Filed 9/30/21

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

VERONICA BECERRA et al.,

Plaintiffs and Appellants,

v.

THE MCCLATCHY COMPANY et al.,

Defendants and Respondents.

F074680

(Super. Ct. No. 08CECG04411)

OPINION

APPEAL from a judgment of the Superior Court of Fresno County. Kristi Culver 

Kapetan, Judge.

Callahan & Blaine, Daniel J. Callahan, Michael J. Sachs, and Scott D. Nelson for 

Plaintiffs and Appellants.

Lewis Brisbois Bisgaard & Smith, Allison Arabian and John S. Poulos; Law 

Offices of William C. Hahesy and William C. Hahesy; Perkins Coie, Eric D. Miller and 

Jill L. Ripke; Pillsbury Winthrop Shaw Pittman and Derek M. Mayor for Defendants and

Respondents.

-ooOoo-
2.

INTRODUCTION

This appeal arises from a class action brought by and on behalf of newspaper 

home delivery carriers for The Fresno Bee newspaper (hereinafter plaintiffs or the 

carriers).1 In the trial court, the matter proceeded to a bifurcated bench trial on the issue 

of whether the owner of The Fresno Bee and its holding company, respectively, The

McClatchy Company and McClatchy Newspapers, Inc. (hereinafter collectively referred 

to as the newspaper or The Bee), violated the unfair competition law (UCL) (Bus. & Prof. 

Code, § 17200 et seq.) by failing to pay the carriers’ mileage expenses as required by 

Labor Code section 2802. The primary issue at trial was whether the carriers were 

employees or independent contractors. The trial court determined the carriers were 

independent contractors and, as a result, entered judgment in favor of The Bee. 

On appeal, the carriers contend (1) the trial court misallocated the burden of proof;

(2) the trial court erred in relying on a regulation promulgated by the Employment 

Development Department (EDD), which the carriers contend is irrelevant; (3) the trial 

court erred in its application of the relevant test, as set out in S. G. Borello & Sons, Inc. v. 

Department of Industrial Relations (1989) 48 Cal.3d 341, (Borello); (4) under Borello, 

the carriers are employees; (5) the trial court erred in relying on equitable considerations 

to determine The Bee’s liability; and (6) the trial court improperly relied on testimony 

from unrepresentative class members. In supplemental briefing, the carriers additionally 

argue the test for employment set out in Dynamex Operations West, Inc. v. Superior 

Court (2018) 4 Cal.5th 903 (Dynamex) applies, and the carriers are employees under that 

test. 

We agree that the question of whether the carriers are employees or independent 

contractors must be determined under the Borello test. As such, the trial court erred in 

1 Appellants are: Veronica Becerra, Williams Herrera Luis, Vanessa Castro, Alma 

Landeros, Randy Leyva, and Roger Carpenter.
3.

deferring to the EDD regulations, which we conclude are inapplicable. Ultimately, the 

trial court also failed to properly analyze the factors required by Borello, and we 

therefore must reverse. However, we decline to resolve whether the carriers are 

employees or independent contractors, and instead remand for the trial court to address

this question in light of the principles set forth herein. We address the carriers’ remaining 

arguments to the extent necessary to provide guidance on remand.

FACTUAL AND PROCEDURAL BACKGROUND

I. Contracts for Delivery of The Bee

Between December 19, 2004, and January 2010, all the carriers signed a contract 

with The Bee to provide newspaper home delivery services. Although there were some 

variations in the contracts used at different times during this period, the differences were 

not substantial. The contracts were titled, “Independent Contractor Home Delivery 

Distribution Agreement” (boldface & some capitalization omitted) and referred to the 

carriers as “Contractor.” 

The contracts contained a paragraph titled, “Independent Contractor Status,”2

which stated:

“Contractor represents that it operates an independently established 

business and desires to contract with [the newspaper] to distribute 

newspapers and other materials as an independent contractor. Contractor’s 

agreement to provide results under this Agreement as an independent 

contractor for all purposes is an essential term of this Agreement. . . . 

Contractor may operate Contractor’s business as Contractor chooses. [The 

newspaper] is interested only in the results to be obtained by Contractor as 

described in this Agreement, and the manner and means of obtaining those 

results are matters entirely within the authority and discretion of 

Contractor. For example, Contractor is (a) free to obtain and utilize one or

more vehicles of Contractor’s selection; (b) free to set Contractor’s own 

working hours; (c) free to set Contractor’s own order of deliveries; (d) free 

to purchase equipment and supplies wherever Contractor chooses; (e) not 

subject to the [newspaper’s] rules and regulations for its employees; (f) not 

2 We quote from the contract contained in trial exhibit 109. 
4.

required or requested to attend meetings of the employees of [the 

newspaper]; (g) free to perform distribution services for other companies, 

including but not limited to competitors of [the newspaper]; and (h) free to 

hire or retain employees or subcontractors to perform Contractor’s 

obligations pursuant to this Agreement, even if Contractor is an individual 

and not a corporation or other business organization. Publisher has no 

authority to impose disciplinary action upon Contractor and may only assert 

rights available to it under this Agreement or as available under application 

law.” 

The contracts also specified that the carriers would be treated as independent contractors 

for tax purposes. 

The contracts provided space to fill in the location and time the carrier could pick 

up the newspapers and related materials for delivery. Pursuant to the contract, the 

carriers each agreed to “assemble and deliver a complete newspaper on the date 

published in a dry and undamaged condition to each subscriber on the Subscriber List at a 

time and at a place that satisfies the reasonable delivery requests of each subscriber.” 

The contracts included blank spaces for the newspaper to specify a time by which the 

newspapers were to be delivered, and stated that “delivery to a porch, driveway, or tube, 

as requested by [the] subscriber” would be considered reasonable. The carriers were 

prohibited from encouraging subscribers to change their delivery location and from 

providing copies of the newspaper to others, with limited exceptions. The carriers also 

were prohibited from including markings, stampings, inserts or imprinted wrapping, 

coverings or containers not pre-approved by The Bee. Additionally, the newspaper was 

not to be delivered in damaged, soiled, or wet condition. 

The contracts required the carriers to agree to avoid missed or damaged deliveries, 

or deliveries to unsatisfactory locations. The contracts contained blank spaces to specify 

the amount the newspaper would charge carriers for various types of complaints. 

Carriers were prohibited from deterring subscribers from contacting the newspaper with 

complaints. If the newspaper received a specified number of complaints regarding a 

carrier, the contract was subject to termination. 
5.

The carriers were required to furnish and maintain their own vehicles and 

equipment. Carriers had the option to purchase delivery supplies, such as bags and 

rubber bands, from the newspaper and were invoiced for such supplies each billing cycle. 

Carriers had the right to hire employees, subcontractors or substitutes to assist in the 

performance of the agreement. Carriers were required to either deposit a cash bond with 

the newspaper or to purchase a commercial bond, and to maintain various types of 

insurance and any necessary licenses. The carriers assumed all risk of loss regarding the 

newspapers once the newspapers were made available for delivery. 

Early agreements during this period required the carriers to purchase and resell the 

newspapers being distributed. Later agreements provided that carriers were paid a piece 

rate, i.e., a specified amount for each newspaper delivered. 

The agreement could be terminated without cause upon 35 days’ written notice. 

The agreement also could be terminated without notice for a material breach. 

II. Initial Proceedings

On December 19, 2008, the carriers filed, on behalf of themselves and others 

similarly situated, a putative class action complaint against The Bee. On June 6, 2013, 

the carriers filed the operative pleading, a second amended complaint consisting of nine 

causes of action: (1) failure to pay minimum wages and overtime wages (Lab. Code, 

§§ 1194, 1197, 1197.1; Industrial Welfare Commission (IWC) Wage Order No. 1-2001; 

Cal. Code Regs., tit. 8, § 11010); (2) failure to provide meal periods or compensation in 

lieu thereof (Lab. Code, §§ 226.7, 512; IWC Wage Order No. 1-2001; Cal. Code Regs., 

tit. 8, § 11010); (3) failure to provide rest periods or compensation in lieu thereof (Lab. 

Code, § 226.7; IWC Wage Order No. 1-2001; Cal. Code Regs., tit. 8, § 11010); 

(4) failure to reimburse reasonable expenses (Lab. Code, § 2802); (5) unlawful 

deductions from wages (Lab. Code, §§ 221, 223); (6) failure to pay for training (29 

C.F.R. § 785.27 et seq.); (7) failure to provide itemized wage statements (Lab. Code, 
6.

§§ 226, 226.3); (8) failure to keep accurate payroll records (Lab. Code, § 1174); and 

(9) unfair business practices (Bus. & Prof. Code, § 17200 et seq.). 

On July 15, 2013, the trial court certified a class as to the fourth, seventh, eighth,

and ninth causes of action as follows: “ ‘All individuals currently or formerly engaged 

by [the newspaper] as newspaper home delivery carriers of [T]he Fresno Bee newspaper, 

who signed contracts directly with [the newspaper] in the State of California, between 

December 19, 2004 and January, 2010.’ ” Omitted from the class were carrier 

substitutes, single-copy carriers, and helpers. 

On January 9, 2014, the trial court granted the newspaper’s motion for judgment 

on the pleadings as to the eighth cause of action. The carriers then moved for a separate 

trial on the ninth cause of action. After the trial court denied the motion for a separate 

trial, the carriers sought to dismiss their fourth and seventh causes of action, as well as 

their individual claims. Following a case management conference, the parties filed, and 

on March 25, 2014, the court approved, the following “STIPULATION AND 

FURTHER RECITALS” regarding the remaining claims: 

“1. At the conference, the parties and the Court discussed a 

number of subjects and the Court made various rulings thereon, some of 

which will be reflected in this stipulation and further orders of the Court. 

[The carriers] are voluntarily dismissing, without prejudice, the Fourth 

Cause of Action under Labor Code Section 2802 and the Seventh Cause of 

Action under Labor Code Sections 226 and 226.3, along with all of [the 

carriers’] individual claims, subject to Court approval. [The carriers] have 

filed a Declaration consistent with Rule 3.770 of the California Rules of 

Court. [The carriers] confirm that they will be proceeding solely with their 

Ninth Cause of Action under Business [and] Professions Code Section 

17200. 

