elmore Jackson Lewis P.C. 50 California Street 9th Floor San Francisco, CA 94111−4615 415−394−9400 Fax: 415−394−9401 Email: allison.elmore@jacksonlewis.com ATTORNEY TO BE NOTICED
Heather Burror Akin Gump Strauss Hauer & Feld LLP 580 California Street Suite 1500 San Francisco, CA 94104 415/765−9521 Fax: 415/765−9501

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 5 of 24

Email: hburror@akingump.com TERMINATED: 10/22/2010 ATTORNEY TO BE NOTICED
Yeongyo Anna Suh Hunton and Williams LLP 575 Market Street Suite 3700 San Francisco, CA 94105 (415) 975−3700 Fax: (415) 975−3701 Email: asuh@hunton.com TERMINATED: 01/29/2014 ATTORNEY TO BE NOTICED

Defendant Eagle Freight Services, Inc.

represented by Yeongyo Anna Suh (See above for address) TERMINATED: 01/29/2014 ATTORNEY TO BE NOTICED

Defendant
Ceva Freight, LLC a Delaware corporation

represented by Fraser Angus McAlpine (See above for address) ATTORNEY TO BE NOTICED
H. Allison Elmore (See above for address) ATTORNEY TO BE NOTICED

Date Filed 10/14/2005
10/14/2005 10/14/2005 10/14/2005 10/24/2005 10/24/2005 11/09/2005
11/10/2005 11/10/2005

# Docket Text
1 NOTICE OF REMOVAL (CLASS ACTION); jury Demand; from Superior Court of Califoria, Santa Clara County. Their case number is 105CV048739. (Filing fee $250 receipt number 5513265). Filed by EGL, Inc.. (bw, COURT STAFF) (Filed on 10/14/2005) Additional attachment(s) added on 10/17/2005 (bw, COURT STAFF). (Entered: 10/17/2005)
2 Certificate Required by Federal Rule of Civil Procedure 7.1 and Civil Local Rule 3−16 filed by EGL, Inc. (bw, COURT STAFF) (Filed on 10/14/2005) (Entered: 10/17/2005)
3 ADR SCHEDULING ORDER: Case Management Statement due by 1/31/2006. Case Management Conference set for 2/7/2006 01:30 PM. (Attachments: # 1 Standing Order)(bw, COURT STAFF) (Filed on 10/14/2005) (Entered: 10/17/2005)
CASE DESIGNATED for Electronic Filing. (bw, COURT STAFF) (Filed on 10/14/2005) (Entered: 10/17/2005)
4 CERTIFICATE OF SERVICE by EGL, Inc. of Notice to Adverse Parties of Removal to Federal Court (Burror, Heather) (Filed on 10/24/2005) (Entered: 10/24/2005)
5 CERTIFICATE OF SERVICE by EGL, Inc. of Supplementary Material (Burror, Heather) (Filed on 10/24/2005) (Entered: 10/24/2005)
6 Declination to Proceed Before a U.S. Magistrate Judge by Thomas Heath, Mohit Narayan, Hanna Rahawi DECLINATION TO PROCEED BEFORE A MAGISTRATE JUDGE AND REQUEST FOR REASSIGNMENT TO A UNITED STATES DISTRICT JUDGE. (Kaufmann, Aaron) (Filed on 11/9/2005) (Entered: 11/09/2005)
7 CLERK'S NOTICE of Impending Reassignment to U.S. District Judge (pmc, COURT STAFF) (Filed on 11/10/2005) (Entered: 11/10/2005)
8 ORDER REASSIGNING CASE. Case reassigned to Judge Ronald M. Whyte for all further proceedings. Magistrate Judge Howard R. Lloyd remains as the referral judge. Signed by Executive Committee on November 10, 2005. (bw, COURT STAFF) (Filed

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 6 of 24

01/17/2006 01/17/2006 01/17/2006 01/18/2006 01/19/2006 01/24/2006 01/27/2006 01/27/2006 02/07/2006 02/10/2006 02/15/2006
02/28/2006 02/28/2006 03/16/2006 03/16/2006
03/24/2006 04/14/2006

on 11/10/2005) (Entered: 11/10/2005)
9 ADR Certification (ADR L.R. 3−5b) of discussion of ADR options −−ADR Certification by Parties and Counsel−−Tom Heath−− (Kaufmann, Aaron) (Filed on 1/17/2006) (Entered: 01/17/2006)
10 ADR Certification (ADR L.R. 3−5b) of discussion of ADR options ?ADR Certification by Parties and Counsel?Mohit Narayan? (Kaufmann, Aaron) (Filed on 1/17/2006) (Entered: 01/17/2006)
11 ADR Certification (ADR L.R. 3−5b) of discussion of ADR options −−ADR Certification by Parties and Counsel−−Hanna Rahawi−− (Kaufmann, Aaron) (Filed on 1/17/2006) (Entered: 01/17/2006)
12 ADR Certification (ADR L.R. 3−5b) of discussion of ADR options by Parties and Counsel (Kubin, Karen) (Filed on 1/18/2006) (Entered: 01/18/2006)
13 NOTICE of need for ADR Phone Conference (ADR L.R. 3−5 d) (Kubin, Karen) (Filed on 1/19/2006) (Entered: 01/19/2006)
14 ADR Clerks Notice Setting ADR Phone Conference on 2/7/06 at 9:30 a.m. Please take note that plaintiff's counsel initiates the call to all parties. (tjs, COURT STAFF) (Filed on 1/24/2006) (Entered: 01/24/2006)
15 JOINT CASE MANAGEMENT STATEMENT filed by Mohit Narayan. (Kaufmann, Aaron) (Filed on 1/27/2006) (Entered: 01/27/2006)
16 AMENDED DOCUMENT by Mohit Narayan. Amendment to 15 Case Management Statement (Joint) −−CASE MANAGEMENT ORDER−−. (Kaufmann, Aaron) (Filed on 1/27/2006) (Entered: 01/27/2006)
ADR Remark: ADR Phone Conference conducted on 2/7/06 by RWS. (tjs, COURT STAFF) (Filed on 2/7/2006) (Entered: 02/07/2006)
17 STIPULATION Protective Order by EGL, Inc.. (Kubin, Karen) (Filed on 2/10/2006) (Entered: 02/10/2006)
18 Minute Entry: Initial Case Management Conference held on 2/10/2006 before Ronald M. Whyte. Discovery cutoff on the First Phase by 11/10/2006. Further Case Management Conference set for 1/27/2007 10:30 AM. Hearing on Motion for Summary Judgment set for 1/26/2007 09:00 AM in Courtroom 6, 4th Floor, San Jose. (Court Reporter Not Reported.) (jg, COURT STAFF) Modified on 3/16/2006 (jg, COURT STAFF). (Entered: 02/15/2006)
19 STIPULATION RE SUMMARY JUDGMENT BRIEFING SCHEDULE AND ORDER THEREON by Mohit Narayan. (Kaufmann, Aaron) (Filed on 2/28/2006) (Entered: 02/28/2006)
20 Proposed Order −−CASE MANAGEMENT ORDER−− by Mohit Narayan. (Kaufmann, Aaron) (Filed on 2/28/2006) (Entered: 02/28/2006)
21 STIPULATION AND ORDER Re: Summary Judgment Briefing Schedule. Signed by Judge Ronald M. Whyte on 3/16/06. (jg, COURT STAFF) (Filed on 3/16/2006) (Entered: 03/16/2006)
22 CASE MANAGEMENT SCHEDULING ORDER: Further Case Management Conference set for 1/26/2007 10:30 AM. Motion Hearing on Motions for Summary Judgment set for 1/26/2007 09:00 AM in Courtroom 6, 4th Floor, San Jose. Signed by Judge Ronald M. Whyte on 3/16/06. (jg, COURT STAFF) (Filed on 3/16/2006) (Entered: 03/16/2006)
23 STIPULATION AND ORDER FOR FILING OF FIRST AMENDED COMPLAINT by Mohit Narayan. (Kaufmann, Aaron) (Filed on 3/24/2006) (Entered: 03/24/2006)
24 STIPULATION AND ORDER for Filing of First Amended Complaint. Signed by Judge Ronald M. Whyte on 4/14/06. (jg, COURT STAFF) (Filed on 4/14/2006) (Entered: 04/14/2006)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 7 of 24

04/20/2006 04/28/2006 09/19/2006 09/19/2006 09/19/2006
09/19/2006 09/19/2006 10/03/2006 10/09/2006 10/09/2006 10/24/2006 10/24/2006 10/31/2006 10/31/2006

ADR Remark: ADR Phone Conference condutced on 4/20/06 by RWS. (tjs, COURT STAFF) (Filed on 4/20/2006) (Entered: 04/20/2006)
25 Defendant's ANSWER to Complaint (First Amended) byEGL, Inc.. (Kubin, Karen) (Filed on 4/28/2006) (Entered: 04/28/2006)
26 MOTION to Compel Production of Documents and Further Responses to Plaintiffs' First Set of Requests for Production [L.R. 37−1(a)] filed by Mohit Narayan. Motion Hearing set for 10/24/2006 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Kaufmann, Aaron) (Filed on 9/19/2006) (Entered: 09/19/2006)
27 MEMORANDUM in Support re 26 MOTION to Compel Production of Documents and Further Responses to Plaintiffs' First Set of Requests for Production [L.R. 37−1(a)] filed byMohit Narayan. (Related document(s) 26 ) (Kaufmann, Aaron) (Filed on 9/19/2006) (Entered: 09/19/2006)
28 Declaration of Aaron Kaufmann in Support of 26 MOTION to Compel Production of Documents and Further Responses to Plaintiffs' First Set of Requests for Production [L.R. 37−1(a)] filed byMohit Narayan. (Attachments: # 1 Exhibit Kaufmann Decl, Exh 1 − first section of Exh 2# 2 Exhibit Kaufmann Decl, middle section of Exh 2# 3 Exhibit Kaufmann Decl, last section of Exh 2 − first section of Exh 5# 4 Exhibit Kaufmann Decl, last section of Exh 5 − Exh 7# 5 Exhibit Kaufmann Decl, Exh 8 − first section of Exh 11B# 6 Exhibit Kaufmann Decl, last section of Exh 11B − Exh 11C# 7 Exhibit Kaufmann Decl, Exh 12 − first section of Exh 13B# 8 Exhibit Kaufmann Decl, last section of Exh 13B − Exh 16)(Related document(s) 26 ) (Kaufmann, Aaron) (Filed on 9/19/2006) (Entered: 09/19/2006)
29 Statement of Facts re 26 MOTION to Compel Production of Documents and Further Responses to Plaintiffs' First Set of Requests for Production [L.R. 37−1(a)] −−CERTIFICATE OF COMPLIANCE−− filed byMohit Narayan. (Related document(s) 26 ) (Kaufmann, Aaron) (Filed on 9/19/2006) (Entered: 09/19/2006)
30 Proposed Order re 26 MOTION to Compel Production of Documents and Further Responses to Plaintiffs' First Set of Requests for Production [L.R. 37−1(a)] by Mohit Narayan. (Kaufmann, Aaron) (Filed on 9/19/2006) (Entered: 09/19/2006)
31 Memorandum in Opposition to Plaintiffs' Motion to Compel Production of Documents and Further Responses to Plaintiffs' First Set of Requests for Production filed byEGL, Inc.. (Kubin, Karen) (Filed on 10/3/2006) (Entered: 10/03/2006)
32 Reply Memorandum of Points and Authorities in Support of Motion to Compel Production of Documents and Further Responses to Plaintiffs' First Set of Requests for Production [L.R. 37−1(a)] filed byMohit Narayan. (Kaufmann, Aaron) (Filed on 10/9/2006) (Entered: 10/09/2006)
33 Declaration of AARON KAUFMANN in Support of Plaintiffs' Motion to Compel Production of Documents and Further Responses to Plaintiffs' First Set of Requests for Production [L.R. 37−1(a)] filed byMohit Narayan. (Kaufmann, Aaron) (Filed on 10/9/2006) (Entered: 10/09/2006)
34 Minute Entry: Motion Hearing held on 10/24/2006 before Magistrate Judge Howard R. Lloyd (Date Filed: 10/24/2006). (Court Reporter FTR.) (pmc, COURT STAFF) (Date Filed: 10/24/2006) (Entered: 10/24/2006)
35 ORDER by Magistrate Judge Howard R. Lloyd granting 26 Motion to Compel (hrllc1, COURT STAFF) (Filed on 10/24/2006) (Entered: 10/24/2006)
36 MOTION to Compel Further Responses to Plaintiff Mohit Narayan's First Set of Interrogatories filed by Mohit Narayan. Motion Hearing set for 12/5/2006 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Kaufmann, Aaron) (Filed on 10/31/2006) (Entered: 10/31/2006)
37 Memorandum of Points and Authorities in Support of 36 Plaintiffs' Motion to Compel Further Responses to Plaintiff Mohit Narayan's First Set of Interrogatories filed by Mohit Narayan. Motion Hearing set for 12/5/2006 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Kaufmann, Aaron) (Filed on 10/31/2006) Modified text on 11/1/2006 to conform with document posted. (dhm, COURT STAFF). (Entered: 10/31/2006)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 8 of 24

10/31/2006 10/31/2006 10/31/2006 10/31/2006 10/31/2006 10/31/2006 10/31/2006 10/31/2006 10/31/2006 10/31/2006

38 Certificate of Compliance in Support of 36 Plaintiffs' Motion to Compel Further Responses to Plaintiff Mohit Narayan's First Set of Interrogatories filed by Mohit Narayan. Motion Hearing set for 12/5/2006 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Kaufmann, Aaron) (Filed on 10/31/2006) Modified text on 11/1/2006 to conform with document posted (dhm, COURT STAFF). (Entered: 10/31/2006)
39 Proposed] Order re 36 Motion to Compel Further Responses to Plaintiff Mohit Narayan's First Set of Interrogatories filed by Mohit Narayan. Motion Hearing set for 12/5/2006 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Kaufmann, Aaron) (Filed on 10/31/2006) Modified text on 11/1/2006 to conform with document posted (dhm, COURT STAFF). (Entered: 10/31/2006)
40 Declaration of Aaron Kaufmann In Support of 36 Plaintiff's Motion to Compel Further Responses to Plaintiff's Mohit Narayan's Interrogatories Volume 1 −− Exhibits 1−2, filed by Mohit Narayan. Motion Hearing set for 12/5/2006 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Kaufmann, Aaron) (Filed on 10/31/2006) Modified text on 11/1/2006 to comform with document posted. (dhm, COURT STAFF). (Entered: 10/31/2006)
41 Declaration of Aaron Kaufmann In Support of 36 Plaintiff's Motion to Compel Further Responses to Plaintiff Mohit Narayan's Interrogatories Volume 2 −− Exhibits 3−4, filed by Mohit Narayan. Motion Hearing set for 12/5/2006 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Kaufmann, Aaron) (Filed on 10/31/2006) Modified text on 11/1/2006 to conform with document posted. (dhm, COURT STAFF). (Entered: 10/31/2006)
42 Declaration of Aaron Kaufmann in Support of 36 Plaintiff's Motion to Compel Further Responses to Plaintiff Mohit Narayan's Interrogatories Volume 3 −− Exhibits 5−8, filed by Mohit Narayan. Motion Hearing set for 12/5/2006 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Kaufmann, Aaron) (Filed on 10/31/2006) Modified text on 11/1/2006 to conform with document posted. (dhm, COURT STAFF). (Entered: 10/31/2006)
43 Declaration of Aaron Kaufmann In Support of 36 Plaintiff's Motion to Compel Further Responses to Plaintiff Mohit Narayan's Interrogatories Volume 4 −− Exhibits 9−10, filed by Mohit Narayan. Motion Hearing set for 12/5/2006 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Kaufmann, Aaron) (Filed on 10/31/2006) Modified text on 11/1/2006 to conform with document posted. (dhm, COURT STAFF). (Entered: 10/31/2006)
44 Declaration of Aaron Kaufmann in Support of 36 Plaintiff's Motion to Compel Further Responses to Plaintiff Mohit Narayan's Interrogatories Volume 5 −− Exhibits 11−12, filed by Mohit Narayan. Motion Hearing set for 12/5/2006 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Kaufmann, Aaron) (Filed on 10/31/2006) Modified text on 11/1/2006 to conform with document posted. (dhm, COURT STAFF). (Entered: 10/31/2006)
45 MOTION to Compel −−NOTICE OF MOTION AND MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND FURTHER RESPONSES TO PLAINTIFFS' SECOND SET OF REQUESTS FOR PRODUCTION [L.R. 37−1(a)]−− filed by Mohit Narayan. Motion Hearing set for 12/5/2006 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Kaufmann, Aaron) (Filed on 10/31/2006) (Entered: 10/31/2006)
46 MEMORANDUM in Support re 45 MOTION to Compel −−NOTICE OF MOTION AND MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND FURTHER RESPONSES TO PLAINTIFFS' SECOND SET OF REQUESTS FOR PRODUCTION [L.R. 37−1(a)]−− filed byMohit Narayan. (Related document(s) 45 ) (Kaufmann, Aaron) (Filed on 10/31/2006) (Entered: 10/31/2006)
47 Declaration of AARON KAUFMANN in Support of 45 MOTION to Compel −−NOTICE OF MOTION AND MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND FURTHER RESPONSES TO PLAINTIFFS' SECOND SET OF REQUESTS FOR PRODUCTION [L.R. 37−1(a)]−−, 46 Memorandum in Support, filed byMohit Narayan. (Attachments: # 1 Exhibit Exhibit 1# 2 Exhibit Exhibit 2# 3 Exhibit Exhibit 3# 4 Exhibit Exhibit 4# 5 Exhibit Exhibit 4 con't# 6 Exhibit Exhibits 5−7)(Related document(s) 45 , 46 ) (Kaufmann, Aaron) (Filed on 10/31/2006) (Entered: 10/31/2006)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 9 of 24

10/31/2006
10/31/2006
11/14/2006 11/14/2006 11/17/2006 11/17/2006
11/17/2006 11/17/2006 11/17/2006 11/17/2006 12/05/2006 12/05/2006 12/08/2006

48 Certificate of Compliance in support of 45 MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND FURTHER RESPONSES TO PLAINTIFFS' SECOND SET OF REQUESTS FOR PRODUCTION [L.R. 37−1(a) filed by Mohit Narayan. (Related document(s) 45 , 46 , 47 ) (Kaufmann, Aaron) (Filed on 10/31/2006) Modified text on 11/1/2006 to conform with document posted. (dhm, COURT STAFF). (Entered: 10/31/2006)
49 Proposed Order re 45 MOTION to Compel −−NOTICE OF MOTION AND MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND FURTHER RESPONSES TO PLAINTIFFS' SECOND SET OF REQUESTS FOR PRODUCTION [L.R. 37−1(a)]−−, 48 Statement of Facts,, 46 Memorandum in Support,, 47 Declaration in Support,, by Mohit Narayan. (Kaufmann, Aaron) (Filed on 10/31/2006) (Entered: 10/31/2006)
50 Memorandum in Opposition to Plaintiffs' Motion to Compel Further Responses to Plaintiff Mohit Narayan's First Set of Interrogatories filed byEGL, Inc.. (Kubin, Karen) (Filed on 11/14/2006) (Entered: 11/14/2006)
51 Statement of Non−Opposition to Plaintiffs' Motion to Compel Production of Documents and further Responses to Plaintiffs' Second Set of Requests for Production filed byEGL, Inc.. (Kubin, Karen) (Filed on 11/14/2006) (Entered: 11/14/2006)
52 Reply Memorandum of Points and Authorities in Support of Motion to Compel Production of Documents and Further Responses to Plaintiffs' Second Set of Requests for Production filed byMohit Narayan. (Kaufmann, Aaron) (Filed on 11/17/2006) (Entered: 11/17/2006)
53 Declaration of DAVID POGREL in Support of 52 Reply Memorandum −−DECLARATION OF DAVID POGREL IN SUPPORT OF PLAINTIFFS' MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND FURTHER RESPONSES TO PLAINTIFFS' SECOND SET OF REQUESTS FOR PRODUCTION−− filed byMohit Narayan. (Attachments: # 1 Exhibit Exhibit 1# 2 Exhibit Exhibit 2 & 3)(Related document(s) 52 ) (Kaufmann, Aaron) (Filed on 11/17/2006) (Entered: 11/17/2006)
54 Proposed Order re 52 Reply Memorandum −−[AMENDED PROPOSED] ORDER RE MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND FURTHER RESPONSES TO PLAINTIFFS' SECOND SET OF REQUESTS FOR PRODUCTION−− by Mohit Narayan. (Kaufmann, Aaron) (Filed on 11/17/2006) (Entered: 11/17/2006)
55 Reply Memorandum OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF'S MOTION TO COMPEL FURTHER RESPONSES TO PLAINTIFF MOHIT NARAYAN'S FIRST SET OF INTERROGATORIES filed byMohit Narayan. (Kaufmann, Aaron) (Filed on 11/17/2006) (Entered: 11/17/2006)
56 Declaration of AARON KAUFMANN in Support of 55 Reply Memorandum −−SUPPLEMENTAL DECLARATION OF AARON KAUFMANN IN SUPPORT OF PLAINTIFF'S MOTION TO COMPEL FURTHER RESPONSES TO PLAINTIFF MOHIT NARAYAN'S INTERROGATORIES−− filed byMohit Narayan. (Related document(s) 55 ) (Kaufmann, Aaron) (Filed on 11/17/2006) (Entered: 11/17/2006)
57 Proposed Order re 55 Reply Memorandum −−[AMENDED PROPOSED] ORDER RE MOTION TO COMPEL FURTHER RESPONSES TO PLAINTIFF MOHIT NARAYAN'S FIRST SET INTERROGATORIES−− by Mohit Narayan. (Kaufmann, Aaron) (Filed on 11/17/2006) (Entered: 11/17/2006)
58 Minute Entry: Motion Hearing held on 12/5/2006 before Magistrate Judge Howard R. Lloyd (Date Filed: 12/5/2006). (Court Reporter FTR.) (pmc, COURT STAFF) (Date Filed: 12/5/2006) (Entered: 12/05/2006)
59 ORDER by Magistrate Judge Howard R. Lloyd granting 36 Motion to Compel, granting 45 Motion to Compel (hrllc1, COURT STAFF) (Filed on 12/5/2006) (Entered: 12/05/2006)
60 MOTION for Summary Judgment on the Individual Claims of Plaintiff Thomas Heath filed by EGL, Inc.. Motion Hearing set for 1/26/2007 09:00 AM in Courtroom 6, 4th Floor, San Jose. (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 10 of 24

12/08/2006 12/08/2006 12/08/2006 12/08/2006 12/08/2006 12/08/2006 12/08/2006 12/08/2006 12/08/2006 12/08/2006 12/08/2006 12/08/2006 12/08/2006
12/08/2006 12/29/2006 12/29/2006

61 MEMORANDUM in Support re 60 MOTION for Summary Judgment on the Individual Claims of Plaintiff Thomas Heath filed byEGL, Inc.. (Related document(s) 60 ) (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
62 Declaration of Jill Vizas in Support of 60 MOTION for Summary Judgment on the Individual Claims of Plaintiff Thomas Heath filed byEGL, Inc.. (Attachments: # 1 Exhibit A to Vizas Declaration# 2 Exhibit B to Vizas Declaration)(Related document(s) 60 ) (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
63 Proposed Order re 60 MOTION for Summary Judgment on the Individual Claims of Plaintiff Thomas Heath by EGL, Inc.. (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
64 Declaration of Martha DeLeon−Schmidt in Support of 60 MOTION for Summary Judgment on the Individual Claims of Plaintiff Thomas Heath filed byEGL, Inc.. (Related document(s) 60 ) (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
65 MOTION for Summary Judgment on the Individual Claims of Plaintiff Mohit Narayan filed by EGL, Inc.. Motion Hearing set for 1/26/2007 09:00 AM in Courtroom 6, 4th Floor, San Jose. (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
66 MEMORANDUM in Support re 65 MOTION for Summary Judgment on the Individual Claims of Plaintiff Mohit Narayan filed byEGL, Inc.. (Related document(s) 65 ) (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
67 Declaration of Jill Vizas in Support of 65 MOTION for Summary Judgment on the Individual Claims of Plaintiff Mohit Narayan filed byEGL, Inc.. (Attachments: # 1 Exhibit A to Vizas Declaration# 2 Exhibit B to Vizas Declaration)(Related document(s) 65 ) (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
68 Declaration of Martha DeLeon−Schmidt in Support of 65 MOTION for Summary Judgment on the Individual Claims of Plaintiff Mohit Narayan filed byEGL, Inc.. (Related document(s) 65 ) (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
69 Proposed Order re 65 MOTION for Summary Judgment on the Individual Claims of Plaintiff Mohit Narayan by EGL, Inc.. (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
70 MOTION for Summary Judgment Regarding the Individual Claims of Plaintiff Hanna Rahawi filed by EGL, Inc.. Motion Hearing set for 1/26/2007 09:00 AM in Courtroom 6, 4th Floor, San Jose. (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
71 MEMORANDUM in Support re 70 MOTION for Summary Judgment Regarding the Individual Claims of Plaintiff Hanna Rahawi filed byEGL, Inc.. (Related document(s) 70 ) (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
72 Declaration in Support of 70 MOTION for Summary Judgment Regarding the Individual Claims of Plaintiff Hanna Rahawi filed byEGL, Inc.. (Related document(s) 70 ) (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
73 Declaration of Jill Vizas in Support of 70 MOTION for Summary Judgment Regarding the Individual Claims of Plaintiff Hanna Rahawi filed byEGL, Inc.. (Attachments: # 1 Exhibit A to Vizas Declaration# 2 Exhibit B to Vizas Declaration)(Related document(s) 70 ) (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
74 Proposed Order re 70 MOTION for Summary Judgment Regarding the Individual Claims of Plaintiff Hanna Rahawi by EGL, Inc.. (Kubin, Karen) (Filed on 12/8/2006) (Entered: 12/08/2006)
75 MOTION to Seal −−ADMINISTRATIVE MOTION TO FILE UNDER SEAL PURSUANT TO CIVIL LOCAL RULES 7−11 AND 79−5−− filed by Mohit Narayan. Motion Hearing set for 1/26/2007 09:00 AM in Courtroom 6, 4th Floor, San Jose. (Kaufmann, Aaron) (Filed on 12/29/2006) (Entered: 12/29/2006)
76 Declaration of AARON KAUFMANN in Support of 75 MOTION to Seal −−ADMINISTRATIVE MOTION TO FILE UNDER SEAL PURSUANT TO CIVIL LOCAL RULES 7−11 AND 79−5−− DECLARATION OF AARON KAUFMANN IN SUPPORT OF PLAINTIFFS' ADMINISTRATIVE MOTION TO FILE UNDER SEAL

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 11 of 24

12/29/2006 12/29/2006 12/29/2006 12/29/2006 12/29/2006 12/29/2006 12/29/2006 12/29/2006 12/29/2006 12/29/2006

PURSUANT TO CIVIL LOCAL RULES 7−11 AND 79−5−− filed byMohit Narayan. (Related document(s) 75 ) (Kaufmann, Aaron) (Filed on 12/29/2006) (Entered: 12/29/2006)
77 DECLARATION of LISA DUNGAN IN OPPOSITION TO 60 , 65 , 70 DEFENDANT EGL, INC.'S MOTIONS FOR SUMMARY JUDGMENT ON THE INDIVIDUAL CLAIMS OF PLAINTIFFS HEATH, NARAYAN AND RAHAWI filed by Mohit Narayan. (Attachments: # 1 Exhibit Exhibits A − J)(Kaufmann, Aaron) (Filed on 12/29/2006) Modified on 1/10/2007 to link entry to document # 60, 65 and 70 (dhm, COURT STAFF). (Entered: 12/29/2006)
78 MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO 60 DEFENDANT EGL, INC.'S MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF THOMAS HEATH'S INDIVIDUAL CLAIMS filed by Thomas Heath. (Kaufmann, Aaron) (Filed on 12/29/2006) Modified on 1/10/2007 to link entry to document #60 (dhm, COURT STAFF). (Entered: 12/29/2006)
79 MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO 65 DEFENDANT EGL, INC.'S MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF MOHIT NARAYAN'S INDIVIDUAL CLAIMS filed by Mohit Narayan. (Kaufmann, Aaron) (Filed on 12/29/2006) Modified on 1/10/2007 to link entry to document #65 (dhm, COURT STAFF). (Entered: 12/29/2006)
80 MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO 70 DEFENDANT EGL, INC.'S MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF HANNA RAHAWI'S INDIVIDUAL CLAIMS filed by Hanna Rahawi. (Kaufmann, Aaron) (Filed on 12/29/2006) Modified on 1/10/2007 to link entry to document #70 (dhm, COURT STAFF). (Entered: 12/29/2006)
81 *** FILED IN ERROR. PLEASE SEE DOCKET # 90 . *** DECLARATION of FRITZ R. KAHN IN OPPOSITION TO DEFENDANT EGL, INC.'S MOTIONS FOR SUMMARY JUDGMENT−− filed byMohit Narayan. (Kaufmann, Aaron) (Filed on 12/29/2006) Modified on 1/4/2007 (ewn, COURT STAFF). (Entered: 12/29/2006)
82 DECLARATION of THOMAS HEATH IN OPPOSITION TO 60 , 65 , 70 DEFENDANT EGL, INC.'S MOTIONS FOR SUMMARY JUDGMENT ON THE INDIVIDUAL CLAIMS OF PLAINTIFFS HEATH, NARAYAN AND RAHAWI filed by Thomas Heath. (Kaufmann, Aaron) (Filed on 12/29/2006) Modified on 1/10/2007 to link entry to document #60, 65, and 70 (dhm, COURT STAFF). (Entered: 12/29/2006)
83 DECLARATION of MOHIT NARAYAN IN OPPOSITION TO 60 , 65 , 70 DEFENDANT EGL, INC.'S MOTIONS FOR SUMMARY JUDGMENT ON THE INDIVIDUAL CLAIMS OF PLAINTIFFS HEATH, NARAYAN AND RAHAWI filed by Mohit Narayan. (Kaufmann, Aaron) (Filed on 12/29/2006) Modified on 1/10/2007 to link entry to document #60, 65 and 70 (dhm, COURT STAFF). (Entered: 12/29/2006)
84 DECLARATION of HANNA RAHAWI IN OPPOSITION TO 60 , 65 , 70 DEFENDANT EGL, INC.'S MOTIONS FOR SUMMARY JUDGMENT ON THE INDIVIDUAL CLAIMS OF PLAINTIFFS HEATH, NARAYAN AND RAHAWI filed by Hanna Rahawi. (Kaufmann, Aaron) (Filed on 12/29/2006) Modified on 1/10/2007 to link entry to document # 60, 65 and 70 (dhm, COURT STAFF). (Entered: 12/29/2006)
85 OBJECTIONS TO EVIDENCE SUBMITTED BY DEFENDANT EGL, INC. IN SUPPORT OF 60 , 65 , 70 MOTIONS FOR SUMMARY JUDGMENT ON THE INDIVIDUAL CLAIMS OF PLAINTIFFS HEATH, NARAYAN AND RAHAWI−−Part 1 of 3−−Pages 1−25−− by Mohit Narayan. (Kaufmann, Aaron) (Filed on 12/29/2006) Modified on 1/10/2007 to link entry to document #60, 65 and 70 (dhm, COURT STAFF). (Entered: 12/29/2006)
86 OBJECTIONS TO EVIDENCE SUBMITTED BY DEFENDANT EGL, INC. IN SUPPORT OF 60 , 65 , 70 MOTIONS FOR SUMMARY JUDGMENT ON THE INDIVIDUAL CLAIMS OF PLAINTIFFS HEATH, NARAYAN AND RAHAWI−−Part 2 of 3−−Pages 26−50−− by Mohit Narayan. (Kaufmann, Aaron)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 12 of 24

