DYNAMEX OPERATIONS WEST v. S.C.

Amicus Curiae Brief of Chamber of Commerce of the United States of America and California Chamber of Commerce, Supplemental Brief

Cal.January 23, 2017

suPREMECOURTCOPY OIP'Y S92973y DISTRICT ATTORNEY REQUIREDBY BUS. & PROF. CODE, §17209 AND CAL. RULES OF COURT, RULE 8.212(C). IN THE SUPREME COURTOF CALIFORNIApreye court FILED DYNAMEX OPERATIONSWEST,INC., JAN 23 2017 Petitioner, fr f Jorge Navarrete Clerk U. \ Deputy THE SUPERIOR COURT OF THESTATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES, Respondent, CHARLES LEEetal. Real Parties in Interest. ON REVIEW FROM A DECISION BY THE COURT OF APPEAL, SECOND APPELLATE DISTRICT, DIVISION SEVEN * CASE No. B249546 SUPPLEMENTAL BRIEF OF CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA AND CALIFORNIA CHAMBER OF COMMERCE HORVITZ & LEVY LLP *JOHN A. TAYLOR,JR. (BAR No. 129333) JEREMY B. ROSEN (Bar No. 192473) FELIX SHAFIR (BAR No. 207372) BUSINESS ARTS PLAZA 3601 WEST OLIVE AVENUE, 8TH FLOOR BURBANK, CALIFORNIA 91505-4681 (818) 995-0800 + FAX: (844) 497-6592 jtaylor@horvitzlevy.com jrosen@horvitzlevy.com fshafir@horvitzlevy.com ATTORNEYS FOR AMICI CURIAE CHAMBER OF COMMERCEFORTHE UNITEDSTATES OF AMERICA; CALIFORNIA CHAMBER OF COMMERCE TABLE OF CONTENTS Page TABLE OF AUTHORITIES 0.00... cece eecccceescesssseeeesseeeesseecsaseveenses li INTRODUCTION.0.0... ceececcceeeceeeeeneeseeeseeeeseeeneeeeseeeeeseesssessscessaeees 1 LEGAL ARGUMENT0...ieeececeeceeeeeeneeeeeseeessseesesssueeseseceseeesnaes 3 I. II. Il. THE DLSE MANUAL, ALTHOUGH NOT BINDING ON COURTS, MAY BE CONSIDERED FOR ITS PERSUASIVE VALUE.2.000... eeeeeceeceeeeeeeeteeeseteeseeesseessseeceas 3 THE DLSE MANUAL’S STRUCTURE AND CONTENT CORRECTLY REFLECT THAT BORELLOS COMMONLAW TEST, RATHER THAN THE WAGE ORDERS’ DEFINITION OF AN “EMPLOYER,” GOVERNS WHETHER WORKERS ARE INDEPENDENT CONTRACTORS........0..cccceeeceeee 7 THE DLSE MANUAL AND OPINION LETTERS FURTHER REFLECT THAT THE IWC WAGE ORDER TESTS CAN BE HARMONIZED WITH THE BORELLO COMMONLAWTEST.....0....ceccceeseccseeesceeseees 12 A. The DLSE Manualaffirmsthat “right of control” is the determinative consideration underlying both the common law and IWCtests. .0.00....eeeeeeeeeeeeee 12 The DLSEopinionletters further clarify that the common law and IWC tests should not be meaningfully different in application when determining whois an independent contractor........ 15 CONCLUSION00.00. eeccceceeeceeneeceseeceneesseseeecseeeesaeeecesecssecssecenas 17 CERTIFICATE OF WORD COUNT.....o eee cecccccecseceessesssesseeeens 19 TABLE OF AUTHORITIES Cases Aleman v. Atrtouch Cellular (2012) 209 Cal.App.4th 556 2.00.0... eeeeeeeeeenseeeeeeee Augustus v. ABM Security Services (Dec. 22, 2016, 8224853) Cal.5th __ (2016 WL 74078328) .00...... eee cceceeccesseseeeeeeestneeeeeeeeenes Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522 00...cccccceeeeesnteeeeeeeeeees Bradley v. Networkers Internat., LLC (2012) 211 Cal.App.4th 1129 w..ceccccccsssssessssseseseeses Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004.00... ceeecceseeeeeessseceeeeseneees Church v. Jamison (2007) 143 Cal.App.4th 1568 oo... ecceeseeeeeeeeees Harris v. Superior Court (2011) 53 Cal.4th 170 .........cccceecccccceecssecceeseneeeeeeseeens Isner v. Falkenberg/Gilliam & Associates, Inc. (2008) 160 Cal.App.4th 1398...ceceeeeeseteeees Marin v. Costco Wholesale Corp. (2008) 169 Cal.App.4th 804 0.0... eececccceeeteneeees Martinez v. Combs (2010) 49 Cal4th 35 00.0... cceccessreeeeseeeeeeessneeees Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575 ..ccccccccssecscsssesecssessesstessessesseeses Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094.00... eeeeecsseeesseteessseneeeees ul Page(s) weeeeeeeeeeesssaees 6 beeseeeeeeeneeees 16 vevteeeeees 13, 14 veeeeceeeeeeeeeee 15 eeeeeeeeeceneees 16 eetteeeeeeeeeees 6 vee aaeeeeecenenen 16 veseeeeeeeeeeeeeees 6 weeeeeeeeeeeeeeeees 6 beteeeeeeepassim seeteeseseceeeeeees 6 waseeeneceeeteneees 4 Nordstrom Com. Cases (2010) 186 CalApp.4th 