“2. The Court has determined that the case shall be bifurcated for 

trial and certain discovery. The Court has determined that the trial shall be 

bifurcated into two phases . . . . The first phase will involve a trial of the 

employee/independent contractor status of the class members and the 

remaining liability issues including the issues relating to the reasonable and 

necessary automobile expenses incurred by the class members and not 
7.

indemnified. Because [the carriers] have the burden of proof on those 

issues, they will proceed first. Only if [the carriers] are able to prove that 

the class members are employees and the other liability elements would the 

parties proceed to the second phase. The second phase, if necessary, would 

concern only the issue of restitution for unindemnified reasonable and 

necessary automobile expenses.” 

III. Trial and Judgment

A bifurcated bench trial on the issue of liability on the ninth cause of action 

commenced on November 19, 2014, and continued over the course of numerous 

nonconsecutive days, with the presentation of evidence concluding on March 4, 2015. 

On July 2, 2015, the trial court denied the newspaper’s motion to decertify the 

class. However, the trial court also ordered briefing and argument on “the issue of 

creating a subclass or, in the alternative, excluding from the class, regional carriers and/or 

large distributors.” After receiving further briefing, on September 28, 2015, the trial 

court excluded “large distributors” from the class and declined to create a subclass of 

regional carriers. 

On September 9, 2016, the trial court issued its statement of decision, concluding 

the carriers were properly classified as independent contractors, rather than employees. 

The court began its analysis by considering the effect of section 4304-6 of title 22 of the 

California Code of Regulations,3 which was promulgated by the EDD and which contains 

factors to be considered in determining whether newspaper carriers are employees or 

independent contractors for purposes of the Unemployment Insurance Code. The court 

determined it was required to “analyze the language of the contracts [between the carriers 

and the newspaper] with a view to both the common law, and the common law as 

specifically applied by the [EDD] to the newspaper industry.” Accordingly, the court 

examined the contracts “[w]ithin the framework of the [EDD] regulations,” and based 

3 Subsequent regulatory citations refer to California Code of Regulations, title 22.
8.

thereon, determined the carriers acted with independence, free from the control of the 

newspaper. 

The court then stated, “Even if the court did not consider the EDD Regulations, 

application of the [common law] factors . . . would lead to the same conclusion.” The 

court then examined 14 “secondary factors” bearing on the independent contractor 

determination, some of which suggested the carriers were independent contractors rather 

than employees. The court declined to consider two cases relied on by the carriers, Brose 

v. Union-Tribune Publishing Co. (1986) 183 Cal.App.3d 1079 and Antelope Valley Press 

v. Poizner (2008) 162 Cal.App.4th 839 (Poizner), on the ground these cases were limited 

to claims arising under the Workers’ Compensation Act. Finally, the court noted that this 

is an action in equity, and that it would be “unfair for [T]he Bee to be penalized for 

relying upon the [EDD] Regulations and following them.” The court thereby concluded 

that both the EDD regulations and the common law test supported a conclusion that the 

carriers were properly classified as independent contractors. 

On September 15, 2016, the court entered judgment in favor of the newspaper. 

This timely appeal followed.4

4 During the pendency of this appeal, the newspaper filed a voluntary bankruptcy 

petition and the appeal was stayed. (11 U.S.C. § 362.) On September 25, 2020, the 

bankruptcy court filed its “Findings of Fact, Conclusions of Law, and Order Approving 

the Disclosure Statement and Confirming the First Amended Joint Chapter 11 Plan of 

Distribution of JCK Legacy Company and its Affiliated Debtors and Debtors in 

Possession.” (Boldface, underlining & some capitalization omitted.) This order 

terminated the automatic bankruptcy stay and, on February 8, 2021, the stay of appeal 

was lifted. At the same time, we ordered the parties to brief whether the bankruptcy 

court’s order rendered the appeal moot. 

An appeal becomes moot when “ ‘ “ ‘the occurrence of events renders it 

impossible for the appellate court to grant appellant any effective relief.’ ” ’ ” (La 

Mirada Avenue Neighborhood Assn. of Hollywood v. City of Los Angeles (2016) 2 

Cal.App.5th 586, 590; accord, Paul v. Milk Depots, Inc. (1964) 62 Cal.2d 129, 132.) 

Generally, the burden is on the party claiming mootness to establish that an appeal is 

moot. (See Smith v. State Savings & Loan Assn. (1985) 175 Cal.App.3d 1092, 1099-

1100.) Here, the parties responded to the court’s request for further briefing with a
9.

DISCUSSION

I. Motions for Judicial Notice

In the course of briefing the instant appeal, the carriers filed two motions for 

judicial notice, both of which the newspaper opposed. 

A reviewing court must take judicial notice of “(1) each matter properly noticed 

by the trial court and (2) each matter that the trial court was required to notice under 

[Evidence Code s]ection 451 or 453.” (Evid. Code, § 459, subd. (a).) In addition, a 

reviewing court has discretion to take judicial notice of any matter specified in Evidence 

Code section 452. (Evid. Code, § 459, subd. (a).) 

A. Motion Filed November 6, 2017

The carriers’ first motion seeks judicial notice of (1) a 2002 update of the Division

of Labor Standards Enforcement (DLSE) Enforcement Policies and Interpretations

Manual (Revised) section 28 (Exhibit A); (2) a DLSE opinion letter dated May 17, 2000 

(Exhibit B); (3) a Department of Industrial Relations (DIR) publication entitled 

“Independent Contractors” (Exhibit C); (4) a purported DIR webpage concerning 

independent contractors (Exhibit D); (5) the EDD rulemaking file concerning section 

4304-6 of the California Code of Regulations (Exhibit E); and (6) section 4304-6 of the 

California Code of Regulations (Exhibit F). 

Both parties sought judicial notice of Exhibit F in the trial court and the trial court 

granted their request. We will grant the carriers’ motion to take judicial notice of 

Exhibit F. (Evid. Code, § 459, subd. (a).)

stipulation, which suggests that effective relief remains available to the carriers should 

they prevail in this appeal. Accordingly, the newspaper has not established that the 

appeal is moot, and we will proceed to address the appeal on the merits. 
10.

As to the remaining exhibits, our determination is discretionary.5 (Evid. Code, 

§ 459, subd. (a).) 

Our Supreme Court recently noted that the provisions of the DLSE manual 

contained in Exhibit A are not entitled to deference, and a party’s reliance on the manual 

was therefore found unpersuasive. (Dynamex, supra, 4 Cal.5th at p. 946.) While we are 

not prohibited from considering this material (see Alvarado v. Dart Container Corp. of 

California (2018) 4 Cal.5th 542, 559), it carries little weight. Thus, while we will grant 

the carriers’ request for judicial notice of Exhibit A, we remain mindful of our duty to 

independently determine the meaning and scope of the provisions at issue in this case 

without deference to this material. 

Likewise, Exhibit B is not entitled to deference. (Brinker Restaurant Corp. v. 

Superior Court (2012) 53 Cal.4th 1004, 1029, fn. 11 (Brinker) [DLSE opinion letters are 

not controlling].) Nor is it relevant. We will deny the carriers’ request for judicial notice 

of Exhibit B. (Stockton Citizens for Sensible Planning v. City of Stockton (2012) 210 

Cal.App.4th 1484, 1488, fn. 3 (Stockton).) 

Exhibits C and D are interpretive documents. Like Exhibits A and B, they are not 

entitled to deference. (Martinez v. Combs (2010) 49 Cal.4th 35, 50, fn. 15 [“[W]e give 

the DLSE’s current enforcement policies no deference because they were not adopted in 

compliance with the Administrative Procedure Act.”]; Tidewater Marine Western, Inc. v. 

Bradshaw (1996) 14 Cal.4th 557, 576 [declining to give weight to DLSE policy 

interpretations].) Moreover, these documents are dated well after the conclusion of the 

5

In the trial court, the carriers’ cited Exhibit A and Exhibit B in their objections to 

the trial court’s proposed statement of decision, but did not request judicial notice. Nor 

do the carriers contend they sought judicial notice of Exhibits C and E in the trial court. 

The trial court denied the carriers’ request for judicial notice of Exhibit D because the 

document was not authenticated and was not shown to be an official agency act. 
11.

class period. They are not relevant, and we will therefore deny the request for judicial 

notice on that basis. (Stockton, supra, 210 Cal.App.4th at p. 1488, fn. 3.) 

Exhibit E is the rulemaking file for the regulation at the heart of this case, section 

4304-6 of the California Code of Regulations. The rulemaking file is the mandatory 

record of the rulemaking proceeding. (Gov. Code, § 11347.3, subd. (a).) It must contain, 

among other things, a statement of reasons for the regulation, supporting data, and 

petitions from interested persons. (Gov. Code, § 11347.3, subd. (b).) A rulemaking file 

is the proper subject of judicial notice (see Friends of Sierra Madre v. City of Sierra 

Madre (2001) 25 Cal.4th 165, 188), and indeed ensures effective judicial review of 

contested regulations. (POET, LLC v. State Air Resources Bd. (2013) 218 Cal.App.4th 

681, 744.) The newspaper presents no reason to deny judicial notice, other than that 

judicial notice was not requested below. We will exercise our discretion to grant judicial 

notice as to Exhibit E. 

Accordingly, we grant the carriers’ November 6, 2017 motion for judicial notice 

as to Exhibits A, E, and F. In all other respects, the motion is denied.

B. Motion Filed August 14, 2018

In their second motion, the carriers request that we take judicial notice of the 

statement of decision for phase 1 of the trial in Sacramento County Superior Court case 

No. 34-2009-00033950, Sawin, et al. v. The McClatchy Company, et al. (Sawin). 

According to the carriers, the court in Sawin applied the correct legal test, thereby 

demonstrating that the trial court in the instant case applied an incorrect test. The carriers 

assert the facts in Sawin are “nearly identical” to those at issue here. The newspaper 

argues Sawin is irrelevant and, in any event, that this court may not judicially notice the 

truth of the facts set forth in that decision. 

Under Evidence Code section 452, subdivision (d), a court may take judicial 

notice of the records of any court of this state. The statement of decision in Sawin is

indisputably a record of a court within the State of California and is therefore a proper 
12.

subject of judicial notice. In Sawin, the court applied Borello and its progeny to conclude 

that a class of newspaper carriers were employees, not independent contractors. 