12/29/2006 12/29/2006 12/29/2006
12/29/2006 01/03/2007 01/03/2007 01/04/2007 01/12/2007 01/12/2007 01/12/2007

(Filed on 12/29/2006) Modified on 1/10/2007 to link entry to document # 60, 65 and 70 (dhm, COURT STAFF). (Entered: 12/29/2006)
87 OBJECTIONS TO EVIDENCE SUBMITTED BY DEFENDANT EGL, INC. IN SUPPORT OF 60 , 65 , 70 MOTIONS FOR SUMMARY JUDGMENT ON THE INDIVIDUAL CLAIMS OF PLAINTIFFS HEATH, NARAYAN AND RAHAWI−−Part 3 of 3−−Pages 51−63−− by Mohit Narayan. (Kaufmann, Aaron) (Filed on 12/29/2006) Modified on 1/10/2007 to link entry to document #60, 65 and 70 (dhm, COURT STAFF). (Entered: 12/29/2006)
91 Received Exhibit C to the Declaration of Lisa Dungan in Opposition to Defendant EGL, Inc's Motions for Summary Judgment on the Individual Claims of Plaintiffs Heath, Narayan and Rahawi by Thomas Heath, Mohit Narayan, Hanna Rahawi. (DOCUMENT SUBMITTED UNDER SEAL) (dhm, COURT STAFF) (Filed on 12/29/2006) Modified on 7/28/2015 (bwS, COURT STAFF). (Entered: 01/05/2007)
92 DECLARATION of Lisa Dungan with Exhibits A through J attached, in Opposition to 70 EGL, Inc,'s MOTION for Summary Judgment Regarding the Individual Claims of Plaintiff Hanna Rahawi filed by Thomas Heath, Mohit Narayan, Hanna Rahawi. (Related document(s) 70 ) (dhm, COURT STAFF) (Filed on 12/29/2006) (Additional attachment(s) added on 7/29/2015: # 1 Exhibit A to Declaration Part 1, # 2 Exhibit A, # 3 Exhibit −A (continuation, # 4 Exhibit A (Continuation)) (bwS, COURT STAFF). (Additional attachment(s) added on 7/29/2015: # 5 Exhibit A Continues, # 6 Exhibit A Continues, # 7 Exhibit A Continues) (bwS, COURT STAFF). (Additional attachment(s) added on 7/29/2015: # 8 Exhbit −B (part 1), # 9 Exhibit −B Part 2) (bwS, COURT STAFF). (Additional attachment(s) added on 7/29/2015: # 10 Exhibit−D (Part 1), # 11 Exhibit D (Part 2), # 12 Exhibit−D (Part 3)) (bwS, COURT STAFF). (Additional attachment(s) added on 7/29/2015: # 13 Exhibit E (Part 1), # 14 EXHIBIT−E (PART 2 OF 2) (bwS, COURT STAFF). (Additional attachment(s) added on 7/29/2015: # 15 Exhibit−F) (bwS, COURT STAFF). (Additional attachment(s) added on 7/29/2015: # 16 Exhibit−G) (bwS, COURT STAFF). (Additional attachment(s) added on 7/29/2015: # 17 Exhibit −H, # 18 Exhibit−H (Part 2), # 19 Exhibit K) (bwS, COURT STAFF). (Entered: 01/05/2007)
124 EXHIBIT C to Declaration. FILED UNDER SEAL PURSUANT TO ORDER #123 POSTED ON 8/22/2007 /b> (dhm, COURT STAFF) (Filed on 12/29/2006) Modified on 7/28/2015 (bwS, COURT STAFF). (Entered: 08/23/2007)
88 PROOF OF SERVICE re 75 , 76 , 77 , 78 , [79,], 80 , 82 , 83 , 84 , 85 , 86 , 87 by Mohit Narayan. (Kaufmann, Aaron) (Filed on 1/3/2007) Modified on 1/10/2007 (dhm, COURT STAFF). (Entered: 01/03/2007)
89 *** FILED IN ERROR. PLEASE SEE DOCKET # 90 . *** DECLARATION in Opposition to 81 Declaration in Opposition −−CORRECTION TO DOCKET # 81 −−DECLARATION OF FRITZ R. KAHN IN OPPOSITION TO DEFENDANT EGL, INC.'S MOTIONS FOR SUMMARY JUDGMENT−− filed byMohit Narayan. (Related document(s) 81 ) (Kaufmann, Aaron) (Filed on 1/3/2007) Modified on 1/4/2007 (ewn, COURT STAFF). (Entered: 01/03/2007)
90 DECLARATION of FRITZ R. KAHN IN OPPOSITION TO 60 , 65 , 70 DEFENDANT EGL, INC.'S MOTIONS FOR SUMMARY JUDGMENT−−CORRECTION OF DOCKET # 81 filed by Mohit Narayan. (Kaufmann, Aaron) (Filed on 1/4/2007) Modified on 1/17/2007 to link entry to document #60, 65 and 70 (dhm, COURT STAFF). (Entered: 01/04/2007)
93 Reply Memorandum re 65 MOTION for Summary Judgment on the Individual Claims of Plaintiff Mohit Narayan filed byEGL, Inc.. (Kubin, Karen) (Filed on 1/12/2007) (Entered: 01/12/2007)
94 Reply Memorandum re 70 MOTION for Summary Judgment Regarding the Individual Claims of Plaintiff Hanna Rahawi filed byEGL, Inc.. (Kubin, Karen) (Filed on 1/12/2007) (Entered: 01/12/2007)
95 Reply Memorandum re 60 MOTION for Summary Judgment on the Individual Claims of Plaintiff Thomas Heath filed byEGL, Inc.. (Kubin, Karen) (Filed on 1/12/2007) (Entered: 01/12/2007)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 13 of 24

01/12/2007 01/12/2007 01/12/2007
01/12/2007 01/16/2007 01/17/2007 01/17/2007 01/17/2007 01/19/2007 01/19/2007
01/23/2007 01/23/2007 01/23/2007

96 Declaration of Jill Vizas in Support of 94 Reply Memorandum, 93 Reply Memorandum, 95 Reply Memorandum filed byEGL, Inc.. (Attachments: # 1 Exhibit A to H)(Related document(s) 94 , 93 , 95 ) (Kubin, Karen) (Filed on 1/12/2007) (Entered: 01/12/2007)
97 Response to 85 , 86 , 87 Plaintiff's Objections to Evidence submitted in support of Motions for Summary Judgment on the Individual Claims of Plaintiffs Heath, Narayan and Rahawi filed by EGL, Inc. (Kubin, Karen) (Filed on 1/12/2007) Modified on 1/23/2007 and link entry to documents # 85, 86 and 87 (dhm, COURT STAFF). (Entered: 01/12/2007)
98 OBJECTIONS to 85 , 86 , 87 Plaintiffs' Evidence submitted in Opposition to Defendant's Summary Judgment Motions and MOTION to Strike Certain Evidence filed by EGL, Inc.. Motion Hearing set for 1/26/2007 09:00 AM. (Kubin, Karen) (Filed on 1/12/2007) Modified text on 1/23/2007 to conform with document posted and to link entry to document #85, 86 and 87 (dhm, COURT STAFF). (Entered: 01/12/2007)
99 CERTIFICATE OF SERVICE by EGL, Inc. re 97 Memorandum in Opposition, 94 Reply Memorandum, 93 Reply Memorandum, 95 Reply Memorandum, 98 MOTION to Strike Plaintiffs' Evidence, 96 Declaration in Support (Kubin, Karen) (Filed on 1/12/2007) (Entered: 01/12/2007)
100 JOINT CASE MANAGEMENT STATEMENT filed by Mohit Narayan. (Kaufmann, Aaron) (Filed on 1/16/2007) (Entered: 01/16/2007)
ADR Remark: ADR Phone Conference conducted on 1/17/07 by RWS. (tjs, COURT STAFF) (Filed on 1/17/2007) (Entered: 01/17/2007)
101 APPLICATION of Fraser A. McAlpine for leave to appear in Pro Hac Vice filed by EGL, Inc. (fee paid, receipt # 54611000274) (dhm, COURT STAFF) (Filed on 1/17/2007) (Entered: 01/17/2007)
Proposed Order re 101 APPLICATION of Fraser A. McAlpine for leave to appear in Pro Hac Vice by EGL, Inc.. (dhm, COURT STAFF) (Filed on 1/17/2007) (Entered: 01/17/2007)
102 ERRATA SHEET FOR EVIDENCE SUBMITTED IN OPPOSITION TO 60 , 65 , 70 DEFENDANT EGL, INC.'S MOTIONS FOR SUMMARY JUDGMENT ON THE INDIVIDUAL CLAIMS OF HEATH, NARAYAN AND RAHAWI by Mohit Narayan. (Kaufmann, Aaron) (Filed on 1/19/2007) Modified on 1/29/2007 to link entry to document #60, 65, and 70 (dhm, COURT STAFF). (Entered: 01/19/2007)
103 DECLARATION of LISA DUNGAN in Opposition to 102 Errata, −−SUPPLEMENTAL DECLARATION OF LISA DUNGAN IN OPPOSITION TO DEFENDANT EGL, INC.'S MOTIONS FOR SUMMARY JUDGMENT ON THE INDIVIDUAL CLAIMS OF PLAINTIFFS HEATH, NARAYAN AND RAHAWI−− filed byMohit Narayan. (Attachments: # 1 Exhibit Exhibit A1# 2 Exhibit Exhibits A2−D# 3 Exhibit Exhibits E1−E9)(Related document(s) 102 ) (Kaufmann, Aaron) (Filed on 1/19/2007) (Entered: 01/19/2007)
104 RESPONSE TO 98 OBJECTIONS TO PLAINTIFFS' EVIDENCE SUBMITTED IN OPPOSITION TO DEFENDANT'S SUMMARY JUDGMENT MOTIONS−−Pages 1−25−− filed by Mohit Narayan. (Kaufmann, Aaron) (Filed on 1/23/2007) Modified on 1/30/2007 to link entry to document #98(dhm, COURT STAFF). (Entered: 01/23/2007)
105 RESPONSE TO 98 OBJECTIONS TO PLAINTIFFS' EVIDENCE SUBMITTED IN OPPOSITION TO DEFENDANT'S SUMMARY JUDGMENT MOTIONS−−Page 26−51 filed by Mohit Narayan. (Kaufmann, Aaron) (Filed on 1/23/2007) Modified on 1/30/2007 to link entry to document #98(dhm, COURT STAFF). (Entered: 01/23/2007)
106 RESPONSE TO 98 OBJECTIONS TO PLAINTIFFS' EVIDENCE SUBMITTED IN OPPOSITION TO DEFENDANT'S SUMMARY JUDGMENT MOTIONS−−Pages 53−67−− filed by Mohit Narayan. (Kaufmann, Aaron) (Filed on 1/23/2007) Modified on 1/30/2007 to link entry to document #98 (dhm, COURT STAFF). (Entered: 01/23/2007)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 14 of 24

01/23/2007 01/23/2007 01/23/2007
01/25/2007 01/25/2007 01/26/2007
02/08/2007 05/15/2007 05/15/2007 06/28/2007 06/28/2007 07/10/2007 07/16/2007

107 RESPONSE TO 98 OBJECTIONS TO PLAINTIFFS' EVIDENCE SUBMITTED IN OPPOSITION TO DEFENDANT'S SUMMARY JUDGMENT MOTIONS−−Pages 68−82−− filed by Mohit Narayan. (Kaufmann, Aaron) (Filed on 1/23/2007) Modified on 1/30/2007 to link entry to document #98 (dhm, COURT STAFF). (Entered: 01/23/2007)
108 RESPONSE TO 98 OBJECTIONS TO PLAINTIFFS' EVIDENCE SUBMITTED IN OPPOSITION TO DEFENDANT'S SUMMARY JUDGMENT MOTIONS−−Pages 83−102−− filed by Mohit Narayan. (Kaufmann, Aaron) (Filed on 1/23/2007) Modified on 1/30/2007 to link entry to document #98 (dhm, COURT STAFF). (Entered: 01/23/2007)
109 DECLARATION of DAVID POGREL IN OPPOSITION TO 98 DEFENDANT EGL, INC.'S OBJECTIONS TO PLAINTIFFS' EVIDENCE SUBMITTED IN OPPOSITION TO DEFENDANT'S SUMMARY JUDGMENT MOTIONS−−filed by Mohit Narayan. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Exhibit D)(Kaufmann, Aaron) (Filed on 1/23/2007) Modified on 1/30/2007 to link entry to document #98 (dhm, COURT STAFF). (Entered: 01/23/2007)
110 CERTIFICATE OF SERVICE by Mohit Narayan re 102 Errata,, 103 Declaration in Opposition, −−PROOF OF SERVICE−− (Kaufmann, Aaron) (Filed on 1/25/2007) (Entered: 01/25/2007)
111 CERTIFICATE OF SERVICE by Mohit Narayan re 105 Reply to Opposition, 109 Declaration in Opposition,, 106 Reply to Opposition, 108 Reply to Opposition, 104 Reply to Opposition, 107 Reply to Opposition −−PROOF OF SERVICE−− (Kaufmann, Aaron) (Filed on 1/25/2007) (Entered: 01/25/2007)
112 Minute Entry: Motion Hearing held on 1/26/2007 before Ronald M. Whyte (Date Filed: 1/26/2007) re 60 MOTION for Summary Judgment on the Individual Claims of Plaintiff Thomas Heath filed by EGL, Inc.,, 70 MOTION for Summary Judgment Regarding the Individual Claims of Plaintiff Hanna Rahawi filed by EGL, Inc.,, 65 MOTION for Summary Judgment on the Individual Claims of Plaintiff Mohit Narayan filed by EGL, Inc.,. (Court Reporter Lee−Anne Shortridge.) (jg, COURT STAFF) (Date Filed: 1/26/2007) (Entered: 01/29/2007)
113 ORDER by Judge Ronald M. Whyte granting 101 Application of Fraser A. McAlpine for Admission Pro Hac Vice. (dhm, COURT STAFF) (Filed on 2/8/2007) (Entered: 02/09/2007)
114 REQUEST for Court Approval to Submit Recently Published Judicial Opinion in Opposition to Defendant's Motions for Summary Judgment filed by Thomas Heath, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 5/15/2007) Modified text on 5/16/2007 (dhm, COURT STAFF). (Entered: 05/15/2007)
115 Proposed Order Re 114 Plaintiffs' Request for Court Approval to Submit Recently Published Judicial Opinion in Opposition to Defendant's Motions for Summary Judgment by Thomas Heath, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 5/15/2007) Modified on 5/16/2007 to link entry to document #114 (dhm, COURT STAFF). (Entered: 05/15/2007)
116 ORDER 115 Re: Plaintiffs' Request for Court Approval to Submit Recently Published Judicial Opinion in Opposition to Defendant's Motions for Summary Judgment. Signed by Judge Ronald M. Whyte on 6/28/07. (jg, COURT STAFF) (Filed on 6/28/2007) (Entered: 06/28/2007)
117 STATEMENT OF RECENT DECISION pursuant to Civil Local Rule 7−3.d filed byThomas Heath, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 6/28/2007) (Entered: 06/28/2007)
118 ORDER by Judge Ronald M. Whyte Granting 60 , 65 , 70 Defendants' Motions for Summary Judgment (rmwlc1, COURT STAFF) (Filed on 7/10/2007) (Entered: 07/10/2007)
119 JUDGMENT in favor of defendants against plaintiffs. Signed by Judge Ronald M. Whyte on 7/16/07. (rmwlc1, COURT STAFF) (Filed on 7/16/2007) (Entered: 07/16/2007)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 15 of 24

08/02/2007 08/02/2007 08/06/2007 08/09/2007 08/22/2007 08/23/2007 10/18/2007 10/19/2007 08/27/2008 08/27/2008 10/14/2008 10/22/2008 07/13/2010 08/10/2010
08/13/2010

120 ASSOCIATION of Counsel by Mohit Narayan. (Kaufmann, Aaron) (Filed on 8/2/2007) (Entered: 08/02/2007)
121 NOTICE OF APPEAL as to 119 Judgment, 118 Order on Motion for Summary Judgment, filed by Thomas Heath, Mohit Narayan, Hanna Rahawi. Filing fee $ 455, receipt number 54611001459. (dhm, COURT STAFF) (Filed on 8/2/2007) (bwS, COURT STAFF). (Entered: 08/06/2007)
Transmission of Notice of Appeal and Docket Sheet to US Court of Appeals re 121 Notice of Appeal (dhm, COURT STAFF) (Filed on 8/6/2007) (Entered: 08/06/2007)
122 TRANSCRIPT DESIGNATION & ORDERING FORM by Thomas Heath, Mohit Narayan, Hanna Rahawi for proceedings held on 1/26/2007 before Judge Ronald M. Whyte.. (Kaufmann, Aaron) (Filed on 8/9/2007) (Entered: 08/09/2007)
123 ORDER to File Documents Under Seal. Signed by Judge Ronald M. Whyte on 8/22/07. (jg, COURT STAFF) (Filed on 8/22/2007) (Entered: 08/22/2007)
USCA Case Number 07−16487 Ninth Circuit for 121 Notice of Appeal filed by Mohit Narayan, Thomas Heath, Hanna Rahawi. (dhm, COURT STAFF) (Filed on 8/23/2007) Modified on 9/25/2012 (bwS, COURT STAFF). (Entered: 08/25/2007)
125 TRANSCRIPT of Proceedings held on 1/26/2007 before Judge Ronald M. Whyte. Court Reporter: Lee−Anne Shortridge.. (dhm, COURT STAFF) (Filed on 10/18/2007) (bwS, COURT STAFF). (Entered: 10/19/2007)
Certificate of Record Mailed to USCA re appeal 121 Notice of Appeal : (dhm, COURT STAFF) (Filed on 10/19/2007) (Entered: 10/19/2007)
126 ORDER of USCA as to 121 Notice of Appeal filed by Mohit Narayan, Thomas Heath, Hanna Rahawi. Appellees' unopposed motion for leave to file an oversized answering brief of 15,802 words is granted. (dhm, COURT STAFF) (Filed on 8/27/2008) (Entered: 09/05/2008)
127 AMENDED ORDER of USCA as to 121 Notice of Appeal filed by Mohit Narayan, Thomas Heath, Hanna Rahawi. Appellees' unopposed motion for leave to file an oversized answering brief of 15,802 words is granted. (dhm, COURT STAFF) (Filed on 8/27/2008) (Entered: 09/05/2008)
128 ORDER of USCA Granting motion to extend time to file brief re 121 Notice of Appeal filed by Mohit Narayan, Thomas Heath, Hanna Rahawi. (dhm, COURT STAFF) (Filed on 10/14/2008) (Entered: 10/14/2008)
129 Certificate of Record Mailed to USCA re 121 Notice of Appeal (dhm, COURT STAFF) (Filed on 10/22/2008) (Entered: 10/22/2008)
130 USCA OPINION AND JUDGMENT ENTERED as to 121 Notice of Appeal filed by Mohit Narayan, Thomas Heath, Hanna Rahawi. The judgment of the district court granting EGL's motion for summary judgment is REVERSED and REMANDED. (dhm, COURT STAFF) (Filed on 7/13/2010) (Entered: 07/14/2010)
131 Received ORDER of USCA as to 121 Notice of Appeal: Appellees' Petition for Panel Rehearing is granted for the limited purpose of amending the Opinion, without further oral argument. The Opinion filed July 13, 2010, slip op 10069, is amended as follows: On page 10084, line 20: "This is not all", is deleted. On page 10085, second indented paragraph, first sentence: The fact that the Drivers here had contracts expressly acknowledging that they were independent contractors is simply not significant under California's test of employment is replaced with "That the Drivers here had contracts expressly acknowledging that they were independent contractors is simply not dispositive under California's test of employment" No subsequent petitions for rehearing and rehearing en banc may be filed. (bw, COURT STAFF) (Filed on 8/10/2010) Modified on 10/5/2010 (bw, COURT STAFF). (Entered: 08/10/2010)
132 MANDATE of USCA. The judgment of this Court, entered 5/12/10 takes effect this date. This Constitutes the formal mandate of this Court issued pursuant to Rule 41(a) of the FRAP. (bw, COURT STAFF) (Filed on 8/13/2010) (Entered: 08/16/2010)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 16 of 24

08/16/2010 09/16/2010
10/01/2010 10/01/2010 10/15/2010 10/15/2010 10/19/2010 10/20/2010 10/21/2010 10/21/2010 10/22/2010
10/26/2010 11/30/2010
01/25/2011 01/27/2011
02/03/2011 02/07/2011 02/07/2011

133 CLERKS NOTICE Spreading Mandate to Counsel. (bw, COURT STAFF) (Filed on 8/16/2010) (Entered: 08/16/2010)
134 CLERKS NOTICE OF SETTING CASE MANAGEMENT CONFERENCE: Case Management Conference set for 10/22/2010 10:30 AM in Courtroom 6, 4th Floor, San Jose. Joint Case Management Statement due by 10/15/2010. (jg, COURT STAFF) (Filed on 9/16/2010) (Entered: 09/16/2010)
135 NOTICE of Appearance by Eve Hedy Cervantez (Cervantez, Eve) (Filed on 10/1/2010) (Entered: 10/01/2010)
136 NOTICE of Appearance by Michael Rubin (Rubin, Michael) (Filed on 10/1/2010) (Entered: 10/01/2010)
137 Amended Certification of Interested Entities or Persons by EGL, Inc. (Elmore, H.) (Filed on 10/15/2010) Modified on 10/18/2010 (bw, COURT STAFF). (Entered: 10/15/2010)
138 Third Joint Case Management Statement and (Proposed) Order filed by Thomas Heath, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 10/15/2010) Modified on 10/18/2010 (bw, COURT STAFF). (Entered: 10/15/2010)
139 NOTICE of Change of Attorney Information by Yeongyo Anna Suh (Suh, Yeongyo) (Filed on 10/19/2010) Text modified on 10/20/2010 conforming to posted document caption (bw, COURT STAFF). (Entered: 10/19/2010)
140 NOTICE of Change In Counsel by Karen Joyce Kubin (Kubin, Karen) (Filed on 10/20/2010) (Entered: 10/20/2010)
141 NOTICE of Change of Attorney Information by Fraser Angus McAlpine (McAlpine, Fraser) (Filed on 10/21/2010) Modified on 10/21/2010 (bw, COURT STAFF). (Entered: 10/21/2010)
142 NOTICE of Change In Counsel by Karen Joyce Kubin (Kubin, Karen) (Filed on 10/21/2010) (Entered: 10/21/2010)
144 Minute Entry: Initial Case Management Conference held on 10/22/2010 before Ronald M. Whyte (Date Filed: 10/22/2010). Further Case Management Conference set for 9/2/2011 10:30 AM in Courtroom 6, 4th Floor, San Jose. (Court Reporter Not Reported.) (jg, COURT STAFF) (Date Filed: 10/22/2010) (Entered: 10/27/2010)
143 (Proposed) Order re Case Management by Mohit Narayan. (Kaufmann, Aaron) (Filed on 10/26/2010) Modified on 10/27/2010 (bw, COURT STAFF). (Entered: 10/26/2010)
145 CASE MANAGEMENT SCHEDULING ORDER 143 : Further Case Management Conference set for 9/2/2011 10:30 AM in Courtroom 6, 4th Floor, San Jose. Signed by Judge Ronald M. Whyte on 11/30/10. (jg, COURT STAFF) (Filed on 11/30/2010) (Entered: 12/01/2010)
146 NOTICE of Appearance by Mohit Narayan, Hanna Rahawl, Thomas Heath (Murray, Matthew) (Filed on 1/25/2011) Modified on 1/25/2011 (bw, COURT STAFF). (Entered: 01/25/2011)
147 STIPULATION and (Proposed) order re leave for filing of second amended complaint; second amended complaint attached as exhibit by Thomas Heath, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit) (Kaufmann, Aaron) (Filed on 1/27/2011) Modified on 1/28/2011 (bw, COURT STAFF). (Entered: 01/27/2011)
148 STIPULATION AND ORDER 147 Re: Leave for Filing of Second Amended Complaint. Signed by Judge Ronald M. Whyte on 2/3/11. (jg, COURT STAFF) (Filed on 2/3/2011) (Entered: 02/03/2011)
149 Second Amended Complaint against EGL, Inc., Eagle Freight Services, Inc. Filed by Hanna Rahawi, Thomas Heath, Mohit Narayan. (Kaufmann, Aaron) (Filed on 2/7/2011) Modified on 2/8/2011 (bw, COURT STAFF). (Entered: 02/07/2011)
150 NOTICE of Firm Name Change (Kaufmann, Aaron) (Filed on 2/7/2011) Modified on 2/8/2011 (bw, by Thomas Heath, Mohit Narayan, Hanna Rahawi COURT STAFF). (Entered: 02/07/2011)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 17 of 24

03/07/2011 03/07/2011 03/07/2011 03/07/2011 04/27/2011 05/06/2011 05/06/2011 05/13/2011 05/13/2011
05/19/2011 05/19/2011 05/19/2011 07/18/2011 08/09/2011 08/12/2011 08/12/2011

151 Answer to Second Amended Complaint re ( 149 ) by EGL, Inc. (McAlpine, Fraser) (Filed on 3/7/2011) Linkage added on 3/8/2011 (bw, COURT STAFF). (Entered: 03/07/2011)
152 Certification of Interested Entities or Persons (Civil Local Rule 3−16) by Ceva Freight, LLC (McAlpine, Fraser) (Filed on 3/7/2011) Modified on 3/8/2011 (bw, COURT STAFF). (Entered: 03/07/2011)
153 Correction to ANSWER TO SECOND AMENDED COMPLAINT re (149]) byCeva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 3/7/2011) Modified on 3/8/2011 (bw, COURT STAFF). (Entered: 03/07/2011)
154 Correction to Certification of Interested Entities or Persons by Ceva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 3/7/2011) Modified on 3/8/2011 (bw, COURT STAFF). (Entered: 03/07/2011)
155 STIPULATION and (Proposed) Order Regarding Extension of Time to Complete Non−Declarant Depositions by Ceva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 4/27/2011) Modified on 4/28/2011 (bw, COURT STAFF). (Entered: 04/27/2011)
156 Expert Witness List by EGL, Inc., Ceva Freight, LLC (McAlpine, Fraser) (Filed on 5/6/2011) Modified on 5/9/2011 (bw, COURT STAFF). (Entered: 05/06/2011)
157 Designation of Experts Regarding Class Certification by Hanna Rahawi, Thomas Heath, Mohit Narayan, Ugo Iheonu (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Cervantez, Eve) (Filed on 5/6/2011) Modified on 5/9/2011 (bw, COURT STAFF). (Entered: 05/06/2011)
158 STIPULATION and (Proposed) Order regarding extension of time to complete non−declarant depositions by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 5/13/2011) Modified on 5/16/2011 (bw, COURT STAFF). (Entered: 05/13/2011)
159 Letter to Judge Whyte regarding request for a three−week Extension of Time on Pre−Class Certification Discovery and a One week Extension of the Deadline for Disclosing Expert Reports Regarding Class Certificaiton from counsel for plaintiffs. (Kaufmann, Aaron) (Filed on 5/13/2011) Modified on 5/16/2011 (bw, COURT STAFF). (Entered: 05/13/2011)
160 Letter to Judge Whyte regarding follow−up and revise the parties' request for continuance from Aaron Kaufmann (Kaufmann, Aaron) (Filed on 5/19/2011) Modified on 5/20/2011 (bw, COURT STAFF). (Entered: 05/19/2011)
161 (Proposed) Order by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 5/19/2011) Modified on 5/20/2011 (bw, COURT STAFF). (Entered: 05/19/2011)
162 ORDER 161 Regarding Extension of Time to Complete Pre−Class Certification Discovery and Expert Reports. Case Management Conference set for 10/7/2011 10:30 AM in Courtroom 6, 4th Floor, San Jose. Signed by Judge Ronald M. Whyte on 5/19/11. (jg, COURT STAFF) (Filed on 5/19/2011) (Entered: 05/19/2011)
163 STIPULATION and (Proposed) order re additional pages for briefing motion for class certification by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 7/18/2011) Modified on 7/25/2011 (bw, COURT STAFF). (Entered: 07/18/2011)
164 STIPULATION AND ORDER 163 Re: Additional Pages for Briefing Motion for Class Certification. Signed by Judge Ronald M. Whyte on 8/9/11. (jg, COURT STAFF) (Filed on 8/9/2011) (Entered: 08/09/2011)
165 RESPONSE to designation of expert witnesses by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 8/12/2011) Modified on 8/15/2011 (bw, COURT STAFF). (Entered: 08/12/2011)
166 Defendants' Counter−Designation of Expert Regarding Class Certification by Ceva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 8/12/2011) Modified on 8/15/2011 (bw, COURT STAFF). (Entered: 08/12/2011)

