Filed 3/28/16

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

WILLIAM A. DAVIS, 

 Plaintiff and Appellant,

v.

FARMERS INSURANCE 

EXCHANGE et al., 

 Defendants and Respondents.

 B257970

 (Los Angeles County

 Super. Ct. No. BA398948)

APPEAL from an order of the Superior Court of Los Angeles County, 

Yvette M. Palazuelos, Judge. Affirmed in part, reversed in part, and remanded, 

with directions.

The Anfanger Law Office and Nancy B. Anfanger for Plaintiff and 

Appellant.

Locke Lord and Stephen A. Tuggy for Defendants and Respondents.
2

Appellant William A. Davis brought suit against respondents Farmers 

Insurance Exchange, Truck Insurance Exchange, Fire Insurance Exchange, MidCentury Insurance Company and Farmers New World Life Insurance Company

(Farmers), contending that as a district manager for Farmers he had been 

wrongfully classified as an independent contractor rather than an employee, that he 

had been wrongfully terminated, and that Farmers had failed to pay wages due

during and at the termination of his employment. 

Appellant asserted a common law claim for wrongful termination in 

violation of public policy; he did not assert a claim under the Fair Employment and 

Housing Act (Gov. Code, § 12940 et seq., “FEHA”). While the case was pending, 

the California Supreme Court held in Harris v. City of Santa Monica (2013) 56 

Cal.4th 203 (Harris) that where an employee supports a FEHA claim by 

establishing that an illegitimate criterion was a substantial factor in the adverse 

employment decision at issue, the employer may avoid liability for damages by 

establishing that it would have made the same decision without the wrongful 

motivation. The court held, however, that other remedies might be available to a 

plaintiff, such as declaratory relief, injunctive relief and attorney fees. 

At trial, the court instructed the jury with CACI instructions amended to 

reflect the holding in Harris. It issued a directed verdict in Farmers’s favor on the 

wage claim. On the remaining claim for wrongful termination in violation of 

public policy, the jury first found that appellant was an employee. It further found 

that his age was a substantial motivating factor in his termination, but concluded

that Farmers would have made the same termination decision for legitimate 

reasons. Accordingly, appellant was awarded no damages. Post-trial, appellant 

sought declaratory and/or injunctive relief, but the trial court denied his request for 

multiple reasons, both procedural and substantive. The court rejected appellant’s 
3

request for attorney fees under Code of Civil Procedure section 1021.5, concluding 

he did not meet the applicable criteria. 

On appeal, appellant contends the trial court erred in giving instructions 

based on the holding in Harris. He further contends he was entitled to declaratory

relief, injunctive relief and attorney fees. Finally, he asserts the court erred in 

granting a directed verdict on his wage claim. We conclude the court did not err in 

giving the Harris instructions or in denying appellant alternative relief when the 

jury rejected his claim for damages. However, we conclude appellant presented 

sufficient evidence to allow his wage claim to go to the jury. We, therefore, 

reverse and remand for retrial on that claim. We otherwise affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. Background Facts

Appellant became an insurance agent for Farmers in 1977. In December 

1983, he entered into a “District Manager’s Appointment Agreement” with 

Farmers.

1

 Under the agreement, Farmers appointed appellant district manager of 

District Number 84, effective December 1, 1983, “and continuing until [the 

agreement is] terminated or cancelled . . . .” Farmers agreed to pay appellant “an

overwrite on all business produced by Agents of, and written by the Exchanges, 

Mid-Century and Farmers New World Life, in the District . . . in accordance with 

schedules and rules adopted from time to time by [Farmers] . . . .”

2

 Appellant 

 

1 All respondents -- Farmers Insurance Exchange, Truck Insurance Exchange, Fire 

Insurance Exchange, Mid-Century Insurance Company and Farmers New World Life 

Insurance Company -- were parties to the agreement.

2 An “overwrite,” sometimes called an “override,” is “a commission paid to 

managerial personnel on sales made by subordinates.” (Naser v. Metropolitan Life 

Insurance Co. (N.D. Cal. Jul. 31, 2013) Case No.: 5:10-CV-04475 EJD [2013 U.S. Dist. 

LEXIS 107706, *38], quoting Merriam-Webster’s Collegiate Dictionary 885 (11th ed. 

(Fn. continued on next page.)
4

agreed to “recruit for appointment and train as many agents acceptable to 

[Farmers] as may be required to produce sales in accordance with goals and 

objectives established by [Farmers]”; to “actively represent [Farmers] in the 

conduct of the District”; to “represent no other insurer”; and to “conform to all 

regulations, operating principles and standards of [Farmers] . . . .” 

The agreement stated that it “may be cancelled without cause by either 

[appellant] or [Farmers] on 30 days’ written notice . . . .” At the time of 

termination, Farmers could elect to pay “‘contract value’” to appellant, defined as 

the service commission overwrite paid to appellant during the six months 

immediately preceding the cancellation, increased by a multiplier based on the 

number of years of appellant’s services. In October 2006, Farmers cancelled the 

appointment agreement, giving 30 days’ notice and thereafter paid appellant a total 

of approximately $500,000 in a series of payments made between April 2007 and 

April 2009. Appellant was 57 when the agreement was terminated. 

B. The Complaint

In September 2008, appellant filed a complaint naming the entities that were 

parties to the appointment agreement.

3

 The complaint alleged that Farmers 

exercised control over appellant’s operations and that appellant was an employee 

of Farmers. The complaint contended that appellant, as well as a number of other 

district managers whose contracts were terminated at approximately the same time,

were wrongfully terminated due to their age. 

 

2003); see Beaumont-Jacques v. Farmers Group, Inc. (2013) 217 Cal.App.4th 1138, 

1141.)

3

The complaint also named another entity -- Farmers Group Inc. In April 2010, the 

trial court granted Farmers Group Inc.’s motion for summary judgment. Farmers Group 

Inc. is not a party to this appeal.
5

The complaint asserted claims for wrongful termination in violation of 

public policy, failure to pay wages under the Labor Code, and unfair business 

practices under the Unfair Competition Law (Bus. & Prof. Code, section 17200 et 

seq. (UCL)).

4

In the cause of action for wrongful termination in violation of public 

policy, the complaint alleged that California public policy requires employers to 

treat all persons equally without regard to age. It asserted that defendants violated 

California public policy by terminating appellant’s employment. It sought 

compensatory and punitive damages and attorney fees. 

The cause of action for failure to pay wages alleged that defendants violated 

Labor Code section 200 et seq., and that Farmers failed to pay wages owed 

appellant, including those due immediately after his termination. 

In the cause of action for violation of the UCL, the complaint alleged, 

among other things, that Farmers “intentionally and improperly failed to pay 

[required] compensation and benefits,” “breached the parties’ contracts and 

breached their fiduciary duties to [appellant],” and “discriminated against 

[appellant] based on his age . . . .” In the body of the complaint and prayer for 

relief, appellant requested restitution of all compensation wrongfully retained by 

defendants, and “a temporary and permanent injunction requiring [d]efendant[s] to 

refrain from withholding earned and/or owed money and property from [him].” 

The operative complaint at the time of trial was the Fifth Amended 

Complaint (5th AC). The 5th AC asserted substantially the same claims for failure 

to pay wages, termination in violation of public policy and violation of the UCL, 

 

4

The complaint also included claims for breach of oral contract, breach of joint 

venture agreement, breach of fiduciary duty, breach of contract, tortious interference with 

prospective economic relations and misrepresentation. In April 2010, the claims for 

misrepresentation and tortious interference were resolved in Farmers’s favor by summary 

adjudication. The other claims were resolved prior to or during trial. None of these 

claims is at issue in this appeal.
6

and sought essentially the same remedies.

5

Farmers answered the 5th AC, 

including several affirmative defenses. Under those entitled “Unclean Hands,”

“Plaintiff’s Own Act,” and “Justification/Privilege,” the answer alleged that 

appellant failed to recruit and train a sufficient number of agents to meet Farmers’s

goals and objectives. 

C. Motion to Amend Complaint

In 2010, shortly before the original trial date and after the parties had 

completed extensive discovery, appellant moved to amend the complaint to add a 

claim under Labor Code section 2802, which requires an employer to “indemnify 

his or her employee for all necessary expenditures or losses incurred by the 

employee in direct consequence of the discharge of his or her duties, or of his or 

her obedience to the directions of the employer . . . .” Appellant contended that the 

claim had “always been part of the case.” The court denied the motion, stating it 

was untimely, and that appellant had failed to explain the delay in seeking to 

amend. Appellant’s subsequent motions to amend also were denied.

D. Trial

1. Motion for Bifurcation

Prior to trial, appellant moved to bifurcate the proceedings, having the jury 

first determine whether he was an employee or an independent contractor before 

addressing liability and damages. The trial court granted the motion. During the 

 

5 A new detail was added to the claim for violation of the UCL: that within “the last 

four years,” defendants intentionally and improperly failed to pay compensation and 

benefits due appellant, and discriminated against him based on his age. The 5th AC also 

added to the failure to pay wages claim the allegation that appellant’s wages were based 

on the insurance policies he or his agents sold. 
7

lengthy discussions of bifurcation, appellant’s counsel never suggested there would 

be equitable or UCL issues remaining to be tried by the court after the jury reached 

its verdict. 

2. First Phase

In the first phase of trial, the jury heard evidence from appellant and three 

other former district managers about the level of control Farmers exercised over 

their duties.

6

 After hearing the evidence, the jury found that appellant was 

Farmers’s employee.7

3. Second Phase

a. Evidence Pertinent to Age Discrimination Claim

In support of his claim that he was terminated due to age discrimination, 

appellant presented evidence that while a district manager, he received multiple 

awards and commendations up to and including the year he was terminated. In 

each of the four previous years, the value of the insurance sold from his district

went up. Appellant and other witnesses testified that it was not unusual for district 

managers to fail to achieve specific assigned goals, and that appellant had failed to 

 

6

Two other former district managers testified in phase one of the trial -- Frederick 

Howland and Timothy Crawley. Both suggested that age was a factor in their 

terminations, but the evidence established that Howland was terminated after sending a 

vulgar email, and Crawley was terminated after allowing less successful agents in his 

district to take credit for policies sold by other agents. 