However, the Sawin decision has no binding or precedential effect. (Harrott v. County of 

Kings (2001) 25 Cal.4th 1138, 1148.) It has, at most, some persuasive value. Although 

we grant the carriers’ August 14, 2018 motion for judicial notice, we again remain 

mindful of the limited relevance of this material. 

II. Borello Governs the Carriers’ Claim 

The trial court concluded the carriers were properly classified as independent 

contractors on two grounds. First, the court concluded the carriers were properly 

classified as independent contractors based on the factors set forth in section 4304-6 of 

the California Code of Regulations (section 4304-6). Second, the court concluded the 

carriers were properly classified as independent contractors under the common law test. 

In this section, we explain that the determination of whether the carriers were 

employees or independent contractors for purposes of Labor Code section 2802 is 

governed by the common law test set out in Borello and its progeny. Although the law 

governing independent contractor and employee status has changed significantly since 

the trial in this case (see Dynamex, supra, 4 Cal.5th 903; see also Assem. Bill No. 5 

(2019-2020 Reg. Sess.) Stats. 2019, ch. 296, § 1), those changes do not apply to the 

carriers’ claim. Further, as we explain, the EDD regulations relied on by the trial court 

are inapplicable to the carriers’ claim that the newspaper engaged in unfair competition 

by violating Labor Code section 2802. Borello remains the governing standard.

A. The Common Law Test 

At common law, the question of whether a worker should be classified as an 

employee or an independent contractor initially arose in the tort context to determine 

whether a hirer should be held vicariously liable for an injury resulting from a worker’s 

actions. (Dynamex, supra, 4 Cal.5th at p. 927; Borello, supra, 48 Cal.3d at p. 350.) In 

this context, “the ‘control of details’ test” had long been “the principal measure of the 
13.

servant’s status for common law purposes.” (Borello, supra, 48 Cal.3d at p. 350.) Under

the control of details test, “ ‘[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.’ ” (Ibid.) Our Supreme Court eventually extended the 

control of details test beyond the tort context to determine whether workers should be 

considered employees or independent contractors for purposes of “the variety of 20th 

century social welfare legislation that had been enacted for the protection of employees.” 

(Dynamex, at p. 927; see Tieberg v. Unemployment Ins. App. Bd. (1970) 2 Cal.3d 943, 

946 [unemployment insurance]; Isenberg v. California Emp. Stab. Com. (1947) 30 Cal.2d 

34, 35, 39 [same]; Perguica v. Ind. Acc. Com. (1947) 29 Cal.2d 857, 858-861 [workers’ 

compensation]; Empire Star Mines Co. v. Cal. Emp. Com. (1946) 28 Cal.2d 33, 43-44 

[unemployment insurance], overruled on another ground in People v. Sims (1982) 32 

Cal.3d 468, 479-480, fn. 8.)

In addition to the control of details, a number of “ ‘secondary’ ” factors were also 

held relevant to the common law determination of an employment relationship. 

(Dynamex, supra, 4 Cal.5th at p. 928; accord, Borello, supra, 48 Cal.3d at pp. 350-351.) 

Foremost among these secondary factors was the hiring entity’s right to discharge a 

worker at will, without cause, which was considered “ ‘[s]trong evidence in support of an 

employment relationship.’ ” (Borello, at p. 350; accord, Ayala v. Antelope Valley 

Newspapers, Inc. (2014) 59 Cal.4th 522, 531 (Ayala).) Additionally, the following 

factors derived from the Restatement Second of Agency section 220 were held to be 

relevant: “(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 
14.

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.” (Borello, supra, 48 Cal.3d at p. 351; 

accord, Dynamex, supra, 4 Cal.5th at p. 928.)

In 1989, our Supreme Court decided Borello, which has been characterized since 

as the “seminal decision” on the appropriate standard for distinguishing between 

employees and independent contractors. (Dynamex, supra, 4 Cal.5th at p. 929.) Borello

involved a controversy over whether agricultural laborers hired to harvest cucumbers 

pursuant to a “ ‘sharefarmer’ ” agreement were independent contractors or employees for 

purposes of California’s workers’ compensation statutes, where the grower did not 

directly supervise the harvest and compensated the farmworkers based on the quantity, 

size, and quality of the cucumbers harvested. (Borello, supra, 48 Cal.3d at pp. 345-347.) 

The grower argued the farmworkers were independent contractors under the control of 

details test because “they manage[d] their own labor, share[d] the profit or loss from the 

crop, and agree[d] in writing that they [were] not employees.” (Id. at p. 345.) However, 

the high court rejected this contention, summarizing its conclusion as follows:

“The grower controls the agricultural operations on its premises from 

planting to sale of the crops. It simply chooses to accomplish one 

integrated step in the production of one such crop by means of worker 

incentives rather than direct supervision. It thereby retains all necessary 

control over a job which can be done only one way. [¶] Moreover, so far 

as the record discloses, the harvesters’ work, though seasonal by nature, 

follows the usual line of an employee. In no practical sense are the 

‘sharefarmers’ entrepreneurs operating independent businesses for their 

own accounts; they and their families are obvious members of the broad 

class to which workers’ compensation protection is intended to apply.” 

(Borello, at p. 345.)

Accordingly, the court concluded the farmworkers were employees as a matter of law. 

(Id. at p. 346.) 
15.

In reaching this conclusion, the Borello court acknowledged that the hiring entity’s 

right to control necessary work details is the “ ‘most important’ or ‘most significant’ ” 

consideration. (Borello, supra, 48 Cal.3d at p. 350.) However, the court also recognized 

the relevance of the secondary factors listed above, the standards set forth for contractor’s 

licensees under Labor Code section 2750.5,6 and a six-factor test developed in other 

jurisdictions.7 (Borello, at pp. 354-355.) 

Additionally, the court recognized that the concept of “ ‘employment’ ” for 

purposes of the Workers’ Compensation Act “is not inherently limited by common law 

principles.” (Borello, supra, 48 Cal.3d at p. 351.) Instead, the “definition of the 

employment relationship must be construed with particular reference to the ‘history and 

fundamental purposes’ of the statute.” (Ibid.) Thus, our Supreme Court has recently 

characterized the Borello test as “calling for resolution of the employee or independent 

contractor question by focusing on the intended scope and purposes of the particular 

statutory provision or provisions at issue. In other words, Borello calls for application of 

a statutory purpose standard that considers the control of details and other potentially 

relevant factors identified in prior California and out-of-state cases in order to determine 

which classification (employee or independent contractor) best effectuates the underlying 

6 Under Labor Code section 2750.5, proof of independent contractor status must 

include proof “(a) That the individual has the right to control and discretion as to the 

manner of performance of the contract for services in that the result of the work and not 

the means by which it is accomplished is the primary factor bargained for. [¶] (b) That 

the individual is customarily engaged in an independently established business. [¶] 

(c) That the individual’s independent contractor status is bona fide and not a subterfuge to 

avoid employee status.” (Ibid.)

7 “Besides the ‘right to control the work,’ the [six] factors 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 of the working relationship; and (5) whether the service rendered 

is an integral part of the alleged employer’s business.” (Borello, supra, 48 Cal.3d at 

pp. 354-355.)
16.

legislative intent and objective of the statutory scheme at issue.” (Dynamex, supra, 4 

Cal.5th at p. 934.) 

B. Recent Changes to Employee and Independent Contractor Status

Our Supreme Court and the Legislature have recently departed from the Borello

test for distinguishing between employees and independent contractors in certain 

circumstances. We requested supplemental briefing on some of these changes. The 

newspaper filed an application for permission to file a supplemental brief addressing 

others.8 We now address the current state of the law. As we explain, despite these 

changes, Borello remains the applicable test for determining whether the carriers were 

independent contractors or employees. 

i. Dynamex 

In 2018, our Supreme Court issued its opinion in Dynamex, supra, 4 Cal.5th 903. 

Although the underlying litigation in Dynamex involved a variety of claims, our Supreme 

Court considered only a single issue: “[W]hat standard applies, under California law, in 

determining whether workers should be classified as employees or as independent 

contractors for purposes of California wage orders, which impose obligations relating to 

the minimum wages, maximum hours, and a limited number of very basic working 

conditions (such as minimally required meal and rest breaks) of California employees.” 

(Id. at pp. 913-914; see id. at p. 919.) In that context, our Supreme Court determined that 

the phrase “suffer or permit to work,” which is contained in the definition of “employ” in 

the applicable wage order, is the applicable standard for distinguishing employees from 

independent contractors for purposes of wage order claims. (Id. at pp. 943-944.) Our 

8 The newspaper filed its application for permission to file a supplemental brief on 

November 19, 2019. We deferred consideration of the motion pending consideration of 

the appeal on the merits. Since that time, the parties have filed a stipulation that this 

court may issue its opinion “without oral argument or further input from the Parties.” 

Accordingly, we deny the newspaper’s November 19, 2019 application for permission to 

file a supplemental brief. 
17.

Supreme Court then announced that, under that standard, a worker should be considered 

an employee unless the hiring entity establishes “(A) that the worker is free from the 

control and direction of the hiring entity in connection with the performance of the work, 

both under the contract for the performance of the work and in fact; and (B) that the 

worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, 

occupation, or business of the same nature as the work performed.” (Id. at p. 957.) This 

test, commonly referred to as the “ABC” test (see id. at p. 916), differs significantly from 

the Borello test. 

Since Dynamex, courts have declined to extend the ABC test, as set out in 

Dynamex, outside the context of wage orders and related Labor Code claims. (See, e.g., 

Vendor Surveillance Corporation v. Henning (2021) 62 Cal.App.5th 59, 68-69 (Vendor 

Surveillance) [declining to extend Dynamex to claims relating to failure to pay 

unemployment insurance tax]; Garcia v. Border Transportation Group, LLC (2018) 28 

Cal.App.5th 558, 570-572 (Garcia) [declining to extend Dynamex to non-wage order 

claims for overtime, wrongful termination in violation of public policy, waiting time 

penalties, and UCL claims resting on such violations]; see also Vazquez v. Jan-Pro 

Franchising International, Inc. (2021) 10 Cal.5th 944, 951-952 (Vazquez) [stating that 

Dynamex “was based upon a determination concerning how the term ‘suffer or permit to 

work’ in California wage orders should be interpreted for purposes of distinguishing 

between employees who are covered by the wage orders and independent contractors

who are not,” and that Dynamex did not overrule any prior Supreme Court decision or 

disapprove any prior Court of Appeal decision].) Additionally, although our Supreme 

Court has concluded that the Dynamex interpretation of the phrase “suffer or permit to 

work” applies retroactively, this holding was limited to nonfinal cases governed by wage 

orders worded similarly to that in Dynamex. (Vazquez, at pp. 949-952.)
18.