576 00... cceecccccccccceeesesecceeecesseaaeess 6 Peabody v. Time Warner Cable, Inc. (2014) 59 Cal.4th 662.00...ccccsccssseccecescseceeeesecssscasssnsecs 5 S. G. Borello & Sons, Inc. v. Deptartment of Industrial Relations (1989) 48 Cal.3d 841 oo...ccccccceecceeussessseeesseesaenseeespassim Schachter v. Citigroup, Inc. (2009) 47 Cal.4th 610.0...eececcccsecccccsstsecccesseesececsaneees 5 Sciborski v. Pacific Bell Directory (2012) 205 Cal.App.4th 1152 oo...cece ccccesssssecececceeeeasaaeeeees 6 See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889 .......cccccessesssccsecsessrenstereesess 6 Sumuel v. Advo, Inc. (2007) 155 Cal.App.4th 1099 o.oo...cececeeecseeseceecesecceceaeaees 6 Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557ooo.eceeecccseecescceterecceesesseees 4,5,6 Tieberg v. Unemployment Ins. App. Bd. (1970) 2 Cal.3d 948 ooocccccccccccssssseasseccsceccessaerveseeeeeceenea 13 United Parcel Service Wage & Hour Cases (2010) 190 Cal.App.4th 1001 0...ccceccsceccceeeseseeseeeeeeeesauee 6 Vranish v. Exxon Mobil Corp. (2014) 223 Cal.App.4th 108 oo...ceeccccccsscesecesssssececanees 6 Miscellaneous No. 1994.04.11 (Apr. 11, 1994) eee ec cccccccccccssessccccsecaccescecececceccecsesessssssseecesceeceeeeeecerseseeeecesers 17 No. 1997.05.27 (May 27, 1997) oooe cece ccccccccceccsssccceeceeeeceesecccceecesssesssssstesseceseesesesseecceceetteeeesers 17 lil Cal. Dept. of Industrial Relations, DLSE Opn.Letter No. 2000.05.17-1 (May 17, 2000) [as of Jan. 18, 2017].) The issue presented by this appeal is which test should control when distinguishing between employees and independent contractors—the commonlawtest discussed in S. G. Borello & Sons, Inc. v. Deptartment of Industrial Relations (1989) 48 Cal.3d 341 (Borello), or the Industrial Welfare Commission (IWC)definitions as construedin Martinez v. Combs (2010) 49 Cal.4th 35 (Martinez). The DLSE Manual, while not binding on California courts because it was not adopted in compliance with the state’s Administrative Procedures Act, may nonetheless be considered for its persuasive value in answering that question. The DLSE Manualis relevant to deciding this appeal for two primary reasons. First, the DLSE Manual supports Dynamex’sposition that the IWC wage order tests discussed in Martinez apply only to the determination of who is an employer, and that the Borello common law test continues to provide the proper test for distinguishing between employees and independent contractors. The DLSE Manualdoes so in several ways:(a) by providing separate sections for making those determinations; (b) by exclusively applying the Borello methodology for deciding whois an independent contractor rather than an employee; and (c) by applying the IWC wageorder tests only for determining whois an employer, particularly in the potential joint employmentsituation at issue in Martinez. Second, in the event this Court rejects Dynamex’s position, then the DLSE Manualis relevant to whether the IWC wageorder tests can and should be harmonized with the Borello common law test in determining when a worker is an employee or an independentcontractor. The DLSE Manual answersthat question by affirming that the extent to which the hirer has the “right of control” is the determinative consideration underlying both the common law and IWCtests. To avoid upsetting decadesof settled law, and the loss of economic benefits that would result if the IWC tests were applied in a manner that essentially eliminates independentcontractor status for any use in California asplaintiffs’ proposed test would do, the IWC tests should at a minimum be harmonized with the Borello commonlaw test, with a focus on the extent to which thehirer has the right to control the work. Indeed, as explained below, the DLSE has donejust that in several opinion letters providing guidance on determining when a workeris an employee or an independent contractor. LEGAL ARGUMENT I. THE DLSE MANUAL, ALTHOUGH NOT BINDING ON COURTS, MAY BE CONSIDERED