7 Appellant devotes a considerable portion of his opening and reply briefs to the 

evidence presented in the first phase of the trial. Farmers did not file a cross-appeal 

challenging the jury’s finding in appellant’s favor in phase one. Accordingly, there is no 

issue with respect to his status as an employee. (See Cristler v. Express Messenger 

Systems, Inc. (2009) 171 Cal.App.4th 72, 78 [determination of employee status is one of 

fact and appellate courts “have no authority to simply second-guess the conclusion 

reached by the fact finder”].)
8

achieve goals assigned to him in the past without being terminated or threatened 

with termination. Appellant testified that the goals assigned him by his supervisors

-- Charles Dabelgott, the Southern California marketing manager, and Elizabeth 

Stella, the Southern Los Angeles Division marketing manager -- in the year prior 

to his termination were higher than had ever been assigned him before. He was 

told by the division marketing manager who preceded Stella that it looked like 

Dabelgott was “out to get [him].” 

Appellant presented evidence that the district managers in appellant’s 

division -- the Southern Los Angeles Division -- were older, on average, than the 

district managers of other divisions. Between 2005 and 2007, Farmers terminated 

six of the division’s district managers, including appellant, most of whom were 

over 40.8 In 2006, the year three district managers, including appellant, were 

terminated or forced to resign, the division won an award for the highest sales and 

recruiting in California. 

Appellant also presented evidence of general comments made by 

management personnel suggesting age bias. In 2003, the President of Farmers 

talked about the importance of replacing “old tools” with “new tools.” People in 

management referred to the Southern Los Angeles Division’s district managers as, 

the “old guys,” the “old farts” and the “Geritol gang.” In December 2004, a 

Farmers executive referred to them as a “bunch of old dogs,” and expressed 

surprise that they were doing so well. At a conference in January 2006, Farmers’s

chief marketing officer gave a presentation showing that the median age of the 

 

8 Glenn Smith, a former Southern Los Angeles Division district manager testified 

on appellant’s behalf. Smith, who was in his 60’s, was discharged in 2011, five years 

after appellant. He claimed to have been asked by his supervisor to retire prior to his 

termination, and to have been told Farmers wanted to replace him with a younger,

Spanish-speaking person. 
9

agency force was 51 or 52, and that medical premiums were going up; during the 

presentation he said he wanted the district managers to recruit younger agents. 

In its defense, Farmers presented evidence that the Southern Los Angeles 

Division was not doing well, that its production figures were down, and that in 

2004 and 2005 it was the poorest performing division in California, as well as one 

of the worst in the country. Farmers established that one of the division’s district 

managers who had been terminated around the same time as appellant was in his

40’s when he became a district manager and had been a district manager for only a 

few years prior to his termination. Farmers also presented evidence that a district 

manager younger than 40 was terminated during that period due to poor 

performance; that Frederick Howland, an older district manager, had been 

terminated after sending a salacious email; that Timothy Crawley had been 

terminated after inflating the policy numbers for less successful agents; that some 

older district managers were retained; and that multiple individuals remained 

district managers in Southern California into their 60’s and 70’s. 

With respect to appellant’s claim that he was a good performer, Farmers 

presented evidence that appellant had failed to significantly expand the number of 

agents in his district between 1991 and 2006, had failed to achieve the goals 

assigned him for recruiting new agents between 2001 and 2003, and in 2005 had 

the second worst record among district managers in Southern California for

recruiting new agents. With respect to the claim that the goals set for appellant 

prior to his termination were unrealistic, Farmers presented evidence that other 

district managers met or exceeded similar goals. 

Dabelgott testified that recruitment and development of new insurance 

agents was a district manager’s most important duty, and that when he became the 

Southern California marketing manager in 2003, Southern Los Angeles Division’s

district managers were not meeting their assigned goals in this area. In 2004, due 
10

to appellant’s history of poor performance in recruiting agents, the division’s

marketing manager who preceded Stella put appellant on a “performance program” 

-- a program he had to meet to retain his position. Appellant improved his 

recruiting numbers in 2004. However, three of the five agents appellant had 

recruited to meet his goals in 2004 resigned or washed out of the program within 

six months. In the early months of 2005, appellant recruited few new agents, and 

in September he was put on another performance program. By the early part of 

2006, appellant was far short of the assigned goals. In March 2006, Dabelgott 

asked appellant to resign. Dabelgott testified he saw no reason a younger person 

would be able to perform the functions of a district manager better than an older 

person, and that he personally had appointed individuals to district manager 

positions when they were older than 40. 

In June 2006, Stella recommended terminating appellant. She testified her 

recommendation was based solely on his lack of performance, and denied that 

appellant’s age had anything to do with her decision. Bernard Shulz, who gave 

final approval for appellant’s termination, denied considering appellant’s age when 

making the decision. He denied ever hearing anyone in management express 

ageist sentiments. Shulz himself was 64 when he retired, and had been asked to 

stay on. 

Stephen Feely, a Farmers vice president who met with appellant after his 

termination to discuss the reasons for it, testified that appellant did not complain of 

having been discriminated against because of his age. Nor did he tell Feely he had 

heard any managerial personnel make offensive comments. Feely had never heard 

anyone in management make comments about the age of the district managers in 

the Southern Los Angeles Division. 
11

b. Evidence Pertaining to Wage Claim Under Labor Code 

Section 200 et seq.

Appellant presented evidence that he entered into a series of loan agreements 

with Farmers’s credit union over the years. Farmers allowed him to repay the 

loans over time, deducting periodic payments from his monthly compensation. 

When Farmers paid appellant the contract value after he was terminated, it 

deducted a $293,000 balloon payment to repay the balance due on the loans. The 

total deducted from the final compensation checks was $302,958. This sum 

included reimbursement for commissions previously advanced to appellant and his 

agents by Farmers. 

Appellant also presented evidence that the policy guide the district managers 

were obliged to follow required them to have a computer connected to Farmers’s 

network. Appellant testified he was not free to buy his own computer equipment 

but was required to use, and incur a monthly fee for, equipment supplied by 

Farmers. All the data about his customers and agents was on Farmers’s network, 

and appellant used the computer equipment for nothing other than communications 

with Farmers and its network. Farmers set up a Web site for appellant’s office, for 

which it charged him a regular service fee. Appellant further testified that he was 

expected to buy a certain number of leads and order a certain number of 

promotional mailings from Farmers, and to pay a contribution toward Farmers’s 

lobbying efforts. He also was required to order stationery designed and approved 

by Farmers for business letters. Farmers deducted the cost of these items from his 

regular compensation checks, as well as the cost of advertising for the district and 
12

its agents in the telephone book, on the radio and on the Internet. It also deducted 

the premiums for appellant’s errors and omissions insurance policy.9

c. Farmers’s Motion for Directed Verdict

At the close of the second phase of trial, Farmers moved for a directed 

verdict on the wage claim. Farmers contended that appellant had proffered no 

evidence to support his claim that Farmers had failed to pay any compensation due 

him, or that any of the deductions taken from his compensation was improper or 

unauthorized. Farmers further contended that appellant’s wage claim represented a 

backdoor attempt to insert a Labor Code section 2802 claim into the case. 

Appellant argued that his wage claim was distinct from the Labor Code 

section 2802 claim he had sought unsuccessfully to add to his complaint. He 

contended that under California law, any deductions taken from his compensation 

checks not specifically permitted by law were presumed improper, and that he had 

presented evidence establishing that deductions not permitted by law had been 

taken from his compensation. He cited Barnhill v. Robert Saunders & Co. (1981) 

125 Cal.App.3d 1 (Barnhill) for the specific proposition that it is improper for an 

employer to deduct a balloon loan repayment from an employee’s wages when the 

employee is terminated. 

The court granted the motion for directed verdict, taking the wage claim 

from the jury’s consideration. The court concluded that in the absence of a claim 

under Labor Code section 2802, appellant was precluded from contending that 

amounts were improperly deducted from his wages to pay business expenses. The 

 

9 According to appellant’s calculations, the total deducted from his regular 

compensation was approximately $93,000 in 2004; approximately $103,000 in 2005; and

approximately $96,000 in 2006. 
13

court distinguished Barnhill as involving a low wage earner, whose paycheck was

eviscerated by the employer’s loan repayment deduction, and pointed out that 

although little evidence had been presented about the loans, there was no dispute 

that appellant had borrowed money and agreed to pay it back.

d. Pertinent Jury Instructions

To guide their deliberations on appellant’s remaining claim for age 

discrimination, the jurors were instructed in accordance with the post-Harris

version of CACI No. 2430 that to establish a claim of discharge in violation of 

public policy due to age, “plaintiff must prove . . . that [his] age was a substantial 

motivating reason for [his] discharge.” In line with CACI No. 2507, “substantial 

motivating reason” was defined for the jurors as “a reason that actually contributed 

to plaintiff’s termination,” that “must be more than a remote or trivial reason,” but 

“does not have to be the only motivating reason.” The court also gave CACI No. 

2512: “If you find that age discrimination was a substantial motivating reason for 

plaintiff’s discharge, you must then consider defendants’ stated reason for the 

discharge. [¶] If you find that plaintiff’s poor job performance also was a 

substantial motivating reason, then you must determine whether the defendants 

have proven that it would have discharged plaintiff anyway based on poor job 

performance, even if they had not also been substantially motivated by age 

discrimination. [¶] . . . [¶] If you find that defendants discharged plaintiff only for a 

discriminatory reason, you will be asked to determine the amount of damages he is 

entitled to recover. [¶] If, however, you find that defendants would have 

discharged plaintiff anyway for a non-discriminatory reason, then plaintiff will not 

be entitled to reinstatement, back pay or damages.” 
14

e. Jury’s Special Verdict

The jury returned the following special verdict: Asked if appellant’s age 

was “a substantial motivating reason” for his discharge, the jury answered, “Yes.” 