In sum, the Dynamex ABC test is limited to claims governed by wage orders that 

employ the “suffer or permit to work” standard. Here, the carriers proceeded to trial on a 

UCL claim, which was based on the newspapers’ alleged violation of Labor Code section 

2802.9 At least one court has characterized claims for business-related transportation 

expenses brought pursuant to Labor Code section 2802 as non-wage-order claims. (See 

Dynamex, supra, 4 Cal.5th at pp. 915, 916, fn. 5, 942 [discussing holding of the Court of 

Appeal].) We agree and conclude that neither the carriers’ UCL claim nor the Labor 

Code violation it is based upon relies on a wage order to distinguish between employees 

and independent contractors. (See Garcia, supra, 28 Cal.App.5th at pp. 570-571.) 

Dynamex does not provide a basis for applying the ABC test to the carriers’ claims.

ii. Subsequent Legislation

“After Dynamex was decided, the Legislature enacted Assembly Bill [No.] 5 

[2019-2020 Reg. Sess.] (Stats. 2019, ch. 296), which amended both the Labor Code and 

Unemployment Insurance Code. The stated legislative purpose in enacting Assembly 

Bill [No.] 5 was to ‘codify’ the Dynamex decision and to ‘clarify’ the decision’s 

application in state law. (Stats. 2019, ch. 296, § 1(d).)” (Vendor Surveillance, supra, 62 

Cal.App.5th at pp. 72-73, fn. omitted.) To this end, the bill added former section 2750.3 

to the Labor Code, which “broadly adopt[ed] the Dynamex holding for purposes of all 

benefits to which employees are entitled under the Unemployment Insurance Code, the 

Labor Code, and all applicable wage orders.”10 (People v. Uber Technologies (2020) 56 

9 The carriers occasionally have asserted that their UCL claim is premised on Wage 

Order 1-2001, because subdivision (9) of this wage order “complements” and “applies” 

to Labor Code section 2802. 

10 Assembly Bill No. 5 (2019-2020 Reg. Sess.) also amended section 621 of the 

Unemployment Insurance Code, which previously distinguished between independent 

contractors and employees based on the “usual common law rules,” and which now 

distinguishes between independent contractors and employees based on the ABC test. 

(Stats. 2019, ch. 296, § 5; see former Unemp. Ins. Code, § 621.)
19.

Cal.App.5th 266, 277; see Stats. 2019, ch. 296, § 2.) Thus, under Labor Code former 

section 2750.3, a person providing labor or services for remuneration was to be 

considered an employee for purposes of the Labor Code and the Unemployment 

Insurance Code, unless the hiring entity established that the ABC test was satisfied. 

(Lab. Code, former § 2750.3, subd. (a)(1).) Labor Code former section 2750.3 specified 

that, with the exception of “wage orders of the Industrial Welfare Commission and 

violations of the Labor Code relating to wage orders,” the ABC test was not retroactive 

but instead applied only to work performed on or after January 1, 2020. (Lab. Code, 

former § 2750.3, subd. (i)(1), (i)(3).) 

In the same legislative session, the Legislature passed, and the Governor signed, 

Assembly Bill No. 170 (2019-2020 Reg. Sess.), which excluded newspaper carriers from 

the ABC test. (Stats. 2019, ch. 415, § 1; see Lab. Code, former § 2750.3, subd. (b)(7).) 

For newspaper carriers, determination of employee or independent contractor status was 

to be governed by Borello. (Lab. Code, former § 2750.3, subd. (b)(7).) The exclusion 

for newspaper workers initially was set to expire on January 1, 2021. (Lab. Code, former 

§ 2750.3, subd. (b)(7)(B).) 

The following year, the statutes regarding employee status and the application of 

the ABC test were “revise[d] and recast.” (Stats. 2020, ch. 38; see Lab. Code, § 2775

et seq.) Under the revised statues, the ABC test remains the operative test for 

determining whether a worker is an employee for purposes of the Labor Code, the 

Unemployment Insurance Code, and all wage orders. (Lab. Code, § 2775, subd. (b)(1); 

see Stats. 2020, ch. 38, § 2.) However, newspaper carriers remain excepted from this 

rule, and their employment status continues to be determined by Borello. (Lab. Code, 

§ 2783, subd. (h).) The exception for newspaper carriers now expires on January 1, 2022, 

unless extended by the Legislature. (Lab. Code, § 2783, subd. (h)(3).) 

In sum, the Legislature has statutorily expanded the reach of the ABC test beyond 

the wage order context addressed in Dynamex. Nonetheless, the employee status of 
20.

newspaper carriers is, and was at the time the carriers’ claims arose, determined by 

application of the Borello test. (See Estrada v. FedEx Ground Package System, Inc.

(2007) 154 Cal.App.4th 1, 10 [“Because the Labor Code does not expressly define 

‘employee’ for purposes of section 2802, the common law test of employment 

applies.”].) Borello governs the claim at issue here.

C. Section 4304-6 is Inapplicable to the Carriers’ Claim

The trial court relied in part on section 4304-6 of the California Code of 

Regulations – a regulation promulgated by the EDD – to conclude the carriers were 

properly classified as independent contractors. We conclude section 4304-6 is 

inapplicable to the carriers’ claim that The Bee engaged in unfair competition by 

violating Labor Code section 2802.

i. The Trial Court’s Statement of Decision

In the trial court, the newspaper argued that section 4304-6 provided a safe harbor 

defense to the carriers’ UCL claim. The trial court rejected this argument, a 

determination which is not challenged on appeal. 

Nonetheless, the trial court found the regulation “relevant and persuasive” in 

determining the carriers were independent contractors. Indeed, the trial court determined 

the EDD regulations were entitled to “substantial deference” or at least carried “strong 

persuasive power” because they were promulgated by the EDD and pertained to a subject 

within the agency’s jurisdiction. The trial court further surmised that the EDD 

regulations set forth the same factors as relied on at common law. The trial court 

therefore determined that the contract and the trial evidence “must be examined” 

“[w]ithin the framework of the regulations,” and that the court “need[ed] to analyze the 

language of the contracts [between the carriers and The Bee] with a view to both the 

common law, and the common law as specifically applied by the [EDD] to the newspaper 

industry.” 

Examining the contract, the court explained:
21.

“Looking to [T]he Bee’s right to control the manner and means of 

accomplishing the contracted for result, the evidence adduced at trial 

demonstrated that although [T]he Bee contracted for and ‘controlled’ the 

outcome, i.e., timely delivery of a dry, readable paper delivered to the 

location requested by the subscriber, the means of accomplishing that 

outcome was not subjected to any particular control. The Bee did not care 

how the paper got delivered, only that it did and that the delivery was 

timely and the paper readable. Similarly, although [T]he Bee required that 

certain advertisements be placed where the clients demanded, the ‘check’ 

[T]he Bee performed was only to ensure that what [T]he Bee’s clients paid 

for the contractors provided. The contracted task was timely delivery of a 

dry readable paper. The way it was accomplished was of no moment. The 

fact that [T]he Bee checked to ensure that the subscriber received what it 

was paying for does not convert an independent contractor into an 

employee.” 

The court then noted:

“The contracts all focus on the carriers providing a result to the customer, 

namely, a readable newspaper which is delivered in a manner that protects 

the papers after delivery. The specific contract provisions that are

indicative of independence and are contained within the contract are 

provisions (1) allowing negotiation of compensation (22 CCR [§] 

4304-6(c)(1)); (2) the Hold Harmless provision (I[bi]d.); (3) The posting of 

a bond at the carrier’s expense (I[bi]d.); (4) negotiation for rates of pay for 

routes (22 CCR [§] 4304-6(c)(4)); (5) charging customer complaints to the 

carrier with [T]he Bee handling [c]omplaints (4304-6(c)(5)); (6) the carrier 

obtaining his or her own substitute without the principal’s approval 

(4304-6(c)(7)); (7) If the principal did have to hire a substitute on behalf of 

the carrier, [T]he Bee charged the carrier (4304-6(c)(7)); (8) Carrier 

compensation was either flat fee or per copy (4304-6(c)(2)).

“Further, several provisions of the contract may not be used as 

evidence of employment pursuant to [section] 4304-6: The fact that [T]he 

Bee provided an opportunity to participate in an insurance program 

(4304-6(c)(3)); The requirement of timely delivery of the paper in a 

readable condition (4304-6(c)(4)); The Bee’s right to terminate if there was 

a material breach (4304-6(c)(6)); The Bee’s right to terminate a carrier with 

35 days’ Notice (4304-6(c)(6)); The Bee limiting the carriers’ use of the 

subscriber list (4304-6(c)(1)); The Bee not allowing the carriers to attach 

any unauthorized material (4304-6(c)(1)); The Bee’s provision of incentive 

bonuses to carriers for new subscriptions (4304-6(c)(2)); The requirement 

that the carriers maintain a current subscriber list that must be given to the 

principal upon request (4304-6(c)(4)). 
22.

“At trial the [carriers] emphasized [T]he Bee’s requirement that the 

carriers deliver a dry, readable paper as evidence of ‘control.’ As set forth 

above, this is not to be used as evidence of control so long as ‘other factors 

indicate the absence of control by the principal of the manner and means

of delivery.’ 4304-6(c)(4) (emphasis added). Contract provisions relating 

to results are irrelevant to the right to control the manner and means of 

performance. [The carriers] also stressed the fact that the carriers were 

charged for customer complaints and [T]he Bee as opposed to the carriers 

often responded to those complaints and remedied the issue. The 

Regulations specifically state that this is evidence of independence; not 

employment. 4304-6(c)(5).” (Fns. omitted.) 

ii. The EDD Regulations

Section 4304-6 is one of several regulations promulgated by the EDD for purposes 

of determining whether a worker is an employee for purposes of the Unemployment 

Insurance Code. (See generally, Cal. Code Regs., § 4304-1 et seq.) Section 4304-1 of 

the California Code of Regulations (section 4304-1) states:

“Whether an individual is an employee for the purposes of Sections 621(b)

and 13020 of the [Unemployment Insurance C]ode will be determined by 

the usual common law rules applicable in determining an employeremployee relationship. Under those rules, to determine whether one 

performs services for another as an employee, the most important factor is 

the right of the principal to control the manner and means of accomplishing 

a desired result. If the principal has the right to control the manner and 

means of accomplishing the desired result, whether or not that right is 

exercised, an employer-employee relationship exists. Strong evidence of 

that right to control is the principal’s right to discharge at will, without 

cause.” 