FOR ITS PERSUASIVE VALUE. This Court's supplemental briefing order, which asks the parties to address the relevance of specified sections of the DLSE Manual, raises the broader question of what relevance, if any, should be given to the DLSE Manualby courts as a general matter. The short answeris that while the DLSE Manualis not binding on California courts becauseit was not adopted in accordance with the Administrative Procedure Act, it may nonetheless be considered for its persuasive value when determined to be consistent with California law. A brief historical review is in order. The IWC “is the state agency empoweredto formulate regulations (known as wageorders) governing employment in the State of California.” (Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557, 561 (Tidewater), emphasis added.) By contrast, the DLSE, which is headed by the Labor Commissioner,“is the state agency empowered to enforce California’s labor laws, including IWC wage orders.” (Id. at pp. 561-562, emphasis added.) Although the Legislature defunded the IWC in 2004, its wage orders remain in effect. (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1102, fn. 4.) In the late 1980s, “the DLSE prepared a formal ‘Operations and Procedures Manual’ ”that incorporated previous enforcement policies and interpretations and “reflected ‘an effort to organize . .. interpretative and enforcementpolicies’ of the agency and ‘achieve some measure of uniformity from one office to the next.’” (Tidewater, supra, 14 Cal.4th at p. 562.) This Court held that particular provisions in the DLSE Manual were “regulations and therefore are void because they were not adopted in accordance with” the Administrative Procedure Act. (id. at p. 561.) Accordingly, courts “can give no weight” to the DLSE Manual’s interpretation of the IWC wageorders because “‘[t]o give weight to [an improperly adopted regulation] in a controversy that pits [the agency] against an individual memberof exactly that class the [Administrative Procedure Act] sought to protect ... would permit an agencyto flout [the Administrative Procedure Act] by penalizing those who wereentitled to notice and opportunity to be heard but received neither.” (Id. at p. 576.) Nonetheless, this Court further held that while courts should not “defer” to the DLSE manual’s wageorderinterpretations, they should not necessarily reject those interpretations. (Tidewater, supra, 14 Cal.4th at pp. 576-577.) Even where courts decide “not to give weight to an agency interpretation, [they] nevertheless consider[ ] whether that interpretation was correct.” (Id. at p. 577.) Following Tidewater, the DLSE hascontinued to publish its Manual with the intent to “summarize[] the policies and interpretations which DLSEhasfollowed and continuesto follow in discharging its duty to administer and enforce the labor statutes and regulations of the State of California.” (DLSE Manual, supra, Acknowledgements.) While reaffirming that it gives the “DLSE’s current enforcementpolicies” in the DLSE Manual “no deference because they were not adopted in compliance with the Administrative Procedure Act” (Martinez, supra, 49 Cal.4th at p. 50, fn. 15), this Court has nonetheless sometimes adopted an interpretation of an enforcement policy in the DLSE Manual after “having independently determinedthat it is correct.” (Peabody v. Time Warner Cable, Inc. (2014) 59 Cal.4th 662, 670; accord, e.g., Schachter v. Citigroup, Inc. (2009) 47 Cal.4th 610, 621-623 [relying on the DLSE Manual].)! 