Asked if appellant’s poor job performance also was “a substantial motivating 

reason” for the discharge, the jury answered, “Yes.” Asked if Farmers would have 

“discharged [appellant] anyway based on [his] poor job performance had [it] not 

also been substantially motivated by discrimination,” the jury again answered,

“Yes.” Accordingly, the jury awarded appellant no damages. 

E. Post-Trial Motions

After the jury returned its verdict, Farmers lodged a proposed judgment,

claiming to be the prevailing party and entitled to costs. Appellant filed an 

objection, contending he had prevailed, in view of the jury’s finding that he was 

misclassified as an independent contractor and that age-based discrimination was a 

substantial cause of his termination. He claimed entitlement to costs under Code 

of Civil Procedure section 1032 and attorney fees under Code of Civil Procedure 

sections 1021.5. Appellant further contended that entry of judgment was 

premature, as there had been no resolution of his claim for equitable relief under 

the UCL, and that under Harris, he was entitled to “declaratory and injunctive 

relief permanently restraining and enjoining [Farmers] from engaging in further 

unlawful discrimination based on age.” Appellant filed an application for an order 

setting a hearing or bench trial to determine whether he was entitled to equitable 

relief under either his claim for wrongful termination or his UCL claim. 

Farmers responded to appellant’s objections to its proposed judgment, 

asserting that because appellant had not prevailed on any cause of action tried to 

the jury, he could not be deemed the prevailing party. Farmers opposed appellant’s 

request for a further hearing, contending that appellant had forfeited his right to 
15

assert the UCL claim by failing to raise any issue concerning the claim during the 

trial or trial setting, and by failing to ask the trial court to resolve it before 

presenting his legal claims to the jury under the general rule that equitable claims 

are to be tried before legal claims. Farmers also contended that to the extent the 

UCL claim was based on failure to pay wages, it was rendered moot by the 

directed verdict. Finally, Farmers contended that appellant was not entitled to 

attorney fees because he had not asserted a FEHA claim and did not meet the 

criteria for an award of fees under Code of Civil Procedure section 1021.5. 

The court denied appellant’s request to adjudicate further claims. The court 

concluded that because appellant’s claim was not premised on a statutory violation 

of FEHA, he was not entitled to “declaratory relief, injunctive relief, [or] attorney 

fees and costs on the basis of [Harris].” With respect to the UCL claim, the court 

observed that appellant had not attempted to pursue that claim until after the trial 

ended, and concluded the jury’s findings were insufficient to support a UCL claim. 

It found the jury’s determination that Farmers would have discharged appellant 

based on his poor job performance precluded any potential for injunctive relief. 

The court analyzed appellant’s entitlement to attorney fees under Code of 

Civil Procedure section 1021.5, focusing on the three factors supporting an award 

of attorney fees under that provision: (a) a significant benefit, pecuniary or 

nonpecuniary, conferred on the general public or a large class of persons; (b) the 

necessity and financial burden of private enforcement; and (c) a finding that in the 

interest of justice, fees should not be paid out of the recovery. The court stated that 

the “primary effect” of appellant’s discrimination claim had been the vindication of 

his “personal rights and economic interest,” rather than those of any broader class 

of persons. The court further found that appellant “brought the instant action for 

his own economic benefit, as [he] asked the jury for damages of $3,994,790 for 

past economic losses; $3,212,829 for future economic losses; $1,000,000 to 
16

$2,000,000 for past emotional distress; and $500,000 for future emotional distress. 

[Citation.]” Accordingly, the court concluded that “an award of fees under section 

1021.5 would be improper.” The court further found that Farmers, not appellant,

was the prevailing party for purposes of recovering costs. 

Judgment was entered. Farmers was awarded costs of $181,356.79. This 

appeal followed. 

DISCUSSION

Appellant’s primary contention on appeal is that the trial court 

misinterpreted and misapplied the Califoria Supreme Court’s decision in Harris, 

supra, 56 Cal.4th 203. Appellant contends that Harris should be limited to FEHA 

claims, and that a plaintiff/employee asserting a claim for the common law tort of 

wrongful discharge in violation of public policy should be permitted to recover if 

he or she establishes that an improper motive formed any part of the decision, even 

if the employer establishes that the plaintiff’s poor job performance alone would 

have led to termination. Alternatively, appellant contends that if Harris applies to 

common law wrongful discharge claims, he was entitled to declaratory and/or 

injunctive relief and attorney fees because he successfully persuaded the jury that 

his age was a substantial motivating factor in connection with the discharge. As 

explained below, we disagree. 

Additionally, appellant appeals from the trial court’s grant of a directed 

verdict on his wage claim, contending he presented sufficient evidence to allow the 

claim to go to the jury. With this contention we agree, and reverse the grant of a 

directed verdict. 
17

A. Harris Instructions in Common Law Wrongful Discharge Claims

In Harris, the plaintiff sued under FEHA, claiming she had been terminated 

from her employment with the defendant City because she was pregnant. (Harris, 

supra, 56 Cal.4th at p. 211.) She did not pursue a common law wrongful discharge 

claim. At trial, the court refused a defense instruction informing the jurors that if 

they found “a mix of discriminatory and legitimate motives, the City could avoid 

liability by proving that a legitimate motive alone would have led it to make the 

same decision to fire her”; the jury was instead instructed, pursuant to former 

CACI No. 2500, that the plaintiff was entitled to judgment if she proved that her 

pregnancy “was a ‘motivating factor/reason for the discharge.’”10 (Harris, supra, 

at pp. 211, 213.) The jury found that the plaintiff’s pregnancy was a motivating

factor in her discharge and awarded substantial damages. The trial court awarded 

the plaintiff attorney fees under Government Code section 12965, subdivision (b). 

(Harris, supra, at pp. 211, 213.)

The California Supreme Court held the trial court had erred in instructing the 

jury that an employee could prevail merely by proving that an illegitimate criterion 

was “a motivating factor.” (Harris, supra, 56 Cal.4th at pp. 214-224, 231-232.) 

Focusing on FEHA’s prohibition against adverse employment actions taken 

“‘because of’” a person’s race, sex, disability, sexual orientation, or other protected 

characteristic, the court held that to establish a claim of employment discrimination 

under FEHA, the employee must instead “‘produce evidence sufficient to show

that an illegitimate criterion was a substantial factor in the particular employment 

decision . . . .’” (Harris, supra, 56 Cal.4th at pp. 231, 232, quoting Price 

 

10 Motivating factor was defined for the jury as “‘something that moves the will and 

induces action even though other matters may have contributed to the taking of the 

action.’” (Harris, supra, 56 Cal.4th at p. 213.) 
18

Waterhouse v. Hopkins (1989) 490 U.S. 228, 278 (conc. opn. of O’Connor, J.).) 

The court explained that FEHA does not prohibit “discrimination ‘in the air’” or 

permit an employee to recover based on “bigoted thoughts or beliefs” or “‘stray 

remarks’” (Harris, supra, at p. 231), but “prohibits discrimination that causes an 

employer ‘to refuse to hire or employ the person or to refuse to select the person 

for a training program leading to employment, or to bar or to discharge the person 

from employment or from a training program leading to employment, or to 

discriminate against the person in compensation or in terms, conditions, or 

privileges of employment.’” (Id. at p. 231, quoting § 12940, subd. (a).) 

“Requiring the plaintiff to show that discrimination was a substantial motivating 

factor, rather than simply a motivating factor, more effectively ensures that 

liability will not be imposed based on evidence of mere thoughts or passing 

statements unrelated to the disputed employment decision.” (Harris, supra, at p. 

232.) The court further held that once a plaintiff has shown discrimination was a 

substantial motivating factor in the employment decision, the employer may avoid 

liability for damages, back pay or an order of reinstatement “by proving that a 

legitimate motive alone would have led it to make the same decision,” absent the 

discrimination. (Harris, supra, 56 Cal.4th at p. 211.)

Following the California Supreme Court’s decision in Harris, the Judicial 

Council amended CACI No. 2500, applicable to claims of disparate treatment 

under FEHA. It now states that to establish a claim of disparate treatment, the 

plaintiff must prove that the improper criterion was “a substantial motivating 

reason” for the employer’s decision to discharge or take other adverse employment 

action, rather than simply “a motivating . . . reason.” The Judicial Council also 

amended CACI No. 2430, applicable to common law claims of wrongful discharge 

in violation of public policy; it now similarly states that to establish such a claim,

the plaintiff must prove that the subject violation of public policy was “a 
19

substantial motivating reason” for the plaintiff’s discharge. In line with these 

amendments, the Judicial Council amended CACI No. 2507 to define a 

“substantial motivating reason” as “more than a remote or trivial reason.” In 

addition, the Judicial Council added CACI No. 2512, to be given when the 

employer presents evidence of a legitimate reason for the adverse employment 

action, informing the jurors that even if they find that discrimination was a 

substantial motivating reason for the adverse action, if the employer establishes 

that the adverse action nonetheless would have been taken for legitimate reasons, 

“then [the plaintiff] will not be entitled to reinstatement, back pay, or damages.”

As discussed, the CACI instructions, amended to conform to Harris, were 

given here. The jury found in favor of appellant on the question whether age 

discrimination was a substantial motivating reason for his discharge. However, it 

also found that Farmers would have discharged him in any event, based on his poor 

job performance. Appellant contends that the holding in Harris should be confined

to FEHA claims and not be applied to claims of wrongful discharge in violation of 

public policy.11

 

11 Farmers contends appellant forfeited any issue with respect to CACI No. 2512 

because he requested the instruction. That does not accord with the record: CACI No 

2512 appears in the packet of instructions lodged by Farmers, not in the packet lodged by 

appellant. Appellant requested the pre-Harris versions of CACI Nos. 2430 and 2507, and 

a special verdict that did not include the “same decision” language. 