Section 4304-1 goes on to identify 10 factors that are to be considered “indicia of 

the right to control.” (Cal. Code Regs., § 4304-1, subd. (b); see ibid., subd. (a).) “In both 

purpose and effect, the regulation restates the Borello factors.”11 (Vendor Surveillance, 

supra, 62 Cal.App.5th at p. 71.) 

11 Notably, however, most of the text of section 4304-1 predates our Supreme 

Court’s 1989 decision in Borello. (See Cal. Code Regs., § 4304-1, Register 84, No. 8 

(Feb. 23, 1984); Register 86, No. 37 (Sept. 9, 1986).)
23.

Section 4304-6 provides that the “determination of whether a carrier is an 

employee or an independent contractor in the newspaper distribution industry will be 

determined generally by the rules set forth in [section] 4304-1,” but “specific application 

of those rules to services in the newspaper distribution industry are set forth in [section] 

4304-6.” (Cal. Code Regs., § 4304-6, subd. (a).) Section 4304-6 goes on to provide 

“ ‘Basic Guidelines’. . . to be considered in determining the employment/independent 

contractor status of newspaper carriers, some of which evidence employment status and 

some of which evidence independent contractor status.” (Espejo v. The Copley Press, 

Inc. (2017) 13 Cal.App.5th 329, 351 (Espejo).) The detailed “Guidelines,” which were 

relied on extensively by the trial court, provide:

“(1) Written agreements. A written agreement signed by both 

parties shall be evidence of intent. However, if the terms of the agreement 

are not complied with in practice, the agreement shall not determine the 

intent or the relationship of the parties. A written agreement to the extent it 

provides for negotiation of terms, including fees, expense adjustments and 

other items of compensation to the carrier, shall tend to indicate the 

existence of an independent contractor relationship. The outcome of any 

such negotiations shall not be evidence of the existence of either an 

employment or an independent contractor relationship.

“A provision prohibiting the carrier from affixing to, or inserting in, 

the newspaper any materials unauthorized by the principal or from making 

use of the principal’s subscriber list without the principal’s consent shall 

not be evidence of employment or independence.

“A provision by which the carrier holds the principal harmless from 

liability shall be evidence of independence.

“A provision whereby the carrier agrees to post a bond with the 

principal at the carrier’s expense shall be evidence of independence unless 

the principal increases the carrier’s remuneration to pay the cost of such 

bond.

“(2) Compensation. Compensation to the carrier in the form of an 

hourly rate shall be evidence of an employment relationship. 

Compensation to the carrier in the form of a flat fee per route or per copy 

delivered shall be evidence of an independent contractor relationship.
24.

“Other bases for compensation, combining factors of distance, 

difficulty and expense of delivery, shall be evidence of an employment 

relationship to the extent that such terms are nonnegotiable and of an 

independent contractor relationship to the extent that they are negotiable.

“Bonuses which are paid as an incentive to the maintenance or 

improvement of customer satisfaction on the carrier’s route, such as might 

be indicated by a slowed rate of cancellations or an increased rate of starts, 

shall not be evidence of employment or independence.

“(3) Benefits plans. The fact that a principal provides the 

opportunity for a carrier to participate in a health, medical, life insurance, or 

retirement insurance program shall not be evidence of an employment

relationship if the carrier is charged for premiums necessary for 

participation in such program. Any adjustment in remuneration of the 

carrier to compensate him or her for the payment for participation in such 

benefits plans shall be evidence of employment.

“(4) Conditions of service. The fact that a principal and carrier agree 

that the carrier shall deliver a newspaper to each customer on his or her 

route in a timely manner and in a readable condition shall not be evidence 

of an employment relationship as long as other factors indicate the absence 

of control by the principal of the manner and means of such delivery.

“Timeliness of delivery may be indicated by agreement for delivery 

or completion of a route by a certain hour.

“Readability may be indicated by agreement for protecting the 

newspaper against damp conditions or by placement on the customer’s 

premises, as the situation may require, in a location readily accessible to the 

customer and protected from theft, animals or moisture.

“The fact that carriers are assigned routes by the principal and that 

such assignments are not negotiated with regard to remuneration shall be 

evidence of employment. However, if a route is offered to a carrier and the 

remuneration for servicing the route is negotiable, it shall be evidence of 

independence.

“The fact that the carrier is required to maintain a subscriber list and 

update such list and provide copies to the principal upon request for the 

benefit of the principal shall not be evidence of either an employee or 

independent contractor relationship.
25.

“Where the principal requires the carrier to deliver billings without 

agreement on compensation to the subscribers, such requirement shall be 

evidence of employment; however, where the carrier is given the option of 

delivering billings for additional remuneration, such evidence shall tend to 

indicate independence. The fact that the principal bills the subscribers and 

is responsible for collecting the accounts receivable shall not be evidence of 

employment or independence.

“The fact that the principal provides transportation for the carrier’s 

delivery of the newspaper, at less than a fair market cost to the carrier, shall 

be evidence of employment.

“(5) Customer complaints. Customer complaints as to missed 

delivery, late delivery or delivery in an unreadable condition may be taken 

by the principal and referred to the carrier without giving rise to the 

inference of either an employment or an independent contractor 

relationship. The fact that the principal requires the carrier to respond to or 

correct such problems shall tend to indicate an employment relationship. 

The fact that the principal responds to or corrects such problems directly 

and charges the carrier with a penalty or with the principal’s cost of 

corrective action shall tend to indicate the existence of an independent 

contractor relationship; the absence of such a charge will be evidence of 

employment. The fact that the principal gives the carrier the option of 

either personally correcting the problem or being charged with a penalty or 

with the principal’s cost of correction shall tend to indicate an independent 

contractor relationship.

“(6) Termination. When, by terms of an agreement or by practice of 

the principal, the relationship between the principal and carrier may be 

unilaterally terminated without 30 days’ notice, it will be evidence of 

employment. A right of termination without such notice for breach of 

statutory or regulatory requirements, for the protection of the public or for a 

material breach by the carrier of the terms and conditions of service 

including, but not limited to, abandonment or complete failure to deliver a 

route, or late, incomplete or damaged delivery over a period of time, or 

other significant interference with customer relationships, shall not be 

evidence of employment.

“(7) Substitutes. The fact that the principal provides substitute 

carriers for the regular carriers shall be evidence of employment. However, 

if the principal provides a substitute in an emergency situation and charges 

the carrier for such delivery, it is evidence of independence. The fact that 

the carrier can obtain his or her own substitute without the principal’s 

approval shall be evidence of independence. If a substitute carrier is paid 
26.

directly by the principal in non-emergency situations, whether the substitute 

is chosen by the carrier or principal, it shall be evidence of employment.

“(8) Recruitment advertising and applications. Terminology in 

carrier recruitment advertising and carrier application forms will be 

evidence of independence or employment.

“(9) Workers’ Compensation Insurance. The fact that a principal 

carries workers’ compensation insurance on all carriers, whether in an 

employment or independent contractor relationship, shall not create an 

inference of employment or independence.” (Cal. Code Regs, § 4304-6, 

subd. (c).)

iii. General Principles of Agency Deference

There are “two classes of [administrative] rules—quasi-legislative and 

interpretive.” (Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 

1, 10 (Yamaha).) Quasi-legislative rules are a form of substantive lawmaking by an 

agency, within the agency’s jurisdiction, on a subject for which the Legislature has 

delegated lawmaking power to the agency. (Ibid.) Review of quasi-legislative rules is 

narrow: the rule must only “lay within the lawmaking authority delegated by the 

Legislature,” and be “reasonably necessary to implement the purpose of the statute.” (Id. 

at pp. 10-11.) In contrast, interpretive rules represent “the agency’s view of the statute’s 

legal meaning and effect, questions lying within the constitutional domain of the courts.” 

(Id. at p. 11.) Courts give limited deference to an agency’s determination of a statute’s 

meaning and effect. (Center for Biological Diversity v. Department of Fish & Wildlife

(2015) 62 Cal.4th 204, 236; accord, Yamaha, at pp. 8, 11.) Thus, “ ‘[t]he standard for 

judicial review of agency interpretation of law is the independent judgment of the court, 

giving deference to the determination of the agency appropriate to the circumstances of 

the agency action.’ ” (Yamaha, at p. 8.) 

Not all administrative rules can be neatly categorized as either quasi-legislative or 

interpretive. (Yamaha, supra, 19 Cal.4th at p. 6, fn. 3; accord, Ramirez v. Yosemite Water 

Co. (1999) 20 Cal.4th 785, 799.) Rather, the two classes constitute “opposite ends of an 
27.

administrative continuum, depending on the breadth of the authority delegated by the 

Legislature.” (Yamaha, at p. 6, fn. 3.) “Regulations that fall somewhere in the 

continuum may have both quasi-legislative and interpretive characteristics, as when an 

administrative agency exercises a legislatively delegated power to interpret key statutory 

terms.” (Ramirez, at p. 799.) For example, although the Legislature delegated to the 

IWC the power to elaborate on the meaning of key statutory terms, our Supreme Court 

has held that a wage order construing a portion of the Labor Code within the IWC’s 

authority “has both quasi-legislative and interpretive characteristics.” (Id. at pp. 799-

800.) We analyze such hybrid regulations under the standards of review applicable to 

both. (New Cingular Wireless PCS, LLC v. Public Utilities Com. (2016) 246 Cal.App.4th 

784, 811; accord, Ramirez, at pp. 800-801.) 

iv. Analysis

We begin our analysis by reiterating the nature of the carriers’ claim. The 

carriers’ sole remaining claim at trial alleged that the newspaper engaged in unfair 

competition within the meaning of Business and Professions Code section 17200, based 

on the allegation that the newspaper violated Labor Code section 2802 by failing to pay 

the carriers’ necessary mileage expenses. The DLSE is the state agency empowered to 

enforce and interpret the Labor Code. (See Brinker, supra, 53 Cal.4th at p. 1029, fn. 11; 

see also Lab. Code, §§ 79, 82.)