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 18 of 24

09/23/2011 09/23/2011 09/23/2011 09/23/2011 09/23/2011 09/23/2011
09/23/2011
09/23/2011 09/23/2011
09/23/2011 09/23/2011 09/23/2011

167 Administrative Motion to File Under Seal filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Declaration Declaration of Aaron Kaufmann)(Kaufmann, Aaron) (Filed on 9/23/2011) (Entered: 09/23/2011)
168 Declaration of Aaron Kafumann in support of plaintiffs' motion for class certification< re 171 filed byT homas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 9/23/2011) Linkage added on 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
169 Declaration of Eve Cervantes in support of plaintiffs' motion for class certification re 171 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit to declaration of Eve Cervantes) (Kaufmann, Aaron) (Filed on 9/23/2011) Linkage added on 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
170 (Proposed ) Order Granting plaintiffs' motion for class certification re 171 by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 9/23/2011) Text modified and linkage added 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
171 Notice of Motion and Motion for Class Certification ; Memorandum of Points and Authorities in Support filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. Responses due by 10/7/2011. Replies due by 10/14/2011. (Kaufmann, Aaron) (Filed on 9/23/2011) Text modified on 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
172 Declaration of Lisa Dungan in support of Motion for Class Cerfification filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit B1, # 2 Exhibit B2, # 3 Exhibit B3, # 4 Exhibit B4, # 5 Exhibit B5, # 6 Exhibit B6, # 7 Exhibit B7, # 8 Exhibit B8, # 9 Exhibit B9, # 10 Exhibit B10) (Kaufmann, Aaron) (Filed on 9/23/2011) Modified on 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
173 EXHIBITS−B11 in support of plaintiffs' motion for class certification re 172 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit B12, # 2 Exhibit B13, # 3 Exhibit B14, # 4 Exhibit B15, # 5 Exhibit B16, # 6 Exhibit B17, # 7 Exhibit B18, # 8 Exhibit B19, # 9 Exhibit B20, # 10 Exhibit B21−23) (Kaufmann, Aaron) (Filed on 9/23/2011) Modified on 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
174 EXHIBITS−C1 in support of plaintiffs' motion for class certification re 172 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit, # 2 Exhibit, # 3 Exhibit, # 4 Exhibit, # 5 Exhibit, # 6 Exhibit, # 7 Exhibit, # 8 Exhibit) (Kaufmann, Aaron) (Filed on 9/23/2011) Modified on 9/27/2011 (bw, COURT STAFF (Entered: 09/23/2011)
175 EXHIBITS−C5 in support of plaintiffs' motion for class certification re 172 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit C11, # 2 Exhibit C12, # 3 Exhibit C13, # 4 Exhibit C14, # 5 Exhibit C15, # 6 Exhibit C16, # 7 Exhibit C17, # 8 Exhibit C18, # 9 Exhibit C19, # 10 Exhibit C10) (Kaufmann, Aaron) (Filed on 9/23/2011) Modified on 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
176 EXHIBITS−D1 in support of plaintiffs' motion for class certification re 172 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit D2, # 2 Exhibit D3, # 3 Exhibit D4, # 4 Exhibit D5) (Kaufmann, Aaron) (Filed on 9/23/2011) Modified on 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
177 EXHIBIT−E1 in support of plaintiffs' motion for class certification re 172 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit E2, # 2 Exhibit E3, # 3 Exhibit E4, # 4 Exhibit E5, # 5 Exhibit E6) (Kaufmann, Aaron) (Filed on 9/23/2011) Modified on 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
178 Exhibit F − Prospective Class Member Declarations re 172 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit F2, # 2 Exhibit F3, # 3 Exhibit F4, # 4 Exhibit F5, # 5 Exhibit F6, # 6 Exhibit F7, # 7 Exhibit F8, # 8 Exhibit F9, # 9 Exhibit F10, # 10 Exhibit F11, # 11 Exhibit F12, # 12 Exhibit F13, #

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 19 of 24

09/23/2011
09/23/2011
09/23/2011 09/29/2011 09/29/2011 09/30/2011 09/30/2011 09/30/2011 10/05/2011 10/06/2011 10/06/2011
10/06/2011

13 Exhibit F14, # 14 Exhibit F15)(Kaufmann, Aaron) (Filed on 9/23/2011) Text modified on 9/27/2011 conforming to Posted Document caption (bw, COURT STAFF). (Entered: 09/23/2011)
179 Continued Prospective Class Member Declarations re 172 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit F17, # 2 Exhibit F18, # 3 Exhibit F19, # 4 Exhibit F20, # 5 Exhibit F21, # 6 Exhibit F22, # 7 Exhibit F23, # 8 Exhibit F24, # 9 Exhibit F25, # 10 Exhibit F26, # 11 Exhibit F27, # 12 Exhibit F28, # 13 Exhibit F29, # 14 Exhibit F30) (Kaufmann, Aaron) (Filed on 9/23/2011) Modified on 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
180 Continued Prospective Class Member Declarations re 172 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit F32, # 2 Exhibit F33, # 3 Exhibit F34, # 4 Exhibit F35, # 5 Exhibit F36, # 6 Exhibit F37, # 7 Exhibit F38, # 8 Exhibit F39, # 9 Exhibit F40, # 10 Exhibit F41) (Kaufmann, Aaron) (Filed on 9/23/2011) Modified on 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
181 EXHIBITS−G1 in support of plaintiffs' motion for class certification re 172 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit G2) (Kaufmann, Aaron) (Filed on 9/23/2011) Modified on 9/27/2011 (bw, COURT STAFF). (Entered: 09/23/2011)
182 STIPULATION and (Proposed) order for late filing of Declaration of Ugo Iheonu in support of plaintiffs' motion for Class Certification by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit) (Kaufmann, Aaron) (Filed on 9/29/2011) Modified on 9/30/2011 (bw, COURT STAFF). (Entered: 09/29/2011)
183 STIPULATION AND ORDER 182 for late filing of declaration in support of plaintiffs' motion for class certification. Signed by Judge Ronald M. Whyte on 9/29/2011. (rmwlc1, COURT STAFF) (Filed on 9/29/2011) (Entered: 09/29/2011)
184 Declaration of Ugo Iheonu in Support of Plaintiff's Motion for Class Certificaiton re 172 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 9/30/2011) Modified on 10/3/2011 (bw, COURT STAFF). (Entered: 09/30/2011)
185 Joint Report on Alternative Dispute Resolution by Ceva Freight, LLC, EGL, Inc., Eagle Freight Services, Inc., Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (McAlpine, Fraser) (Filed on 9/30/2011) Modified on 10/3/2011 (bw, COURT STAFF). (Entered: 09/30/2011)
186 (Proposed) Order egarding Continued Class Certification Briefing and Discovery Schedule by Ceva Freight, LLC, EGL, Inc., Eagle Freight Services, Inc., Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (McAlpine, Fraser) (Filed on 9/30/2011) Modified on 10/3/2011 (bw, COURT STAFF). (Entered: 09/30/2011)
187 Order by Hon. Ronald M. Whyte denying 167 Administrative Motion to File Under Seal.(rmwlc1, COURT STAFF) (Filed on 10/5/2011) (Entered: 10/05/2011)
188 Notice of Motion and Motion for Class Certification; Memorandum of Points and Authorities in Support (FRCP 23) filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. Responses due by 10/20/2011. Replies due by 10/27/2011. (Kaufmann, Aaron) (Filed on 10/6/2011) Modified on 10/7/2011 (bw, COURT STAFF). (Entered: 10/06/2011)
189 EXHIBIT−1A in support of Motion for Class Cerfification re 172 Declaration in Support, filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit A2, # 2 Exhibit A3, # 3 Exhibit A4, # 4 Exhibit A5, # 5 Exhibit A6, # 6 Exhibit A7−1, # 7 Exhibit A7−2, # 8 Exhibit A7−3, # 9 Affidavit A7−4, # 10 Exhibit A7−5, # 11 Exhibit A7−6, # 12 Exhibit A7−7, # 13 Exhibit A7−8, # 14 Exhibit A7−9) (Kaufmann, Aaron) (Filed on 10/6/2011) Modified on 10/7/2011 (bw, COURT STAFF). (Entered: 10/06/2011)
190 EXHIBIT−A in support of Motion for Class Cerfification re 172 Declaration in Support, filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit A7−11, # 2 Errata A7−12, # 3 Exhibit A7−13, # 4 Exhibit A7−14, # 5 Exhibit A7−15, # 6 Exhibit A7−16, # 7 Exhibit A7−17, # 8 Exhibit

Case: 5:05-cv-04181-RMW As of: 01/02/2017 12:33 PM PST 20 of 24

10/06/2011 10/06/2011 10/06/2011 10/06/2011 10/06/2011 10/06/2011 10/06/2011 10/06/2011 10/06/2011 01/13/2012

A7−18, # 9 Exhibit A7−19, # 10 Exhibit A7−20, # 11 Exhibit A7−21) (Kaufmann, Aaron) (Filed on 10/6/2011) Modified on 10/7/2011 (bw, COURT STAFF). (Entered: 10/06/2011)
191 EXHIBIT−A8 in support of Motion for Class Cerfification re 172 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit A9, # 2 Exhibit A10, # 3 Exhibit A11, # 4 Exhibit A12, # 5 Exhibit A13, # 6 Exhibit A14, # 7 Exhibit A15, # 8 Exhibit A16, # 9 Exhibit A17) (Kaufmann, Aaron) (Filed on 10/6/2011) Modified on 10/7/2011 (bw, COURT STAFF). (Entered: 10/06/2011)
192 EXHIBIT−A18 in support of Motion for Class Cerfification re 172 Declaration in Support, filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit A19, # 2 Exhibit A20, # 3 Exhibit A21, # 4 Exhibit A22, # 5 Exhibit A23, # 6 Exhibit A24, # 7 Exhibit A25, # 8 Exhibit A26, # 9 Exhibit A27) (Kaufmann, Aaron) (Filed on 10/6/2011) Modified on 10/7/2011 (bw, COURT STAFF). (Entered: 10/06/2011)
193 EXHIBIT−A28 in support of Motion for Class Cerfification re 172 Declaration in Support, filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit A29, # 2 Exhibit A30, # 3 Exhibit A31, # 4 Exhibit A32, # 5 Exhibit A33, # 6 Exhibit A34, # 7 Exhibit A35, # 8 Exhibit A36, # 9 Exhibit A37) (Kaufmann, Aaron) (Filed on 10/6/2011) Modified on 10/7/2011 (bw, COURT STAFF). (Entered: 10/06/2011)
194 EXHIBIT−A38 in support of Motion for Class Cerfification filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit A39, # 2 Exhibit A40, # 3 Exhibit A41, # 4 Exhibit A42−1, # 5 Exhibit A42−2, # 6 Exhibit A42−3, # 7 Exhibit A42−4, # 8 Exhibit A42−5, # 9 Exhibit A42−6)(Kaufmann, Aaron) (Filed on 10/6/2011) Modified on 10/7/2011 (bw, COURT STAFF). (Entered: 10/06/2011)
195 EXHIBITS in support of Motion for Class Cerfification re 172 Declaration in Support, filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit A42−8, # 2 Exhibit A42−9, # 3 Exhibit A42−10, # 4 Exhibit A42−11, # 5 Exhibit A42−12, # 6 Exhibit A42−13, # 7 Exhibit A42−14, # 8 Exhibit A42−15, # 9 Exhibit A42−16) (Kaufmann, Aaron) (Filed on 10/6/2011) Modified on 10/7/2011 (bw, COURT STAFF). (Entered: 10/06/2011)
196 EXHIBITS in support of Motion for Class Cerfification re 172 Declaration in Support, filed byThomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit A42−18, # 2 Exhibit A42−19, # 3 Exhibit A42−20, # 4 Exhibit A42−21, # 5 Exhibit A42−22, # 6 Exhibit A42−23, # 7 Exhibit A42−24, # 8 Exhibit A42−25, # 9 Exhibit A42−26) (Kaufmann, Aaron) (Filed on 10/6/2011) Modified on 10/7/2011 (bw, COURT STAFF). (Entered: 10/06/2011)
197 EXHIBIT−A43 in support of Motion for Class Cerfification re 172 Declaration in Support, filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit A44, # 2 Exhibit A45, # 3 Exhibit A46, # 4 Exhibit A47, # 5 Exhibit A48−1, # 6 Exhibit A48−2, # 7 Exhibit A48−3, # 8 Exhibit A48−4, # 9 Exhibit A48−5) (Kaufmann, Aaron) (Filed on 10/6/2011) Modified on 10/7/2011 (bw, COURT STAFF). (Entered: 10/06/2011)
198 EXHIBIT−A49 in support of Motion for Class Cerfification re 172 Declaration in Support, filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit A50, # 2 Exhibit A51, # 3 Exhibit A52, # 4 Exhibit A53, # 5 Exhibit A54, # 6 Exhibit A55, # 7 Exhibit A56 (Kaufmann, Aaron) (Filed on 10/6/2011) Modified on 10/7/2011 (bw, COURT STAFF). (Entered: 10/06/2011)
199 STIPULATION AND ORDER 186 Regarding Continued Class Certification Briefing and Discovery Schedule. Case Management Conference set for 2/10/2012 10:30 AM in Courtroom 6, 4th Floor, San Jose. Signed by Judge Ronald M. Whyte on 10/6/11. (jg, COURT STAFF) (Filed on 10/6/2011) (Entered: 10/06/2011)
200 Administrative Motion to File Under Seal filed by Ceva Freight, LLC, EGL, Inc.. (McAlpine, Fraser) (Filed on 1/13/2012) (Entered: 01/13/2012)

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01/13/2012
01/13/2012 01/13/2012 01/13/2012 01/13/2012
01/13/2012 01/13/2012 01/13/2012 01/13/2012 01/19/2012 02/06/2012 02/07/2012 02/07/2012 02/07/2012

201 Declaration of H. Allison Elmore in Support of 200 Administrative Motion to File Under Seal filed byCeva Freight, LLC, EGL, Inc.. (Attachments: # 1 Exhibit)*** FOR CORRECT EXHIBIT REFER TO DOCUMENT 203 . *** (Related document(s) 200 ) (McAlpine, Fraser) (Filed on 1/13/2012) Modified on 1/13/2012 (feriab, COURT STAFF). (Entered: 01/13/2012)
202 (Proposed) Order Granting Administrative Motion to File Under Seal re 200 by Ceva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 1/13/2012) Modified on 1/17/2012 (bw, COURT STAFF). (Entered: 01/13/2012)
203 EXHIBITS to Declaration of H. Allison Elmore in Support of Administrative Motion to File Under Seal re 200 filed by Ceva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 1/13/2012) Modified on 1/17/2012 (bw, COURT STAFF). (Entered: 01/13/2012)
204 Opposition to Plaintiff's Motion for Class Certification re 188 filed by Ceva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 1/13/2012) Modified on 1/17/2012 (bw, COURT STAFF). (Entered: 01/13/2012)
205 Declaration of H. Allison Elmore in Support of Defendants' Oppositon to Plaintiff's Motion for Class Certification re 204 filed by Ceva Freight, LLC, EGL, Inc. (Attachments: # 1 Exhibit A.1 to A.5, # 2 Exhibit A.6 to A.11, # 3 Exhibit A.12 to A.16, # 4 Exhibit A.17 to A.22, # 5 Exhibit A.23 to A.26, # 6 Exhibit A.27 to A.33, # 7 Exhibit B*** FOR EXHIBIT B REFER TO DOCUMENT 209 . *** , # 8 Exhibit C, # 9 Exhibit D.1, # 10 Exhibit D.2, # 11 Exhibit E.1, # 12 Exhibit E.2, # 13 Exhibit F) (McAlpine, Fraser) (Filed on 1/13/2012) Modified on 1/17/2012 (bw, COURT STAFF). Modified on 1/17/2012 (feriab, COURT STAFF). (Entered: 01/13/2012)
206 Declaration of Rhonda Bateman in Support of Defendants' Opposition to Plaintiffs' Motion for Class Certification re 204 filed by Ceva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 1/13/2012) Modified on 1/17/2012 (bw, COURT STAFF). (Entered: 01/13/2012)
207 Declaration of Sam Slater in Support of Defendant's Opposition to Plaintiffs' Motion for Class Certification re 204 filed by Ceva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 1/13/2012) Modified on 1/17/2012 (bw, COURT STAFF). (Entered: 01/13/2012)
208 (Proposed) Order Granting Plaintiffs' Motion for Class Certification re 204 by Ceva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 1/13/2012) Modified on 1/17/2012 (bw, COURT STAFF). (Entered: 01/13/2012)
209 Correction of Exhibt−B to Declaration of H. Allison Elmore in Support of Defendants' Opposition to Plaintiffs' Motion for Class Certification re 205 filed by Ceva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 1/13/2012) Modified on 1/17/2012 (bw, COURT STAFF). (Entered: 01/13/2012)
210 CASE MANAGEMENT STATEMENT and (Proposed) order re class cert briefing filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 1/19/2012) Modified on 1/19/2012 (bw, COURT STAFF). (Entered: 01/19/2012)
211 Order by Hon. Ronald M. Whyte denying 200 Administrative Motion to File Under Seal.(rmwlc1, COURT STAFF) (Filed on 2/6/2012) (Entered: 02/06/2012)
212 Administrative Motion to File Under Seal filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 2/7/2012) (Entered: 02/07/2012)
213 Declaration of Aaron Kaufmann in Support of Plaintiff's Motion to Seal Documents re 212 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 2/7/2012) Modified on 2/8/2012 (bw, COURT STAFF). (Entered: 02/07/2012)
214 (Proposed) Order Granting Administrative Motion to File Under Seal re 212 by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Kaufmann, Aaron) (Filed on 2/7/2012) Modified on 2/8/2012 (bw, COURT STAFF). (Entered:

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02/09/2012 02/09/2012 02/10/2012 03/01/2012 03/16/2012 03/16/2012
03/23/2012 03/23/2012 03/23/2012 03/30/2012 08/20/2012 08/20/2012 08/20/2012

02/07/2012)
215 JOINT CASE MANAGEMENT STATEMENT AND ORDER RE: CLASS CERTIFICATION BRIEFING 210 : Motion Hearing set for 3/30/2012 09:00 AM in Courtroom 6, 4th Floor, San Jose before Hon. Ronald M. Whyte. Signed by Judge Ronald M. Whyte on 2/9/12. (jg, COURT STAFF) (Filed on 2/9/2012) (Entered: 02/09/2012)
216 Order by Hon. Ronald M. Whyte granting 212 Administrative Motion to File Under Seal.(rmwlc1, COURT STAFF) (Filed on 2/9/2012) (Entered: 02/09/2012)
217 DOCUMENT E−FILED UNDER SEAL re 216 Order on Administrative Motion to File Under Seal Declaration of Fraser A. McAlpine in Support of Defendants' Opposition to Plaintiffs' Motion for Class Certification by Ceva Freight, LLC, EGL, Inc.. (Attachments: # 1 Exhibit Exhibit 1, # 2 Exhibit Exhibit 2)(McAlpine, Fraser) (Filed on 2/10/2012) (Entered: 02/10/2012)
218 NOTICE of Change of Attorney Firm Affiliation by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi (Kaufmann, Aaron) (Filed on 3/1/2012) Modified on 3/2/2012 (bw, COURT STAFF). (Entered: 03/01/2012)
219 Reply Memorandum of Points and Authorities in Support of Motion for Class Certification re 188 filed by Mohit Narayan. (Kaufmann, Aaron) (Filed on 3/16/2012) Text modified on 3/20/2012 (bw, COURT STAFF). (Entered: 03/16/2012)
220 Declaration of Natalya DeRobertis−Theye in Support of Reply Memorandum of Points and Authorities in Support of Motion for Class Certification re 219 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit−A, # 2 Exhibit−B, # 3 Exhibit−C, # 4 Exhibit−D, # 5 Exhibit−E, # 6 Exhibit−F, # 7 Exhibit−G, # 8 Exhibit−H, # 9 Exhibit−I, # 10 Exhibit−J, # 11 Exhibit−K, # 12 Exhibit−L, # 13 Exhibit−M, # 14 Exhibit−N, # 15 Exhibit−O, # 16 Exhibit−P, # 17 Exhibit−Q, # 18 Exhibit−R, # 19 Exhibit−S, # 20 Exhibit−T) (Kaufmann, Aaron) (Filed on 3/16/2012) Text modified on 3/20/2012 (bw, COURT STAFF). (Entered: 03/16/2012)
221 OBJECTIONS to REPLY EVIDENCE [L.R. 7−3(d)(1)] re 219 by Ceva Freight, LLC, EGL, Inc.(McAlpine, Fraser) (Filed on 3/23/2012) Linkage added on 3/26/2012 (bw, COURT STAFF). (Entered: 03/23/2012)
222 Declaration of H. Allison Elmore in Support of OBJECTIONS to REPLY EVIDENCE [L.R. 7−3(d)(1)] re 221 filed by Ceva Freight, LLC, EGL, Inc. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H) (McAlpine, Fraser) (Filed on 3/23/2012) Text modified on 3/26/2012 (bw, COURT STAFF). (Entered: 03/23/2012)
223 (Proposed) Order Granting OBJECTIONS to REPLY EVIDENCE [L.R. 7−3(d)(1)] re 221 by Ceva Freight, LLC, EGL, Inc. (McAlpine, Fraser) (Filed on 3/23/2012) Text modified on 3/26/2012 (bw, COURT STAFF). (Entered: 03/23/2012)
224 Minute Entry: Motion Hearing held on 3/30/2012 before Ronald M. Whyte (Date Filed: 3/30/2012) re 188 MOTION to Certify Class filed by Ugo Iheonu, Mohit Narayan, Thomas Heath, Hanna Rahawi. (Court Reporter Summer Fisher.) (jg, COURT STAFF) (Date Filed: 3/30/2012) (Entered: 03/30/2012)
225 REQUEST TO FILE A STATEMENT OF RECENT DECISION RE MOTION FOR CLASS CERTIFICATION [L.R. 7−3(D] re 188 by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Certificate/Proof of Service Proof of Service) (Kaufmann, Aaron) (Filed on 8/20/2012) Modified on 8/20/2012 (bwS, COURT STAFF). (Entered: 08/20/2012)
226 ORDER GRANTING 225 PLAINTIFFS' REQUEST TO FILE A STATEMENT OF RECENT DECISION. Signed by Judge Ronald M. Whyte on 8/20/2012. (rmwlc1, COURT STAFF) (Filed on 8/20/2012) (Entered: 08/20/2012)
227 STATEMENT OF RECENT DECISION re Motion for Class Certifiction (Local Rule 7−3.d ) re 188 filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Exhibit Copy of Opinion: Scovil v. FedEx Ground Package System, Inc., # 2 Certificate/Proof of Service Proof of Service) (Kaufmann, Aaron) (Filed on

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09/07/2012 09/21/2012 09/24/2012
09/25/2012 09/26/2012 10/11/2012 12/17/2012 12/09/2013 01/29/2014 08/11/2014 10/27/2015 12/03/2015
12/04/2015

8/20/2012) Modified on 8/21/2012 (bwS, COURT STAFF). (Entered: 08/20/2012)
228 ORDER by Judge Whyte denying 171 , 188 Motion for Class Certification. (rmwlc1, COURT STAFF) (Filed on 9/7/2012) (Entered: 09/07/2012)
230 USCA Memorandum as to receipt of Petition for Permission to Appeal under 23(f) 121 Notice of Appeal filed by Mohit Narayan, et al (bwS, COURT STAFF) (Filed on 9/21/2012) (Entered: 09/25/2012)
229 Transcript of Proceedings held on 03/30/2012, before Judge Ronald M. Whyte. Court Reporter/Transcriber Summer Fisher, Telephone number 408−288−6150. Per General Order No. 59 and Judicial Conference policy, this transcript may be viewed only at the Clerks Office public terminal or may be purchased through the Court Reporter/Transcriber until the deadline for the Release of Transcript Restriction.After that date it may be obtained through PACER. Any Notice of Intent to Request Redaction, if required, is due no later than 5 business days from date of this filing. Release of Transcript Restriction set for 12/24/2012. (Fisher, Summer) (Filed on 9/24/2012) (Entered: 09/24/2012)
*** PLEASE DISREGARD. DOCKETED IN ERROR. *** USCA Case Number 12−80175 USCA for 121 Notice of Appeal filed by Mohit Narayan, Thomas Heath, Hanna Rahawi. (bwS, COURT STAFF) (Filed on 9/25/2012) Modified on 9/25/2012 (bwS, COURT STAFF). (Entered: 09/25/2012)
231 STIPULATION and (PROPOSED) ORDER re LIMITED STAY OF ORDER DENYING CLASS CERTIFICATION TO TOLL STATUTE OF LIMITATIONS filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Certificate/Proof of Service) (Kaufmann, Aaron) (Filed on 9/26/2012) Modified on 9/26/2012 (bwS, COURT STAFF). (Entered: 09/26/2012)
232 STIPULATION AND ORDER 231 Re: Limited Stay of Order Denying Class Certification to Toll Statute of Limitations. Signed by Judge Ronald M. Whyte on 10/11/12. (jgS, COURT STAFF) (Filed on 10/11/2012) (Entered: 10/11/2012)
233 ORDER of USCA as to 121 Notice of Appeal. The court, in its discretion, denies the petition for permission to appeal the district courts September 7, 2012 order denying class action certification. See Fed. R. Civ. P. 23(f); Chamberlan v. Ford Motor Co., 402 F.3d 952 (9th Cir. 2005) (per curiam). (bwS, COURT STAFF) (Filed on 12/17/2012) (Entered: 12/18/2012)
234 NOTICE of Substitution of Counsel and (Proposed) Order by H. Allison Elmore (Elmore, H.) (Filed on 12/9/2013) Modified on 12/10/2013 (bwS, COURT STAFF). (Entered: 12/09/2013)
235 ORDER 234 Granting Notice of Substitution of Counsel. Attorney Bruce Mitchell Jacobs and Yeongyo Anna Suh Terminated. Signed by Judge Ronald M. Whyte on 1/29/14. (jgS, COURT STAFF) (Filed on 1/29/2014) (Entered: 01/29/2014)
236 NOTICE of Lien filed by M&G Truck Service, Inc. (srmS, COURT STAFF) (Filed on 8/11/2014) (Entered: 08/12/2014)
237 RELEASE OF LIEN by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi (Kaufmann, Aaron) (Filed on 10/27/2015) Modified on 10/28/2015 (bwS, COURT STAFF). (Entered: 10/27/2015)
238 STIPULATION AND [PROPOSED] ORDER REGARIDNG DISMISSAL OF ALL CLAIMS BY PLAINTIFFS MOHIT NARAYAN, THOMAS HEATH AND UGO IHEONU, WITH PREJUDICE filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Proposed Order [PROPOSED] ORDER OF DISMISSAL OF ALL CLAIMS BY PLAINTIFFS MOHIT NARAYAN, THOMAS HEATH AND UGO IHEONUS CLAIMS, WITH PREJUDICE)(Kaufmann, Aaron) (Filed on 12/3/2015) Modified on 12/3/2015 (bwS, COURT STAFF). (Entered: 12/03/2015)
239 ORDER Granting 238 Stipulation RE Dismissal of all claims by Plaintiffs Mohit Narayan, Thomas Heath and Ugo Iheonu ONLY with prejudice. It is ordered that all claims asserted by and on behalf of Plaintiffs Mohit Narayan, Thomas Heah and Ugo Iheonu are hereby dismissed with prejudice. Each party will bear

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02/24/2016 02/25/2016

its own attorneys' fees and costs related to the claims. This order does not apply to Plaintiff Hanna Rahawi, his claims remain. Signed by Judge Ronald M. Whyte on 12/4/2015. (amk, COURT STAFF) (Filed on 12/4/2015) (Entered: 12/04/2015)
240 STIPULATION WITH PROPOSED ORDER REGARDING DISMISSAL OF ALL CLAIMS BY PLAINTIFF HANNA RAHAWI, WITH PREJUDICE filed by Thomas Heath, Ugo Iheonu, Mohit Narayan, Hanna Rahawi. (Attachments: # 1 Proposed Order [PROPOSED] ORDER OF DISMISSAL OF ALL CLAIMS BY PLAINTIFF HANNA RAHAWIS CLAIMS, WITH PREJUDICE)(Pogrel, David) (Filed on 2/24/2016) (Entered: 02/24/2016)
241 ORDER Granting 240 Stipulation Regarding Dismissal of ALL CLAIMS by Plaintiff Hanna Rahawi, with prejudice. It is hereby ordered that pursuant to the parties stipulation that all claims asserted by Plaintiff Hanna Rahawi are hereby DISMISSED, WITH PREJUDICE. Each party will bear its own attorneys' fees and costs related to the claims for Plaintiff Hanna Rahawi, except as otherwise provided for in the parties settlement agreement. The entire matter is hereby dismissed. The Clerk shall close the file. Signed by Judge Ronald M. Whyte on 2/25/2016. (amkS, COURT STAFF) (Filed on 2/25/2016) (Entered: 02/25/2016)

 
 FILED

MAY0 8 2008

Case No. 07-16487

CATH\,, ;, C,al l E',45U_',L,,_ L'_

Q

L1.S /;OUR7 OF APPEALS

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

MOHIT NARAYAN, Plaintiffs-Appellan

et al., ts,

O

V.