Alternatively, Farmers contends appellant “‘invited error’” because his counsel 

acquiesced in giving CACI No. 2512. During the debate over the form of the special 

verdict, appellant’s counsel made his position clear: “We don’t think that the Harris

instruction is appropriate, because this is a wrongful termination [in] violation of public 

policy. The Harris case had to do with a statutory claim. There hasn’t been a case 

directing that the wrongful termination [in] violation of public policy instruction be 

changed.” During the discussion of jury instructions, specifically addressing CACI No. 

2512, appellant’s counsel similarly stated: “It may be inapplicable. I think it’s 

envisioned to be given in a statutory setting where there’s other remedies that would 

survive such as attorney fees and injunction.” The court then cautioned that it would be 

(Fn. continued on next page.)
20

This issue whether Harris’s reasoning applies where the sole claim is for

wrongful termination in violation of public policy was addressed in Mendoza v. 

Western Medical Center Santa Ana (2014) 222 Cal.App.4th 1334, where the 

plaintiff claimed retaliatory termination for reporting sexual harassment, but 

abandoned his statutory FEHA claim before the case was submitted to the jury. 

(See Mendoza v. Western Medical Center, supra, 222 Cal.App.4th at p. 1341.)

Over defense objection, the court instructed the jury that the plaintiff was required 

to prove his report was a “motivating reason” for his discharge, rather than “‘ a 

substantial motivating reason.’” (Id. at p. 1340.) The Court of Appeal concluded 

this was error. Acknowledging that “[t]he directions for use included with the 

current version of CACI No. 2430 state that ‘[w]hether the FEHA standard [(as 

explicated in Harris)] applies to cases alleging a violation of public policy has not 

been addressed by the courts,” the court concluded: “It would be nonsensical to 

provide a different standard of causation in FEHA cases and common law tort 

cases based on public policies encompassed by FEHA. [That the plaintiff]

abandoned his statutory FEHA claims before the case was submitted to the jury[,] 

is a distinction without a difference for purposes of crafting appropriate jury 

 

“[p]retty risky” to fail to give the instruction and said: “You tell me which way you want 

me to risk.” Appellant’s counsel responded : “Yes, that’s fine.” The court said: “2512 

will be given.” Assuming counsel’s final statement can be viewed as acquiescence in the 

instruction, it is insufficient to support invited error, which requires “affirmative conduct 

demonstrating a deliberate tactical choice on the part of the challenging party.” (Huffman 

v. Interstate Brands Corp. (2004) 121 Cal.App.4th 679, 706.) “[E]xpress acceptance of 

an incorrect instruction is not sufficient.” (Pappert v. San Diego Gas & Electric Co. 

(1982) 137 Cal.App.3d 205, 213, fn. 3; accord, Fassberg Construction Co. v. Housing 

Authority of City of Los Angeles (2007) 152 Cal.App.4th 720, 743, fn. 15.) The Court of 

Appeal in Transport Ins. Co. v. TIG Ins. Co. (2012) 202 Cal.App.4th 984, cited by 

Farmers, found invited error because the appealing party “made a strategic reason to 

vigorously argue for the instruction [the trial court] gave . . . .” (Id. at p. 1007.) 

Appellant’s counsel did not do so here.
21

instructions.” (Mendoza v. Western Medical Center, supra, at p. 1341; accord,

Alamo v. Practice Management Information Corp. (2013) 219 Cal.App.4th 466, 

479 (Alamo) [where plaintiff asserted both a FEHA claim and a claim for 

termination in violation of public policy, trial court erred in giving older version of 

CACI No. 2430, requiring plaintiff to prove only that her pregnancy or pregnancy 

leave was “‘a motivating reason’” rather than “‘a substantial motivating reason’” 

for her discharge].)

We agree with the Mendoza and Alamo courts that the reasoning of Harris

applies to claims of wrongful termination in violation of public policy as well as 

FEHA claims.

12 The two claims are analogous, and unless one is barred by a 

failure to exhaust administrative remedies or the statute of limitations, they are 

likely to be pursued jointly. (See Stevenson v. Superior Court (1997) 16 Cal.4th 

880, 908 [common law wrongful discharge claim “provides another legal theory on 

which employees may pursue remedies comparable in all relevant respects to those 

. . . available to them under the FEHA” and “does not afford any different or 

expanded penalties for discriminatory conduct beyond those already available 

under the FEHA”].) Although the California Supreme Court in Harris focused on 

the statutory language of FEHA, the claim that a termination violates public policy 

must be “tethered to fundamental policies that are delineated in constitutional or 

statutory provisions.” (Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1095, 

 

12 Tacitly acknowledging that the post-Harris version of CACI No. 2430 was 

properly given under Mendoza and Alamo, appellant attempts to persuade us that whether 

to give the mixed motive instruction (CACI No. 2512) should be subject to an 

independent analysis. He fails to articulate a coherent reason for applying the California 

Supreme Court’s reasoning in Harris to causation, but not motivation. He contends “a 

wrongful termination claim against public policy does not seek to vindicate individual 

rights, it seeks to vindicate the right of society at large.” Individual rights and societal 

concerns are equally vindicated by both types of claims.
22

overruled in part on another point in Green v. Ralee Engineering Co. (1998) 19 

Cal.4th 66.) The California Supreme Court has said that “a common law tort claim 

based on the public policy against age discrimination articulated in the FEHA is 

subject to the FEHA’s limitations on the nature and scope of the statutory 

prohibition against age discrimination.” (Esberg v. Union Oil Co. (2002) 28 

Cal.4th 262, 272.)

13

 

Moreover, on multiple occasions, the California Supreme Court has held that 

where a wrongful termination claim would not be cognizable under the provisions 

of FEHA, the conduct at issue cannot offend fundamental public policy. (See, e.g., 

Silo v. CHW Medical Foundation (2002) 27 Cal.4th 1097, 1108-1109 [where 

employee of religious hospital terminated for discussing another religion in the 

workplace was barred from pursuing FEHA claim due to statutory exemption for 

religious corporations, hospital could not be held liable under theory of wrongful 

termination in violation of public policy]; Jennings v. Marralle (1994) 8 Cal.4th 

121, 134-135 [FEHA exemption for employers who employ fewer than five 

persons precluded tortious wrongful discharge claim based on public policy].) If 

claims for wrongful termination in violation of public policy must track FEHA, it 

necessarily follows that jury instructions pertinent to causation and motivation

 

13 See also Stevenson v. Superior Court, supra, 16 Cal.4th at p. 904 [“[W]hen a 

plaintiff relies upon a statutory prohibition to support a common law cause of action for 

wrongful termination in violation of public policy, the common law claim is subject to 

statutory limitations affecting the nature and scope of the statutory prohibition.”]; Estes v. 

Monroe (2004) 120 Cal.App.4th 1347, 1355 [“‘FEHA’s provisions prohibiting 

discrimination may provide the policy basis for a claim for wrongful discharge in 

violation of public policy.’ [Citations.] But the tort claim based on a violation of the 

FEHA is limited by the terms of the statute” and must be “tethered to the meaning of the 

FEHA.”]
23

must be the same for both. Accordingly, we conclude the trial court did not err in 

giving the instructions set forth in the CACI model jury instructions.14

B. Remedy for the Jury’s Mixed Motive Finding

As discussed, the jury found that appellant’s age was a substantial 

motivating reason for his discharge, but that Farmers would have discharged 

appellant in any event, based on his poor job performance. The Court in Harris

addressed the relief available where the employee meets the burden of showing 

that discrimination was a substantial factor motivating the adverse employment 

decision, but the employer shows that “it would have made the same decision in 

any event.” (Harris, supra, 56 Cal.4th at p. 232.) The Court rejected the 

suggestion that a plaintiff under these circumstances might be entitled to an order 

of reinstatement or backpay: “In the context of an allegedly unlawful termination, 

an order of reinstatement or backpay would not ‘redress the adverse effects of 

[discriminatory] practices on aggrieved persons’ [citation,] if legitimate, 

nondiscriminatory reasons would have led the employer to terminate the employee 

 

14 It is clear that to be entitled to mixed-motive instructions, the employer must raise 

as an affirmative defense that nondiscriminatory reasons standing alone would have 

caused it to make the same decision. (Harris, supra, 56 Cal.4th at p. 240; Alamo, supra, 

219 Cal.App.4th at pp. 481-482.) Appellant contends that Farmers did not raise a mixedmotive defense, and that he was “ambushed” by the request for mixed motive jury 

instructions at trial. We disagree. Farmers’s answer alleged in the affirmative defenses 

for “Unclean Hands,” “Plaintiff’s Own Act” and “Justification/Privilege” that appellant’s 

termination was justified because he neglected his district manager duties by failing to 

recruit and train a sufficient number of agents to meet Farmers’s goals and objectives. 

This was sufficient to raise the defense. (See Harris, supra, at p. 240 [answer put 

plaintiff on notice that employer intended to defend based on having a legitimate reason 

for discharging her where it asserted that “‘[a]ny alleged adverse employment actions of 

which plaintiff complains . . . were not based on plaintiff’s gender and/or sex, pregnancy 

or any other alleged discriminatory practice, but instead were based on one or more 

legitimate nondiscriminatory reasons’”].)
24

in any event. Although such remedies might help to ‘prevent and deter unlawful 

employment practices’ [citation], they would do so only at the cost of awarding 

plaintiffs an unjustified windfall and unduly limiting the freedom of employers to 

make legitimate employment decisions. Curtailing employers’ prerogatives in this 

way -- that is, forcing an employer to retain someone when it had sufficient and 

legitimate reasons not to do so -- would cause inefficiency and would thus tend to 

‘deprive[ ] the state of the fullest utilization of its capacities for development and 

advancement,’ contrary to the FEHA’s purposes. [Citation.]” (Harris, supra, at 

pp. 232-233, quoting Gov. Code, §§ 12920 & 12920.5.)