In contrast, the EDD is the state agency vested with jurisdiction over the state’s 

unemployment insurance program. (Unemp. Ins. Code, § 301; American Federation of 

Labor v. Unemployment Ins. Appeals Bd. (1996) 13 Cal.4th 1017, 1024; Rebolledo v. 

Tilly’s Inc. (2014) 228 Cal.App.4th 900, 919.) Under this authority, the EDD 

promulgated sections 4304-1 and 4304-6, to determine whether a worker qualifies as an 

employee for purposes of the Unemployment Insurance Code. (See §§ 4304-1, 4304-6.) 

Indeed, the regulation is expressly limited to determinations relating to unemployment 

compensation. (See § 4304-1; Unemp. Ins. Code, §§ 621, 13020.) 
28.

In promulgating section 4304-6, the EDD did not purport to engage in rulemaking 

regarding a worker’s right to indemnification for necessary expenditures under Labor 

Code section 2802, nor would such a rule be within the EDD’s jurisdiction. We are 

aware of no authority that suggests a regulation is entitled to deference on a question 

outside the promulgating agency’s jurisdiction. Whatever relevance section 4304-6 may 

have in the context of unemployment compensation,12 the regulation is instructive at best 

in relation to the Labor Code. We decline to defer to the language of section 4304-6

beyond the narrow purpose for which it was drafted.13

Nor do we find section 4304-6 particularly instructive. Contrary to the 

newspaper’s assertion, section 4304-6 does not represent a straightforward application of 

Borello, but rather diverges from the common law test in material ways. For example, 

the regulation provides that termination without cause and without 30 days’ notice is 

evidence of employment (Cal. Code Regs., § 4304-6, subd. (c)(6)), while case law 

applying Borello has regularly found that termination without cause supports a finding of 

employment, regardless of whether 30 days’ notice is required. (See, e.g., Poizner, 

12 The validity of section 4304-6 as applied to the Unemployment Insurance Code is 

not before us. We note, however, that section 4304-6 identifies itself an interpretive aid 

for determining whether a worker qualifies as an employee for purposes of sections 621 

and 13020 of the Unemployment Insurance Code. (See §§ 4304-1, 4304-6.) In 2019, 

section 621 of the Unemployment Insurance Code was amended to define “employee” 

under the ABC test. (See Unemp. Ins. Code, § 621, subd. (b); Stats. 2019, ch. 296, § 5.) 

It therefore appears that sections 4304-1 and 4304-6 have been abrogated by statute. 

Relatedly, we note that proposed amendments to these regulations have been placed on 

the EDD’s 2020 and 2021 rulemaking calendars. (<https://www.edd.ca.gov/about_edd/

pdf/2020_Rulemaking_Calendar.pdf> [as of Sept. 30, 2021]; <https://www.edd.ca.gov/

about_edd/pdf/Rulemaking_Calendar.pdf> [as of Sept. 30, 2021].) 

13 Because section 4304-1 effectively reiterates the Borello test (see Cal. Code Regs., 

§ 4304-1, subd. (a); Vendor Surveillance, supra, 62 Cal.App.5th at pp. 70-71), we see no 

reason to rely on, let alone defer to, this regulation in lieu of the substantial body of case 

law applying Borello. Application of section 4304-1 would not add to or alter our 

analysis.
29.

supra, 162 Cal.App.4th at p. 854 [finding right to discharge at will, without cause, where 

30 days’ notice was required]; see also Espejo, supra, 13 Cal.App.5th at pp. 346, 348

[finding that newspaper carriers were employees where contract was terminable on 30 

days’ notice].) Additionally, the regulation provides that hourly pay shall evidence an 

employment relationship, whereas flat fee or per copy compensation shall evidence an 

independent contractor relationship. (Cal. Code Regs., § 4304-6, subd. (c)(2).) 

Meanwhile, case law applying Borello has recognized that piece rate compensation –

such as per copy compensation – may be consistent with an employment relationship. 

(See, e.g., Espejo, at pp. 338-339, 351-352; Poizner, at pp. 855-856; accord, Bluford v. 

Safeway Stores, Inc. (2013) 216 Cal.App.4th 864, 871; Gonzalez v. Downtown LA 

Motors, LP (2013) 215 Cal.App.4th 36, 40.) Perhaps most significantly, the regulation 

provides that the newspaper may require a carrier to deliver a newspaper to customers by 

a particular time and in a readable condition without giving rise to an employment 

relationship, so long as the newspaper does not otherwise control the “manner and 

means” of delivery. (Cal. Code Regs., § 4304-6, subd. (c)(4).) However, as we discuss 

in greater detail below in our analysis of the instant contract, this aspect of the regulation 

ignores Borello’s mandate that a reviewing court consider whether the hiring entity 

exercised “all necessary control” over the delegated operations. (Borello, supra, 48 

Cal.3d at p. 357.) Finally, by emphasizing matters not implicated by the common law 

test, the regulations have the effect of minimizing the weight given to the factors 

identified at common law. Indeed, section 4304-6 itself specifies that the common law 

factors discussed in section 4304-1 are to be applied only where “a specific application is 

not interpreted by [section] 4304-6.” (Cal. Code Regs., § 4304-6, subd. (a).)

We see numerous reasons to reject the newspaper’s attempt to import this standard 

into the common law test for determining employment under the Labor Code. First, we 

note that section 4304-6 predated Borello by two years. (Cal. Code Regs., § 4304-6, 

Register 87, No. 38 (Sept. 17, 1987).) Thus, to the extent section 4304-6 purported to set 
30.

forth the common law test for employment, it necessarily referred to the pre-Borello test. 

(See Dynamex, supra, 4 Cal.5th at p. 930 [explaining that the Borello test is not limited 

by earlier common law principles and requires consideration of the purposes of the 

statute at issue].) To the extent section 4304-6 conflicts with Borello, it would appear to 

have been abrogated by that decision. 

Second, at least one other court has rejected such an extension of section 4304-6. 

In Espejo, the Court of Appeal held that a trial court is not required to apply section 

4304-6 in a claim brought under the UCL for violation of Labor Code section 2802. 

(Espejo, supra, 13 Cal.App.5th at pp. 340-341, 351-352.) The court opined that the 

factors set forth in section 4304-6 are merely guidelines, rather than an absolute test, and 

thus the trial court was free to ignore those guidelines and rely solely on the common law 

factors set forth in Borello and repeated in section 4304-1. (Espejo, at pp. 351-352.) 

Although Espejo did not expressly reject application of section 4304-6, we note that 

many of the contract provisions at issue in that case would not have been considered 

evidence of employee status under section 4304-6. Nonetheless, the Espejo court 

affirmed the trial court’s determination that these factors supported a finding that the 

carriers were employees, rather than independent contractors. (Espejo, at pp. 346-348 

[contract specified the workers were independent contractors (contra Cal. Code Regs., 

§ 4304-6, subd. (c)(1)), prohibited workers from inserting materials with the newspaper 

(contra ibid.), required delivery by a specified deadline (contra id., subd. (c)(4)), 

permitted carriers to be charged with a penalty for excessive complaints (contra id., 

subd. (c)(5)), required carriers to post a bond (contra id., subd. (c)(1)), and specified that 

customers would be invoiced by the newspaper (contra id., subd. (c)(4))].)

Relatedly, we note the existence of a fairly well-developed body of case law 

addressing the question of whether newspaper carriers are employees or independent 

contractors. Not a single published decision has relied on section 4304-6 to resolve this 

question. (See Espejo, supra, 13 Cal.App.5th at pp. 351-352; Poizner, supra, 162 
31.

Cal.App.4th at pp. 852-853; Gonzalez v. Workers’ Comp. Appeals Bd. (1996) 46 

Cal.App.4th 1584, 1589-1590; see also, Ayala, supra, 59 Cal.4th at pp. 530-532; Sotelo v. 

Medianews Group, Inc. (2012) 207 Cal.App.4th 639, 656-657, disapproved on another 

ground in Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 986, fn. 15.) Indeed, Espejo 

appears to be the only published decision to reference California Code of Regulations

section 4304-6 in the regulation’s nearly 34-year history. 

Finally, we note that our Legislature has expressed the view that section 4304-6 is

incompatible with the Borello test. While considering the 2019 legislation that ultimately 

excluded newspaper carriers from the ABC test, the Senate Rules Committee, Office of 

Senate Floor Analyses explained:

“Newspaper distributors and newspaper[] carriers have a uniquely complex 

regulatory and legal history when it comes to independent contractor law. 

The core of this complexity comes from an Employment Development 

Department (EDD) regulation: 22 CCR §4304-6. Created in 1987 under 

the Deukmajian administration, this regulation is designed to specifically 

address the question of when a newspaper carrier or newspaper distributor 

is an employee for the purposes of Unemployment Insurance Code. 

[¶] . . . [¶]

“In all contexts, however, 22 CCR §4304-6 shows its age: coming 2 years 

before the Borello test and related decisions, the regulation does not reflect 

the 1989 decision and its focus on factors of control in determining an 

employer-employee relationship. Despite this, in recent litigation, some 

newspaper publishers have used the EDD regulation to defend against wage 

and hour litigation – something that the regulation cannot be extended to 

without ignoring both case law and the permissible scope of EDD 

regulations. [¶] . . . [¶]

“A[ssembly ]B[ill No.] 170 addresses these problems by definitely placing 

newspaper distributors and newspaper carriers under the Borello decision 

for both the purposes of unemployment insurance and wage and hour 

requirements, effectively nullifying 22 CCR §4304-6, which was already 

dubious law. By placing newspaper distributors and carriers under the 

Borello test until January 1, 2021, A[ssembly ]B[ill No.] 170 gives the 

newspaper industry a year to remedy their contracts with newspaper 

carriers and newspaper distributors in order to come into compliance with 
32.

the 2018 California Supreme Court decision in Dynamex and the recentlypassed Assembly Bill [No.] 5 (Gonzalez), which codifies the Dynamex

decision.” (Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading 

analysis of Assem. Bill No. 170 (2019-2020 Reg. Sess.) as amended 

Sept. 10, 2019, pp. 2-4.) 