1 At other times, the Court has simply declined to address whether a policy stated in the DLSE Manual is correct. (See Martinez, (continued...) Applying Tidewater, the Courts of Appeal have generally treated the DLSE Manualas containing appropriate and persuasive interpretations of wage and hour law when the court concludes those interpretations are consistent with California law. (See,e.g., Vranish v. Exxon Mobil Corp. (2014) 223 Cal.App.4th 103, 112; See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 902; Sciborski v. Pacific Bell Directory (2012) 205 Cal.App.4th 1152, 1167, 1171, 1174; United Parcel Service Wage & Hour Cases (2010) 190 Cal.App.4th 1001, 1011; Nordstrom Com. Cases (2010) 186 Cal.App.4th 576, 584-585, 587 & fn. 5; Marin v. Costco Wholesale Corp. (2008) 169 Cal.App.4th 804, 815-816; Jsner_ v. Falkenberg/Gilliam & Associates, Inc. (2008) 160 Cal.App.4th 1393, 1399; Sumuel v. Advo, Inc. (2007) 155 Cal.App.4th 1099, 1109.) Although the Courts of Appeal have sometimesdisregarded: the DLSE Manual, they have done so only after independently concludingit does not accurately interpret California law. (See,e.g., Aleman v. Atrtouch Cellular (2012) 209 Cal.App.4th 556, 573; Church v. Jamison (2007) 143 Cal.App.4th 1568, 1578-1579.) In sum, although the interpretations of IWC wageorders in the DLSE Manual are not controlling, California courts may independently consider them for whatever persuasive value or weight they carry. (...continued) supra, 49 Cal.4th at p. 50, fn. 15; Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 581-582.) Il. THE DLSE MANUAL’S STRUCTURE AND CONTENT CORRECTLY REFLECT THATBORELLO’S COMMON LAW TEST, RATHER THAN THE WAGE ORDERS’ DEFINITION OF AN “EMPLOYER,” GOVERNS WHETHER WORKERS ARE INDEPENDENT CONTRACTORS. In Martinez, this Court applied three alternative tests set by IWC’s wage orders to determine which of multiple possible employers could be sued as joint employers by workers whom nobody disputed were employees. (Martinez, supra, 49 Cal.4th at pp. 64, 66, 68-77.) Dynamex’s briefs on the merits explain why the IWC wage order tests should not be extended beyond the joint employmentcontext addressed in Martinez to govern cases in which workerschallenge their independent contractor status. Consistent with Dynamex’s position, the DLSE Manual reveals that the DLSE—theentity charged with enforcing the IWC orders—likewise does not believe that the IWC wageordertests at issue in Martinez, howeverthey could be construed, should govern whether a workeris an employee rather than an independentcontractor. The DLSE Manual correctly reflects that the IWCtests should be limited to the specific context addressed by Martinez— determining whether multiple possible employers can all be sued as joint employers by workers whom no onedisputes were employees. The DLSE Manualfurther confirms that the question whether a worker is an independent contractor should be governed by the common law test explicated in Borello, and not by the IWCtests. The DLSE Manualdoesso by adopting the Borello methodology for deciding whois an independentcontractor rather than an employee, without mentioning any other test described in Martinez. Those other tests are instead mentioned only ina separate section of the DLSE Manualthatdescribes thedistinct definition for an employer, and Martinez is cited only in that separate section. This Court’s supplemental briefing order specifically directs the attention ofthe parties and amicito sections 2.2 and 2.2.1 ofthe DLSE Manual, as well as to sections 28 through 28.4.2.4. Section 2.2.1 states that one section of the DLSE Manual concerns when “Joint employers” may share responsibility for an employee's wages, while a separate section of the DLSE Manual concerns when a workeris an independent contractor: Asexplainedin detail at Section 37.1.2 of this Manual, it is possible that two separate employerentities (joint employers) may share responsibility for the wages due an employee. Also, at Section 28 of this Manual, there is a detailed discussion on how to distinguish between an employee and an independentcontractor. (DLSE Manual, supra, § 2.2.1.) Section 37.1.2—to which section 2.2.1 refers for its regulation of “joint employers”—recognizes that the “broad definition of ‘employer’” under wage and hourlaw “allows more than one person to be liable for unpaid wages andpenalties” because “there may be more than one entity responsible for the payment of wagesor other benefits.” (DLSE Manual, supra, § 37.1.2.) Correspondingly, section 28 et seq.