The court held that for similar reasons, the plaintiff should not be awarded 

damages for economic loss: “Such an award would provide the plaintiff with an 

unjustified windfall.” (Harris, supra, 56 Cal.4th at p. 233.) The court reached the 

same conclusion with respect to monetary damages for noneconomic loss: “When 

an employee is fired, and when discrimination has been shown to be a substantial 

factor but not a ‘but for’ cause, we believe it is a fair supposition that the primary 

reason for the discharged employee’s emotional distress is the discharge itself. 

Such distress is not compensable under the FEHA -- indeed, compensation for such 

distress would be a windfall to the employee -- if the employer proves it would 

have fired the employee anyway for lawful reasons.” (Id. at pp. 233-234.) In 

short, “a termination decision substantially motivated by discrimination is not 

compensable in damages under section 12940(a) when an employer makes a samedecision showing.” (Id. at p. 234.) 

The court went on to state, however, that the unavailability of damages or an 

order of reinstatement or backpay need not make a finding of unlawful 

discrimination an “empty gesture.” (Harris, supra, 56 Cal.4th at p. 234.) Citing 

Code of Civil Procedure section 1060, the court stated that proof that an adverse 

employment decision was substantially motivated by discrimination “may warrant 
25

a judicial declaration of employer wrongdoing,” which in the appropriate 

circumstances “may serve to reaffirm the plaintiff’s equal standing among [his or] 

her coworkers and community, and to condemn discriminatory employment 

policies or practices. [Citation.].” (Ibid.)15 The court added that “upon a finding 

of unlawful discrimination, a court may grant injunctive relief where appropriate to 

stop discriminatory practices.” (Ibid.; see Aguilar v. Avis Rent A Car System, Inc. 

(1999) 21 Cal.4th 121, 131.) Finally, citing Government Code section 12965, 

subdivision (b), the court stated: “[W]hen a plaintiff has proven unlawful 

discrimination, the plaintiff may be eligible for ‘reasonable attorney’s fees and 

costs.’” (Harris, supra, at p. 235.)16 

1. Declaratory and Injunctive Relief

Citing the California Supreme Court’s discussion of available remedies in 

Harris, appellant contends he was entitled to declaratory and injunctive relief

under the facts presented and the jury’s findings. We conclude that appellant 

failed to properly raise or preserve issues pertaining to these remedies, and that in 

any event, no effective alternative relief was available. 

 

15 Code of Civil Procedure section 1060 is the statute governing declaratory relief, 

and provides that “[a]ny person . . . who desires a declaration of his or her rights or duties 

with respect to another . . . may, in cases of actual controversy relating to the legal rights 

and duties of the respective parties, bring an original action or cross-complaint in the 

superior court for a declaration of his or her rights and duties . . . .” 

16 Government Code section 12965, subdivision (b) provides: “In civil actions 

brought under this section, the court, in its discretion, may award to the prevailing party 

. . . reasonable attorney’s fees and costs, including expert witness fees.” The California 

Supreme Court has explained that in FEHA actions, “a prevailing plaintiff should

ordinarily receive his or her costs and attorney fees unless special circumstances would 

render such an award unjust.” (Williams v. Chino Valley Independent Fire Dist. (2015) 

61 Cal.4th 97, 115.) 
26

In order for a party to pursue an action for declaratory relief, the grounds for 

such relief must be specifically pleaded in the complaint. (Jenkins v. JPMorgan 

Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 513-514, disapproved in part on 

another ground in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 

citing City of Cotati v. Cashman (2002) 29 Cal.4th 69, 80; accord, American Meat 

Institute v. Leeman (2009) 180 Cal.App.4th 728, 741.) Appellant did not plead a 

claim for declaratory relief. Neither his original complaint nor the operative 5th 

AC contained a cause of action for declaratory relief; nor did he include a request 

for declaratory relief in the prayer. Although appellant asked for injunctive relief 

in connection with his UCL cause of action, the only such relief sought was “a 

temporary and permanent injunction requiring [d]efendant[s] to refrain from 

withholding earned and/or owed money and property from [him].”17 Appellant’s

failure to seek declaratory or injunctive relief relevant to his wrongful termination 

claim precluded him from obtaining such relief. (See Griffin Dewatering Corp. v. 

Northern Ins. Co. of New York (2009) 176 Cal.App.4th 172, 210 [plaintiff must 

recover on causes of action set out in the complaint or obtain permission to amend 

to include omitted claims].) 

Further, although Harris was decided in April 2013, almost a year prior to 

the trial of this matter, appellant made no attempt to amend his complaint to add a 

 

17 An unfair business practice under the UCL includes “any unlawful, unfair or 

fraudulent business act or practice . . . .” (Bus. & Prof. Code, § 17200.) “An employer’s 

business practices concerning its employee are within the scope of [the act]” (Wilkinson 

v. Times Mirror Corp. (1989) 215 Cal.App.3d 1034, 1052), including practices that 

violate FEHA (Sisemore v. Master Financial, Inc. (2007) 151 Cal.App.4th 1386, 1426) 

and failure to pay wages due (Cortez v. Purolator Air Filtration Products Co. (2000) 23 

Cal.4th 163, 177-178). A UCL action is equitable in nature, and prevailing plaintiffs are 

generally limited to injunctive relief and restitution. (Bradstreet v. Wong (2008) 161 

Cal.App.4th 1440, 1458, abrogated on another ground in Martinez v. Combs (2010) 49 

Cal.4th 35, citing Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 

1144; see Bus. & Prof. Code, § 17203.)
27

claim for declaratory relief or to expand his request for injunctive relief to include 

relief relevant to his discrimination claim. Prior to trial, when the parties discussed

the bifurcation motion and the order of trial, appellant neither asked the court to 

resolve any equitable issues first, nor suggested he intended to seek a court trial on 

any equitable claim following the jury trial. To the contrary, he took the position 

that Harris had no application to the issues at trial because he had not asserted a 

statutory claim under FEHA. In short, appellant did nothing to suggest he intended 

to seek injunctive relief in connection with his wrongful termination claim. 

Finally, even had the trial court addressed appellant’s UCL claim, the record 

did not support an award of injunctive relief. In order to grant injunctive relief 

under the UCL, “there must be a threat that the wrongful conduct will continue. 

‘Injunctive relief will be denied if, at the time of the order of judgment, there is no 

reasonable probability that the past acts complained of will recur . . . .’” (Colgan v. 

Leatherman Tool Group, Inc. (2006) 135 Cal.App.4th 663, 702; accord Feitelberg 

v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997, 1012 [“‘[A]n 

injunction must seek to prevent harm, not to punish the wrongdoer.’”]; Madrid v. 

Perot Systems Corp. (2005) 130 Cal.App.4th 440, 464-465 [“‘[Injunctive relief]

. . . is not a remedy designed to right completed wrongs. [Citations.]’”].) The 

injuries appellant suffered at the hands of Farmers are all in the past. Neither at 

trial nor on appeal has appellant identified any threat of real and immediate future 

injury to himself as a result of Farmers’s employment practices. He is not 

employed by Farmers, and there is no reasonable likelihood he will be at any time 

in the future or will otherwise be in a position to be harmed by Farmers’s actions. 

Appellant claims an injunction is required to prevent Farmers from engaging 

in age discrimination against current employees. “[I]njunctive relief under the 

UCL is an appropriate remedy where a business has engaged in an unlawful 

practice of discriminating against older workers.” (Herr v. Nestlé U.S.A., Inc. 
28

(2003) 109 Cal.App.4th 779, 789 [affirming trial court orders enjoining Nestlé

from discriminating on the basis of age in promoting employees, and directing 

company to issue repudiation of its earlier memorandum recommending “‘hiring, 

identifying and developing young people to have in the long-term enough 

resources for future management’”], italics added.) Appellant contends there was 

“ample evidence” that Farmers “engaged in a pattern of discrimination against 

older District Managers,” but cites nothing in the record to support that contention. 

Our review of the record reveals that one other district manager, Glenn Smith, was 

terminated under circumstances suggestive of age discrimination -- some five years 

after appellant was terminated.

18

 The jury made no finding that age played a part 

in any other employment decision by Farmers, and its verdict represents, at best, a 

determination that appellant’s age played a non-pivotal role in his discharge. On 

this record, there was insufficient evidence to support issuance of an injunction

forbidding Farmers from engaging in age discrimination.

2. Attorney Fees

Appellant contends the California Supreme Court’s decision in Harris

supports an award of attorney fees. In Harris, the court stated that when a plaintiff 

in a FEHA action has proven that an adverse employment decision was 

substantially motivated by discriminatory intent, he or she may be eligible for 

 

18 At trial, appellant identified five other district managers terminated at about the 

same time as he, and claimed this supported a pattern of age discrimination. According 

to the evidence presented, one of the district managers was under 40, one was appointed 

district manager while in his 40’s and was terminated a few years later, one was 

terminated for allowing agents to take credit for policies they had not sold, and one was 

terminated after distributing an offensive email. The final district manager in that group, 

Steve Fox, was over 60 when he was terminated. Farmers presented evidence that he was 

terminated due to poor performance, and appellant presented no countervailing evidence. 
29

attorney fees under Government Code section 12965, subdivision (b). (Harris, 

supra, 56 Cal.4th at p. 235.) Section 12965, subdivision (b) provides that “[i]n

civil actions brought under this section, the court, in its discretion, may award to 

the prevailing party, including the department, reasonable attorney fees and costs.” 

(Italics added.) Appellant did not bring an action under FEHA, and nothing in 

Harris suggests its fee provision should be expanded for use outside that context. 