EGL, INC., et al., Defendants-Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

Case No. CV-05-04181 RMW

O

Hon. Ronald M. Whyte

PLAINTIFFS-APPELLANTS'

OPENING BRIEF

Q

Michael Rubin Stacey M. Leyton Rebecca Smullin ALTSHULER BERZON LLP 177 Post Street, Suite 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064

Aaron Kaufmann David Pogrel HINTON, ALFERT & SUMNER 1646 N. California Blvd., Suite 600 Walnut Creek, CA 94596 Telephone: (925) 932-6006 Facsimile: (925) 932-3412

Attorneys for Plaintiffs-Appellants MOHIT NARAYAN, et al.

4P

(Additional Counsel for Plaintiffs-Appellants Listed on the Following Page.)

.f

Case No. 07-16487

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

MOHIT NARAYAN, Plaintiffs-Appellants,

et al.,

g.

EGL, INC., et al., Defendants-Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT Case No. CV-05-04181

OF CALIFORNIA RMW

Hon. Ronald M. Whyte

CERTIFICATE

OF SERVICE

Michael Rubin

Stacey M. Leyton

Rebecca Smullin

ALTSHULER

BERZON LLP

177 Post Street, Suite 300 San Francisco, CA 94108

Telephone: Facsimile:

(415) 421-7151 (415) 362-8064

Aaron Kaufmann David Pogrel HINTON, ALFERT & SUMNER 1646 N. California Blvd., Suite 600 Walnut Creek, CA 94596 Telephone: (925) 932-6006 Facsimile: (925) 932-3412

Attorneys for Plaintiffs-Appellants MOHIT NARAYAN, et al.

(Additional Counsel for Plaintiffs-Appellants

Listed on the Following Page.)

.o

Lorraine Grindstaff

PATTEN, FAITH & SANDFORD 635 W. Foothill Blvd.

Monrovia, CA 91016

Telephone:

(626) 359-9335

Facsimile: (626) 303-2391

!

CERTIFICATE

OF SERVICE

CASE: CASE NO.:

Mohit Narayan et al. v. EGL, Inc. et al.
U.S. Court of Appeals for the Ninth Circuit No. 07-16487

I am employed in the City and County of San Francisco, California. I am over the age of eighteen years and not a party to the within action; my business address is 177 Post Street, Suite 300, San Francisco, California 94108. On May 8, 2008, I served the following document(s):

lo

PLAINTIFFS-APPELLANTS'

OPENING BRIEF (additional

copies; original filed on March 28, 2008);

o

PLAINTIFFS-APPELLANTS'

EXCERPTS OF RECORD,

VOLUMES I THROUGH

III AND V THROUGH

VI;

t

PLAINTIFFS-APPELLANTS'

EXCERPTS OF RECORD,

VOLUME IV (filed under seal by August 22, 2007 order of U.S.

District Court, Northern District of California)

4.

NOTIFICATION

OF FILING UNDER SEAL; and this

5.

CERTIFICATE

OF SERVICE

on the parties, through their attorneys of record, by placing true copies thereof in sealed envelopes addressed as shown below for service as designated below:

[]

By Messenger Service: I am readily familiar with the practice of

Altshuler Berzon LLP for messenger delivery, and I prepared each

such envelope, to be delivered by a courier employed by Western

Messenger Service, with whom we have a direct billing account, who

personally delivered each such envelope to the office of the

addressee(s) on the date last written below.

o4
I

ADDRESSEE Fraser McAlpine, Esq. Heather Burror, Esq. Karen Joyce Kubin, Esq. Akin Gump Strauss Hauer & Feld LLP 580 California Street, Suite 1500 San Francisco, California 94104-1036 Telephone: (415) 765-9500

PARTY Defendants-Appellees

I declare under penalty of perjury under the law_ of the United States of

America that the foregoing is true and correct. Eye, erie )_ay

8, 2008, at San

Francisco, California.

Case No. 07-16487
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

MOHIT NARAYAN, Plain t(ffs-Appellan

et al., ts,

V.

EGL, INC., et al., Defi, ndan ts-Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN

DISTRICT OF CALIFORNIA

Case No. CV-05-041gl

RMW

lion. Ronald M. Whyte

PLAINTIFFS-APPELLANTS'

OPENING

BRIEF

Michael Rubin

Stacey M. Leyton Rebecca Smullin

ALTSHULER

BERZON LLP

177 Post Street, Suite 300

San Francisco, CA 94108

Telephone: Facsimile:

(415) 421-7151 (415) 362-8064

Aaron Kauflnann

David Pogrel

HINTON, ALFERT & SUMNER

1646 N. California Blvd., Suite 600 Walnut Creek, CA 94596

Telephone: Facsimile:

(925) 932-6006 (925) 932-3412

Attorneys for Plaintiffs-Appellants

MOHIT NARAYAN,

et al.

(Additional

Counsel for Plaintiffs-Appellants

Listed on the Following Page.)

Lorraine Grindstaff PATTEN, FAITH & SANDFORD 635 W. Foothill Blvd. Monrovia, CA 91016 Telephone: (626) 359-9335 Facsimile: (626) 303-2391

TABLE OF CONTENTS

TABLE OF AUTHORITIES

.........................................

iv

JURISDICTIONAL

STATEMENT

....................................

1

ISSUES PRESENTED

..............................................

1

STATEMENT

OF THE CASE ........................................

2

STATEMENT

OF FACTS ...........................................

3

A.

EGL's Contract and policies gave EGL enonnous control

over how plaintiffs performed their duties .....................

6

B.

EGL closely managed the details of plaintiffs' work days ........

10

C.

EGL controlled plaintiffs' earnings and other business

decisions ...............................................

15

SUMMARY

OF ARGUMENT

.......................................

19

STANDARD

OF REVIEW ..........................................

21

ARGUMENT

.....................................................

21

I.

PlaintitTs' Factual Showing Would Permit a Reasonable

Jury to Conclude that Plaintiffs Are Employees Under

California Law ..........................................

23

II.

The Court Should Apply California Law to the Question

Whether Plaintiffs Are Employees or Independent

Contractors .............................................

37

A.

The Contract's narrow choice-of-law

provision

does not encompass plaintiffs' claims, so California

law should apply ...................................

38

i

o The choice-of-law provision does not

encompass plaintiffs' statutory claims .............

38

,

The choice-of-law provision is equally

inapplicable to the "employee" element of

plaintiffs' claims ..............................

43

, California law applies under the governmental

interests test ..................................

46

B°

Even if the Contract's choice-of-law provision

encompasses plaintiffs' claims, California law does

not permit its enforcement ............................

47

l°

Application of Texas law as the district court

characterized it would violate fundamental

California policies .............................

48

a.

A state rule of law constitutes a

fundamental policy when it promotes

important goals or is not waivable ...........

48

b.

The Labor Code provisions at isstle

embody Rlndamental California policies ......

50

C.

Application of the Texas law definition

of"employee" would violate fundamental

California policies ........................

54

d.

California has a materially greater interest

in application of its law than does Texas,

and its interests would be more seriously

impaired if its policy were subordinated to

that of Texas ............................

57

III. Even Under Texas Law, a Reasonable Jury Could Find that

Plaintiffs Were Employees, Not Independent Contractors ........

59

A,

The Contract's terms do not establish plaintiffs'

status as independent

contractors ......................

62

B.

Evidence that tile parties' actual relationship was

inconsistent

with any independent

contractor contract

is sufficient to defeat summary judgment ................

64

CONCLUSION

...................................................

71

APPENDIX

.....................................................

A-I

111

TABLE OF AUTHORITIES

FEDERAL CASES

Bassidji v. Goe, 413 F.3d 928 (9th Cir. 2005)

...................................

Benchmark

Electronics

v. J.M. thtber Corp.,

343 F.3d 719 (5th Cir.) ........................................

Brazil v. Dell, hlc., 2007 WL2255296

(N.D. Cal. Aug. 3, 2007) .......................

Caton v. Leach, 896 F.2d 939 (5th Cir. 1990)

...................................

Dark v. Cur_y CounO,, 451 F.3d 1078 (9th Cir. 2006)

..................................

Davis v. EGL Eagle Global Logistics L.P., 243 Fed. Appx. 39 (5th Cir. 2007) ............................
Desimone v. Allstate hrs. Co., 1999 WL 33226248 (N.D. Cal. Sept. 14, 1999) .....................

Desimone

v. AlLs'tate

hrs. Co.,

2000 WL 1811385 (N.D. Cal. Nov. 7, 2000)

.......................

Dollar Sys., htc. v. A vcar Leasing S3:s'., lnc., 890 F.2d 165 (9th Cir. 1989) ...................................

Douglas v. U.S. District Court, 495 F.3d 1062 (9th Cir. 2007)

...............................

Hathcock v. Aeme Truck Lines, hTc., 262 F.3d 522 (5th Cir. 2001) ...................................

iv

37 42 53 40 21 59, 66 52 54 4l 53, 57 68

NLRB v. F)'iendly Cab Co., hlc., 512 F.3d 1090 (9th Cir. 2008)

...............................

Oestreicher

v. Alienware Corp.,

502 F.Supp.2d 1061 (N.D. Cal. 2007)

......................

Plute v. RPS, hTc., 141 F.Supp.2d

1005 (N.D. Cal. 2001) ............................

Real v. Driscoll Strawberry Associate, hw., 603 F.2d 748 (9th Cir. 1979) ...................................

Ribbens hTt 'l S.A. v. Tran.v)ort hit 7 Pool, hTc., 47 F.Supp.2d 1117 (C.D. Cal. 1999) ..........................
S-Fer htt 'l, hw. v. Paladion Partnetw, Lid, 906 F. Supp. 211 (S.D.N.Y. 1995) ...............................

See ), oJ'Labor v. Lauritzen, 835 F.2d 1529 (7th Cir. 1987)

..................................

ThoJ_wson & Wallace v. Falconwood 100 F.3d 429 (5th ('it'. 1996)

C'oJp., ...................................

Valles v. h 3, lfill Crop., 410 F.3d 1071 (9th Cir. 2005)

..................................

Van Slyke v. Capital 503 F.Supp.2d

One Bank, 1353 (N.D. Cal. 2007)

.........................

Walker v. BankeJ;s' L(fe & Cas. Co., 2007 WE 967888 (N.D. I11. Mar. 28, 2007)

.....................

Wright v. UniveJwal Marithne Serv. Cm])., 525 U.S. 70 (1998) ...........................................

22, 29 38, 53, 58
45 32 48, 58 41 22 40 51 48, 58 41, 44 41

CALIFORNIA

STATE CASES

ABF Capital Corp. v. Grove Properties Co.,

126 Cal.App.4th

204 (2005) .................................

A CORN v. Dep 't ofhzdus. Relations,

41 Cal.App.4th

298 (1995) .....................................

Air Couriers hit 'l v. Employment

Dev. Dep 't,

150 Cal.App.4th

923 (2007) ................................

America Online, Inc. v. Superior Court,

90 Cal.App.4th

1 (2001) ....................................

Application

Group, lnc. v. lhmter

61 CaI.App.4th

881 (1998)

Group, hTc., ...............................

Bernhard v. Harrah _ Club, 16 Cal.3d 313 (1976)

.........................................

Borello v. Dep 't qf htdus. Relations, 48 Cal.3d 341 (1989) .....................................

Brassinga v. Ci O, of Molmtain View,

66 Cal.App.4th

195 (1998) .....................................

Broxe v. Uniotz- TJqbune Publis'hing Co.,

183 CaI.App.3d

1079 (1986) .............................

Elder v. Aetna Cas. & Surety Co., 236 S.W.2d 611 (1951) ........................................

Estrada v. FedEx Ground Package Sys., hTc.,

154 CaI.App.4th

1 (Nov. 28, 2007) ..............................

Gent13, v. Superior Court, 42 Cal.4th 443 (2007)

...................................

vi

49, 57 50
passim 48, 49
48, 57, 58 57
passim 25
23, 35, 36 60 19
45, 49, 51

Gonzalez v. Worke_w' Comp. Appeal Bd., 46 Cal.App.4th 1584 (1996) ................................

Grant v. Woods, 71 Cal.App.3d

647 (1977) .............................

Grissom v. Vons Cos., h_c., 1 Cal.App.4th 52 (1991) .......................................

Guardian Savings & Loan Ass 'n v. MD Assocs., 64 Cal.App.4th 309 (1998) .....................................

ttudgins v. Neiman Marcus Group, 34 Cal.App.4th 1109 (1995) ....................................

Hurtado v. Superior Court, 11 Cal.3d 574 (1974)

.........................................

h7 re Marriage o['C)'osby and Grooms, 116 Cal.App.4th 201 (2004) ....................................

JKH Enterprises, Inc. v. Dep 't q['hldus. Relations, 142 Cal.App.4th 1046 (Dec. 20, 2006) ........................

Kearnev v. Salomon Smith Barney, hlc., 39 Cal.4th 95 (2006) ..........................................

Kerr's Catering Serv. v. Dep 't q/'hldus. Relations, 57 Cal. 2d319 (1962) ......................................

Klussman v. Cross CountJT Bank, 134 Cal.App.4th 1283 (2005) ................................

Nedllovd Lines B. V. v. Sttperior Court, 3 Cal.4th 459 (1992) .................................

vii

passim 26, 34, 35, 45
50 49 51 46 57 passim 46 50, 51 53, 57 20, 37, 38,47

Phillips v. Gemini Moving Specialists,

63 Cal.App.4th

563 (1998) .....................................

Quillian v. Lion Oil Co.,

96 Cal.App.3d

156 (1979) ......................................

Santa OTtz Transport, 235 Cal.App.3d

hTc. v. Unemploy. hTs. App. Bd., 1363 1991) ...............................

Toyota Motor Sales v. Supertor Court, 220 Cal.App.3d 864 (1990) ................................

Washington Mutual Bank, FAv. Superior Court, 24 Cal.4th 906 (2001) ................................

Wedeck v. Unocal Corp.,

59 Cal.App.4th

848 (1997)

.....................................

Yellow Cab Coop. Inc. v. Workers' Comp. Appeal Bd.,

226 Cal.App.3d

1288 (1991) ...............................

TEXAS STATE CASES

Alice Leasing Colt_. v. Castillo, 53 S.W.3d 433 (Tex. App. 2001 ) ................................

Bell v. VPSI, Inc., 205 S.W.3d 706 (Tex. App. 2006)

......................

Bennack Hying Services, hTc. v. Balboa, 997 S.W.2d 748 (Tcx. App. 1999) ............................

Betel v. IICA llealth Services oJ'Texas, htc., 881 S.W.2d 21 (Tex. App. 1994) ................................

viii

51 51 passim passim 37, 38, 46, 47 29 passim
45 62, 69, 70, 71
63, 64 64

Durbin v. Culberson County, 132 S.W.3d 650 (Tex. App. 2004)

............................

62, 63

Gonzalez v. Mission Am. his. Co.,

795 S.W.2d 734 (Tex. 1990) ....................................

38

Hoechst Celanese Corp. v. Compton,

899 S.W.2d 215 (Tex. App. 1994) ...............................

69

Home hTteriors & G(]Ps, hw. v. Veliz, 695 S.W.2d 35 (Tex. App. 1985)

.............................

Household

O+edit Services, Inc. v. Driscol,

989 S.W.2d 72 (Tex. App. 1998) ................................

67, 68 68

Humble Oil & Rc.,/ining C'o. v. Martin,

222 S.W.2d 995 (Tex. 1949) ....................................

63

Limestone Prods. Dist., Inc. v. McNamara, 71 S.W.3d 308 (Tcx. 2002) ..................................

69, 70

Merchant v. State,

379 S.W.2d 924 (Tcx. Civ. App. 1964) ...........................

69

Newspapelw,

Inc. v. Love,

380 S.W.2d 582 (Tcx. 1964) ..............................

60, 62, 71

Permian Basin CmO,. Cents..[or Merit. Health and Merit. Retardation

v. Johns,

951 S.W.2d 497 (Tcx. App. 1997) ...............................

68

Red Roo/lmls,

hlc. v. Mltl'at Iloldings, L.L.C.,

223 S.W.3d 676 (Tex. App. 2007) ............................

Southwestern

Bell Tel. 0_. v. Pub. Util. Comm 'n,

863 S.W.2d 754 (Tex. App. 1993) ...............................

41, 42 61

ix

Stier v. Reading & Bates CoJp., 992 S.W.2d 423 (Texas 1999) ...............................

Sw(ft v. Aetna Cas. & Sur. Co., 449 S.W.2d 818 (Tex. Civ. App. 1970) ...........................

Texas Emp. Ins. Ass 'n v. Bewley, 560 S.W.2d 147 (Tex. Civ. App. 1977) ...........................

Thompson v. Travelers Indem. Co. of Rhode Island, 789 S.W.2d 277 (Tex. 1990) ..............................

WaSSOtl

V. SIFHCCIICF,

786 S.W.2d 414 (Tex. App. 1990) .........................

Weidner v. Sanchez, 14 S.W.3d 353 (Tex. App. 2000) ............................

FEDERAL STATUTES 28 U.S.C. §1291 ................................................... 28 U.S.C. §1332(a) ................................................. 28 U.S.C. §1441(a) .................................................

CALIFORNIA

STATE STATUTES

Cal. rig. Code §3513

..............................................

Cal. Lab. Code §219(a) ..........................................

Cal. Lab. Code §510(a) ..........................................

Cal. Lab. Code §512(a) ..........................................

39, 40 62 69
63, 65, 71 56, 59, 69
passim
1 1 1
2
44, 52 44, 52 44, 52

Cal. Lab. Code § 1194 ........................................... Cal. Lab. Code §2804 ...........................................

44, 52 44, 52

TEXAS STATE STATUTES

40 Tex. Admin. Code §821.5 ...............................

Tex. Lab. Code §61.001

............................................

Tex. Lab. Code §61.002

............................................

Tex. Lab. Code §61.051

............................................

Tex. Lab. Code, Ch. 61-62

..........................................

61, 62, 64, 65
| 1 61 1

OTHER AUTHORITIES

Restatement

(Second) Conflict of Laws §6 .............................

43

The Dunlo t) Commission ol7 the l_)tture of Worker-Management Report (Comell University 1994) .....................................

Relations

- Final 21

GAO, Enq)lovee Misclass(fication."

hnproved Outreach Could ttelp Ensure Proper

Worker Classi.fication,

No. GAO-07-859T

(2007) ........................

22

xi

JURISDICTIONAL

STATEMENT

EGL, a Texas-based corporation, removed this case from Santa Clara Superior Court to the U.S. District Court for the Northern District of California (Whyte, J.) pursuant to 28 U.S.C. §§1332(a), 1441(a). ER 856-59. The district court entered final judgment on July 16, 2007, and plaintiffs filed a timely notice of appeal on August 2, 2007. Fed. R. App. P. 4(a)(1); ER I, 20-21. This Court has jurisdiction under 28 U.S.C. § 1291.

ISSUES PRESENTED 1. Whether the district court erred in granting summary judgment for defendant EGL oil the ground that plaintiff delivery drivers, who allege violations of the Calitbrnia Labor Code, were ineligible "independent contractors" rather than covered "employees," as a matter of law. 2. Whether the district court erred, tinder California choice-of-law principles, in concluding that Texas law rather than California law applies to tile determination of whether plaintiffs were "employees" for the purposes of their California Labor Code claims.

STATEMENT OF THE CASE

Plaintiffs-Appellants

Mohit Narayan, Hanna Rahawi and Thomas Heath,

pick-up and delivery drivers for defendant EGL, Inc., filed this putative class

action lawsuit for back wages and expense reimbursenlents under California law.

Their First Amended Complaint alleges nine statutory claims for relief. ER 83055. I

Defendant EGL sought stlmmary judgment on the ground that plaintiffs were independent contractol5 rather than employees, and thus ineligible for the protections of the California Labor ('ode. The district court agreed, concluding as a matter of law that plaintiffs were not EGL's employees. See ER 3-19.

The district court analyzed plaintiffs' status under Texas law, rather than

California law, becanse of language in plaintiffs' contracts with EGL stating that

the"Agreenmnt

shall be interpreted under the laws of the State of Texas." ER

9:17-18. Despite Texas case law holding that such "interpret[ation]"

clauses

should be construed narrowly, the district court construed this language as

requiring it to apply Texas law in determining whether plaintiffs were

"employees" for ptnposes of their Calilbrnia Labor Code claims. ER 9-13.

' Plaintiffs also stied Eagle Freight Services, a subsidiary longer exists. ER 4:9, 857. References to "EGL °' shall include appropriate.

of EGL that no both entities, as

The district court concluded that plaintiffs had not created a triable issue concerning their employment status,and that plaintiffs were independent contractors as a matter of law. ER 13-17. In a brief footnote, the district court also concluded that the result would be the sameunder California law. ER 17 n.12.

STATEMENT OF FACTS 2

EGL is a Texas-basedcompany that provides local freight pick-up and

delivery services in California. ER 4:8-14. Although EGL classifies some of its

drivers as "employees," see ER 106, 450, it unlawfully classifies most of them

(including plaintiffs and the class they purport to represent) as "independent

contractors"

even though it controls their work by requiring them to pick tip and

deliver cargo at times specified by EGL, on tenns negotiated by EGL, pursuant to

Plaintiffs do not believe this Court nccds to reach any of the evidentiary

objections asserted below to conclude that disputed issues of fact should have

precluded sunmlaryjudgment.

However, if the Court finds it necessary to address

those objections, plaintiffs appeal the district court's ovemlling of plaintiffs'

objections to: (1) Schmidt Dec1.¶¶5-12 (ER 774-75),which

lack foundation,

constitute improper opinion testimony, arc irrelevant, and rely on vague and

ambiguous tcrms, see ER 4 n.4, 5 nn.5-7, 15 n. 11, and (2) Heath Depo. Tr. at

143:11-24 (ER 785), which constitutes improper opinion testimony and is

irrelevant, see ER 17 n. 13. The district court did not expressly rule on plaintiffs'

remaining objections. Plaintiffs preserve all other objections asserted below, to

the extent they become relevant.

procedures established and enforced by EGL. Plaintiffs lived and worked for EGL in California. See ER 452, 453-454,

751. Two plaintiffs were based in EGL's Sacramento station (Heath, December

1999 to July 2002; Narayan, July 1999 to September 2006), and the third was

based in EGL's San Francisco area station (Rahawi, 2000 to October 2005). ER

651¶2,652¶4; ER 671¶2, 672¶4; ER 632¶2, 645. All three worked for EGL full-

time and did not drive their vehicles for any other company during the applicable

limitations period. ER 637¶27; ER 656¶26; ER 675¶23. 3 Narayan and Rahawi

drove small, two-axle trucks that weighed under 26,000 pounds, see, e.g., ER 468,

while Heath drove a van weighing less than 10,000 pounds, ER 633¶2, 652¶2,

671¶2.

Plaintiffs performed pick-up and delivery functions that EGL's regional

manager called as "basic as it gets." ER 328-29. EGL required only an ordinary,

non-commercial drivers' license and limited driving experience. See ER 450.

Still, each plaintiff was required to complete an application, interview, and drug

test to be hired, ER 310-13,633¶5,652¶3,672¶3,

and to agree in writing to adhere

to EGL's policies and procedures. See ER 291-92, 450-51,457-58;

see also ER

3 Rahawi and Heath also worked part-time for EGL before the period covered by their present claims. ER 683,777.
4

460. Plaintiffs were also required to sign a company-drafted,

non-negotiated,

one-

year form contract, which set forth the terms and conditions of their duties as EGL

drivers. See ER 5:23-6:6, 6:28-7:7, 7:24-8:6, 633¶15,652¶3,672¶3; ER151-53.4

see generally

The principal isstle in this case is whether plaintiffs were employees - and

thus covered by the California Labor Code - or independent

contractors.

As

explained below, under both California law (which should apply in this case) and

Texas law (on which the district court erroneously

relied), a worker's status as an

employee or independent

contractor depends on the extent of the principal's right

to control the worker's duties. Tile evidence before tile district court, set forth

below, demonstrates

that EGL had substantial control over the details of plaintiffs'

job duties and performance,

enough to satisfy the test for "employee"

status under

either State's laws, and certainly enough to create a triable issue of fact as to their

4 Although EGL had different fore1 contracts for 1999 and 2000, tile

contracts' language was identical in relevant respects. Tile 2000 contracts are at

ER 694-710, 809-29, and 751-72. See also ER 688-93 (partial contract). The

1999 contracts are at ER 794-808 and 735-50. Hereinafter, "Contract" refers to

the cited paragraphs

as included in eacD of the contracts.

When distinction

between the paragraph numbering in the 1999 and 2000 versions is necessary, the versions will be referred to as "1999 Contract" and "2000 Contract."

status. 5
A. EGL's Contract and policies gave EGL enormous control over how plaintiffs performed their duties.
While EGL's Contracts with its drivers included boilerplate, conclusory
language proclaiming that plaintiffs had "independent discretion and judgment to
determine the method, manner and means of performance of [their] contractual
obligations," Contract ¶I, in fact EGL tightly controlled nearly every aspect of plaintiffs' work. Such control was enstn'ed by more specific provisions in the
Contract and by EGL's comprehensive corporate policies, see ER 66, 139-40, 178,
238-40, 461, many of which were set forth in EGL's "Safety and Compliance
Manual," ER 334-91, "Driver's Handbook," ER 394-439, and training video, ER 440-48. See also ER 64-67, 93-94, 143, 147-49, 303-04, 461-65,495¶27,672¶7)
EGL retained nearly unlimited authority to regulate its drivers' pick-up and
5 Indeed, both the California En3ployment Development Department and the federal Internal Revenue Service conchlded in opinion letters that Narayan was an "employee" of EGL because the company had the right to control his work. ER 621-23; 625-31.
<' Evidence from current and former EGL supervisors, dispatchers, and other employees, as well as declarations from 23 drivers other than plaintiffs confirm the uniformity of EGL's company policy. See ER 54-180, 215-264, 307-329,490-502 (declarations and testimony from dispatchers and other personnel); ER 505-619 (driver declarations); ER 33-39 (SUlnlnary of common elements in driver declarations, with citations to the specific declarations and paragraph numbers).

delivery duties. Under the Contract, EGL expressly reserved the right to require its drivers' compliance with all "safety" and "driving" requirements, Contract ¶2.07, and all "instructions regarding the results to be accomplished by Contractor," Contract ¶I. The Contract also required plaintiffs to meet a host of standardspresented in language so imprecise as to vest EGL with enormous enforcement discrction, such as "prompt and speedy transit times," "timely and accurate communication," and a "courteous, customer-focused, service-oriented, professional, business-like manner." 2000 Contract ¶4.04; 1999 Contract ¶4.03.
EGL's Safety and Compliance Manual covered such details as vehicle inspections, accidents, and permissible passengers. See ER 335. The company's
accident policy, for example, required drivers to complete a form report, subnait to post-accident drug testing in some cases, and follow step-by-step instructions including, "[n]ever use foul language and never admit fault" and "[t]ake pictures of the vehicles, the people involved in the accident, any property damage, cargo damage, and a clock or watch." ER 360-63.
EGL's Drivers' Handbook directed drivers how to receive assignments, what to do at a dclivcry site, how to respond to an upset customer, and how to handle damaged fieight. ER 406-09, 414. Drivers were instructed when to communicate with dispatch (e.g., upon arrival of an urgent shipment, before

leaving the dock, after each stop); when to use the two-way radio (e.g., not while playing the car radio, not while swearing); how to introduce themselves to customers (e.g., driver's name and motor carrier's name); and what tasks to perfoml upon pick-up or delivery (e.g., check addresslabels and count pieces). ER 403-12.
The company's training video was also highly detailed, including such precise instructions as,"When receiving a call for pickup, acknowledge information from the dispatcher.... Remember to lock your cab and keep your trailer door down and locked until you're ready to begin loading." ER 444 at 16:12-16.
EGL closely regulated its drivers' appearanceas well. Drivers were required to wear EGL-logoed shirts, dark pants, safety boots, and an EGL identification badge. ER 182-83,243,245,494¶21,634¶8, 653¶11,672']19,721. In accordancewith the Contract requiremcnt that drivers maintain their work clothes in "good condition" and keep their "personal appearanceconsistent with reasonablestandards of order," Contract ¶2.10; ER 325-27, EGL's managers directed drivers (including Narayan) to wear clean, tucked-in shirts, to maintain their personal hygiene, and to keep their badgesvisible. ER 89-90, 201-02, 495¶23.