We acknowledge these statements were made in relation to the passage of legislation that 

does not directly bear on the carriers’ claim. Nonetheless, in determining which factors 

are relevant to whether a worker is an employee for purposes of Labor Code section 

2802, “[o]ur fundamental task is to ascertain the Legislature’s intent and effectuate the 

law’s purpose.” (Kaanaana v. Barrett Business Services, Inc. (2021) 11 Cal.5th 158, 

168.) Our Supreme Court has determined the Borello test is the standard for determining 

whether employment status effectuates the Legislature’s intent in the context of a 

particular statute. (Dynamex, supra, 4 Cal.5th at p. 934.) Our Legislature has given no 

indication it intended to circumscribe that standard, for purposes of the Labor Code, with 

the factors set forth in section 4304-6. We find it relevant that the Legislature has since 

expressly disapproved of attempts to do so. 

Based on the foregoing, we conclude the trial court erred in deferring to section 

4304-6 to determine the carriers were independent contractors. 

III. The Trial Court Failed to Properly Analyze the Borello Factors 

After finding the carriers were independent contractors under section 4304-6, the

trial court also purported to find, in the alternative, that the carriers were independent 

contractors under the common law test. As we explain, however, the trial court failed to 

fully set aside the EDD regulations in attempting to apply Borello. Because the trial 

court failed to properly analyze the factors required by Borello, we must reverse. (See 

Linton v. DeSoto Cab Co., Inc. (2017) 15 Cal.App.5th 1208, 1225 (Linton).)

A. Standard of Review

We review questions of law under a de novo standard of review. (See Ruiz v. 

Musclewood Property Investments, LLC (2018) 28 Cal.App.5th 15, 20.) We will reverse 
33.

if the court misapplied the law and the error was prejudicial. (See Orange County Water 

Dist. v. Alcoa Global Fasteners, Inc. (2017) 12 Cal.App.5th 252, 313-314.) 

When the trial court applies the proper legal standard, “[t]he determination of 

employee or independent-contractor status is one of fact if dependent upon the resolution 

of disputed evidence or inferences.” (Borello, supra, 48 Cal.3d at p. 349.) The decision 

will be upheld if the court’s factual findings are supported by substantial evidence. 

(Ibid.) “If the evidence is undisputed, the question becomes one of law.” (Ibid.) 

B. Right to Control

As explained in detail above, the trial court’s analysis of the newspaper’s right of 

control was based primarily on the guidelines set forth in section 4304-6. In the sole 

paragraph of the court’s analysis that did not cite to section 4304-6, the court found that 

the newspaper contracted for a specific outcome (timely delivery of a newspaper in dry, 

readable condition), but exercised no particular control over how that outcome was 

accomplished, and merely checked to see that its clients and subscribers received the 

services they paid for. However, this is simply a restatement of section 4304-6, which

provides that a requirement for delivery of a newspaper in “a timely manner and in a 

readable condition shall not be evidence of an employment relationship as long as other 

factors indicate the absence of control by the principal of the manner and means of such 

delivery.” (See Cal. Code Regs., § 4304-6, subd. (c)(4).) Indeed, the trial court relied on 

California Code of Regulations section 4304-6, subdivision (c)(4) to make this same 

finding later in its statement of decision. 

This is not an adequate application of the common law test. Contrary to section 

4304-6, Borello held there is often “little use” in determining whether the principal has 

the right to control the manner and means of accomplishing the result desired. (Borello,

supra, 48 Cal.3d at p. 350; accord, Dynamex, supra, 4 Cal.5th at p. 958 [“a business need 

not control the precise manner or details of the work in order to be found to have 

maintained the necessary control that an employer ordinarily possesses over its 
34.

employees”].) Thus, while the trial court relied on factors such as the carriers’ freedom 

to choose between throwing a newspaper from their car or hand delivering it to the 

subscriber’s porch to conclude the carriers were generally free of the newspaper’s 

direction, Borello required the court to consider whether the newspaper retained “ ‘all 

necessary control’ ” over the delegated operations. (Ayala, supra, 59 Cal.4th at p. 531; 

accord, Dynamex, at p. 958; Borello, at p. 357.) The hiring entity’s right to control the 

necessary operations is the “ ‘most important’ or ‘most significant’ consideration” under 

Borello. (Borello, at pp. 350, 357; accord, Ayala, at p. 531.) Yet, the trial court did not 

purport to consider this factor.14 Because the trial court failed to consider necessary 

elements of the Borello test, and instead relied on the EDD standard, we must reverse. 

(See Linton, supra, 15 Cal.App.5th at p. 1225.) 

Having so concluded, the carriers ask us to hold that they are employees as a 

matter of law. However, the question of whether the carriers were employees or 

independent contractors is one of law only if the evidence is undisputed. (Borello, supra,

48 Cal.3d at p. 349.) We acknowledge that many of the facts found by the trial court are 

suggestive of employee status. As in Borello, it appears that newspaper delivery 

“involves simple manual labor which can be performed in only one correct way,” 

rendering “detailed supervision and discipline unnecessary.” (Id. at pp. 356-357.) Thus, 

14 The trial court also failed to consider “the intended scope and purposes” 

(Dynamex, supra, 4 Cal.5th at p. 934) of Labor Code section 2802 in order to determine 

whether employee or independent contractor classification “best effectuates the 

[statute’s] underlying legislative intent and objective,” a necessary consideration under 

Borello. (Dynamex, at p. 934.)

Labor Code section 2802 “shows a legislative intent that duty related losses 

ultimately fall on the business enterprise, not on the individual employee.” (Janken v. 

GM Hughes Electronics (1996) 46 Cal.App.4th 55, 74, fn. 24.) “[T]he obvious purpose 

of [Labor Code section 2802] is to protect employees from suffering expenses in direct 

consequence of doing their jobs.” (Grissom v. Vons Companies, Inc. (1991) 1 

Cal.App.4th 52, 60; see Janken, at p. 74, fn. 24; accord, Cochran v. Schwan’s Home 

Service, Inc. (2014) 228 Cal.App.4th 1137, 1144.) 
35.

unsurprisingly, courts have determined that newspaper carriers operating under contracts 

similar to those presented here were subject to pervasive control by the contracting 

newspaper. (See Espejo, supra, 13 Cal.App.5th at pp. 343-346; Poizner, supra, 162 

Cal.App.4th at pp. 853-854;15 Gonzalez v. Workers’ Comp. Appeals Bd., supra, 46 

Cal.App.4th 1584, 1589-1593.)

Nonetheless, the carriers and the newspaper each point us to evidence they 

contend is indicative of either the newspaper’s right to control or a lack thereof. Much of 

this evidence is disputed. For the most part, the trial court did not resolve whether the 

evidence was credible or whether the evidence described policies applicable to the entire 

class. We therefore cannot find the carriers are employees as a matter of law, and instead 

remand for the trial court to address, in the first instance, the newspaper’s right to control 

the necessary operations in light of the principles set forth in this opinion. 

C. Secondary Factors

The court considered 14 secondary factors derived from Borello. (See JKH 

Enterprises, Inc. v. Department of Industrial Relations (2006) 142 Cal.App.4th 1046, 

1064, fn. 14 [“These factors substantially include: (1) whether there is a right to fire at 

will without cause; (2) whether the one performing services is engaged in a distinct 

occupation or business; (3) 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; (4) the skill required in the particular occupation; (5) whether the 

principal or the worker supplies the instrumentalities, tools, and the place of work for the 

15 The trial court declined to consider Poizner because it was a workers’ 

compensation case and involved deferential review of an agency decision. Although 

differently postured, the facts nonetheless may support a finding of employee status for 

different types of social welfare legislation. (See Dynamex, supra, 4 Cal.5th at pp. 914-

915, 919 [approving extension of Borello analysis beyond the workers’ compensation 

context; accord, Espejo, supra, 13 Cal.App.5th at p. 348 [relying on Poizner in a case 

involving Labor Code violations].)
36.

person doing the work; (6) the length of time for which the services are to be performed; 

(7) the method of payment, whether by the time or by the job; (8) whether or not the 

work is a part of the regular business of the principal; (9) whether or not the parties 

believe they are creating an employer-employee relationship; (10) whether the 

classification of independent contractor is bona fide and not a subterfuge to avoid 

employee status; (11) the hiree’s degree of investment other than personal service in his 

or her own business and whether the hiree holds himself or herself out to be in business 

with an independent business license; (12) whether the hiree has employees; (13) the 

hiree’s opportunity for profit or loss depending on his or her managerial skill; and 

(14) whether the service rendered is an integral part of the alleged employer’s 

business.”].)

Here, too, the trial court seemingly relied on the EDD regulations to resolve at 

least some of the secondary factors. For example, the court concluded that the contract 

did not create an at-will employment relationship because it was terminable only for 

material breach or upon 35 days’ notice. (See Cal. Code Regs., § 4304-6, subd. (c)(6); 

contra, Poizner, supra, 162 Cal.App.4th at p. 854; Espejo, supra, 13 Cal.App.5th at 

p. 346.) The court also considered the carriers’ lack of an hourly wage as evidence of 

independence. (See Cal. Code Regs., § 4304-6, subd. (c)(2); contra, Borello, supra, 48 

Cal.3d at pp. 357-358; Poizner, at pp. 855-856.) And, the court seemingly considered the 

carriers’ ability to use substitutes of their own choosing as evidence of independence. 

(See Cal. Code Regs., § 4304-6, subd. (c)(7); contra, Poizner, at p. 856.) On remand, the 

trial court is directed to consider the secondary factors without resort to section 4304-6, 

and with an eye toward determining whether employee or independent contractor status 

best effectuates the intended scope and purposes of Labor Code section 2802. (Dynamex,

supra, 4 Cal.5th at p. 934.) 
37.

IV. The Carriers’ Remaining Arguments

A. The Trial Court Misapplied the Burden of Proof

The trial court held the carriers “at all times” bore the burden of proof. We agree 

with the carriers that the trial court erred; the newspaper bore the burden of proving the 

carriers were independent contractors.

Allocation of the burden of proof presents a question of law, which we review de 

novo. (See In re Aurora P. (2015) 241 Cal.App.4th 1142, 1157.)