However, courts have held that Code of Civil Procedure section 1021.5 may permit 

an award of attorney fees in a claim is for wrongful discharge under the 

appropriate circumstances. (Jaramillo v. County of Orange (2011) 200 

Cal.App.4th 811, 828-829 [assistant sheriff’s suit for wrongful termination 

“inure[d] to the benefit of the citizens and taxpayer of the county by lessening the 

probabilities of abuse and corruption in the sheriff’s office”]; Jabola v. Pasadena 

Redevelopment Agency (1982) 125 Cal.App.3d 931, 936, disapproved of in part on 

another ground in Cranston v. City of Richmond (1985) 40 Cal.3d 755 [services of 

petitioner’s counsel fell within meaning of private attorney general statute where 

proceeding not only benefitted petitioner, but also “serve[d] as a decision of 

general import, applicable to agencies and employees generally”]; see Satrap v. 

Pacific Gas & Electric Co. (1996) 42 Cal.App.4th 72, 76 [recognizing principle, 

but affirming order denying fee award]; Luck v. Southern Pacific Transportation 

Co. (1990) 218 Cal.App.3d 1, 29 [same].) The trial court considered and rejected 

appellant’s request for an award of attorney fees under Code of Civil Procedure 

section 1021.5. We review that determination for abuse of discretion. (Satrap v. 

Pacific Gas & Electric Co., supra, 42 Cal.App.4th at p. 77; Westside Community 

for Independent Living, Inc. v. Obledo (1983) 33 Cal.3d 348, 355.)

Under Code of Civil Procedure section 1021.5, “a court may award 

attorneys’ fees to a successful party against one or more opposing parties in any 

action which has resulted in the enforcement of an important right affecting the 
30

public interest . . . .” It provides “explicit statutory authorization for a ‘private 

attorney general’ attorney fee award” where the litigant vindicates a public policy 

resting on “Constitution or statute.” (Woodland Hills Residents Assn., Inc. v. City 

Council (1979) 23 Cal.3d 917, 931.) “[E]ligibility for a section 1021.5 attorney 

fees is established when ‘(1) plaintiffs’ action “has resulted in the enforcement of 

an important right affecting the public interest,” (2) “a significant benefit, whether 

pecuniary or nonpecuniary, has been conferred on the general public or a large 

class of persons,” and (3) “the necessity and financial burden of private 

enforcement are such as to make the award appropriate.”’” (Conservatorship of 

Whitley (2010) 50 Cal.4th 1206, 1214, quoting Woodland Hills Residents Assn., 

Inc. v. City Council, supra, 23 Cal.3d at p. 935.) The purpose of an award of 

attorneys’ fees pursuant to section 1021.5, is to encourage suits that enforce 

“common interests of significant societal importance, but which do not involve any 

individual’s financial interest to the extent necessary to encourage private litigation 

to enforce the right. [Citation.]” (Beach Colony II v. California Coastal Com. 

(1985) 166 Cal.App.3d 106, 114.)

The trial court’s conclusion that the underlying litigation did not meet the

criteria for an award of attorney fees under Code of Civil Procedure section 1021.5 

was a reasonable one. The jury’s verdict did not result in the enforcement of an 

important right affecting the public interest. Nor did it confer a significant benefit, 

pecuniary or nonpecuniary, on the general public or a large class of persons. 

Appellant established that in his position as district manager, he was treated by his 

managers as an employee, rather than the independent contractor Farmers claimed 

him to be, and that his age was a substantial motivating factor in his termination. 

These findings were not significant to the general public or demonstrably

applicable to any other district manager or Farmers’s employee. (See Woodland 

Hills Residents Assn., Inc. v. City Council, supra, 23 Cal.3d at pp. 939-940 [in 
31

adjudicating motion for attorney fees under Code of Civil Procedure section 

1021.5, trial court should take into consideration “significance of the benefit, as 

well as the size of the class receiving benefit, from a realistic assessment, in light 

of all the pertinent circumstances, of the gains which have resulted in a particular 

case”].)

Assessment of the final factor -- the necessity and financial burden of private 

enforcement -- further supports the court’s finding. Appellant’s reasonable

expectation of financial benefits from the litigation was sufficient to motivate him 

to pursue the litigation. “The financial burden of private enforcement requirement 

means that an award of attorney fees under section 1021.5 of the Code of Civil 

Procedure is only appropriate when the cost of the claimant’s legal victory 

transcends his or her personal interest -- i.e., when the necessity for pursuing the 

lawsuit placed a burden on the plaintiff out of proportion to his or her individual 

stake in the matter.” (Luck v. Southern Pacific Transportation Co., supra, 218 

Cal.App.3d at p. 30.) “Section 1021.5 was not designed as a method for rewarding 

litigants motivated by their own pecuniary interests who only coincidentally 

protect the public interest.” (Beach Colony II v. California Coastal Com., supra,

166 Cal.App.3d at p. 114.) “Private attorney general fees are not intended to 

provide insurance for litigants and counsel who misjudge the value of their case, 

and vigorously pursue the litigation in the expectation of recovering substantial 

damages, and then find that the jury’s actual verdict is not commensurate with their 

expenditure of time and resources.” (Satrap v. Pacific Gas & Electric Co., supra, 

42 Cal.App.4th at pp. 79-80.) The relevant issue is “‘“the estimated value of the 

case at the time the vital litigation decisions were being made.”’” (Id. at p. 79, 

quoting Beasley v. Wells Fargo Bank (1991) 235 Cal.App.3d 1407, 1414.) 

As the trial court observed, appellant sought over ten million dollars in 

damages for his allegedly wrongful discharge. In addition, he expected to recover 
32

hundreds of thousands of dollars for improper wage deductions. On this record, it 

was reasonable for the court to find that at every critical juncture appellant 

expected a substantial financial recovery, and that this was sufficient motivation to 

pursue the case. In view of appellant’s failure to meet the criteria for attorney fees 

under Code of Civil Procedure section 1021.5, the trial court did not abuse its 

discretion in rejecting appellant’s request.

C. Failure to Pay Wages

Farmers treated appellant as an independent contractor, deducting from his 

compensation premiums for his errors and omissions insurance, as well as the cost 

of supplies and equipment, along with other expenses incurred in operating an 

insurance business. In addition, when it terminated him, it deducted a balloon 

payment to repay the loans it had made to him over the years and the commissions 

it had advanced. However, appellant established in the first phase of trial that he 

was Farmers’s employee, not an independent contractor, as Farmers claimed. As 

an employee, appellant was entitled to the benefit of wage laws requiring an 

employer to promptly pay all wages due, and prohibiting the employer from 

deducting unauthorized expenses from the employee’s wages, deducting for debts 

due the employer, or recouping advances absent the parties’ express agreement. 

(See Cotter v. Lyft, Inc. (N.D. Cal. 2015) 60 F.Supp.3d 1067, 1073-1074

[“Whether a worker is classified as an employee or an independent contractor has 

great consequences. California law gives many benefits and protections to 

employees; independent contractors get virtually none.”]; Estrada v. FedEx 

Ground Package System, Inc. (2007) 154 Cal.App.4th 1, 15 [drivers wrongly 

treated as independent contractors entitled to recover as employees under Labor 

Code for business expenses paid out of pocket during their employment]; Zaremba 

v. Miller (1980) 113 Cal.App.3d Supp. 1, 6 [mistaken belief that employee was 
33

independent contractor did not free employer from obligations of Labor Code 

provision imposing penalty for failing to pay wages immediately upon discharge].) 

As explained below, we conclude appellant presented evidence sufficient to 

establish a prima facie case that deductions from the compensation Farmers paid 

appellant in his final years and after his termination were precluded by California 

law. Accordingly, the trial court erred in granting a directed verdict on his claim 

for unpaid wages.19 

The wages an employer owes its employees are accorded “a special status” 

under California law. (Kerr’s Catering Service v. Department of Industrial 

Relations (1962) 57 Cal.2d 319, 325 (Kerr’s Catering).) Full and prompt payment 

of wages due an employee “is a fundamental public policy of this state.” (Gould v. 

Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1147.) “This public 

policy has been expressed in the numerous statutes regulating the payment, 

assignment, exemption and priority of wages.” (Kerr’s Catering, supra, 57 Cal.2d 

at p. 325.) The chapter of the Labor Code governing compensation and payment 

of wages includes provisions requiring immediate payment of wages upon 

 

19 A motion for directed verdict may be granted “‘“only when, disregarding 

conflicting evidence and giving to plaintiff’s evidence all the value to which it is legally 

entitled, . . . indulging in every legitimate inference which may be drawn from that 

evidence, the result is a determination that there is no evidence of sufficient substantiality 

to support a verdict in favor of the plaintiff . . . .”’” (CC-California Plaza Associates v. 

Paller & Goldstein (1996) 51 Cal.App.4th 1042, 1051.) “‘Unless it can be said as a 

matter of law, that . . . no other reasonable conclusion is legally deducible from the 

evidence, and that any other holding would be so lacking in evidentiary support that a 

reviewing court would be impelled to reverse it upon appeal . . . , the trial court is not 

justified in taking the case from the jury.’” (Ibid., italics omitted.) “‘“‘“If there is any 

substantial evidence, or reasonable inferences to be drawn therefrom, in support of [a]

verdict, the motion should be denied.”’”’” (Fountain Valley Chateau Blanc 

Homeowner’s Assn. v. Department of Veterans Affairs (1998) 67 Cal.App.4th 743, 751.) 

We review the trial court’s entry of a directed verdict de novo. (Guillory v. Hill (2015) 

233 Cal.App.4th 240, 249.)
34

discharge, layoff or resignation (Lab. Code, §§ 201 & 202), requiring regular 

payment of wages (Lab. Code, § 204), and prohibiting an employer from insisting 

an employee execute a release of a claim before paying wages due (Lab. Code,

§ 206.5). The Labor Code’s protections are “designed to ensure that employees 

receive their full wages at specified intervals while employed, as well as when they 

are fired or quit” (On-Line Power, Inc. v. Mazur (2007) 149 Cal.App.4th 1079, 

1085), and are applicable not only to hourly employees, but to highly-compensated 

executives and salespeople. (See, e.g., ibid.; Sciborski v. Pacific Bell Directory

(2012) 205 Cal.App.4th 1152, 1166; Lindell v. Synthes USA (E.D. Cal. Jan. 6, 

2016) __ F.Supp.3d __ [2016 U.S.Dist. LEXIS 1940, at *11.)20 The statutes 

governing the employer/employee relationship are “remedial in nature” and must 

be liberally construed, “with an eye to promoting the worker protections they were 

intended to provide.” (Prachasaisoradej v. Ralphs Grocery Co., Inc. (2007) 42 

Cal.4th 217, 227 (Ralphs Grocery Co.).)