EGL also tightly regulated its drivel3' equipment. EGL retained the

authority to require plaintiffs' vehicles to comply with any "customer service specifications" it established, Contract ¶2.01; and in practice, EGL required its drivers' vehicles to be less than five years old, painted entirely white, and covered

with EGL-mandated logos and markings. Contract ¶2.04; ER 634¶9, 637¶28, 652¶6, 656¶27, 672¶¶5,8, 675¶23; see also ER 107, 256, 484-85. Daily, quarterly

and annual vehicle inspections or maintenance reports were mandatory. Contract

¶2.06; ER 637¶¶24-26, 655-56_[]23-25,675¶¶20-21

; see also ER 91-92, 10 t, 110-

11, 155, 219-20, 372,459,495¶25.

EGL's managers enforced the Contract

requirement that plaintiffs maintain their vehicles "in a clcan and presentable

fashion free from body damage and extraneous markings," Contract ¶2.10, by

requiring drivers to wash their vehicles or make certain repairs, ER [ 75-76,

495¶24, 634¶9. The Contract also. required drivers to use a Nextel brand or other

company-mandated

two-way communication unit, Contract ¶I¶15.01-5.02, and

obtain EGL's written consent before using any replacement rental vehicle,

Contract ¶2.06.

EGE trained plaintiffs and other drivers in the minutiae of its required

procedures, including in required forms. ER 158-59, 284, 633¶6, 653¶8, 672¶6;

see also ER 464-65. Managers distributed the company's memos and policies to

drivers, ER 109, 241-42, 495¶27, and regularly exercised the company's right

(Contract ¶¶2.07, 2.11) to require drivers to attend unpaid meetings on company policies. See 637¶29, 656¶[28, 675-76¶24; ER 16:7-9; see also ER 82-84, 238-40,

276, 495¶26, 502¶11,664.

EGL obtained compliance with its policies through threats and discipline.

See generally ER 495¶28. For example, EGL suspended Rahawi for three days for

failing to report an accident as required, ER 636¶]22, 641-43, and threatened

Narayan with termination for failing to paint his truck cab white, ER 652¶6, 171-

74, 186, 476, and for failing to put EGL decals on the box of his truck, ER 185.

B. EGL closely managed the details of plaintiffs' work days.

EGL exercised close supervisory control over plaintiffs throughout their

work days, through management and oversight of their schedules, equipment, and

assignments.

First, the record contains substantial evidence that EGL regulated which

days and hours its drivers worked (notwithstanding

the district court's finding to

the contrary, see ER 5:4-5, 15:2-3, 17 n. 12). Managers ordered drivers to report to

their stations at specified times and directed them to give advance notice of

requested days off. See ER 49-50, 187-89, 272-73,634¶10,

638¶33,645,653¶12,

672¶10 (plaintiffs' testimony); ER 55-58, 107-08, 492¶7,498¶[7, 501¶8

10

(dispatcher and other employee testimony); ER 47 l, 473 (photos of start times). Indeed, EGL denied work to Rahawi as discipline for his having arrived late to a shift. ER 57. Although the district court noted that drivers did not always submit vacation requestsin advance, ER 15:1-3, EGL repeatedlydemanded such advance notice, ER 38¶1I.X (and evidence cited therein), and it also challenged driver requestsfor days off, even for such compelling reasonsas attending a funeral. ER 552-53¶17,564¶19. 7
EGL also determined when its drivers' work days could end. EGL's dispatchers often ordered drivers to wait without pay for additional pick-ups, ER 636¶19, 655¶19, 674¶16, 85-86,494¶17, or to call dispatch to be "cleared" to return to the station after completing their assignments, ER 636¶20, 655¶20, 674¶17; see also ER 169-70, 289-90, 404.
Second, EGL provided and controlled most of the facilities, personnel, and

7 While EGL submitted evidence to support its position that some drivers

took days off, arrived early or late, or did not comply entirely with supervisors'

orders, see ER 778-82,785-91;

ER 196-97, 722, 726-27,728; ER 271,272-75,

plaintiffs objected to much of this evidence as inadmissible or incomplete (although the district court did not rule on those objections). To the extent EGL reasserts that evidence, plaintiffs renew their objections - but note that whether

EGL's evidence is admissible or not, because plaintiffs' evidence is sufficient to create a disputed isstle of fact the district court should not have found that EGL's drivers "make themselves available at their own discretion," ER 15:2-3, and "were

not required to work regular schedules," ER 17 n.12.

ll

equipment that plaintiffs needed to perform their duties. At the loading dock,

EGL employees assisted the drivers in loading freight. ER 67-68, 99-100, 216-17,

235-37, 286-87, 493¶¶12-13,498-99¶¶6,8,

634-35¶14; 654¶16, 673¶13. EGL

issued its drivers logoed boxes and packing tape for special pick-ups, ER 234-35,

302, and required them to use EGL-issued forms to track their work, ER 636-

37¶23,655¶22,

675¶19, and to communicate

using EGL-mandated

equipment,

which EGL leased to those who chose not to purchase it, Contract ¶¶5.01-5.02.

EGL even arranged the laundering of its drivers' uniforms. ER 495¶22, 502¶113.

Finally, EGL managers supervised plaintiffs' work from the time that they arrived at the loading dock until they returned. Drivers began work by reporting

to stations and waiting for EGL dispatchers to issue pick-up and/or delivery

assignments.

Delivery assignments

typically came in batches of"delivery

receipts" which specified the shipment, customer, delivery time and place, and any

special instructions.

ER 115-16, 122-23,225-27,

492¶8,634¶12,654¶14,673¶11;

see generally ER 58-59, 80-82,477. s Although the Contract purportedly gave

plaintiffs the right to reject assignments,

Contract ¶2.02, in practice the drivers had

Special instructions could designate loading times, contact persons, freight unpacking instructions, additional help or a lift gate. See ER 87-88, 115-21, 30, 319-24, 477,670.

methods, specific delivery or limitations on use of
130-34, 165-66, 221-27,229-

12

little choice but to accept what was offered. EGL did not permit drivers to "pick and choose" among the batched delivery assignments, but required them to accept the entire batch or to wait for whatever remained after all other drivers were

dispatched. ER 61-63, 123, 160, 308-09,494¶15,660.

Narayan and Heath feared

retaliation if they refused an assignment, ER 655¶21,674¶18;

see also ER 191-96,

and considerable evidence showed that EGL responded to such refusals with

threats and retribution such as offering "junk" or no assignments the following

day. See ER 37¶1 I.T (and evidence cited therein), 73-76, 190,493-94¶¶10,

15,

499¶9. In particular, EGL repeatedly sent Rahawi home or told him not to report

the day after he refused particular assignments, ER 102-05,268-70, 636¶21, and

EGL terminated him after "an argument he had with a dispatcher regarding refusal

to pick up assignments." ER 7:8-9, 639¶35,649.

EGL often required plaintiffs to wait without pay for fl'eight to be ready for

loading. ER 634'[[11,653¶13,673¶11;

see also ER 77, 125-26, 498-99¶7. When

freight was ready, EGL required its drivers to load it in accordance with company

policy and any special customer requests, ER 120-2 I, 126-29, 301-02,493¶ 13,

635¶15, and EGL did not permit drivers to depart until they had notified dispatch

or submitted the EGL manifest. ER 71-72, 124-25,203, 287; see also 673¶ I 1.

EGL's supervision of its drivers continued even after they left the station.

13

Although the district court concluded that "[t]he contracted truckers determine how to route the orders in the assigneddelivery packet," ER 5:9-10; see also ER

15:5-6, 17 n. 12, substantial evidence shows that in practice, plaintiffs had little control over the order or schedule of their deliveries or, as a result, the order in

which to pack their vehicles. In some cases, EGL supervisors specifically told the drivers how to order their routes; in others, EGL set specific delivery times,

windows, or priorities that left plaintiffs little discretion in how to order deliveries.

See ER 59-60, 69-70,492-93¶8,499'][8,634¶¶12-13,654¶¶14-15,673_[_11

- 12; see

also ER 36¶11.O (and evidence cited therein). '_

EGL required its drivers to remain in contact with tile company throughout

the day, thus enabling it to oversee the drivers' work, task by task. Drivers were

instructed to notify the company immediately of delays and other problems, ER

144-46, 287-88, and promptly to confirm pick-ups and deliveries by phone or

through "Eagle Mobile Access" (cMAD), the company's electronic tracking

system. ER 635¶_T17-18,654¶¶17-18,674-75¶1¶14-15;

see also ER 112-14, 161-

62, 164, 246-51,481,488-89,

660, 666. EGL's dispatchers called drivers

EGL disputed this fact and submitted evidence that plaintiffs were not always directly ordered to perform their assignments in a certain order. See ER 205,730-32, 783-84. Again, although plaintiffs' objections to some of that evidence should have been sustained, plaintiffs' evidence is sufficient to create a material fact dispute.
14

throughout the day to check on their location and progress, to update work

instructions,

and to assign additional pick-ups. ER 635¶17, 654¶17, 674-75914-

15; see also ER 135, 255,493-94¶14,

499¶9. The EGL training video instructed,

"As an Eagle driver, you need to be in constant communication

with dispatch, with

the customer and with the computer tracking system. Communicating

with

dispatch is the single most important aspect of your job." ER443 at 9: 13-17.

Plaintiffs finished most work days at the station, where they unloaded any

remaining freight. In accordance with EGL policy, drivers had to tuna in

documentation

of their assignments

and COD payments the same day (or, in

exceptional circumstances,

early the following morning) in order to be paid. ER

636-37¶23,655¶22,662,

675 ¶19; see also ER 169, 177, 228-29,285,494¶19.

C.

EGL controlled plaintiffs' earnings and other business decisions.

EGL also retained snbstantial authority over the business aspects of

plaintiffs' work. t¢GL alone negotiated all customer relationships,

and drivers had

no input into the pricing or details of the services they provided. ER 252-54, 285, 638¶32, 657¶31,676¶26.

Moreover, EGL unilaterally controlled its drivers' compensation.

Drivers

were paid weekly or biweekly, based on their submissions

of mandatory

paperwork.

2000 Contract ¶4.03; 1999 Contract ¶4.02. Wages were calculated

15

based on: 1) a percentage of a "tariff' that EGL assigned to each routine pick-up

and delivery based on weight and distance, subject to a per-load weight cap, ER

6:26-27, ER 638¶30, 656-57¶29,676¶25;

see also 153-54, 257-60, 296-98,314-

15,496¶30; per-distance charges for unusual "hot-shot" deliveries, see, e.g., ER

47,475; and 3) "accessorial" fees to cover special services, see ER 78-79,474; see

generally 2000 Contract Appendix III; 1999 Contract ¶4.01; ER 475,478. EGL

unilaterally set tariff rates and drivers' percentages, decided if non-contract rates

would be paid, and determined whether drivers would be compensated for accessorials. See ER 47-48, 51, 150-52, 167-68, 198-200, 218, 261-62,293-95,

314-18,479, 633¶5,652¶3,672¶3.

While drivers could occasionally negotiate a

higher rate for unusual deliveries, such assignments were rare and negotiations over pay rarer still. ER 206, 277, 638¶31,676¶125. Furthemlore, EGL reserved

the right to reduce drivers' pay for "partial" performance and for any customer "service" claims that it (unilaterally) decided to honor. See 2000 Contract

¶4.04(b), (f), Appendix III; 1999 Contract ¶¶4.01,4.03(a),

(e); ER 231-33,

638¶32, 676¶26. EGL also reserved the right to deduct certain permit fees from

plaintiffs' paychecks, Contract ¶2.05, and required plaintiffs to purchase certain insurance, Contract ¶3.02, and to indemnify EGL for any service-related losses,

Contract ¶3.03.

16

EGL also controlled each driver's job tenure. Although the Contract

contained an automatic renewal clause, it could "be terminated by either party

without causewith thirty days' notice" or by EGL "immediately for failure to

follow EGL instructions." ER 6:l 1-12, 16:26-27; see also Contract ¶¶1, 6.02-03.

For instance, EGL "suspended" Rahawi pending investigation into alleged

misconduct and then informed him during his suspension that he would be

terminated effective 30 days after the notice. See ER 639¶35,649.

Finally, EGL limited the scope of plaintiffs' services for EGL and their

ability to work for others. Although the Contract purported to permit plaintiffs to

hire assistants, those assistants (as well as replacement drivers) were subject to

restrictions similar to those imposed on plaintiffs. See 2000 Contract ¶¶2.07, 2.09,

2.10; 1999 Contract ¶¶2.07, 2.09, 2.10. Moreover, drivers could not use an

assistant without EGL's consent to that specific individual for a specific date or

trip. ER 374. Furthermore, tile drivers did not alone decide when they required

assistance; sometimes EGL just assigned a "second man" and paid the worker

directly. ER 7:20-23,676¶28.

The Contract's "noncompetition"

clause prohibited drivers from servicing

any EGL customer outside of the Contract, a prohibition that extended six months

after termination. 2000 Contract ¶6.08; 1999 Contract ¶6.07. EGL also prohibited

17

its drivers from using their EGL-dedicatcd vehicles for "any non-[EGL] use" unless they notified EGL and covered all EGL "identification, signs and permit

markings." 2000 Contract ¶2.12; 1999 Contract ¶4.08; see also Contract ¶2.04. In

practice, this requirement made it virtually impossible for plaintiffs to put their

EGL vehicles to any other commercial use. EGL's required markings covered

much of the plaintiffs' vehicles when fully applied, and plaintiffs found that

covering them was difficult and impracticable. See ER 43-45, 184, 656¶27,

637¶27, 675¶23; cf ER 461; 467,469,472,

484-85.

18

SUMMARY OF ARGUMENT
Plaintiffs filed this lawsuit under California Labor Code provisions that require companies, among other things, to reimburse employees' business expenses, provide meal periods, and pay overtime to their "employees." Whether plaintiffs were covered employees, rather than non-covered independent contractors, should have been decided under California law. Under California law, plaintiffs were clearly employees, given EGL's expansive right of control over their work. See Borello v. Dep 't. of Indus. Relations, 48 Cal.3d 341 (1989); Estrada v. FedEx Ground Package Sys., Inc., 154 Cal.App.4th 1, review denied (Nov. 28, 2007); Air Couriers bTt 'l v. Employment Dev. Dep 't., 150 Cal.App.4th 923 (2007).
The district court erroneously analyzed the threshold employee/independent contractor question under the law of Texas the State where EGL is headquartered, but wherc no plaintiff lived or worked and compounded that error by incorrectly ruling under Texas law that undisputed material facts established plaintiffs' status as independent contractors.
The district court was wrong for several reasons. First, it erred in concluding that the choice-of-law provision in plaintiffs' contracts required application of Texas law to determine whether plaintiffs were "employees" for
19

purposes of their California Labor Code claims. ]-he parties' Contract specified only that Texas law would govern questions of contract interpretation - not
statutory claims or their elements. In the absence of a contract provision designating foreign law as governing those claims, California law applies under applicable choice-of-law rules.
Second, the trial court erred in holding that the Texas choice-of-law provision, even if intended to encompass plaintiffs' statutory claims, could be enforced under California choice-of-law principles. If the test for "employee" status under Texas law were as the district court characterized it, enforcement of a contract provision requiring application of such Texas law would undermine fundamental California labor policies and therefore be prohibited under Nedlloyd Lines B. V. v. Superior Court, 3 Cal.4th 459 (1992). An employer cannot force its workers to waive the statutory protections of the California Labor Code simply by imposing adhesive contract terms that designate the law of a less protective state as applying to all workplace claims.
Finally, even if the district court had been correct to apply Texas law, it applied that law incorrectly in granting summary judgment. At a minimum, material disputes of fact should have precluded such a ruling.
20

STANDARD OF REVIEW The district court's grant of summaryjudgment is reviewed de novo. The
Court should "view the evidence in the light most favorable to the nonmoving party and then determine whether there remains a genuine issue of material fact and whether the moving party is entitled to judgment as a matter of law." Dark v. Cur_ y County, 451 F.3d 1078, 1082 n.2 (9th Cir. 2006). EGL "can prevail only if it can show that no reasonable jury would infer from [plaintiffs'] evidence that [they have] stated.., valid claim[s]." ld.

ARGUMENT

The district court granted summary judgment to EGL upon concluding that

plaintiffs were independent contractors rather than employees, and therefore were

statutorily ineligible for the protections of the California Labor Code. ER 8:22-24, 13:18-18:3. The distinction between employees and independent contractors is

"It]he single most important factor in determining which workers are covered by

employment and labor statutes." The Dunlop Commission on the Future _["

Worker-Management

Relations - Final Report 64 (Cornell University 1994),

available at lattp://digitalcommons.ilr.corlaell.cdu/key

workplace/2. This

distinction was initially developed to protect companies from tort liability for the

21

actions of workers they did not in fact control. But in recent years, increasing

numbers of employers have sought to exploit the distinction to insulate themselves

from liability under worker protection statutes, by misclassifying

workers fully

integrated into their businesses, often through designations

in adhesive contracts.

See, e.g, NLRB v. Friendly Cab Co., Inc., 512 F.3d 1090, 1093 (9th Cir. 2008);

Estra&z, 154 CaI.App.4th

at 4. _°

In this case, the district court erred in accepting EGL's characterization

of

its drivers' status. The undisputed facts fail to support the court's conclusion that

plaintiffs are independent

contractors

as a matter of law- and that is tree under

Texas law as well as California law.

,0 The purpose of the employee/independent

contractor distinction is

different in tort law and worker protection law. See Sec '3' o/'Lat)or v. kauritzen,

835 F.2d 1529, 1543-45 (7th Cir. 1987) (Easterbrook,

J. concurring) (contrasting

tort law's focus on risk with wage-and-hour

law's concern with unfair working

conditions);

Borello, 48 Cal.3d at 352 (contrasting

tort law's concern with injuries

b), employees with social legislation's

concern with injuries to employees).

An employer's

financial incentives for misclassifying

workers, as EGL has

done, can be substantial.

For example, employers owe fewer taxes and are not

bound by federal mininlum wage, overtime, family leave, workplace safety, and

workers' compensation

laws with regard to independent

contractors.

See GAO,

Employee Misclassification:

hnproved Outreach Could Help Ensure Proper

Worker Classification,

No. GAO-07-859T,

at 7-8 (2007), available al

www.gao.gov/cgi-bin/getrpt?GAO-07-859T.

22

!.

Plaintiffs' Factual Showing Would Permit a Reasonable Jury to

Conclude that Plaintiffs Are Employees Under California Law.

California's test for employee status requires a fact-intensive examination of

the "nature of [plaintiffs'] work" and their "overall arrangements" with their

principal. See Borello, 48 Cal.3d at 353. "The essence of the test is the

[principal's] 'control of details' - that is, whether the principal has the right to

control the manner and means by which the worker accomplishes the work."

Estrada, 154 Cal.App.4th at 10. Even a relatively low level of oversight is

sufficient to establish an enaployment relationship where, as here, the job "d[oes]

not require a high degree of skill and [is] an integral part of the employer's

business." JKtt Entelw., hw. v. Dep 't oJ'[ndus. Relations, 142 Cal.App.4th 1046,

1064, review denied (Dec. 20, 2006); cf Borello, 48 Cal.3d at 356-57. Although a

company's _:x-ercise of control is often persuasive evidence of its underlying right

to control, see e.g., Borello, 48 Cal.3d at 356, a company need not actually

exercise that control for an employment relationship to be found. The right of

control over the manner and means of work, whether exercised or not, is what

matte,-s. See To3'ota Motor Sales v. Sttperiov Court, 220 Cal.App.3d 864,875 ( 1990); see also Brose v. Union-Tribune Publishing Co., 183 Cal.App.3d 1079,

1082, 1086 (1986).

23

In Borello, the California Supreme Court explained that while the
principal's right to control is the "'most significant consideration" affecting
employment status, court may also weigh a series of"secondary indicia" in
evaluating such status. 48 Cal.3d at 350 (quotation marks omitted). These indicia
include whether the principal has the right to discharge the purported employee at
will, and:
(a) whether the one perfomling 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 requircd in the particular occupation; (d) whether tile plincipal or the worker 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 perfomled; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (11) whether or not the parties believe they are creating the relationship of employer-employee.
ld. at 350-51; see also Estrada, 154 Cal.App.4th at 10.
These factors are not meant to be applied "mechanically as separate tests,"
but "are intertwined and their weight depends often on particular combinations."
Borello, 48 Cal.3d at 351 (internal quotes omitted). Under California law,
moreover, the crucial inquiry is the actual relationship between the parties; the
"parties' label is not dispositive and will be ignored if their actual conduct
establishes a different relationship." Estrada, 154 CaI.App.4th at 10-11; see also
24

Toyota, 220 Cal.App.3d at 877. Contractual designations are particularly irrelevant if workers had no "real choice" over their terms. See Borello, 48 Cal.3d at 359.

In cases involving worker-protection

legislation, as here, the "test for

determining whether a person rendering service to another is an 'employee' or an

excluded 'independent contractor' must be applied with deference to the purposes of the protective legislation." Id. at 353; see also id. at 359. "The... statutory

purpos[e] of the distinction between 'employees' and 'independent contractors' [is] substantially different" from the common law purpose, to limit employers' tort liability. Id. at 352. Such a difference justifies necessary "departures from common law principles." ld.
Because the district court mistakenly evaluated plaintiffs' status under Texas law, it addressed plaintiffs' argument that they were employees under California law only in a single, short, erroneous footnote. See ER 17 n. 12. Plaintiffs' evidence established that EGL's drivers should not be considered

independent contractors, or, at a minimum, raises "'conflicting inferences,'" Brassinga v. City of Mountain View, 66 Cal.App.4th 195, 210 (1998), that

25

preclude summary judgment. See also Borello, 48 Cal.3d at 349. _
California courts have repeatedly found drivers in circumstances similar to plaintiffs to be employees rather than independent contractors. See, e.g., A#" Couriers, 150 Cal.App.4th at 937-39; JKtt, 142 Cal.App.4th at 1064-67; Gonzalez v. Workers' Comp. Appeal Bd., 46 Cal.App.4th 1584, 1593-94 (1996); Santa Cruz Transport, hTc. v. Unemploy. Ins. App. Bd., 235 CaI.App.3d 1363, 1372-78 (1991); Yellow Cab Coop. hTc. v. Workers' Comp. Appeal Bd., 226 CaI.App.3d 1288, 1298-1302 (1991); Grant v. Woods', 71 Cal.App.3d 647, 653-54 (1977). Most notably, the relationship between EGL and plaintiffs, as established by plaintiffs' facts, closely mirrors tile enlployment relationships described in Estrada, 154 Cal.App.4th 1, decided shortly after summary judgment here, and Air Couriers lnt 'l, 150 Cal.App.4th 923, decided shortly after the district court's summary judgment hearing.
In Estrada, plaintiff FedEx drivers provided and maintained their own trucks which had to be painted approved colors and marked with the company's logo (compare supra at 9); agreed to maintain their own and their truck's

_ Indeed, the evidence of EGL's control over its drivers is so consistent

that it is difficult to imagine a reasonable jury concluding anything other than that

plaintiffs were EGL's employees. While plaintiffs did not file a cross-motion for

summary adjudication remand.

of their legal status, plaintiffs reserve the right to do so on

26

appearmlcein good condition (compare supra at 8-9); were paid weekly at rates
set by the company (compare supra at 15- 16); worked full-time and exclusively for the company and had to work each day unless they had pre-approved replacements (compare supra at 4, 10, 17); were required to arrive at a particular time each day for sorting, packing, and mandatory meetings (compare supra at 1011 ); had to return with required paperwork at the end of each day (compare supra at 15); could sequence tile order of their route but had to comply with designated pick-up and delivery times (compare supra at 14); could use only companyapproved helpers (compare supra at 17-18); could finance required equipment purchases through the company (compare sttpra at 12); and had to comply with delivery and tracking rules, including by using the company's approved scanners and fonns (compare slq)ra at 7-8, 12, 14). 154 Cal.App.4th at 7-8, 12. The Court of Appeal, attributing no weight to the fact that the driving' contract nominally identified them as independent contractors, concluded that "the evidence shows unequivocally that FedEx's conduct spoke louder than its words." ld. at 5, 11.
The circumstances of the employment relationship in Air Couriers also paralleled those here in all significant respects (except where they were less indicative of employee status): the drivers had control over their routes but worked regular schedules and had to meet designated delivery and pick-up times (corware
27

supra at 14); had discretion over when to take breaks and vacation (compare
supra at 10-11); could turn down jobs but did so infrequently (compare supra at 13); worked long tenures for the company (compare supra at 4); were paid on a regular schedule (compare supra at 15- 16); had to use company forms and comply with delivery rules (compare supra at 7-8, 12); were dispatched to deliveries and required to notify dispatchers when deliveries were completed (compare supra at 14); were encouraged to wear uniforms (compare supra at 8); delivered packages to the company's customers rather than their own (compare supra at 15); had no control over customer rates or billings (compare supra at 15); and "were performing an integral and entirely essential aspect of [the employer]'s business." 150 Cal.App.4th at 937-38. Based on these facts, the Court of Appeal concluded that substantial evidence supported the finding that the drivers were employees because the employer "exerted control over the drivers to coordinate and supervise the company's basic function: timely delivery of packages.'" 150 Cal.App.4th at 939.
The strikingly similar facts in this case - particularly when viewed in the light most favorable to plaintiffs, as required on review of summary judgment -
28

establish the same relationship. _ And, as shown below, many other California casesare in accord.
1. Right of control. As in Estrada, Air Couriers, and other cases in which
courts found an employment relationship, the detail and breadth of EGL's pick-up, driving, delivery, and documentation rules would permit a reasonable jury to conclude that EGL's control over its drivers was sufficient to establish their
employee status - especially because the company could modify its policies at any time, and did in fact enforce its policies through training and discipline. Compare supra at 6-10 with Estrada, 154 CaI.App.4th at 7; Wedeck v. Unocal Corp., 59 Cal.App.4th 848, 858 (1997); Toyota, 220 Cal.App.3d at 875; of. Friendly Cab Co., 512 F.3d at 1099. Indeed, EGL's retention (and frequent exercise) of the right to impose virtually aJo_ directive upon plaintiffs, supra at 6-7, belies any description of plaintiffs' work as "independent."
Particularly indicative of plaintiffs' employee status is their lack of control over the issues for which they seek statutory protection: the expenses they bore,
_2 The district court sought to distinguish Air Coztrie_w based on its findings that in thc instant casc plaintiffs had written contracts and "were not required to work regular schedules, were paid on a per job basis, and determined their own routes." ER 17 n.12. But these distinctions were all either inaccurate or insignificant. In particular, the Air Courietw decision did not treat the fact that many drivers lacked written contracts as dispositive (and, in fact, one driver testified he had signed such a contract). 150 Cal,App.4th at 938.
29

the hours they worked, and the wages they were paid. See supra at 15-17; also

generally h_'a at 50-52. EGL's drivers negotiated neither their pay rates nor any

other terms or conditions of their employment - facts that the district court

ignored. Compare supra at 5, 15-16 witD Estrada, 154 Cal.App.4th

at 7; Borello,

48 Cal.3d at 359; Gonzalez, 46 Cal.App.4th

at 1594; cf Yellow Cab, 226

Cal.App.3d at 1301 (drivers who do not set rates, but are paid based on number of

passengers and distance, bear no entrcpreneurial

risk and are not independent).

Furthermore,

the EGL dlivers' ostensible control over their hours, assignments,

and routes was illusory. In practice, drivers worked frill-time, regular schedules,

with assignments

dictated by EGL, and little flexibility over their routes, see supra

at 4, 10, 13-14 - arrangements

consistently

associated with employment.

See

Yellow Cab, 226 CaI.App.3d at 1298-99 (control over workers' hours is

"paradigmatic"

of employment

relationship);

iU. at 1298 (all-or-nothing

dispatch

policy); see alxo E.s't#'ada, 154 ('al.App.4th

at 12; Aic Cou#'ie#w, 150 Cal.App.4th

at

937-38; Gonzalez, 46 Cal.App.4th

at 1593; CJ.' Toyota, 220 Cal.App.3d

at 876

(when company "determined

what would be delivered, when and to whom and

what price would be charged," its failure to control delivery drivers' actual routes

and speeds did not alone show absence of right of control, as such freedom was

inherent in work).

3O

EGL's personal appearance and uniform policies also indicate an

employment relationship. Such measures are unrelated to any delivery results;

they only evidence EGL's effort to make its drivers as fully integrated into the

company as alo_ regular employee would be. Compare supra at 8 with Estrada,

154 Cal.App.4th at 11-12; Air Couriers, 150 Cal.App.4th at 938; Santa Cruz, 235 Cal.App.3d at 1372-73; Yellow Cab, 226 Cal.App.3d at 1298. The same is true of

EGL's vehicle appearance requirements. As in Estrada, 154 Cal.App.4th at 5-7, plaintiffs' vehicles had to meet size, color, and other specifications; to display the

company's logo prominently when in service for the company but not otherwise,

and to be inspected and cleaned in accordance with company standards, see supra

at 9; see also Yellow Cab, 226 CaI.App.3d at 1298 (cab cleanliness requirenlent).

2. SecondawJactors.

The Borello secondary indicia reinforce EGL's right

of control over its drivers and also weigh strongly in favor of plaintiffs' employee

status.

