Opinion ID: 2630272
Heading Depth: 6
Heading Rank: 1

Heading: Defendant Apio.

Text: Plaintiffs next argue that defendant Apio, through its contractual relationship with Munoz, dominated his business financially and thus exercised indirect control over his employees' wages and hours. [47] In making this argument, plaintiffs seek to portray Munoz as a straw man, engaged by Apio to shield itself from agricultural workers' wage claims. Certainly Wage Order No. 14's definition of employer, which encompasses any person . . . who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person, [48] is broad enough to reach through straw men and other sham arrangements to impose liability for wages on the actual employer. The undisputed facts, however, show that Munoz alone controlled plaintiffs' wages, hours and working conditions. Plaintiffs contend Apio indirectly controlled Munoz's ability to pay his employees because Apio unilaterally decided the amount of estimated net proceeds to advance to Munoz as Pick-Pack payments, and because Apio demanded that Munoz continue to harvest produce that would not produce a net return. Apio's right to set off its expenses, however, was simply an aspect of its contractual relationship with Munoz. Munoz had made a profit from the same relationship in prior years. Plaintiffs note that Apio reduced its Pick-Pack payments below the $2 level initially set by contract as the end of the season neared and the market deteriorated, but the contract unequivocally permitted Apio to set off its expenses before remitting net proceeds. Moreover, nothing in the record shows that Apio ever compelled Munoz to harvest on any occasion. Although Munoz had strong incentives to harvest fresh market berries for Apio in order to repay Apio's preseason advance and also to make a profit for himself, he testified without contradiction that he, alone, decided which fields to harvest on any given day and whether to harvest strawberries for fresh market sale or for the freezer. So far as the record discloses, negotiations between Apio and Munoz over the amount of fresh market berries to be delivered took place in the field, after Munoz had already informed Apio that he planned to harvest fresh market berries from the Oceano or Zenon field on a given day. While Munoz stated on May 27, 2000, during the work stoppage in El Campo, that he could not pay his workers because Apio was withholding payment, the undisputed facts show that Apio had paid Munoz ahead of schedule and more than it was eventually determined to owe him. More importantly, plaintiffs' factual assertions do not establish that Apio's business relationship with Munoz allowed the company to exercise control over Munoz's employees' wages and hours. In making the argument, plaintiffs ignore the following undisputed facts: First, Munoz operated a single, integrated business operation, growing and harvesting strawberries for several unrelated merchants and combining revenue from all sources with a personal investment, in the hope of earning a profit at the end of the season. Munoz paid his employees out of those combined revenues and assets. Second, Munoz had losses unrelated to his business with Apio from his unsuccessful business with Ramirez Brothers, who paid Munoz nothing during the 2000 season. Third, Munoz had substantial revenue from other sources on May 27, 2000. On that same day, Frozsun paid Munoz $149,340, bringing to $181,003 the amount it had paid him since April 29. This source of revenue continued until August 12, by which date Frozsun had paid Munoz a total of $476,955. Finally, Munoz alone, with the assistance of his foremen, hired and fired plaintiffs, trained and supervised them, determined their rate and manner of pay (hourly or piece-rate), and set their hours, telling them when and where to report to work and when to take breaks. Plaintiffs' claim that Apio dominated Munoz's financial affairs cannot be reconciled with these facts. Taking a different approach not based on the applicable wage order, plaintiffs attempt to compare this case with S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 [256 Cal.Rptr. 543, 769 P.2d 399] ( S.G. Borello ), in which we held that workers hired by a large agricultural landowner under sharefarmer agreements were employees rather than independent contractors for purposes of the workers' compensation law. (§ 3200 et seq.) The sharefarmers, we found, exhibit no characteristics which might place them outside the Act's intended coverage of employees. They engage in no distinct trade or calling. They do not hold themselves out in business. They perform typical farm labor for hire wherever jobs are available. They invest nothing but personal service and hand tools. They incur no opportunity for `profit' or `loss'; like employees hired on a piecework basis, they are simply paid by the size and grade of cucumbers they pick. They rely solely on work in the fields for their subsistence and livelihood. (48 Cal.3d at pp. 357-358, fns. omitted.) Applying the common law test of employment in light of the remedial purposes of the workers compensation law, we reasonably concluded the sharefarmers were, [w]ithout doubt, . . . a class of workers to whom the protection of the [workers' compensation law] is intended to extend. ( Id., at p. 358, fn. omitted.) Assuming the decision in S.G. Borello, supra, 48 Cal.3d 341, has any relevance to wage claims, a point we do not decide, the case does not advance plaintiffs' argument. Plaintiffs are correct in that, if Munoz had been Apio's employee rather than an independent contractor, Munoz's employees arguably would also have been Apio's employees; the determination that a purported independent contractor is in fact an employee raises the strong possibility, generally speaking, that the contractor and its employer jointly employ the contractor's employees. ( Rinaldi v. Workers' Comp. Appeals Bd. (1991) 227 Cal.App.3d 756, 759 [278 Cal.Rptr. 105], and cases cited.) But Munoz was not Apio's employee. In contrast to the sharefarmer-employees in S.G. Borello, Munoz held himself out in business, invested substantial capital and equipment, employed over 180 workers, sold produce through four unrelated merchants, enjoyed an opportunity for profit or loss dependent on his business acumen and market conditions, and had indeed made a profit in prior years operating in the same manner. Next, plaintiffs argue Apio controlled their wages on June 8 or 9, 2000, when Apio's vice-president Tim Murphy cooperated with the DLSE and Munoz to ensure that Munoz used Apio's final advance of net proceeds to pay his workers. (See, ante, at p. 47.) The argument fails. At that time, as noted, Murphy gave Munoz a check for $77,662, Munoz endorsed the check to the bank, and the bank immediately issued cashier's checks payable to 71 employees whose names Munoz had provided. In so doing, Apio participated with the government in what amounts to a garnishment of money owed to Munoz for the benefit of his employees. To hold on this basis that Apio controlled plaintiffs' wages would punish Apio for cooperating with the DLSE's attempt to enforce the wage laws and likely deter future cooperation by other employers. Viewing the undisputed evidence in the light most favorable to plaintiffs, we find no basis for concluding Apio exercised control over plaintiffs' wages and hours.