Of particular pertinence here are Labor Code sections 221 and 224 which 

make it “unlawful for any employer to collect or receive from any employee any 

part of wages theretofore paid by said employer to said employee” (Lab. Code, 

§ 221), but permit employers to “withhold or divert” a portion of an employee’s 

wages when “required or empowered so to do by state or federal law or when a 

deduction is expressly authorized in writing by the employee to cover insurance 

 

20 By the same token, wages include not just salaries earned hourly, but also bonuses, 

profit-sharing plans, and commissions. (Sciborski v. Pacific Bell Directory, supra, 205 

Cal.App.4th at p. 1166; Schachter v. Citigroup, Inc. (2009) 47 Cal.4th 610, 618; 

Neisendorf v. Levi Strauss & Co. (2006) 143 Cal.App.4th 509, 523; see Lab. Code, § 200, 

subd. (a) [defining wages as “all amounts for labor performed by employees . . . , whether 

the amount is fixed or ascertained [on a] commission basis”].) In general, a wage is 

anything “promised as part of the compensation for employment,” and it is due when “all 

conditions agreed to in advance . . . have been satisfied.” (Neisendorf v. Levi Strauss & 

Co., supra, 143 Cal.App.4th at p. 522.)
35

premiums, hospital or medical dues, or other deductions not amounting to a rebate 

or deduction from the standard wage arrived at by collective bargaining or 

pursuant to wage agreement or statute . . . .” (Lab. Code, § 224.) Where, as here, 

no collective bargaining agreement or statute is at issue, these provisions prohibit 

an employer from “collecting or receiving wages that have already been earned by 

performance or agreed-upon requirements,” unless they are (1) expressly 

authorized in writing by the employee, and (2) do not amount to a rebate or 

deduction from the standard wage set forth in the parties’ agreement. (Steinhebel 

v. Los Angeles Times Communications, LLC (2005) 126 Cal.App.4th 696, 707.) 

Appellant’s testimony appeared to concede that he agreed to at least some of the 

deductions taken from his compensation over the years. That fact, however, is not 

dispositive: “The one tool that is not available to [the employer] . . . is an 

employment agreement by which [it] requires its employees to consent to unlawful 

deductions from their wages.” (Hudgins v. Neiman Marcus Group, Inc. (1995) 34 

Cal.App.4th 1109, 1124 (Hudgins), italics omitted.)

Under the 1983 appointment agreement, appellant’s compensation was to be 

based on a certain percentage of the commissions earned by the sales people 

working in his district. Under California law, the obligation to pay a commission 

may be contingent on events that occur after the sale (such as the customer 

returning the merchandise), and amounts advanced to the salesperson may be 

deducted at a later date if the contingencies are not satisfied. (See Ralphs Grocery 

Co., supra, 42 Cal.4th at pp. 239-240 and cases cited therein.) The employer also 

may deduct expenses directly related to a sale, such as free shipping or free 

products offered by the salesperson to induce the sale. (See Aguilar v. Zep (N.D. 

Cal. Aug. 27, 2014) Case No. 13-CV-00563 – WHO [2014 U.S. Dist. LEXIS 

120315, at *49].) However, the preconditions to earning the commission must be 

“clearly expressed[,] generally . . . in writing,” “must relate to the sale,” and 
36

“cannot merely serve as a basis to shift the employer’s cost of doing business to the 

employee.” (Sciborski v. Pacific Bell Directory, supra, 205 Cal.App.4th at 

p. 1171; see Marr v. Bank of America, N.A. (9th Cir. 2013) 506 Fed. Appx. 661, 

[“Deductions from . . . commissions are permitted . . . when (1) the deductions are 

tied to the employee’s sales rather than general business expenses, and (2) the 

employee agrees to the deductions by contract.”]; Aguilar v. Zep, supra, [2014 

U.S. Dist. LEXIS 120315, at *49] [“Even if a contract exists . . . , an employer 

cannot shift the cost of doing business to an employee. . . . [Where] routine 

business expenses that shift the cost of doing business to the employee [are 

deducted from the employees’ commission-based compensation,] . . . [t]he fact that 

the [employees] consented to the practice is irrelevant.”].)

This principle was first propounded by the California Supreme Court in 

Kerr’s Catering. There, the employer promised a commission of 15 percent on all 

sales in excess of a certain minimum to the employees who sold food items from 

its lunch trucks, but deducted cash shortages resulting from the failure to properly 

charge for the sold items. The court held the deductions were improper, observing 

that “some cash shortages, breakage and loss of equipment are inevitable in almost 

any business operation” and should be borne as a “business expense,” rather than 

deducted from a promised commission. (Kerr’s Catering, supra, 57 Cal.2d at

p. 329.) This holding was applied to managerial employees in Quillian v. Lion Oil 

Company (1979) 96 Cal.App.3d 156 (Quillian). There, the court found that 

commissions similarly calculated on sales volumes and reduced by cash and 

merchandise shortages improperly placed the “burden of losses” on the managers 

and thus violated Labor Code section 221 and other statutory provisions, even 

though the managers had executed written contracts agreeing to this method of 

salary calculation. (Quillian, supra, 96 Cal.App.3d at pp. 159-160, 163.) 
37

More recently, in Hudgins, supra, 34 Cal.App.4th 1109, the court addressed 

an employer policy that promised salespersons commissions based on completed 

sales, but deducted on a pro rata basis returned merchandise that could not be 

traced to a particular sale or salesperson. The court found the policy “calls for 

deduction from earned commission wages of all sales associates a sum of money 

representing what would otherwise be business losses . . . .” (Hudgins, supra, at 

p. 1123.) The court explained that this was improper under Labor Code section 

221: “[T]he Legislature has recognized the employee’s dependence on wages for 

the necessities of life and has, consequently, disapproved of unanticipated or 

unpredictable deductions . . . .” (Hudgins, supra, at p. 1119.) “By enacting section 

221, and retaining it as interpreted by the courts and [the Industrial Welfare 

Commission], the Legislature has prohibited employers from using self-help to 

take back any part of ‘wages theretofore paid’ to the employee, except in very 

narrowly defined circumstances provided by statute.” (Id. at p. 1121.)21

In cases such as Kerr’s Catering, Quillian and Hudgins, the courts’ findings 

were based on the impermissibility of transferring to the employee, by way of 

wage deductions, the financial burden of business expenses that otherwise would

be borne by the employer. California law also prohibits other types of wage 

deductions taken for the sole benefit of the employer. In Agnew v. Cameron

(1967) 247 Cal.App.2d 619, the court rejected an employer’s attempt to recoup 

 

21 In Ralphs Grocery Co., supra, 42 Cal.4th 217, although finding in favor of the 

employer in the circumstances before it, the California Supreme Court cited Kerr’s 

Catering, Quillian and Hudgins with approval, stating that “statutes, regulations, and 

cases” prohibit an employer from “reduc[ing] individual employees’ wages to increase its 

own retained profits” by way of “deduction, setoff, or recapture of expected wages for the 

purpose of saddling employees with prohibited employer costs . . . .” (Id. at p. 236.) The 

Supreme Court expressed agreement with the principle that an employer may not “create 

an expectation of or entitlement to a specified wage, then take deductions or contributions 

from that wage to reimburse [the employer] for its business costs.” (Id. at p. 223.)
38

advances from an employee’s final compensation, where the employer failed to 

establish the parties’ agreement expressly permitted it. In Barnhill v. Robert 

Saunders & Co., supra, 125 Cal.App.3d 1, the employer deducted a balloon 

payment from the employee’s final check to recoup the balance due on a loan 

made to the employee a few months earlier. (Id. at p. 4.) The appellate court 

affirmed an award to the employee of the wages due and held that the employer 

was “not entitled to a setoff of debts owing it by an employee against any wages 

due that employee.” (Id. at pp. 6, 9.) The same conclusion was reached in 

California State Employees’ Assn. v. State of California (1988) 198 Cal.App.3d 

374, where the employer sought to recoup an accidental overpayment of wages by 

deducting sums from the employees’ current paychecks. The court agreed with 

Barnhill that “wages actually earned during the current pay period are due, and the 

fact that the employee owed a debt to the [employer], even for a prior

overpayment, does not ‘affect the validity or alter the amount of the current claim’ 

for wages earned.” (California State Employees’ Assn., supra, 198 Cal.App.3d at 

p. 378; accord, Sciborski v. Pacific Bell Directory, supra, 205 Cal.App.4th at 

p. 1166 [“Labor Code section 221 prohibits an employer from deducting amounts 

from an employee’s wages, even as a set-off for amounts clearly owed by the 

employee.”]; Phillips v. Gemini Moving Specialists (1998) 63 Cal.App.4th 563, 

574 [“[T]here is in this state a fundamental and substantial public policy protecting 

an employee’s wages, and that protection includes freedom from setoffs . . . .”]; see 

also Kerr’s Catering, supra, 57 Cal.2d at p. 325 [“[An employee’s wages are] . . .

generally beyond the reach of claims by creditors including those of an 

employer”].) 

Appellant presented evidence that amounts were deducted from the 

compensation paid him from 2004 to 2006, and from his final compensation. He 

testified that the deductions fell into four basic categories: (1) loan repayments; (2) 
39

repayment of commissions advanced; (3) premiums for his errors and omissions 

insurance policy; and (4) operational expenses, such as the computer equipment he 

used in his office, promotional mailers and stationery, contributions toward 

Farmers’s lobbying efforts, and advertisements.