First, unlike tree independent contractors, plaintiffs were not engaged in a

separate profession or business in which their "remuneration...

depend[ed] upon

[their] initiative, [their] judgment, or [their] managerial abilities." Gonzalez, 46

Cal.App.4th at 1594. Plaintiffs drove their vehicles exchisively for EGL during the relevant time periods. Compare supra at 4 with Est#zula, 154 Cal.App.4th at

31

12; Yellow Cab, 226 CaI.App.3d at 1298. And EGL - not its drivers controlled
the customer relationship. Compare supra at 15 with Estrada, 154 Cal.App.4th at 12; Air Couriers, 150 CaI.App.4th at 938; Gonzalez, 46 Cal.App.4th at 1593; Toyota, 220 Cal.App.3d at 876; see also JKH, 142 Cal.App.4th at 1064-65 ("[O]btaining tile clients in need of the service and providing the workers to conduct it" establishes control because the drivers' work was simple).
Plaintiffs' opportunity to profit was further limited by EGL's unilateral authority to impose per-load caps on pay, to decide whether to pay for "accessorials," to impose insurance and indenmification requirements, to reduce pay to reflect customer service complaints and partial performance, and to reject plaintiffs' choice of helpers. Co,qmre stq)ra at 16-18 with Estrada, 154 CaI.App.4th at 12 (pay reduced by limits on assignments or for "slight violations of the rules"); id. (FedEx's discretion to reject helpers, temporary replacements, or assignees); cf Friendly ('ah Co., 512 F.3d at 1098-99 (taxi company's prohibition against drivers soliciting customers and employing others evidences employment); Real v. Driscoll Strawberry Assoc., hlc., 603 F.2d 748,756 (9th Cir. 1979) (power to reject licensee's choice of %ub-licensee" showed control).
Second, plaintiffs were paid like employees fully integrated into the company rather than like contractors with discrete projects: weekly or biweekly,
32

not by the job, even though one component of their pay was basedon the number of deliveries they made. Compare supra at 15-16 with Estrada, 154 Cal.App.4th
at 7, 12 (drivers' weekly pay showed employment status, even though weekly pay partially reflected per-package rate); Air Couriers, 150 Cal.App.4th at 938 ("regular" pay schedule and required use of principal's forms in order to be paid); Gonzalez, 46 Cal.App.4th at 1594 (payment by number of routes completed); Toyota, 220 CaI.App.3d at 877 (payment on commission basis); see also Borello, 48 Cal.3d at 357-58 (payment by weight is similar to piecework payment to employees).
Third, like the drivers in Estrada and Air Couriers, EGL's drivers were not specialized outsiders; their "only required skill [was] the ability to drive." Eslrada, 154 Cal.App.4th at 12; compare with supra at 4; see aLro JKIt, 142 Cal.App.4th at 1064.
Fourth, the general practice in the industry is to classify package delivery drivers as employees. Although the record in this case does not address competitors' practices, Estrada not only held that FedEx drivers should be classified as employees, but it also recognized that competitors UPS and DHL classify their drivers as employees. See Eslrada, 154 Cal.App.4th at 12. Indeed,
33

EGL itself has used drivers who it admits are employees. Supra at 3. _s
Fifth, plaintiff drivers' long tenures, automatically renewable annual contracts, and full-time schedules established a "permanency" that indicates an employment relationship. Compare sztpra at 4 with Estrada, 154 Cal.App.4th at 6, 12; Air Couriers, 150 Cal.App.4th at 938; Gonzalez, 46 Cal.App.4th at 1594; Borello, 48 Cal.3d at 357.
Sixth, as plaintiffs' regular pay, schedules, and uniforms established, the drivers' work was an essential "part of the regular business of" EGL, Borello, 48 Cal.3d at 351, and was "wholly integrated into [its] operation," Estrada, 154 Cal.App.4th at 9. See also Air Coztrielw, 150 Cal.App.4th at 938 ("drivers were performing an integral and entirely essential aspect of [employer]'s business" as shown by use of employer's forms to be paid, payment on regular schedule, and dispatcher control); JKtI, 142 Cal.App.4th at 1064 (pick-up and delivery services are the "'heart" of courier service business); Sanlcz ("vuz, 235 Cal.App.3d at 1376 (no independent business where cabs bore Yellow Cab's identity and Yellow Cab made arrangements with customers for business); Fellow Cab, 226 CaI.App.3d at 1300 (driving is essential component of taxi business); Grant, 71 Cal.App.3d at
_ The record does not indicate in what respect, if any, the employee drivers' jobs differed fi'om those of plaintiffs.
34

653 (newspaper carriers were "essential" to distributor's businessrather than involved in a "separate and distinct occupation of their own").
Finally, EGL reserved almost unlimited discretion to terminate its drivers. While the district court dismissedthis fact as irrelevant, ER 16:25-17:1, under California law the authority to terminate generally indicates an employment relationship, Santa Cruz, 235 Cal.App.3d at 1372; Grant, 71 CaI.App.3d at 653;
and at-will termination is particularly "strong evidence" of an employment relationship. Borello, 48 Cal.3d at 350; see a/so Toyota, 220 Cal.App.3d at 875; Brose, 183 Cal.App.3d at 1085.
EGL's Contract with its drivers, like FedEx's, "provide[d] for nonrenewal without any cause at all" on 30 days' notice. Estrada, 154 Cal.App.4th at 11; compare id. at 6 with Contract ¶¶6.01, 6.02. Furthermore, EGL reserved the right to terminate plaintiffs' agreements without cause upon 30 days' notice, Contract ¶6.03 effectively, the right to terminate immediately at will, since EGL faced no penalty for failing to provide work during the 30-day notice period and could effectively ignore the notice requirement because of its attthority to "suspend" a driver without pay at any time (as it did to Rahawi). See supra at 17; see a/so Golzzalez, 46 Cal.App.4th at 1593 ("at will" status when employer would suffer no consequence for violating 14-day notice provision).
35

EGL also retained the right to terminate the agreement"immediately for failure to follow EGL instructions," ER 16:25-27; see also Contract ¶¶I, 6.03 - an
additional measure of unbridled discretion that evidences employment. See Toyota, 220 Cal.App.3d at 875 ("real test" of right to control is "whether the employee was subject to the employer's orders and control and was liable to be discharged for disobedience or misconduct") (internal quotes omitted); Santa Cruz, 235 Cal.App.3d at 1372 ("[F]ailure to maintain good public relations as a specific reason for termination" shows employee status); Yellow Cab, 226 Cal.App.3d at 1298 ("Liability to discharge for disobedience or misconduct is strong evidence of control."); Brose, 183 Cal.App.3d at 1085-86 (agreement allows discharge without notice if worker "violated the agreement in any way" and fails to fully define many requirements).
In short, although EGL's Contract nominally classified plaintiff drivers as "independent contractors" and disavowed control over their manner and means of performing pick-up and delivery services, Contract ¶I, the company's "conduct spoke louder than its words." 154 Cal.App.4th at 11. Particularly when the facts are viewed in the light most favorable to plaintiffs, a reasonable jury could conclude that EGL retained the right to control drivers' conduct, by instructing them on nearly every detail of where to go, what to do, and when and how to do it.
36

II.

The Court Should Apply California

Law to the Question Whether

Plaintiffs Are Employees or Independent

Contractors.

California law should control this case. The distlict court erroneously

applied Texas law to determine plaintiffs' status.

Because California is the forum state, California choice-of-law

principles

determine the choice of law, as EGL concedes. See Bassidj'i v. Goe, 413 F.3d 928,

933 (9th Cir. 2005). Those rules require application of California law to this case

for two independent reasons. First, the Contract's narrow choice-of-law

provision applies only to disputes

over contract interpretation,

not to disputes over statutory rights. In the absence

of a governing choice-of-law

clause, California law must apply under Wash. Mut.

Bank, FAv. Szq)erior Court, 24 Cal.4th 906, 919 (2001).

Second, cvcn if the Texas choice-of-law

clause were broadly stretched to

encompass plaintiffs' statutory claims, application of Texas law as construed by

the district court would interfere with fundamental

California state policy. In such

circumstances,

when California's

interests materially outweigh the foreign state's,

California

will not enforce contractual

provisions

designating

foreign law as

controlling.

See Nedloyal, 3 Cal.4th at 466.

37

A. The Contract's narrow choice-of-law provision does not encompass plaintiffs' claims, so California law should apply.

It is EGL's burden to prove that the Contract's provision designating Texas

law applies to plaintiffs' California Labor Code claims. See Oestreicher v.

Alienware Corp., 502 F.Supp.2d 1061, 1065 (N.D. Cal. 2007), citing Wash. Mut.

Bank, 24 Cal.4th at 916. The scope of a contractual choice-of-law designation "is

a question of contract interpretation that in the normal course should be

determined pursuant to" the law designated in the provision

in this case, Texas

law. Nedlloyd, 3 Cal.4th at 469 n.7; see also Wash. Mut. Bank, 24 Cal.4th at 916

n.3. Because EGL drafted plaintiffs' Contract, any ambiguities in its contractual

choice-of-law designation must be construed against the company. See Gonzalez

v. Mission Am. Ins. Co., 795 S.W.2d 734,737 (Tex. 1990).

1. The choice-of-law provision does not encompass plaintiffs' statutory claims.
Contracting parties can provide language that a particular state's law will

narrowly apply only to disputes over contract interpretation, broadly apply to all disputes between the contracting parties, or anything in between. Plaintiffs'

contracts state, "This Agreement shall be inte_7_reted under the laws of the State of

Texas," Contract ¶7.03 (emphasis added), which is one of the narrowest choice-

of-law designations commonly used.

38

On its face, the Contract's narrow designation doesnot encompass plaintiffs' statutory claims, which seekrelief under the California Labor Code.

See ER 830-55, citing Lab. Code §2802 (requiting reimbursement of business

expenses); §§221,223,400-410

(prohibiting wage deductions by all employers);

§450 (prohibiting coerced purchases); §§226.7, 512 (requiring meal breaks);

§§510, I194 (requiring overtime compensation); §§226, 226.3 (requiring accurate

wage statements); §§1174, 1174.5 (requiring accurate payroll records); §§201-203

(imposing waiting tirne penalties)). '4

These California statutes apply to all employers and employees, whether

they have formal written employment contracts or not. The statutory rights are

independent of any contract claims or the existence of an employment contract,

and do not depend on the interpretation of such contracts. In short, they are not

contract "interpret[ation]"

claims.

Under Texas law, this plain reading of the Contract's narrow choice-of-law

provision is the only permissible reading. See Stier v. Reading & Bates Copp., 992

S.W.2d 423,433 (Texas 1999) (cmployecs's non-contractual claims not covered

by choice-of-law provision covering disputes over "interpretat[ion]"

or

H Plaintiffs' ninth cause of action, for unfair competition under section 17200 of the California Business and Professions Code, is derivative of plaintiffs' Labor Code claims. See ER 849-52.
39

"enforce[ment]" of the agreement).

Stier involved a plaintiff's claim that his employer was liable for his on-the-

job injuries because it violated its duty to provide a safe workplace. 992 S.W.2d.

at 424,433. Stier's employment contract was broader than EGL's, as it stated,

"this agreement shall be interpreted and enJbrced in accordance with" Texas law.

ld. at 433 (emphasis added). The Texas Stipmme Court held that the provision's

narrow language did not encompass the plaintiff's claim, which "sounds in tort

and does not concern the interpretation or enforcement of his contract." ld. at 433.

The Court recognized that the claim ultimately derived from plaintiff's

relationship with his employer (in other words, agency principles), id., but held

that choice-of law provision inapplicable because, "by its terms, [it] applie[d] only

to the interpretation and enforcement of the contractual agreement[; i]t [did] not

purport to encompass all disputes between the parties or to encompass tort

claims.'" Id.; see also Thompson & Wallace v. Falconwood

Colp., 100 F.3d 429,

432-33 (5th Cir. t 996) (similar analysis, noting that "narrow choice-of-law

provisions are to be construied narrowly"); Caton v. Leach, 896 F.2d 939, 943 & n.3 (5th Cir. 1990) (similar analysis, noting narrowness of clause mentioning only

4O

contract construction).

J5

The Stier rule - holding that a provision designating a particular state's law

for contract interpretation

does not encompass statutory or tort disputes - applies

even when the parties' underlying relationship is contractual and the plaintiffs'

statutory or tort claims arise from that relationship.

In Red Roo[hms, Inc. v.

Murat tloldings, L.L.C., 223 S.W.3d 676 (Tex. App. 2007), review denied (Jan. 25, 2008), for example, the Texas Court of Appeals concluded that a franchise

agreement's

choice-of-law

provision (again broader than EGL's) stating that it

would "be interpreted, construed and enforced in accordance with" Ohio law did

not apply to tile franchisce's

statutory and tort claims. 223 S.W.3d at 684. At

_5 Texas law is not unique in construing such choice-of-law

designations

narrowly. See Dollar Sys., Inc. v. Avcar Leasing S3's., Inc., 890 F.2d 165, 171 (9th

Cir. 1989) ("By its own terms, this 'choice of law' provision governs [only] the

construction

or interpretation

of the franchise agreement itself' and not recission

counterclaims

based on noncompliance

with applicable franchise laws.); Walker v.

Banketw Life & ('as. Co., 2007 WL 967888 at *3-*4 (N.D. I11. Mar. 28, 2007)

(provision stating "[c]ontract shall be construed in accordance with the laws of the

State of Illinois" is narrower than "provisions that apply to all claims 'arising out

of' the contract" and does not encompass tort claims); c[ S-Fer Int 7, Inc. v.

Paladion Partnetw, Ltd., 906 F.Supp. 211,213-14

(S.D.N.Y. 1995) (forum

selection clause mentioning only "el]forcement"

is nmvower than clause

mentioning "validity, performance

and enforcement,"

and does not cover action

for fraudulent inducement challenging

validity of agreement);

c[ also Wright v.

Universal Maritime Serv. Corp., 525 U.S. 70, 79 (1998) ("The cause of action

[plaintiff] asserts arises not out of contract, but out of [federal statute], and is

distinct from any right conferred by the collective-bargaining

agreement.").

41

least one of the claims (for tortious interference with contract) necessarily involved the parties' contract and application of contract law; to prevail, the plaintiff would have to prove the existence and breach or impossibility of the franchise agreement, ld. at 686. Nonetheless, the court held the choice-of-law provision inapplicable because, "[b]y its language, the choice of Ohio law is limited to the interpretation, construction, and enforcement of the franchise agreement." Id. at 684. Similarly, in Benchmark Electronics, Inc. v. J.M. Huber Colp., 343 F.3d 719 (5th Cir.) modiJied, 355 F.3d 356 (5th Cir. 2003), the Fifth Circuit concluded under Texas law that a provision stating that a contract should be "governed by, and construed in accordance with" New York law applied to the plaintiff's breach of contract claim and a subsidiary issue concerning the validity of a disclaimer in the contract, but not to his fl'aud and negligent misrepresentation claims- even though those claims were based on representations set forth in the parties' contracts. 343 F.3d at 722, 726-27, 729-30.
Under Stier, Red Roo/£ and Benchmark, the Contract's choice-of-law provision cannot be construed to encompass plaintiffs' statutory claims. The district court erred in concluding otherwise.
42

2.

The choice-of-law

provision is equally inapplicable

"employee"

element of plaintiffs' claims.

to the

EGL took the more limited, but equally indefensible

position in the district

court that its contractual choice-of-law

provision governs at least one element of

plaintiffs' claims: the definition of"employee."

ER 8:22-24, ER 25-26. For good

reason, however, neither Stier nor the Contract pemait such an element-specific

choice-of-law

analysis.

In determining

whether plaintiffs are "employees"

for purposes of their

California Labor Code claims, it makes 11o difference whether they would be

considered '°employees'" under Texas law. When the California Legislature

created the employment

rights guaranteed by the Labor Code, it determined as a

matter of State policy which categories of workers should be protected. No

provision was made in the California scheme for another state's law to govern

different elements of the statutory analysis, o1" to intcrfcrc with the Legislature's choice of which categories of workers are entitled to which statutory protections.

Further, divorcing the term "employee"

from the remainder of plaintiffs'

claims serves none of the basic purposes of choice-of-law

rules: to protect a state's

policy interests, to promote the parties' interests in predictability

and uniformity,

and to determine and apply the law with ease. See Restatement

(Second) Conflict

43

of Laws §6. It is not easy to fit Texas law - shaped mostly in the context of tort claims, see infra at 59-60 - into California wage and hour statutes. See generally Borello, 48 Cal.3d at 353 ("employee" definition "must be applied with deference to the purposes of the protective legislation."). Because state legislatures and Congress have given the term "employee" specific statutory meanings, a plaintiff's status in one context and in one jurisdiction may bear little relation to his or her status in other contexts and other jurisdictions.
In any event, application of the Stier rule would produce the same result, whether addressed to plaintiffs' claims as a whole or to a single element of them. Under the California Labor Code, a court's determination whether plaintiffs were statutory employees is not a matter of contract interpretation. See Walker, 2007 WL 967888 at *5-*6 (California expense reimbursement claim does not depend on contract). Rather, it is a term of art defined through an extensive body of case law, which depends on the actual relationship between the parties and the Legislature's intent in defining the term "employee." See supra at 24-25.
In fact, Calitbmia prohibits employers from redefining by contract who is an "employee" under the Labor Code. A California employer may not require employees by contract to waive statutory wage rights, either directly, see, e.g., Labor Code §§219(a), 510(a), 512(a), 1194, 2804; Cal. Civ. Code 3513, or
44

indirectly, see, e.g., Gentry v. Superior Court, 42 Cal.4th 443,450,457

(2007).

Appropriately, a contract provision labeling someone an "independent contractor"

is accorded minimal weight under California law in determining the parties' actual

relationship. See Est_ztda, 154 Cal.App.4th at 11 ; Toyota, 220 Cal.App.3d at 877;

Plute v. RPS, Inc., 141 F.Supp.2d 1005, 1010 (N.D. Cal. 2001); see generally

Grant, 71 Cal.App.3d at 654 (employer "cannot, in effect, require his employees

to waive their rights under the Unemployment Insurance Code and absolve himself

of obligations under the code by requiring his employees to sign a document

which states that they will act as independent contractors."); Borello, 48 Cal.3d at

359 (permitting employers to evade workers' compensation laws by signing

nominal independent contractor agreements would "suggest a disturbing means of

avoiding an employer's obligations under other California legislation intended for

the protection of 'employees'")] _'

_ Even under Texas law, contractual characterization is not dispositive. See Alice Leasing Corp. v. Castillo, 53 S.W.3d 433,441 (Tex. App. 2001 ); Weidner v. Sanchez, 14 S.W.3d 353,373 (Tex. App. 2000); itT/?a at 59-61. Thus, even if this Court were to decide that one state's law may be used to construe another state's statute, the fact that contractual characterizations may be given greater weight in Texas than in California does not transform the issue of whether plaintiffs were employees into a question of contract interpretation.
45

3.

California law applies under the governmental

test.

interests

Because no contractual choice-of-law

designation governs plaintiffs'

statutory claims, this Court should apply California law. Absent a contractual

choice-of-law

designation,

California requires application of the law of the forum

state, unless a party invokes a foreign state's law and establishes that: 1) the foreign state's law "materially differs fi'om the law of California"; 2) the foreign

state has an interest in application of its own law; and 3) the foreign state's

interests will be '"more impaired'" than the forum state's if its law is not applied.

Wash. Mut. Bank, 24 Cal.4th at 919-20; see a/so Kearney v. Salomon Smith

Barney, htc., 39 Cal.4th 95, 100 (2006); lhtrtado v. Stq)erior Court, I I Cal.3d

574, 581 (1974).

EGL did not argue in the district court that Texas law would apply in the

absence of its contractual choice-of-law

designation.

See ER 10 n. 10. Nor has

EGL identified any Texas state interest in applying its definition of"employee"

to

claims by plaintiffs who lived in California, worked in California, filed suit in

California,

and asserted clailns exclusively

under Calitbrnia statutes. See also

inJi'a at 57-58. Accordingly,

this Court should hold that California law applies.

46

B. Even if the Contract's choice-of-law provision encompasses plaintiffs' claims, California law does not permit its enforcement.
Even if EGL's contractual choice-of-law provision could be distorted to encompass plaintiffs' statutory claims, plaintiffs' status should still be determined under California law. Under California's choice-of-law rules, even if a contractual choice-of-law designation encompasses the dispute at issue, it will not be given effect if contrary to fundamental California policy where California has a materially greater interest in the determination of the particular issue than the foreign state. See Nedllovd, 3 Cal.4th at 466; Wash. Mut. Bank, 24 Cal.4th at 91617.
To tile extent the district court accurately characterized Texas law as it would apply to this case, California choice-of-law principles would preclude enforcement of the contractual choice-of-law designation. Enforcing the provision to apply Texas law in these cil'cmnstances would allow EGL to effect a waiver of fundamental and unwaivable protections that California guarantees to employees in the State - simply by designating that another state's law should apply.
47

1. Application of Texas law as the district court characterized it would violate fundamental California policies. a. A state rule of law constitutes a fundamental policy when it promotes important goals or is not waivable.
In determining whether differences in two states' law are "fundamental," courts look to the importance of the policies underlying those differences. See America Online, Inc. v. Superior Court, 90 Cal.App.4th 1, 5, t4-15 (2001) (choice of law provision not enforceable when practical effect would be to waive nonwaivable statutory rights, law of chosen state provides "significantly less... protection," and policies underlying California laws are important); Application Group, Inc. v. thmter Group, hm., 61 Cal.App.4th 881,900-01 (1998) (refusing to enforce choice-of-law provision in contract containing noncompete clause based on importance of policies underlying California's statutory prohibition of such agreements); see also Van Slyke v. Capital One Bunk, 503 F.Supp.2d 1353, 1361 (N.D. Cal. 2007); Ribbens Int 'l S.A. v. Transport hzt 'l Pool, hie., 47 F.Supp.2d
117, 1122-23 (C.D. Cal. 1999). A statutory protection that may not be waived necessarily reflects a
fundamental state policy for purposes of Nedlloyd choice-of-law analysis: "If the policy underlying [the statute] bars avoidance of the statute by contractual waiver or formal structuring of a transaction, it should be fundamental enough to restrict
48

use of a choice-of-law

provision to avoid application of the statute." Guardian

Savings & Loan Ass '11 v. MD Assocs., 64 Cal.App.4th

309, 322 (1998); see also id.

(decisions holding statute non-waivable

"reveal a policy sufficiently strong to be

characterized

as fimdamental..,

because they elevate the statutory policy...

above the consensual arrangements

of the parties"); ABF Capital Corp. v. Grove

Properties C'o., 126 Cal.App.4th

204, 217-18 (2005). Consequently,

when "the

enforcement..,

of a choice-of-law

provision adopting out-of-state law will be the

praclical equivalent of enforcing a contractual waiver" of an otherwise non-

waivable right, the provision may not be enforced.

Guardian, 64 Cal.App.4th

at

322 (emphasis added); see also America Onlilw, 90 Cal.App.4th

at 5

("Enforcement

of the contractual forum selection and choice of law clauses would

be the functional equivalent of a contractual waiver of the consumer protections

under the CRLA and, thus, is prohibited under California law."); Gent W, 42 Cal.4th at 457 (courts will not enforce "a class arbitration waiver [that] would lead

to a de facto waiver of statutory rights"). A contrary rule would permit parties that

cannot obtain direct waivers to accomplish the same result by contractually

designating

the law of a state that has no comparable

statutory protection.

49

b.

The Labor Code provisions

at issue embody

fundamental

California

policies.

Plaintiffs' complaint seeks to vindicate statutmy wage and hour rights,

including the rights to reimbursement

of business expenses, meal periods,

overtime pay, and against improper payroll deductions.

These rights, long

protected by the Labor Code, are "fundamental"

in California.

California's

wage and hour statutes express "important societal interests...

includ[ing] the assurance of a wage adequate to supply tile necessary cost of

proper living and to maintain tile health and welfare of employees."

ACORN v.

DelL) 't ofhMus. Relations, 41 Cal.App.4th

298, 301 (1995) (punctuation omitted);

see also Kerr's Catering Serv. v. Dep 't oJ'hM,s. Relations, 57 Cal.2d 319, 325

(1962) (California public policy grants workers' wages "special status," as

"expressed

in the numerous statutes regulating the payment, assignment,

exemption and priority of wages").

Specifically,

Labor Code §2802, regarding business expenses, embodies the

"obvious" purpose of protecting "employees

fl-om suffering expenses in direct

consequence

of doing their jobs." Grissom v. Vons Cox., Inc., 1 Cal.App.4th

52,

59-60 (I 991). Furthernmre,

"there is in this state a fundamental

and substantial

public policy protecting an employee's

wages, and that protection includes

5O

freedom from [prohibited] setoffs." Phillips v. Gemini Moving Specialists, 63

Cal.App.4th 563,574 (1998) (referencing Labor Code §§201-02,221-24).

Provisions of the Labor Code that prohibit deductions from employee wages serve

the important state policies of preventing employer fraud and deceit, avoiding the

imposition of "special hardship" upon employees, and protecting employees' right

to rely on the timely payment of their legally owed wages. See Kerr's Catering

Serv., 57 Cal.2d at 327-29; see also Hudgins v. Neiman Marcus Group, 34

Cal.App.4th 1109, 1118-19 (1995) (regarding Labor Code §§221-23); Quillian v. Lion Oil Co., 96 CaI.App.3d 156, 163 (1979) (regarding Labor Code § §400-10).

The Labor Code's meal period provisions similarly "address some of'the

most basic demands of an employee's health and welfare.'" Valles v. Ivy tlill

Corp., 410 F.3d 1071, 1081 (9th Cir. 2005), quoting Cal. Mfi: Ass'n v. lndus. Wel./are Comm 'n, 109 Cal.App.3d 95, 115 (1980). Further, "[e]ntitlement to

overtime compensation..,

is based on an important public policy," and laws

requiring payment of overtime serve "the public health and general welfare" by

giving employers incentives to "spread employment throughout the work force" as

well as "serv[ing] the important public policy goal of protecting employees...

against the evil of overwork." Gento,, 42 Cal.4th at 456 (internal quotation marks

omitted); see also id. at 455.

51

Additionally, the California Legislature has declared that the statutory rights plaintiffs seek to vindicate may not be waived by contract. Labor Code §2804 provides that the indemnification requirements of §2802 may not be waived by "[a]ny contract or agreement, expressor implied." See also Desimone v. Allstate
bTs. Co., 1999 WL 33226248 at *9 (N.D. Cal. Sept. 14, 1999) ("Section 2804, on its face, explicitly and unequivocally precludes any contractual waiver of an employee's right to indemnification for all necessary expenses under §2802). The Labor Code's other protections are also unwaivable, except in particular circumstances not present in this case. See Labor Code §219(a) (§§200-43 rights); id. §510(a) (§510 rights); id. §512(a) (§512 rights); id. §1194 (minimum wage and legal overtime); see also Cal. Civ. Code §3513 ("[A] law established for a public reason cannot be contravened by a private agreement").
As a result, effectively waiving tile protections on which plaintiffs rely through application of Texas law would violate California's fundamental policies. Texas law cannot be so applied to plaintiffs who lived, worked, and signed contracts in California.
This limitation on Texas law applies even though "the issue before this court is whether plaintiffs were employees or whether they were independent contractors." ER 11:20-22. The determination of whether a foreign state's law
52

violates a fundamental policy can be case-specific. Even if a particular statutory right may be waivable in some circumstances, (e.g., for true independent

contractors), if it would not be waivablc in the particular case before the court

(e.g., if plaintiffs would be employees under California law), then application of a

different state's law that does pemlit waiver would violate fundamental state

policy under Nedlloyd. See Douglas v. U.S. D&t. Court, 495 F.3d 1062, 1068 (9th

Cir. 2007) (when class action waivers that are valid under New York law may be

unconscionable under California law, choice-of-law designation of New York law

is unenforceable); Oestreicher, 502 F.Supp.2d at 1066-68 (because California law

would not enforce class action waiver in this case, fundamental state policy is

implicated and California law must be applied); Brazil v. Dell, hlc., 2007 WL

2255296 at *7 (N.D. Cal. Aug. 3, 2007) (application of Texas law, which would

enforce contractual class action waiver, would violate fundamental California

policy when facts establish unconscionability

of waiver under California law);

Klussman v. Cross Cmmt_3, Bank, 134 Cal.App.4th 1283, 1293-98 (2005)

(similar).

53

c.

Application

of the Texas law definition of "employee"

would violate fundamental

California

policies.

California law is in many respects far more protective of worker rights than

Texas law, as it guarantees substantive statutory rights (including those asserted

by plaintiffs) that the State of Texas has chosen not even to recognize.

Texas law

provides no general right to meal periods or overtime pay, for example, and does

not prohibit the types of deductions fi'om wages that California forbids. See

generally Tex. Lab. Code, Ch. 61-62.

Additionally,

if EGL and the district court have correctly applied Texas law

ira characterizing

plaintiffs as independent

contractors (which plaintiffs do not

concede), the test for" distinguishing

independent

contractors and employees is

necessarily different under Texas and California law, in a potentially outcome-

determinative

way. In other words, application of Texas law alone could prohibit

plaintiffs from receiving California's

fundamental

Labor Code protections.

Consequently,

California's

fundamental

policy interests must trump the

contractual

designation

of Texas law provisions.

First, as EGL has acknowledged,

in California there is a presumption

of

employee status when analyzing whether someone is covered by an employee-

protective statute. See ER 24 n. 1; see aLvo Borello, 48 Cal.3d at 349; Desimone v.