Evidence Code section 500 provides, “Except as otherwise provided by law, a 

party has the burden of proof as to each fact the existence or nonexistence of which is 

essential to the claim for relief or defense that he is asserting.” Under Evidence Code 

section 500, the plaintiff generally bears the burden of establishing the elements of his or 

her cause of action. (Sargent Fletcher, Inc. v. Able Corp. (2003) 110 Cal.App.4th 1658, 

1668.) However, the burden of proof may be reallocated by statute or common law. (See 

id. at p. 1670.) 

In Borello, our Supreme Court explained that “[o]ne seeking to avoid liability has 

the burden of proving that persons whose services he has retained are independent 

contractors rather than employees.” (Borello, supra, 48 Cal.3d at p. 349.) In so holding, 

the high court relied on Labor Code section 3357, which contains a statutory presumption 

that a person rendering service for another is an employee, and Labor Code section 5705, 

which provides that independent contractor status is an affirmative defense to a claim that 

a person was injured while performing service for an alleged employer. (Lab. Code, 

§ 5705, subd. (a).) Both provisions are contained in division 4 of the Labor Code, which

pertains to Workers’ Compensation and Insurance. 

Here, the carriers did not proceed to trial on a workers’ compensation claim. 

Thus, the presumptions set out in Labor Code sections 3357 and 5705 do not directly 

apply. Nonetheless, courts have routinely extended these presumptions to other contexts. 

(See, e.g., Robinson v. George (1940) 16 Cal.2d 238, 242 [holding in the personal injury 
38.

context, 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” (italics omitted)]; Linton, supra, 15 Cal.App.5th at p. 1221 

[holding that “the rebuttable presumption of employment in [Labor Code,] section 3357 

applies to actions brought under Labor Code provisions falling outside workers’ 

compensation”]; accord, Cristler v. Express Messenger Systems, Inc. (2009) 171 

Cal.App.4th 72, 76, 82-84 [burden was on employer to establish independent contractor 

status on claims for failure to pay overtime compensation, failure to provide itemized 

wage statements, failure to indemnify business expenses, and unfair and unlawful 

business practices].) Our Supreme Court recently cited to this line of authority with 

approval, stating: “[T]he rule that a hiring entity has the burden of establishing that a 

worker is an independent contractor rather than an employee has long been applied in 

California decisions outside the workers’ compensation context.” (Dynamex, supra, 4 

Cal.5th at p. 957, fn. 24; see id. at pp. 914-915.)

The newspaper nonetheless suggests that the carriers bear the burden of proof 

pursuant to Evidence Code 500 because their claim is not brought under the Labor Code, 

but rather the UCL. However, where, as here a UCL claim is derivative of an underlying 

violation of law, it must stand or fall with the underlying claim. (See Medical Marijuana, 

Inc. v. ProjectCBD.com (2020) 46 Cal.App.5th 869, 896-897.) Accordingly, the burden 

to prove an unlawful act or practice rests with the party who bears the burden on the 

underlying claim. (Parada v. East Coast Transport Inc. (2021) 62 Cal.App.5th 692, 695, 

698-699 [placing burden on employer to prove worker was an independent contractor on 

a UCL claim based on an alleged wage order violation]; Maldonado v. Epsilon Plastics, 

Inc. (2018) 22 Cal.App.5th 1308, 1320, 1327 [placing burden on employer to prove 

worker was an independent contractor on a UCL claim based on alleged violation of Lab.

Code, § 510 for failure to pay overtime].) It was the newspaper’s burden to establish the 
39.

carriers were independent contractors for purposes of Labor Code section 2802. The 

same is true on the carriers’ derivative UCL claim. 

The newspaper also suggests the carriers stipulated that they bore the burden of 

proof. This argument strains credulity. The “stipulation” cited by the newspaper is one 

of several “stipulations and further recitals” agreed to by the parties. (Boldface, 

capitalization & underlining omitted.) The purported stipulation memorializes certain 

rulings of the trial court for conduct of the bifurcated trial. Additionally, the purported 

stipulation indicates these rulings were derived from the newspaper’s “Case Management 

Conference Statement.”

16

 The paragraph at issue states, among other things, “Because 

[the carriers] have the burden of proof on those issues, they will proceed first.” However, 

the record does not suggest this is anything other than an agreement that the court so 

ruled. The newspaper directs us to no point in the record in which the carriers agreed 

they bore the burden to prove employee status. To the contrary, the carriers asserted in 

the trial court that they bore only an initial burden to demonstrate the carriers were 

performing work for the newspaper, whereas the newspaper bore the ultimate burden to 

prove the carriers were independent contractors. 

Accordingly, we conclude the newspaper bore the burden of proving the carriers 

were independent contractors. The trial court misallocated the burden of proof. 

B. Equitable Considerations do not Bear on Liability

The carriers argue the trial court erred in relying on equitable considerations to 

determine the newspaper’s liability. To the extent the trial court did so, we agree it was 

error.

In considering whether the language of the contracts concerning independent 

contractor status was merely subterfuge, the trial court stated as follows:

16 The Case Management Conference Statement itself is not contained in the record 

before us.
40.

“This is an action in equity. The [newspaper] complied with and 

relied upon California’s EDD regulations regarding which factors are not to 

be taken as evidence of employment in the context of newspaper carriers. 

In fact, Tom Cullinan[17] testified that in 2000 the [S]tate of California 

conducted an analysis of the [newspaper’s] relationship with its carriers and 

concluded that the carriers were properly classified as independent 

contractors. [Citation.] Although intent is not an element in an unfair 

business practices case, the understanding of the parties is relevant to an 

analysis of employment versus independence. It would be unfair for the 

[newspaper] to be penalized for relying upon the Regulations and following 

them. Given their close adherence to the EDD Regulations, the 

[newspaper] believed that the carriers who contracted with it were 

independent contractors. This belief was validated by the EDD’s audit of 

[the newspaper] in 2000. [The carriers] submitted nothing to refute the 

[newspaper’s] bona fide belief in the independent contractor status of the 

carriers. The contracts were not a mere subterfuge. As set forth above, the 

court considered both the common law test and the EDD Regulations and 

finds that application of both support a conclusion that the carriers were 

properly classified as independent contractors.”18 (Italics added.) 

Our Supreme Court has explained the proper role for equitable considerations in a 

Business and Professions Code section 17200 proceeding. “The UCL imposes strict 

liability when property or monetary losses are occasioned by conduct that constitutes an 

unfair business practice.” (Cortez v. Purolator Air Filtration Products Co. (2000) 23

Cal.4th 163, 181 (Cortez).) Thus, equitable considerations generally cannot defeat a 

defendant’s liability: “[E]quitable defenses may not be asserted to wholly defeat a UCL 

17 Cullinan is the president and publisher of The Fresno Bee. 

18 The carriers also argue this ruling is not factually supported because Cullinan 

testified it was the EDD, rather than the state, which audited the newspaper. 

Additionally, the carriers contend, without citation to the record, that the EDD held the

carriers to be employees, and this finding was overturned by an administrative law judge. 

Prior to trial, the trial court declined to take judicial notice of the administrative law 

judge’s decision. 

There may be merit to the carriers’ arguments. However, because these arguments 

are not properly presented, we do not address them. (See Cal. Rules of Court, rule 

8.204(a)(1)(B); Consolidated Irrigation Dist. v. City of Selma (2012) 204 Cal.App.4th 

187, 201 [failure to comply with rule requiring each argument be presented under a 

separate heading forfeits the argument].) 
41.

claim since such claims arise out of unlawful conduct.” (Id. at p. 179.) To the extent the 

trial court determined it would be unfair to hold the newspaper liable for improperly 

classifying the carriers as independent contractors, the trial court erred.

Equitable defenses such as good faith may be considered in fashioning a remedy 

under Business and Professions Code section 17200. (Cortez, supra, 23 Cal.4th at 

pp. 180-181; People ex rel. Harris v. Aguayo (2017) 11 Cal.App.5th 1150, 1173.) 

However, the court is required to consider the relative equities on both sides of the 

dispute, and not merely the unfairness to one party. (Cortez, at p. 180; see id. at p. 182 

(conc. opn. of Werdegar, J.) [“[E]quitable considerations normally should not lead a trial 

court to reduce or eliminate a UCL restorative order when it is established that the 

defendant committed an unlawful practice, but the defendant claims that its violation was 

unintentional or committed in a good faith belief the action was lawful. Rather, in 

general, as between a person who is enriched as the result of his or her violation of the 

law, and a person intended to be protected by the law who is harmed by its violation, for 

the violator to retain the benefit would be unjust.”].) In any event, here, any weighing of 

the equities was premature, as the bifurcated trial proceeded only on the issue of liability.

C. The Trial Court’s Reliance on Unrepresentative Testimony

The carriers contend the trial court improperly relied on testimony from 

unrepresentative absent class members to conclude the carriers were independent 

contractors.

We are unable to evaluate the merits of this argument. The record in this case is 

comprised primarily of appellant’s appendix, which spans 20 volumes and more than 

11,000 pages. The reporter’s transcript is comprised of nearly 8,000 pages. Although the 

carriers direct us to portions of the statement of decision they contend were based on 

“cherry-picked witness testimony,” they do not direct us to the testimony at issue. “It is 

not the function of this court to comb the record looking for the evidence or absence of 

evidence to support [a party’s] argument.” (People ex rel. Reisig v. Acuna (2010) 182 
42.

Cal.App.4th 866, 879; see People ex rel. Strathmann v. Acacia Research Corp. (2012) 

210 Cal.App.4th 487, 502-503 [if a party fails to support its argument with necessary 

citations to the record the argument will be deemed waived].) 

Moreover, we note the authority cited by the carriers provides that a party seeking 

to extrapolate facts regarding classwide liability from the testimony of a small sample of 

absent class members must develop their sampling strategy with the input of an expert. 

(Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1, 13, 38-40.) However, in 

motions in limine regarding the testimony of absent class members, the newspaper 

disavowed any intent to extrapolate classwide data from the testimony of absent class 

members, stating, “On the contrary, [the newspaper] will offer class member testimony to 

show that certain facts do not apply classwide.” It was on this representation that such 

testimony was permitted. The trial court is directed to remain mindful of this limitation 

on remand. 

DISPOSITION

The judgment is reversed. Costs are awarded to the carriers. (California Rules of 

Court, rule 8.278(a)(1).)

DETJEN, J.

WE CONCUR:

HILL, P. J.

FRANSON, J.