With respect to loan repayments, the Division of Labor Standards 

Enforcement (DLSE) has taken the position that employers may take deductions to 

recover debts owed them, “provided that the amount of the deduction from any one 

paycheck cannot exceed the amount authorized by the employee for any such 

deduction, and that after making any such authorized deduction, the employee 

must still receive no less than the minimum wage . . . .” (DLSE Opn. Letter No. 

1999.09.22-1 (Sept. 22, 1999), at p. 3.)22 Otherwise, the employer must “pursue a 

civil action to recover any unpaid debt from the employee.” (Ibid.) Farmers 

contends appellant authorized all the deductions taken from his compensation, but 

provides no citation to the record supporting this assertion. Our own review of the 

record reveals no evidence that appellant agreed to have a balloon payment taken 

from his final compensation.23

Similarly, with respect to commission advances, California law permits an 

employer to recover the excess of advances over commissions where there is an 

agreement in place to do so. (Agnew v. Cameron, supra, 247 Cal.App.2d at p. 622; 

Koehl v. Verio, Inc. (2006) 142 Cal.App.4th 1313, 1330.) Farmers does not direct 

us to any agreement permitting it to recover the advances it withheld from 

 

22 DLSE opinion letters, “‘“‘while not controlling upon the courts by reason of their 

authority, do constitute a body of experience and informed judgment to which courts and 

litigants may properly resort for guidance.’”’” (Brinker Restaurant Corp. v. Superior 

Court (2012) 53 Cal.4th 1004, 1029.)

23 Neither the loan documents nor any of the other exhibits pertaining to deductions 

taken from appellant’s compensation are included in the record provided by the parties. 
40

appellant’s final compensation, and our review of the record reveals none. (See 

Agnew v. Cameron, supra, at p. 624 [employer bears burden of establishing 

existence of agreement requiring return of advances on commissions when 

employee resigns].)

Farmers contends the premiums for appellant’s errors and omissions policy 

represented a “personal expense.” This is contrary to legal authority. California 

law directs employers to indemnify employees for all expenses and losses incurred 

in direct consequence of the discharge of their duties, “requir[ing] the employer not 

only to pay any judgment entered against the employee for conduct arising out of 

his employment but also to defend an employee who is sued for such conduct.” 

(Jacobus v. Krambo Corp. (2000) 78 Cal.App.4th 1096, 1100.) Thus, the errors 

and omissions policy was for the benefit of Farmers.24 (See Gattuso v. Harte-Hank 

Shoppers, Inc. (2007) 42 Cal.4th 554, 567-568 [recognizing California law 

requires employers to reimburse employees for automobile insurance expenses

when vehicles are used for work]; Estrada v. FedEx Ground Package System, Inc., 

supra, 154 Cal.App.4th at p. 19 [affirming trial court order requiring employer to 

reimburse drivers wrongly treated as independent contractors for “obtaining 

liability insurance”]; DLSE Opn. Letter No. 1993.02.22-3 (Feb. 22, 1993), at p. 2 

[employer may not require employees to purchase automobile insurance at their 

own expense, as employers are liable for “losses due to accident or theft while the 

vehicle is being used for the purposes of the employer”].) 

 

24 Although Labor Code section 224 permits deductions “to cover insurance,” that 

provision has been interpreted to apply to insurance for the benefit of the employee, such 

as medical or dental coverage. (City of Oakland v. Hassey (2008) 163 Cal.App.4th 1477, 

1501, citing 3 Ops.Cal.Atty.Gen. 178, 179 (1944); Lindell v. Synthes USA, supra, 

__ F.Supp.3d at p. __ [2014 U.S. Dist. LEXIS 1940 at *50], fn. 22; DLSE, Enforcement 

Policies and Interpretations Manual (Jan. 2009, rev.), ¶ 11.3.3, “Allowable Deductions,” 

p. 11-3.)
41

With respect to the remaining disputed deductions, they appear on their face 

to be for standard business expenses, not chargeable to an employee, even a 

commissioned sales employee. Farmers contends the deductions were for 

expenses that “increase[d] the basis on which [appellant’s] commissions were 

calculated” and were, therefore, properly charged to him. As appellant’s 

commissions were based on his agents selling Farmers’s insurance, every 

additional dollar he earned represented an increase to Farmers’s bottom line. A 

DLSE opinion letter addressing whether the expense of hiring an assistant could be 

charged to an insurance company’s commissioned sales manager explains why 

such expenses are not transferable: “[Labor Code provisions] announce the longstanding policy of the State of California in regard to an employer’s obligation to 

pay all costs his employee expends or loses in carrying out the duties of the 

employment. The employment of more help to either sell insurance or help with 

the paperwork so that others would be free to sell more insurance is . . . a ‘direct 

consequence of the discharge of [the manager’s] duties.’ [¶] As is clear from the 

[Labor Code], under the California law, an employer may not ‘pass through’ the 

normal costs of operating a business to the employee he hires. Debiting an 

employee’s earned wages to cover a normal operating expense of the employer is 

not allowed in California.” (DLSE Opn. Letter No. 2000.08.01 (Aug. 1, 2000), at 

p. 4.) Stated succinctly: “It would appear to be axiomatic that any increase in the 

amount of legitimate sales made by an agent of an insurance company would 

normally be expected to result in an increase in the profits of the company” and 

therefore, “inure to the benefit of [the company].” (Id. at p. 3.)

Farmers contends appellant bore the burden of establishing that the expenses 

at issue were both “necessary” and “directly incurred in the discharge of 

[appellant’s] duties.” (Italics omitted.) We disagree. An employee seeking to 

recover under Labor Code section 2802 for business expenses paid out of pocket 
42

must show that the expenditures were “necessarily expend[ed] in direct 

consequence of the discharge of the employee’s duties.” (Grissom v. Vons 

Companies, Inc. (1991) 1 Cal.App.4th 52, 57, italics omitted.) However, that 

burden does not apply to the wage claim presented here, where appellant

established that Farmers took deductions for apparently business-related expenses 

directly from his paychecks. Under Labor Code sections 221 and 224, the 

employer bears the burden of establishing that such deductions are authorized by 

law. (See Lindell v. Synthes USA, supra, __ F.Supp.3d at p. __ [2016 U.S.Dist. 

LEXIS 1940 at *47-49] [granting employee’s motion for summary judgment 

where employer failed to establish deductions were “permitted by any of [the] 

exceptions identified in [Lab. Code] section 224 (or any other statute)”].) 

Appellant’s evidence established that certain deductions taken by Farmers 

appeared to be for ordinary business expenses not falling into any of the categories 

authorized by statute or decisional authority. With respect to each expense, he 

described the specific business-related purpose, and testified that it was incurred at 

the express instruction of Farmers.25 That showing was sufficient to support a 

prima facie case. 

 

25 We reject Farmers’s contentions that appellant’s wage claim represents an attempt 

to revive the Labor Code section 2802 claim omitted from his complaint. The two claims 

are distinct. As explained, section 2802 permits an employee to claim reimbursement for 

all funds the employee establishes were necessarily and reasonably spent on 

employment-related duties or enhancing the employer’s business; a wage claim under 

Labor Code sections 221 and 224 is limited to amounts deducted from the employee’s 

compensation. We also reject Farmers’s contention that appellant did not raise his wage 

deduction theory until after the failure of his requests to amend the complaint to add a 

section 2802 claim. Farmers itself cites portions of the record in which its counsel and 

the court acknowledged that appellant was asserting a claim for “failure to pay 

wages”/“deductions from [his] paycheck.” Moreover, a claim for failure to pay wages 

appears in the original complaint and in the operative 5th AC, and during discussions of 

appellant’s motions to amend, his counsel referenced the “hundreds of thousands of 

dollars, if not more” improperly taken out of appellant’s compensation “because he was 

(Fn. continued on next page.)
43

In sum, in support of his wage claim, appellant presented evidence that 

multiple deductions were taken from his compensation that were not clearly 

authorized by law. Farmers persuaded the trial court that it was entitled to a 

directed verdict, but fails on appeal to direct us to evidence entitling it to judgment 

as a matter of law. Accordingly, we conclude the court erred in granting the 

directed verdict. Our conclusion with respect to the wage claim necessarily revives 

appellant’s UCL claim to the extent it is based on failure to pay wages and seeks 

restitution to recover such wages. (See Cortez v. Purolator Air Filtration Products 

Co., supra, 23 Cal.4th at pp. 177-178.)26

 

treated as an independent contractor not as an employee.” We further note that when 

appellant and his expert presented evidence of the funds deducted from his paychecks 

and the purposes for which these funds were spent, Farmers did not object on the ground 

that these matters were not at issue.

26 Nothing in our opinion may be construed to revive the Labor Code section 2802 

claim. Appellant did not appeal the trial court’s denial of his motions to amend to insert 

that claim, and in any event, we discern no error in the court’s rulings. Thus, appellant’s 

claim that the amounts he borrowed from Farmers, or any other funds in his possession 

and control, were used to pay business expenses reimbursable under that provision 

remains foreclosed.
44

DISPOSITION

The judgment in Farmers’s favor on appellant’s claim for wrongful 

termination is affirmed. The court’s order denying appellant attorney fees, costs, 

and injunctive and declaratory relief on this claim is affirmed. The court’s order 

granting a directed verdict on appellant’s wage claim is reversed. Absent 

resolution of appellant’s wage claim, the court’s finding that Farmers was the 

prevailing party entitled to costs is premature. Accordingly, we also reverse that 

finding. The matter is remanded for retrial of appellant’s wage claim and the UCL 

claim to the extent it seeks restitution for Farmers’s alleged failure to pay wages. 

Each side shall bear its own costs on appeal.

CERTIFIED FOR PUBLICATION

MANELLA, J.

We concur:

EPSTEIN, P. J.

WILLHITE, J.