54

Allstate bTs. Co., 2000 WL 1811385 at *10 (N.D. Cal. Nov. 7, 2000). The district court recognized no such presumption tinder Texas law.
Second, in California, a contract that designates someone as an independent contractor "is not dispositive and will be ignored if [the parties'] actual conduct establishes a different relationship." Estrada, 154 Cal.App.4th at 11; see also Toyota, 220 Cal.App.3d at 877. The district court held that under Texas law, by contrast, an independent contractor agreement "is determinative, unless there is extrinsic evidence indicating the contract was a sham or cloak designed to conceal the true legal relationship betwecn the parties." ER 9:25-27; see also ER 17:7-9, 713-14.
Third, under the district court's and EGL's reading of Texas law, the rightof-control test differs in a fundamental respect fi'om California's test. In California, the key question is whether the employer has the right to control the person's work, even if that right is not exercised, see Toyota, 220 Cal.App.3d at 875; but in Texas (if the district court and EGL are correct), when a contract designates workers as independent contractors, it must be shown that the employer's "'exercise of control [is] so persistent and the acquiescence therein so pronounced as to raise an inference that.., the parties by implied consent had agreed that the principal had the right to control the details of the work.'" ER 714.
55

Fourth, California considers several factors that Texas case law seemingly
does not (or at least has not yet addressed), including: whether the work is usually performed by employees; whether the work is part of the principal's regular business; and the parties' subjective beliefs about their relationship. Compare Borello, 48 Cal.3d at 350-51 and Estrada, 154 Cal.App.4th at 11, with Wasson v. Stracener, 786 S.W.2d 414,420 (Tex. App. 1990); compare also supra at 24-25 with il_'a at 59-61. In particular, under California law, "[p]crhaps no single circumstance is more conclusive to show the relationship of an employee than the right of the employer to end the service whenever he sees fit to do so." Toyota, 220 CaI.App.3d at 875 (quotation marks omitted). By contrast, under the district court's reading of Texas law, the principal's right to terminate its contracts without constraint is not entitled to any weight at all. ER 16:25-17:2, citing Bell v. VPSI, Inc., 205 S.W.3d 706, 714 (Tex. App. 2006).
To the extent these distinctions are real and would produce a different result in this caseifTexas law were applied- at this stage or later in the proceeding Texas law must be rejected as the applicable rule of decision. Classifying workers as independent contractors under Texas law when they would be employees under California law would violate policies fimdamental to California by waiving statutory protections that, as explained above, California has deemed so
56

critical that they should be unwaivable for such workers.

d.

California

has a materially

greater interest in

application of its law than does Texas, and its

interests would be more seriously impaired if its

policy were subordinated

to that of Texas.

All plaintiffs lived, worked, and signed contracts in California, and filed suit

in California court to assert their right to California statutory protection.

As a

result, California's

interest in applying its own state's laws to plaintiffs' claims is

substantial, see Douglas, 495 F.3d at 1067 n.2, citing Reich v. Purcell, 67 Cal.2d

551,555 (1967); K/ussman, 134 Cal.App.4th

at 1299; ABF Capital Corp., 126

Cal.App.4th

at 220; Ii7 re Marriage of Crosby and Grooms, 116 CaI.App.4th

201,

211 (2004), and outweighs any contrary Texas interest that EGL might assert,

compare Klussman,

134 Cal.App.4th

at 1300 ("California's

ftmdamental public

policy interest in protecting its residents is materially greater than Delaware's

interest in uniformity among its corporate citizens."); see a/so Application

61 Cal.App.4th

at 901,903.

Group,

EGL's superior bargaining power and role as the drafter of the Contract

favors application of California law as wcll, bccausc'"[t]he

state where a party to

the contract is domiciled has an obvious interest ira the application of its law

protecting its citizens against the unfair use of superior bargaining power.'"

57

Oestreicher, 502 F.Supp.2d at 1068-69, quoting Klussman, 134 Cal.App.4th at 1299).
EGL's regular and extensive conduct of business in California further undermines any claim that it should not be subject to California's labor laws. See Application Group, 61 Cal.App.4th at 904-05; Van Slyke, 503 F.Supp.2d at 136162; cf Ribbens lnt 7, 47 F.Supp.2d at 1123; Bernhard v. llarrah _ Chtb, 16 Cal.3d 313,322 (1976), supelweded on other grozmds by statute, as stated in g'oJy v. Shierloh, 29 Cal.3d 430 (1981 ). To permit out-of-state businesses that operate in California with California workers to ignore the California Legislature's requirements for the employment relationship would mean that the State "c[ould] not reasonably effectuate" its protections for employees. See Bernhard, 16 Cal.3d at 322.
In fact, Texas lacks a/o, legitimate interest in denying the statuto_T protections of the California Labor ('ode to workers who pertbrm their jobs in California. California's interest in application of its wage and hour laws, including its definition of who qualifies for the protections of those laws, thus greatly outweighs any interest that Texas might have in such definition, and provides another reason why this Court should apply California law.
58

1II. Even Under Texas Law, a Reasonable

Jury Could Find that Plaintiffs

Were Employees,

Not Independent

Contractors.

Even if this Court were to disagree with plaintiffs' choice-of-law

analysis

and hold that Texas law applies, it should reverse the district court's order

granting sunmlaryjudgment.

Despite the differences between California and

Texas law articulated by the district court, material factual disputes would also

require the reversal of stimmary judgment for EGL tinder Texas law. Cfi Davis v. EGL Eagle Global Logistics L.P., 243 Fed. Appx. 39, 43 n.3 (Sth Cir. 2007)

(recognizing

the "significant indications of control" by EGL over its drivers).

Like California, Texas distinguishes

employees from independent

contractors by application of a common law 'hight to control" test. In a series of

tort and workers' compensation

cases, Texas courts have recited the following

description of the factors bearing on employee status:

In determining

whether a worker is an employee or an independent

contractor, several factors lntlst be considered: (I) the independent

nature of

the worker's business; (2) the worker's obligation to furnish the necessary

tools, supplies, and materials to perfoml the job; (3) the worker's right to

control the progress of the work except as to final results; (4) the time for

which the worker is employed: and (5) the method of payment, whether by

time or the job.

IVasson, 786 S.W.2d at 420.

In such cases (the only contexts in which Texas courts appear to have

59

explained the definition of"employee" in detail), a contractual classification may shed light on the right to control issue but is not determinative. No matter how a contract characterizes a worker's status, if its terms are ambiguous or indefinite a court applying Texas law may still consider evidence of the parties' actual practice or the principaL's exercise of control over the worker. See Newspapers, btc. v. Love, 380 S.W.2d 582,590 (Tex. 1964). Furthermore, a contract that "expressly provides for an independent contractor relationship" is "determinative" only "in the absence of extrinsic evidence indicating the contract was subterfuge, that the hiring party exercised control in a manner inconsistent with tile contract provisions, or [that] tile written contract has been modified by subsequent agreement." Weidner, 14 S.W.3d at 373, citing Newspapers, 380 S.W.2d at 590; see also Elder v. Aetna Cas. & Sure O, Co., 236 S.W.2d 611,623 (195l) ("The test is: Did the.., company actually assume and exercise such detailed control over [its worker] ... as to make him a servant, even though the contract did not so provide?").
The right of control test under tort and worker's compensation law, however, does not necessarily apply to this case. The Texas Workforce Commission, the agency responsible for enforcing Texas' Payday Law and which servcs as a forum for Texas wage claims, has articulated a different version of the
60

test, which relies on 20 conmmn law factors whose weight dependson the facts of eachcase. See 40 Tex. Admin. Code § 821.5; see generally Tex. Lab. Code
§§61.001, 61.002, 61.051. Under the Payday Law test, a contractual label is irrelevant to a worker's status. The Workforce Commission regulation states that "[i]f an employment relationship exists, it does not matter that the employee is called something different." 40 Tex. Admin. Code §821.5.
Although Texas courts have apparently not addressed the definition of "employee" in the context of Payday Law claims or clarified the relationship between the Payday Law's "right of control" test and the tort version of the test, the Workforce Commission's Payday Law test would be the most appropriate for this case, if Texas law applied. Under the Payday Law, which is the Texas statute most similar to the California statutes at issue here, that test would beentitIed to substantial deference. See Southwestern Bell Tel. C'o. v. Pub. Util. Comnl '11,863 S.W.2d 754, 758 (Tex. App. 1993) ("[W]e give duc deference to an agency's construction of a statute that the agency is charged with enforcing"). For the sake of completeness, however, we discuss both tests below.
61

A.

The Contract's terms do not establish plaintiffs' status as

independent

contractors.

The Contract's

description of plaintiffs as independent

contractors does not

determine their status tinder either Texas "right of control" test. As explained

above, such a label is irrelevant under the Payday Law test. 40 Tex. Admin. Code

§821.5. Under the tort test, a contract labeling aworkeran

"independent

contractor"

is prestimptive

evidence of such status only if it also "definitely

fix[es]" the worker's status as such. Newspapers,

380 S.W.2d at 590; see also

Sw(ft v. Aetna Cas. & Sur. Co., 449 S.W.2d 818, 820 (Tex. Civ. App. 1970) (contract must be "specific in treatment of the matter of the right of one to control

the other" to establish parties' relationship).

In other words, an agreement must

not only "provid[e] that a person shall be an independent

contractor,"

but also

must provide "for no right of control [in the employer]."

DurDin v. Cztlbet:ron

Coun0,, 132 S.W.3d 650, 659 (Tex. App. 2004); see generally Nemvl)apel:v, 380 S.W.2d at 591-92. A contract's specific terms must be fully consistent with any

recitation of the "independent

contractor" label. CJ;, e.g., Bell, 205 S.W.3d at 713-

14 (considering

whether contract's terms are consistent with its labeling of the

parties). There is no such consistency

here.

Although EGL's Contract characterized

its drivers as "independent

62

contractor[s]," Contract ¶I, other contract terms - not to mention the parties' actual relationship - contradict this facile, self-serving label. The district court erred in concluding otherwise. See ER 17: I 1-12. EGL's contractual control over its drivers' "tools and appliances" - vehicles, uniforms and communication equipment, see supra at 9, 11-12 is emblematic of an employment relationship under Texas laws. Thompson v. Traveletw Indem. Co. of Rhode Island, 789 S.W.2d 277, 278-79 (Tex. 1990); see also Bennack Flying Servs., hTc. v. Balboa, 997 S.W.2d 748, 753 (Tex. App. 1999) (citing contractual equipment specifications and right to approve pilots and equipment as evidence of principal's right of control). EG L's general authority to require compliance with each of its instructions and policies, see supra at 6-7, further "indicates a master-servant relationship" because it is "in effect [a requirenlent for a driver] to do anything [EGL] might tell him to do." llumble Oil & Relining Co. v. Martin, 222 S.W.2d 995,998 (Tex. 1949) (citing provision that required worker to "perform other duties.., that may be required of him"). And the comprehensive control that the Contract grants EGL over its drivers' business decisions (including non-EGL vehicle use and insurance purchases) is inconsistent with Texas' definition of independent contractors as those "in the pursuit of an independent business." Durbin, 132 S.W.3d at 658 (internal quotation marks omitted).
63

Because,at a minimum, the Contract terms permit "more than one reasonableconclusion" about the drivers' status,see Bennack Flying Services, 997
S.W.2d at 751;see also Berel v. HCA Health Services oJ'Texas, Inc., 881 S.W.2d 2 l, 24 (Tex. App. 1994), this Court must reverse the district court's summary judgment ailing even if Texas law is deemed to apply.
B. Evidence that the parties' actual relationship was inconsistent with any independent contractor contract is sufficient to defeat summary judgment.
Even if the Court were to conclude that the Contract's terms were consistent with an independent contractor relationship under Texas law, it should reverse the district court's ruling because the extensive evidence of EGL's exercise of control over plaintiffs and other drivers is sufficient to show that EGL retained a right to control them.
Under the Payday Law test, a reasonable jury could conclude that plaintiffs arc employees under Tcxas law based on evidence that supports the great majority of the 20 factors that the Texas Workforce Commission attributes to an employment relationship. As described previously, plaintiffs normally: 1) _receiv[ed] instructions about when, where and how the work is to be performed"; 2) "[we]re required to attend lneetings or take training courses"; 3) saw their "[s]ervices ... merged into [EGL's] overall operation"; 4) "[could] act as a
64

foreman for the employer but, if so, helpers [we]re paid the employers' funds"; 5) "often continu[ed] to work for [EGL] month after month or year after year"; 6) "work[ed]... during hours and days as set by [EGL]"; 7) "ordinarily devot[ed] full-time service to [EGL], or [EGL] [had] a priority on the [drivers'] time"; 8) were told "where services arc performed"; 9) "perfornl[ed] services in the order or sequenceset by [EGL]"; 10) were "required to submit regular oral or written reports about the work in progress"; 11) "[we]re paid for servicesrendered"; 12) "ordinarily work[ed] for one employer at a time and may be prohibited from joining a competitor"; 13) "c[ould] be discharged at any time without liability on the employer's part"; and 14) "[could] quit work at any time without liability on [the drivers'] part." See 40 Tex. Admin. Code § 821.5; sttpra at 6-18.
Even tinder the Texas tort law "right of control" test, plaintiffs' status would at least be a jury question. Because of EGL's regulation of hours, extensive policies, training, threats and discipline, a reasonable jury could conclude that EGL exercised "the type of control normally exercised by an employer[:] when and where to begin and stop work, the regularity of hours, the amount of time spent on particular [tasks], the tools and appliances used .... and ... manner of accomplishing the end result." Thompson, 789 S.W.2d at 278-79; see also generally Weidner, 14 S.W.3d at 375 ("[T]he draconian economic penalties
65

Liberty threatened to assessagainst Weidner... only servedto intensify its

explicit and implicit control"). Indeed, in Davis, 243 Fed. Appx. 39, a case involving EGL, its drivers, and

Texas law that was decided the day before the summary judgment ruling in this

case, the Fifth Circuit recognized as "arguably the most significant indications of

[EGL's] control" over its drivers requirements similar to those in this case: that

drivers work exclusively for EGL and for minimum number of hours, attend EGL

meetings, and keep and use EGL communications equipment. Id. at 43 & n.3 (not

reaching the issue of drivers' status because the district court's summary judgment

could be affimled on other grounds, but expressing doubt about the district court's

ruling that drivers were independent contractors as a matter of law because it

ignored or contradicted evidence of the cited factors).

Moreover, Texas courts have repeatedly concluded in circtnnstances similar

to those here that a jury could find that workers are employees

regardless of

whether a contract recites the term "independent contractor." In Weidner, 14

S.W.3d at 374-75, for example, the Texas Court of Appeals affirmed a jury's

finding that a taxi driver who had signed an agreement nominally creating an

independent contractor relationship, which "gave [him] full managerial

responsibility, management and operation of his business," was an employee,

66

based on evidence that the employer similarly to EGL - directed the driver which customersto pick up, when and where to pick them up and take them, how to sequencepick-ups, within which time period to complete the route, and generally how to dress; required the driver to report accidents; prohibited him from picking up other fares while working for the company; and threatened fines for violations. Compare szq_ra at 7-10, 12-13, 17-18.
The circumstances of this case are also similar to those in llome Interiors &

Gifts, btc. v. Veliz, 695 S.W.2d 35 (Tex. App. 1985) - indeed, are even more

indicative of an employment relationship. The court there considered the status of

a delivery driver who was told at the time of hiring that he was an independent

contractor, and had far more independence than plaintiffs: he rented warehouse space for storing deliveries, hired helpers, chose his own hours, worked for other

customers, and was subject to virtually no daily superviso|y control. 695 S.W.2d at 38, 41. The court concluded that record nonetheless supported a finding of

employment because the employer "prescribe[d] detailed procedures and policies"

that were strikingly similar to EGL's: they instructed drivers on tasks including

"receiving ... merchandise[,]..,

reporting shortages and damaged merchandise[,]

•.. delivering merchandise[,]

...returning or reshipping merchandise[,]...

processing freight claims and.., a [driver's] vacation or absence" and

67

communications with headquarters. Id. at 38 & n.1, 41; compare with supra at 7-
8. The policies indicated employment because, like EGL's policies, they left the driver "little or no discretion" over the two critical parts of his job: "how to receive.., merchandise [for delivery] or... what to do upon receipt thereof." 695 S.W.2d at 41.
In particular, courts applying Texas law have recognized that company policies as extensive and mandatory as EGL's strongly indicate employment; such policies quite literally delineate an employer's right of control. See tlousehold Credit Sen,ices, Inc. v. Driscol, 989 S.W.2d 72, 86 (Tex. App. 1998) (upholding finding of agency based on principal's extensive "Work Standards" despite facts showing that agent, a business, could work for others, operated its own facilities and equipment, and otherwise exercised some autonomy); Permian Basin Cmty. Cents../or Merit. flealth and Merit. Retardation v. Johns, 951 S.W.2d 497, 501 (Tcx. App. 1997) (employer's use of a personnel manual and its "right to evaluat[e] performance, hire and fire, set hours and salaries, define work assignments, and supervise the day-to-day functioning of the group home" evidence employment); see also lIathcock v. Acme Truck Lines, hzc., 262 F.3d 522,525-27 (5th Cir. 2001) (although transport driver owned his truck and chose route and some work details, he was an employee because, inter alia, the company
68

imposed medical and driving requirements, disciplined drivers' manual violations, required driver to drive exclusively for the company with the company logo on his truck, paid administrative costs, and controlled prices and rates)) 7
Becausecourts applying Texas law - like California courts - have consistently found workers similar to plaintiffs to be employees,the district court erred in concluding that plaintiffs were independent contractors as a matter of law. In particular, the district court erroneously likened this case to Limestone Prods.
Distrib., hw. v. McNamara, 71 S.W.3d 308 (Tex. 2002) (per curiam) and Bell. See ER at 13-17. In Limestone, a driver was told "where to pick up and drop off loads,

r7 Texas courts have also recognized a number of other factors present in

this case as as probative of employment starts. Compare Wasson, 786 S.W.2d at

420 (evidence that principal paid driver's helper is probative of employee status)

with supra at 17; compare Texas Emp. Ins. Ass'n v. Bewley, 560 S.W.2d 147, 150

(Tex. Civ. App. 1977) (skill required indicates independent contractor status), with

supra at 4; compare Merchant v. State, 379 S.W.2d 924, 925-26 (Tex. Civ. App.

1964) (citing noncompetition clause as evidence of employment, where employer

also "made all basic decisions, [such as] what equipment would be used .... the

prices to be charged,... 18.

[and] what insurance would be carried") with supra at 16,

Under Texas law, the parties' beliefs about their relationship (other than as expressed in a work contract) are irrelevant. See lloechst Celanese Cotp. v. Compton, 899 S.W.2d 215, 22l (Tex. App. 1994). The district court thus erred in concluding that supposed evidence of Heath's belief about his status was relevant under Texas law. See ER 17:14-17. And certainly, under any law, any evidence of Heath's subjective beliefs is irrelevant to Narayan and Rahawi.

69

and [had to] turn in his load tickets to get paid." 71 S.W.3d at 312. However, "he had broad discretion in how to do everything else" including "to drive any route he wished when delivering .... [The driver] did not work regular hours and did not have to visit the office on a regular basis. Moreover, [the company] supplied no tools or equipment to [the driver] .... [and] paid [him] by the load." /d. "[The
driver] could submit the [load] tickets daily or let them accumulate." Id. at 310. Here, by contrast, plaintiffs submitted evidence that they had to work regular hours, visit the office regularly for meetings, and submit daily paperwork, and were not as a practical matter free to drive any route oi work any hours they wished. See supra at 10-11, 14-15; see also Weidner, 14 S.W.3d at 375 (jury could infer that dclivery limitations affected driver's decisions about how to drive). I_
Bell is also inapposite. In that case, the court held that a volunteer van pool driver, who was provided with a van in return for agreeing to drive and maintain it, was not an employee. 205 S.W.3d at 710-11. The court held that provisions regulating van maintenance, gasoline purchase, and driver training did not

'_ Given these differences, the few similarities between this case and

Limestone manifests EGL.

vehicle ownership, per shipment payment, and submission of delivery for payment, see ER 14:24-15:9- cannot justify summary judgment to

70

evidence a right to control becausethere was no explanation of"how... [they] constitute anything more than would be required for an ordinary lease or bailment

or are inconsistent with the express provision that [the driver was] not an...

employee." ld. 715 (emphasis added). In this case, by contrast, EGL and its

drivers are not operating under a lease or bailment agreement; the drivers provided

their own vans to EGL, ER 4: 19, and thus EGL's extensive vehicle regulations

constitute only management of its drivers' work. See generally Thompson, 789

S.W.2d at 278-79 (control over "the tools and appliances used" indicates

employment).

In sum, in Texas law as under California law, the district court's ruling

cannot stand. A reasonable jury could conclude that plaintiffs were employees,

not independent contractors because "the true operating agreement..,

vested the

right of control in [EGL]." New,v)_q)el:s', 380 S.W.2d at 592.

CONCLUSION For the reasons discussed, tile district court erred in granting summary judgment to EGL, and its decision should be reversed.

71

DATED: March 28, 2008

Respectfully submitted,
Michael Rubin Stacey Leyton RebeccaSmullin ALTSHULER BERZON LLP

Aaron Kaufmann David Pogrel ttlNTON, ALFERT

& SUMNER

Lorraine Grindstaff PATTEN, FAITtt & SANDFORD

Attorneys for plaintiffs-appellants

Mohit Narayan, t._nna RahTi, and

Thomas/_/_

_////_,/"/

tvlicnael Rul_i_

72

West's Ann.Cal.Labor Code § 219
West's Annotated California Codes Currentness Labor Code (Refs & Annos) Division 2. Employment Regulation and Supervision (Refs & Annos) Part 1. Compensation (Refs & Annos) _NC__ter 1. Payment of Wages %_IArticle 1. General Occupations (Refs & Annos) •*§ 219. Payment of wages at more frequent intervals, or in greater amounts, or in full when or before due; private agreements; state employers

(a) Nothing in this article shall in any way limit or prohibit the payment of wages at more frequent intervals, or in greater amounts, or in full when or before due, but no provision of this article can in any way be contravened or set aside by a private agreement, whether written, oral, or implied.

(b) The state employer does not violate this section by authorizing employees who quit, or are discharged from, their employment with the state to take payment for any unused or accumulated vacation, annual leave, holiday leave, sick leave to which the employee is
otherwise entitled due to a disability retirement, or time off to which the employee is entitled by reason of previous overtime work where compensating time offwas given by the appointing power, as provided in Section 201 or 202.

CREDIT(S)

(Stats.1937, c. 90, p. 200,§ 219. Amended by St_s.2002, c. 40(A.B.1684),§ 16 2002.)

8, eft. May

A-1

West's Ann.Cal.Labor Code § 510

West's Annotated California Codes Currentness

Labor Code (Refs & Annos) Division 2. Employment Regulation and Supervision _Part 2. Working Hours (Refs & Armos)

(Refs & Annos)

_NChapter I. General (Refs & Annos) ,*§ 510. Day's work; overtime; commuting time

(a) Eight hours of labor constitutes a day's work. Any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee. Any work in excess of 12 hours in one day shall be compensated at the rate of no less than twice the regular rate of pay for an employee. In addition, any work in excess of eight hours on any seventh day of a workweek shall be compensated at the rate of no less than twice the regular rate of pay of an employee. Nothing in this section requires an employer to combine more than one rate of overtime compensation in order to calculate the amount to be paid to an employee for any hour of overtime work. The requirements of this section do not apply to the payment of overtime compensation to an employee working pursuant to any of the following:
(1) An alternative workweek schedule adopted pursuant to Section 511.
(2) An alternative workweek schedule adopted pursuant to a collective bargaining agreement pursuant to Section 514.
(3) An alternative workweek schedule to which this chapter is inapplicable pursuant to Section 554.
(b) Time spent commuting to and from the first place at which an employee's presence is required by the employer shall not be considered to be a part of a day's work, when the employee commutes in a vehicle that is owned, leased, or subsidized by the employer and is used for the purpose of ridesharing, as defined in Section 522 of the Vehicle Code.
(c) This section does not affect, change, or limit an employer's liability under the workers' compensation law.
CREDIT(S)
(Stats.1937, c. 90, p. 205,§ 510. Amended by Stats.1982, c. 185, p. 563,§ 1;Stats.1999, c. 134 (A.B.60), § 4.)

A-2

West's Arm.Cal.Labor Code § 512

West's Annotated California Codes Currentness Labor Code (Refs & Annos) Division 2. Employment Regulation and Supervision "_Part 2. Working Hours (Refs & Annos) '_[._]ChapterI. General (Refs & Armos) O§ 512. Meal periods

(Refs & Annos)

(a) An employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes, except that if the total work period per day of the employee is no more than six hours, the meal period may be waived by mutual consent of both the employer and employee. An employer may not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived.
(b) Notwithstanding subdivision (a), the Industrial Welfare Commission may adopt a working condition order permitting a meal period to commence after six hours of work if the commission determines that the order is consistent with the health and welfare of the affected employees.
(c) Subdivision (a) does not apply to an employee in the wholesale baking industry who is subject to an Industrial Welfare Commission wage order and who is covered by a valid collective bargaining agreement that provides for a 35-hour workweek consisting of five seven-hour days, payment of I and 1/2 the regular rate of pay for time worked in excess of seven hours per day, and a rest period of not less than 10 minutes every two hours.
(d) If an employee in the motion picture industry or the broadcasting industry, as those industries are defined in Industrial Welthre Commission Wage Orders 11 and 12, is covered by a valid collective bargaining agreement that provides for meal periods and includes a monetary remedy if the employee does not receive a meal period required by the agreement, then the tcrms, conditions, and remedies of the agreement pertaining to meal periods apply in lieu of the applicable provisions pertaining to meal periods of subdivision (a) of this section, Section 226.7, and Industrial Welfare Commission Wage Orders 11 and 12.
CREDIT(S)
(Added by Stats.1999. c. 134 (A.B.60), § 6. Amended by Stats.2000, c. 492 (S.B.88), § 1, eft: Sept. 19, 2000; Stats.2003, c. 207 (A.B.330), § I; Stats.2005, c. 414 (A.B.1734), § 1.)

A-3

West's Ann.Cal.I,abor Code § 1194 West's Annotated California Codes Currentness
Labor Code (Refs & Annos) Division 2. Employment Regulation and Supervision (Refs & Annos) _Part 4. Employees (Refs & Annos) "aChapter 1. Wages, ttours and Working Conditions (Refs & Annos) =t§ 1194. Action to recover minimum wage, overtime compensation, interest, attorney's fees, and costs by employee
(a) Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney's fees, and costs of suit. (b) The amendments made to this section by Chapter 825 of the Statutes of 1991 shall apply only to civil actions commenced on or after January 1, 1992. CREDIT(S) (Stats.1937, c. 90, p. 217, § 1194. Amended by Stats.1961, c. 408, p. 1479, § 3; Stats.1972, c. 1122, p. 2156, § 13; Stats.1973, c. 1007, p. 2004, § 8; Stats.1991, c. 825 (S.B.955), § 2; Stats.1992, c. 427 (A.B.3355), § 120.)
A-4

West's Ann.Cal.Labor Code § 2804

West's Annotated California Codes Currentness Labor Code (Refs & Annos) Division 3. Employment Relations '_[._Chapter 2. Employer and Employee _l:_Article 2. Obligations of Employer ,*§ 2804. Invalidity of agreement waiving

article provisions

Any contract or agreement, express or implied, made by any employee to waive the benefits of this article or any part thereof, is null and void, and this article shall not deprive any employee or his personal representative of any fight or remedy to which entitled under the laws of this State.

he is

CREDIT(S)

(Stats.1937, c. 90, p. 259, § 2804.)

A-5

West's Ann.Cal.Civ.Code § 3513

West's Annotated California Codes Currentness Civil Code (Refs & Annos) Division 4. General Provisions (Refs & Annos) _NPart 4. Maxims of Jurisprudence (Refs & Annos) ,*§ 3513. Waiver of advantage; law established

for public

reason

Any one may waive the advantage of a law intended solely for his benefit. But a law established for a public reason cannot be contravened by a private agreement.
CREDIT(S)
(Enacted 1872.)

A-6

Figure: 40 TAC §821.5

EMPLOYMENT STATUS - A COMPARATIVE APPROACH

Under the common law test, a worker is an empl_y_ J f the
purchaser of that work_'s service has the right to direct or contzol the worker, both as to the final results and as to the details of when, where, and how the work is done Control need not acttndly be exercised; rather, if the service recipient has the rightto control, employment may be shown,

Depending upon the type of busioe_ and the services
pertbrmed, not all 20 common law factors may apply In addition, the weight azsigned to a specific factor may vary depending on the facts of the case.
If an employment relatioashlp exists, it does no( matter that the employee is called soraethmg different, such as agent, contract labor_, subcontractor, or independent contractor

1. INSTRUCTIONS:

An Employee receives instructions how the work is to be performed

about when, where and

An Independent Contractor
with few. if any. itlMrltcllons the work

does the job ht_ or her own way as to the details or methods of

2. TRAINING:

Employees employee COUPES

are often trained by a more experienced or are reqmred to attend meetiqgs or take training

An lndependetlt arm thua need those ._er'vtcea

Contractor not receive

uses his or her own melhods

traimngfrom

the purchaser of

INTEGRATION:

Services of an Employee are usually merged into the firm's overall operation, the firm's success depends on those

Fm't pl oyee services

An Independent from the chent into tt

Contra ctor _ services are usually separate "s business and are not integrated or merged

SERVICES

RENDERED

PERSONALLY:

An Employee's services most be rendered Employees do not hire their own substltmes work to them

personally; or delegate

A true brdependent Contractor m able to ass+gn another to do the job in hm or her place and need not perform sera,wes personally

HIR1NG_ SUPERVISING

& PAYING HELPERS:

An Employee may act a_ a foreman for the employer but, ff

so. helpers axe paid with the employer's fiznds

hldependent

Contractors select, hire. pay and s_+perelsc any

helpers used and are responsible for the results of the

helpers" labor

CONTINUING

RELATIONSHIP:

An Employee often continues to work for the same employer month after month or year after year An Independent Contractor Is usually hired to do one 3ob of bruited or indefinite duration and has no expectanon of continuing _lork

7. SET I IOURS OF WORK:

An Employee may work "on call" or during hours and days as set by the employer ,4 true Independent Contractor ts the masler of his or her own lime and works the days and hours tie or she chooses

II. ORAL OR WRITTEN

REPORTS:

An Employee may be required to submit regular oral or written reports about the work in progress.