—to whichsection 2.2.1 refers for its “discussion on how to distinguish between an employee and an independent contractor’—deals with the subject of “INDEPENDENT CONTRACTOR vs. EMPLOYEE.” (DLSE Manual, supra, § 28.) Section 2.2.1 thus supports the view that the wage orders’ definition of an “employer” is meant to govern only the joint employer analysis, and does not govern the distinct question, at issue here, of which workers are independent contractors rather than employees. Section 2.2.1 refers to section 37.1.2 as the specific section governingthe joint employer context basedonits definition of an “employer,” whereas section 2.2.1 refers to a different section—28 et seq.—for the methodology by which employers can distinguish between employees and independent contractors. In other words, by distinguishing between the joint employer concept on the one hand andthe independent contractor/employee context on the other, and by referencing two different sections that utilize different legal principles, section 2.2.1 recognizes that the definition ofwho constitutes an employer does not govern the distinct question of who constitutes an employee. Section 2.2 further confirms that the questions of who is an employer and who is an employee should not be conflated and governed by the sametest, as urged by plaintiffs. Section 2.2 contains a definition of “Employer,” which the DLSE Manualstates “is set forth in the Wage Orders promulgated by the Industrial Welfare Commission at Section 2 (see Section 55.2.1.2 of this Manual).” (DLSE Manual, supra, § 2.2.) Although the current version of the Manual does not include a “Section 55.2.1.2,” section 55.2 explains whatthe definition of an “employer” is under the wage orders: Definition Of “Employer”. The definition of employer for purposesof California’s labor lawsis set forth in the Wage Orders promulgated by the Industrial Welfare Commission. [] To employ under the IWC definitions has three alternative definitions. “It means(a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work,or (c) to engage, thereby creating a common-law employment relationship.” Martinez |, supra,] 49 Cal.4th 35 (DLSE Manual, supra, § 55.2.) In sharp contrast, section 28 et seq. of the DLSE Manualcontains no reference to Martinez, the IWC tests for determining who is an employer, or anything else to suggest that those tests have superseded the commonlaw test set forth in Borello that for more than a century has been used to determine whena workeris an independent contractor. (See DLSE Manual, supra, §§ 28-28.4.2.4.) Of final andparticular significance is the fact that Section 28 et seq. of the DLSE Manual—which section 2.2.1 references as governing “how to distinguish between an employee and an independent contractor’—expressly adopts the common law test explicated in Borello for making that determination. Section 28.3, for example, providesthat: In determining whetheran individual providingservice to anotheris an independentcontractor or an employee, there is no single determinative factor. Rather, it is necessary to closely examinethe facts of each service relationship and to then apply the “multi-factor” or “economic realities” test adopted by the California Supreme Court in Borello, supra, 48 Cal.3d 341. 