An Independent Contractor is usually not required to _ubmlt

regular oral or written reports about the work in progress

12. PAYMENT BY THE HOUR l WEEK OR MONTH: An Employee is typically paid by the emplo)e,r in regular amounts at stated mtervaJs, such as by the hour or week An Independent Contractor ts normally paid by the job. either a negotiate dflat rate or upon submission of a bid

13. PAYMENT OF BUSINESS & TRAVEL E,"G_ENSE:

An Employee's business and travel expenses are Other prod

threctly or reimbursed by the employer

Independent Contractors normally pay all of their own

bltst_ess and IraTe/expensed

wlthovt reimbursement.

14. FURNISHING

"FOOLS & EQUIPMENT:

Employees ate furnished all necessary tools, materials and eqmpment by then employer An Independent Contractor ordmardy provtd e_ all of the tools and equipment necessary to complele the job

15. SIGNIFICA_NT

INVESTMENT:

A n Employee generally has little or no investment :n the buzintrss Instead. an Emifloyee is economte._liy dependent

on the employer. True Independent

Contractors

usually hove a substantial

financial im_slment m thetr independent business

16. REAIJZE

PROFIT OR LOSS:

An Employee
m the business rendered

does not ordinarily reahze a profit or Io_, Rather, Employees are paal for services

An Independent Contractor can either reah=e a profit or

suffer a loss depet_dmg and revenues,

on the management

of exper_es

17. WORKING TIME:

FOR MORE TILMN ONE FIRM AT A

An Employee ordinarily works for one employer and may he prohibited from joining a compemor

at a Ume

An Independent Contractor often work*for more than one

cbent or ftrrn at the same lime and ts not subject to a non-

competition rule.

A-7

8. FULL TIME REQUIRED: An Employee ordmardy devotes fu_14im¢ service to the employer, or the employer may have a pnonty on the Em p[oyce's time A true Independent Contractor cannot be required to devote full-trine service to one firrn exclumvely. LOCATION WHERE SERVICES PERFORMED:
Employment is indicated if the onployer has the right to mandate where serv*ces are performed Independent Contractors ordmardy work where they choose The workplace may be cnvayflrom the client's premts_ 10. ORDER OR SEQUENCE SET: An Employee performs services m the order or sequence set by the employer Thtsshowseon_ol by the employer. A true Independent Contractor is concenled only with the flntshed product and sets hts or her own order or sequence of work
C-8(994) Inv. No. 518975

18. MAKING SERVICE AVAILABLE TO THE PUBLIC:
An Employee does not make his or her services available to the public except through the employer's company An Independent Contractor may advertise, carry business cards, hang out a shingle or hold a separate business license. 19. RIGHT TO DISCHARGE WITHOUT LIABILITY:
An Employee can be discharged at any time without hability on the employer's part If the work meets the contract terms, an Independent Contractor cannot be fired wtthout Itabdity for breach of
COtllTtlCl.
20. RIGHT TO QUIT WITHOUT LIABILITY: An Employee may qua work at any time wtthout liability on the Employee's part An Independent Contractor ts legally responsible for job completion co_cl,on quitting, becomes liable for breach of
contract.

A-8

CERTIFICATE

OF COMPLIANCE

PURSUANT

TO

FEDERAL

RULE OF APPELLATE

PROCEDURE

AND NINTH CIRCUIT RULE 32-1

32(a)(7)(C)

FOR CASE NO. 07-16487

I certify that:

Pursuant to Federal Rule of Appellate Procedure 32(a)(7)(C) and Ninth

Circuit Rule 32-1, the attached opening b_ief is proportionately

spaced, has a

typeface of 14 points or more, and contains 15,529 wBrds.

_,

Dated:March28,2008

By: /_J/S_ ,Afclj_'h'{e 1"_-_b in

 
 616 F.3d 895 (2010)
Mohit NARAYAN; Hanna Rahawi; and Thomas Heath, Plaintiffs-Appellants, v.
EGL, INC.; Eagle Freight Systems, Inc.; and Does 1-10, Defendants-Appellees.
No. 07-16487.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted November 4, 2009. Filed July 13, 2010.
Amended August 5, 2010.
896 *896 Stacey Leyton (argued) and Michael Rubin (briefed), Altshuler Berzon, LLP, San Francisco, CA, for the plaintiffs-appellants.
Aaron Kaufmann (briefed), David Pogrel, Hinton, Alfert & Sumner, Walnut Creek, CA, for the plaintiffs-appellants.
R. Ted Cruz (argued), Morgan, Lewis & Bockius, LLP, Houston, TX, and Y. Anna Suh (briefed), Hunton & Williams LLP, San Francisco, CA, for the defendants-appellees.
Robert R. Roginson, Division of Labor Standards Enforcement, Department of Industrial Relations, State of California, San Francisco, CA, Amicus Curiae in support of the plaintiffs-appellants.
Matthew Goldberg, The Legal Aid Society0907Employment Law Center, San Francisco, CA, and Cynthia Rice, California Rural Legal Assistance Foundation, Sacramento, CA, Amici Curiae in support of the plaintiffsappellants. Before: HAWKINS and SIDNEY R. THOMAS, Circuit Judges, and EDWARD R. KORMAN,[*] District Judge.
ORDER
Appellees' Petition for Panel Rehearing is granted for the limited purpose of amending the Opinion, without further oral argument.
The Opinion filed July 13, 2010, slip op. 10069, is amended as follows:
On page 10084, line 20: is deleted.
On page 10085, second indented paragraph, first sentence: Drivers here had contracts "expressly acknowledging that they were independent contractors" is simply not significant under California's test of employment.> is replaced with .
No subsequent petitions for rehearing and rehearing en banc may be filed.
KORMAN, District Judge:
OPINION
The California Labor Code ("Labor Code") confers certain benefits on employees that it does not afford independent contractors. Of particular relevance here are the provisions that, inter alia, require employers to pay overtime compensation, Cal. Lab.Code §§ 510 & 1194, prohibit employers from making certain improper deductions from wages, Cal. Lab.Code § 221, reimburse employees for necessary business expenses, Cal. Lab.Code § 2802, and provide off-duty meal periods, Cal. Lab. Code §§ 226.7 & 512. These provisions are part

of a broad regulatory policy defining the obligations that "`the law places on an employer without regard to the substance of its contractual obligations to its employee.'" Nedlloyd Lines B.V. v. Super. Ct., 3 Cal.4th 459, 11 Cal.Rptr.2d 330, 834 P.2d 1148, 1153 (1992) (quoting Foley v. Interactive Data Corp., 47 Cal.3d 654, 254 Cal.Rptr. 211, 765 P.2d 373, 394 (1988)). As Judge Easterbrook observed in a closely analogous context, statutes enacted to confer special benefits on workers are "designed to defeat rather than implement contractual arrangements." Sec'y of Labor v. Lauritzen, 835 F.2d 1529, 1545 (7th Cir.1987) (Easterbook, J., concurring).
This appeal from a judgment of the United States District Court for the Northern District of California granting the motion of an employer for summary judgment dismissing claims for benefits under the Labor Code principally presents the issue whether, assuming the existence of an employer-employee relationship in California, the employer may avoid its obligations under the Labor Code by inserting a clause in an employer-drafted pre-printed form contract in which: (1) the employee acknowledges that he is an independent contractor and (2) agrees that the contract would be interpreted in accordance with the laws of another jurisdiction where such an agreement is generally enforceable.
BACKGROUND
EGL, the employer, is a global transportation, supply chain management and information services company incorporated under the laws of Texas and headquartered in Texas.[1] EGL's services include, inter alia, "air and ocean freight forwarding, customs brokerage, [and] local pickup and delivery service." EGL operates through a network of over 400 facilities located in over 100 countries. One of the many aspects of EGL's business is domestic delivery services. Such services may be provided either as part of EGL's freight-forwarding operations or for customers requiring local pick-up and delivery services.
Mohit Narayan, Hanna Rahawi and Thomas Heath (the "Drivers") were residents of California who were engaged to provide freight pick-up and delivery services for EGL in California. All three Drivers signed agreements with 898 EGL for *898 "Leased Equipment and Independent Contractor Services" (the "Agreements"). The Agreements provided that the "intention of the parties is to ... create a vendor/vendee relationship between Contractor and [EGL]," and acknowledged that "[n]either Contractor nor any of its employees or agents shall be considered to be employees of" EGL. The terms of the Agreements provide, inter alia, that the Drivers "shall exercise independent discretion and judgment to determine the method, manner and means of performance of its contractual obligations," although EGL retained the right to "issue reasonable and lawful instructions regarding the results to be accomplished."
Notwithstanding the terms of the Agreements, the Drivers filed a complaint in California against EGL and one of its subsidiaries, Eagle Freight Services (collectively, "EGL"), alleging that they were EGL employees who were deprived of benefits conferred upon them by the Labor Code. They sought money damages for unpaid overtime wages, business expenses, meal compensation and unlawful deductions from wages as well as other relief, including statutory penalties.
After the case was removed pursuant to 28 U.S.C. § 1332, EGL moved for summary judgment arguing that, under the terms of the Agreements, the Drivers were not employees. Instead they were independent contractors who were not entitled to the benefits conferred upon employees by the Labor Code. Relying on a choice-of-law clause in the Agreements, the district court held that the law of Texas applied, and that declarations in the Agreements that the Drivers were independent contractors rather than employees, compelled the holding that they were independent contractors as a matter of law. Moreover, although California does not regard such declarations as controlling, and applies a multi-factor analysis in which the intent of the parties is one of over a dozen and a half factors, the district court held, without undertaking any analysis of the relevant factors, that the result would be the same under California law. Narayan v. EGL, Inc., No. CV-05-04181-RMW, 2007 WL 2021809, at *9 n. 12 (N.D.Cal. July 10, 2007). Consequently, the district court granted EGL's motion for summary judgment.
DISCUSSION

I. Choice-of-Law
EGL argues that the choice-of-law clause in the Agreements, which provides that the contracts "shall be interpreted under the laws of the State of Texas," applies to the current dispute. The district court agreed. We review questions regarding choice of law de novo. Paulsen v. CNF Inc., 559 F.3d 1061, 1072 (9th Cir.2009).
To determine the applicable substantive law, a federal court sitting in diversity applies the choice-of-law rules of the forum. Fields v. Legacy Health Sys., 413 F.3d 943, 950 (9th Cir.2005). California, the forum state, ordinarily examines the scope of a choice-of-law provision in a contract under the law designated in that contract. Wash. Mut. Bank, FA v. Super. Ct., 24 Cal.4th 906, 103 Cal.Rptr.2d 320, 15 P.3d 1071, 1078 n. 3 (2001). In this case, that is Texas law.
Under Texas law, similarly narrow choice-of-law clauses, providing under what law an agreement "shall be interpreted and enforced," apply only to the interpretation and enforcement of the contract itself; they do not "encompass all disputes between the parties." Stier v. Reading & Bates Corp., 992 S.W.2d 423, 433 (Tex. 1999); accord Benchmark Elecs., Inc. v. J.M. Huber Corp., 343 F.3d 719, 727 (5th Cir.2003) (calling similar provision 899 "narrow"). They govern claims that "rise or *899 fall on the interpret[ation] and enforce[ment] of any contractual provision." Stier, 992 S.W.2d at 434 (internal quotations omitted) (alterations in original); see also Busse v. Pac. Cattle Feeding Fund # 1, Ltd., 896 S.W.2d 807, 812-13 (Tex. App.1995) ("The rights, obligations, and cause of action do not arise from the contracts but from the Deceptive Trade Practices Act, the Texas Securities Act, and the common law.").
The Drivers' claims involve entitlement to benefits under the California Labor Code. Whether the Drivers are entitled to those benefits depends on whether they are employees of EGL, which in turn depends on the definition that the otherwise governing law0907not the parties 0907 gives to the term "employee." While the contracts will likely be used as evidence to prove or disprove the statutory claims, the claims do not arise out of the contract, involve the interpretation of any contract terms, or otherwise require there to be a contract. See S.G. Borello & Sons, Inc. v. Dep't of Indus. Relations, 48 Cal.3d 341, 256 Cal.Rptr. 543, 769 P.2d 399, 403-07 (1989) (listing over one dozen factors "logically pertinent to the inherently difficult determination whether a provider of service is an employee or an excluded independent contractor").
CBS Corp. v. FCC, 535 F.3d 167 (3d Cir.2008), vacated on other grounds, ___ U.S. ___, 129 S.Ct. 2176, 173 L.Ed.2d 1153 (2009), is instructive. There, the Third Circuit held that federal rather than New York law governed the question of whether performers were independent contractors or employees despite the presence of a choice-of-law clause in a contract defining performers as "independent contractors" because the claims arose under a federal regulatory scheme, and "defining the boundaries of permissible vicarious liability under that scheme is ... a federal matter." Id. at 190-92. Similarly here, appellants claims arose under the Labor Code, a California regulatory scheme, and consequently, California law should apply to define the boundaries of liability under that scheme.
II. Propriety of Summary Judgment Under California Law
Although the district judge applied Texas law to determine that the Drivers were independent contractors as a matter of law, he observed in a conclusory footnote that "[t]he result would be no different if California law governed." Narayan, 2007 WL 2021809, at *9 n. 12. This conclusion is erroneous. We review a district court's grant of summary judgment de novo. Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir.1996). In doing so, we determine, "viewing the evidence in the light most favorable to the nonmoving party, whether genuine issues of material fact exist and whether the district court correctly applied the relevant substantive law." Id. Summary judgment is not appropriate if a reasonable jury viewing the summary judgment record could find by a preponderance of the evidence that the plaintiff is entitled to a favorable verdict. Davis v. Team Elec. Co., 520 F.3d 1080, 1089 (9th Cir.2008). "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from facts are jury functions, not those of a judge ... The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "A `justifiable inference' is not necessarily the most likely inference or the most persuasive inference. Rather, `an inference as to another material fact may be drawn in favor of the 900 nonmoving party ... if it is `rational' or `reasonable.'" United Steelworkers of Am. v. Phelps Dodge *900 Corp., 865 F.2d 1539, 1542 (9th Cir.1989) (internal citation omitted).

There are two special circumstances that are relevant to the application of this standard here. First, under California law, once a plaintiff comes forward with evidence that he provided services for an employer, the employee has established a prima facie case that the relationship was one of employer/employee. Robinson v. George, 16 Cal.2d 238, 105 P.2d 914, 917 (1940). As the Supreme Court of California has held, "[t]he rule ... is that the fact that one is performing work and labor for another is prima facie evidence of employment and such person is presumed to be a servant in the absence of evidence to the contrary." Id. at 916; see also Cristler v. Express Messenger Sys., Inc., 171 Cal. App.4th 72, 83, 89 Cal.Rptr.3d 34 (2009). Once the employee establishes a prima facie case, the burden shifts to the employer, which may prove, if it can, that the presumed employee was an independent contractor. Cristler, 171 Cal.App.4th at 84, 89 Cal.Rptr.3d 34 (approving a jury instruction that "[t]he Defendant has the obligation to prove that the Plaintiffs were independent contractors"); Bemis v. People, 109 Cal.App.2d 253, 240 P.2d 638, 644 (1952) ("It is also the law that, generally speaking, the burden of proof is on the party attacking the employment relationship.").

The Drivers here have established a prima facie case. This means that, in order to prevail on its motion for summary judgment, drawing all justifiable inferences from the uncontroverted evidence, EGL would have to establish that a jury would be compelled to find that it had established by a preponderance of the evidence that the Drivers were independent contractors. This hurdle is particularly difficult for EGL to overcome in light of the second special consideration in this case, namely, the multi-faceted test that applies in resolving the issue whether the Drivers are employees.

The Supreme Court of California has enumerated a number of indicia of an employment relationship, the most important of which is the "right to discharge at will, without cause." Borello, 256 Cal. Rptr. 543, 769 P.2d at 404 (quoting Tieberg v. Unemployment Ins.App. Bd., 2 Cal.3d 943, 88 Cal.Rptr. 175, 471 P.2d 975, 979 (1970)). Borello endorsed other factors derived from the Restatement (Second) of Agency that may point to an employment relationship:

(a) whether 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 worker 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 a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer-employee.

Id., 256 Cal.Rptr. 543, 769 P.2d at 404. Borello also approvingly cited five factors adopted by cases in other jurisdictions. These include:

(1) the alleged employee's opportunity for profit or loss depending on his managerial skill; (2) the

alleged employee's investment in equipment or materials required for his task, or his employment

of helpers; (3) whether the service rendered requires a special skill; (4) the degree of permanence

901

of the working relationship; and (5) whether the service *901 rendered is an integral part of the

alleged employer's business.

Id., 256 Cal.Rptr. 543, 769 P.2d at 407. Moreover, it characterized as "helpful" the standards set forth in Labor Code Section 2750.5, id., which provide "extensive guidelines for determining whether one who operates under a required contractor's license is an independent contractor or employee." Id., 256 Cal.Rptr. 543, 769 P.2d at 404 n. 5.

All factors were held to be "logically pertinent to the inherently difficult determination whether a provider of service is an employee or an excluded independent contractor." Id., 256 Cal.Rptr. 543, 769 P.2d at 407. Nevertheless,

"the individual factors cannot be applied mechanically as separate tests; they are intertwined and their weight depends on particular combinations." Id., 256 Cal.Rptr. 543, 769 P.2d at 404 (internal citation and quotations omitted). "We must assess and weigh all of the incidents of the relationship with the understanding that no one factor is decisive, and that it is the rare case where the various factors will point with unanimity in one direction or the other." NLRB v. Friendly Cab Co., 512 F.3d 1090, 1097 (9th Cir.2007) (internal citation and quotations omitted).
Judge Easterbrook has keenly observed in a case under the Fair Labor Standards Act that:
[i]f we are to have multiple factors, we should also have a trial. A fact-bound approach calling for the balancing of incommensurables, an approach in which no ascertainable legal rule determines a unique outcome, is one in which the trier of fact plays the principal part. That there is a legal overlay to the factual question does not affect the role of the trier of fact.
Sec'y of Labor v. Lauritzen, 835 F.2d 1529, 1542 (7th Cir.1987) (Easterbook, J., concurring) (internal citations omitted). Under these circumstances, "we cannot readily say . . . that the `ultimate conclusion as to whether the workers are employees or independent contractors' is one of law. The drawing of inferences from subordinate to `ultimate' facts is a task for the trier of fact 0907if, under the governing legal rule, the inferences are subject to legitimate dispute." Id. at 1543.
The inferences here are subject to legitimate dispute. The delivery services provided by the EGL drivers were an essential part of the regular business of EGL. Indeed, EGL's instructional video shown to the drivers advises them that "as an [EGL] pickup and delivery driver, you have the key role in the shipping process. . . The [EGL pickup and delivery] driver is the eyes of a dispatcher. You can identify shipments that are potential claims before they are put into our system and you ensure our customers' freight is protected by using proper loading work method techniques." More than that, "[y]ou are a vital source for shipping leads and competitor information at the actual shipping points, and you are a source of traffic and road condition information for dispatch and other [EGL] drivers to be able to avoid unnecessary delays on critical shipments." The video goes on to describe the drivers as "our company's largest sales force," because "[t]hrough your interactions with the customer, you communicate [EGL's] commitment to excellence." Indeed, the video acknowledges that "for our company to continue to grow, every [EGL] driver must understand the critical importance of the job they do."
Consequently, EGL's Safety and Compliance Manual and Drivers' Handbook instructed the EGL drivers on, inter alia, how to conduct themselves when receiving assignments and packages, responding to customer complaints 902 and handling damaged freight. The drivers used EGL-supplied *902 forms, received company memoranda and attended meetings on company policies. The Handbook also provided guidelines on how to communicate with EGL's dispatch, instructing drivers to notify the dispatcher before leaving EGL's facility dock, to contact the dispatcher after each delivery stop to report that the delivery was completed, and to immediately report any traffic delays. Indeed, the EGL drivers were told that "[c]ommunicating with dispatch is the single most important aspect of the services drivers are paid for. It is not enough to get the freight picked up or delivered. To be competitive in today's market, the team must be able to identify at a moment's notice exactly where a shipment is in the course of transit." The EGL drivers were also instructed "never [to] wait at a stop without notifying the dispatcher first" and "allow[ing the] dispatcher to make the service decisions." Similarly, EGL's drivers were told that, if they cannot find a pickup or delivery site, "Don't ride around for 15 or 30 minutes, radio in and ask for help!"
Moreover, there was evidence that EGL's drivers were ordered to report to the EGL station at a set time each morning0907whether or not packages were available to be delivered. Indeed, one of EGL's dispatchers testified that one of the plaintiff Drivers was subject to disciplinary action for showing up late. Similarly, the record indicates that the drivers had to submit advance notice of vacation days. The plaintiff Drivers also submitted evidence that, although their contracts purportedly gave them the right to pick and choose assignments, in practice, EGL presented them with batches of deliveries that they generally had to accept as an all-ornothing proposition. In some circumstances, standard operating procedure agreements between EGL and many of its customers determined the manner in which drivers made deliveries. Moreover, the plaintiff Drivers drove exclusively for EGL during their period of employment, and there is at least a material issue of fact as to whether they could have driven for other delivery companies because EGL required them to affix EGL logos to their trucks, which the plaintiff Drivers allege could not practically be covered up.

The record also shows that EGL controlled many other details of their drivers' performance. EGL regulated their drivers' appearance0907requiring them to wear EGL-branded shirts, safety boots and an EGL identification card. Although their drivers owned their own trucks or vans as noted above, EGL required that they affix EGL logos to the outside of their vehicles. This requirement was "established due to government regulations, customer requests, and for security purposes." EGL imposed requirements on their drivers' vehicles in 0907 particular, that they be painted white and less than five years old, although EGL disputes whether these requirements were enforced. This requirement was imposed to meet "the industry standard, the DOT regulation, and . . . customer's requirements."
EGL's drivers supplied some of the equipment used to deliver packages (e.g., hand trucks, lift gates, etc.), but EGL provided other supplies such as EGL-branded boxes and packing tape to their drivers for package pick-ups. While EGL's drivers retained the right to employ others to assist in performing their contractual obligations, EGL required all helpers to be approved by it. The same rule applied to passengers. This requirement was imposed "to safeguard EGL employees, contractors, . . . customers, and the general public from unsafe and unlawful actions" by a helper or passenger. Nonetheless, none of the plaintiff Drivers hired helpers to perform their duties for EGL.
903 Significantly, the contracts signed by the plaintiff Drivers contained automatic renewal *903 clauses and could be terminated by either party upon thirty-days notice or upon breach of the agreement. Such an agreement is a substantial indicator of an at-will employment relationship. See Estrada v. FedEx Ground Package Sys., Inc., 154 Cal.App.4th 1, 6, 11, 64 Cal. Rptr.3d 327 (2007) (agreement providing for termination with thirty-day notice is evidence of at-will employment); Gonzalez v. Workers' Comp. App. Bd., 46 Cal. App.4th 1584, 1593, 54 Cal.Rptr.2d 308 (1996) (contract with two-week notice termination provision constituted at-will employment where contract provided no consequences for employers' failure to give notice); Antelope Valley Press v. Poizner, 162 Cal.App.4th 839, 854, 75 Cal.Rptr.3d 887 (2008) (termination with thirty-day notice requirement "clearly" gives employer the right to discharge at-will without cause). But see State Comp. Ins. Fund v. Brown, 32 Cal.App.4th 188, 203, 38 Cal. Rptr.2d 98 (1995) (termination provision with fourteen-day notice requirement was "consistent either with an employment-at-will relationship or parties in a continuing contractual relationship").
Moreover, the occupation that the plaintiff Drivers were engaged in did not require a high level of skill. Drivers were not required to possess any special license beyond a normal driver's license, and no skills beyond the ability to drive. Estrada, 154 Cal.App.4th at 12, 64 Cal.Rptr.3d 327; JKH Enters., Inc. v. Dep't of Indus. Relations, 142 Cal.App.4th 1046, 1064, 48 Cal. Rptr.3d 563 (2006) (courier service drivers did not require a high level of skill); cf. Brown, 32 Cal.App.4th at 202-03, 38 Cal. Rptr.2d 98 (commercial truck drivers require "abilities beyond those possessed by a general laborer (or, indeed, possessors of ordinary driver's licenses)"); Gonzalez, 46 Cal.App.4th at 1592, 54 Cal.Rptr.2d 308 (distinguishing between truckers in Brown, who require a special driver's license and must learn special driving skills, from individuals who deliver newspapers in cars).
Finally, the length and indefinite nature of the plaintiff Drivers' tenure with EGL also point toward an employment relationship. Here, the plaintiff Drivers worked at EGL for several years, and their Agreements were automatically renewed. This was not a circumstance where a contractor was hired to perform a specific task for a defined period of time. There was no contemplated end to the service relationship at the time that the plaintiff Drivers began working for EGL.
The district court, as we have previously observed, did not apply the relevant factors identified by the Supreme Court of California to the facts in this case. The only reference to factors that were arguably relevant were addressed in the context of distinguishing a California case that found an employee-employer relationship in closely analogous circumstances. See Air Couriers Int'l v. Employ. Dev. Dep't, 150 Cal.App.4th 923, 59 Cal.Rptr.3d 37 (2007). Thus, the district judge observed that "in Air Couriers, the drivers did not have written contracts, as here, expressly acknowledging that they were independent contractors. Further, in Air Couriers, the drivers drove regular routes, worked regular schedules, and were paid on regularly scheduled paydays." Narayan, 2007 WL 2021809, at *9 n. 12. By contrast, he found that the instant case was distinguishable because "the drivers were not required to work regular schedules, were paid on a per job basis, and determined their own routes." Id. These distinctions are neither dispositive nor the subject of factual disputes suitable for resolution by summary judgment.

That the Drivers here had contracts "expressly acknowledging that they were independent contractors" is simply 904 not dispositive under California's test of employment. *904 Borello, 256 Cal.Rptr. 543, 769 P.2d at 403 ("The label
placed by the parties on their relationship is not dispositive, and subterfuges are not countenanced.") Moreover, there is an issue of fact over whether the plaintiff Drivers were required to work regular schedules. Contrary to the district judge's suggestion, they were paid on a regular basis, although their salary was based on a percentage of each delivery. Nevertheless, the fact that their salary was determined in this way is equally consistent with an employee relationship, particularly where other indicia of employment are present. Ali v. L.A. Focus Publ'n., 112 Cal.App.4th 1477, 1485, 5 Cal.Rptr.3d 791 (2003) (that reporter was paid by the article is indicative of an independent contractor relationship, but that fact alone is not dispositive if other indicia of employment are present); Toyota Motor Sales U.S.A., Inc. v. Super. Ct., 220 Cal.App.3d 864, 877, 269 Cal.Rptr. 647 (1990) (the fact that worker was paid on a commission basis is consistent with employee status).
Similarly, setting aside evidence that the plaintiff Drivers did not, as a practical matter, determine their own routes, the ability to determine a driving route is "simply a freedom inherent in the nature of the work and not determinative of the employment relation." Toyota, 220 Cal. App.3d at 876, 269 Cal.Rptr. 647; see also Home Interiors & Gifts, Inc. v. Veliz, 695 S.W.2d 35, 40-41 (Tex.App.1985) (finding employee-employer relationship although drivers generally determined how to get to their destinations). These cases simply reflect the commonsense rule that, "[i]f an employment relationship exists, the fact that a certain amount of freedom is allowed or is inherent in the nature of the work involved does not change the character of the relationship, particularly where the employer has general supervision and control." Air Couriers, 150 Cal.App.4th at 934, 59 Cal.Rptr.3d 37 (quoting Grant v. Woods, 71 Cal.App.3d 647, 653, 139 Cal. Rptr. 533 (1977)).
Ultimately, under California's multi-faceted test of employment, there existed at the very least sufficient indicia of an employment relationship between the plaintiff Drivers and EGL such that a reasonable jury could find the existence of such a relationship. Indeed, although it plays no role in our decision to deny summary judgment, it is not without significance that, applying comparable factors to those that we apply here, the Internal Revenue Service (at EGL's request) and the Employment Development Department of California (at Narayan's request) have determined that Narayan was an employee for federal tax purposes (applying federal law) and California Unemployment or Disability Insurance (applying California law), respectively.
CONCLUSION
The judgment of the district court granting EGL's motion for summary judgment is REVERSED and REMANDED.
[*] The Honorable Edward R. Korman, Senior United States District Judge for the Eastern District of New York, sitting by designation.
[1] The complaint was originally filed against EGL and Eagle Freight Services, a subsidiary of EGL. After the district court entered final judgment in this case, EGL was purchased by CEVA Logistics U.S. Holdings, Inc.
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