10 (DLSE Manual, supra,§ 28.3, emphasis added;see also, e.g., id. §§ 28.2 [citing Borello's presumption of employment]; 28.3.1 [summarizing pre-Borello law], 28.3.2 [discussing Borello’s “departure from [an] overriding focus on control over work details”], 28.3.2.1 [acknowledging that “the right to control the work remains a significant factor” andlisting the “additional factors” identified in Borello “that mustbe considered”).) To sum up the DLSE’sview,then, the wageorders’ definition and Martinez’s analysis of that definition goes to the question of whois an employer, and especially to the issue of potential joint employmentsituation at issue in Martinez. The fact that section 2.2.1 then refers to a different provision of the Manual—section 28 et seq., with its summaryofthe Borello common law test—for “how to distinguish between an employee and an independent contractor,” rather than to section 55.2 with its definition of an employer, confirms that Martinez’s assessment of who constitutes an employer underthe wage orders should not control the distinct question of who constitutes an employee. The DLSE Manualthus supports Dynamex’s view that the determination of when a worker is an independent contractor should continue to be determined under the multi-factor common law test explicated in Borello. As Dynamex’s briefs on the merits correctly explain, this view is fully consistent with and supported by California law, confirming the propriety of the DLSE Manual’s approach. 11 lll. THE DLSE MANUAL AND OPINION LETTERS FURTHER REFLECT THAT THE IWC WAGE ORDER TESTS CAN BE HARMONIZED WITH THE BORELLO COMMONLAW TEST. A. The DLSE Manualaffirmsthat “right of control”is the determinative consideration underlying both the common law and IWCtests. In our original amici brief we explained why, if the Court disagrees with Dynamex and extends the IWC tests beyond the joint employment context to govern employeestatus as well, those tests should not be interpreted and applied as if they imposed materially different limitations than those set in Borello for determining who is an employee under the commonlaw test. Rather, because the critical requirement under both Borello’s common law test and the IWCtests is the right of control, the common law and IWCtests should be harmonized, thereby avoiding the disruption of decades of settled law, and the numerous substantive problemsthat wouldarise ifthe IWC tests were applied in a mannerthat eliminated independent contractor status for most or virtually all service providers in California. (See Amici Curiae Brief of Chamber of Commerceofthe United States ofAmerica and California Chamber of Commerce (ACB) 20-34.) The DLSE Manual supports this approach. As previously noted, sections 28 through 28.4.2.4 of the Manual address the standardsfor distinguishing between independent contractors and 12 employees. While cautioning against using the “‘control’ test . .. rigidly andin isolation,” the DLSE Manualstates that the “right to control the work remainsa significant factor,” along with the “additional factors that must be considered.” (DLSE Manual, supra, § 28.3.2.1.) These secondary factors, which are described in several of section 28’s provisions, are part of the Borello common law test and many of them are merely further indicia of hirer control sufficient to make the worker an employee. (See, e.g., Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522, 539 (Ayala) [explaining that certain secondary factors are “relevant to support an inference that thehireeis, or is not, subject to the hirer’s direction and control”]; Tieberg v. Unemployment Ins. App. Bad. (1970) 2 Cal.3d 943, 953 [describing various factors for assessing whether workers are independent contractors or employees—like whether“their work involvesskill,” or whether “they do not work on the [hirer’s] premises,” or whether“they are paid by the job rather than by the hour’—and explaining “[t]hese factors are merely evidentiary indicia of the right to control”); DLSE Manual, supra, § 28.3.1 [explainingthat, “[p]rior to Borello, the leading case on the subject was Tieberg”(italics added)].) Thus, the DLSE Manual’s approachis entirely consistent with past Supreme Court precedent, which recognizes that Borello calls for a multi-factor assessment but emphasizes that “control over how a result is achieved lies at the heart of the common law test for employment” and thus “what matters under the common law is... how much control the hirer retains the right to exercise.” (Ayala, supra, 59 Cal.4th at p. 533.) 13 Just like Borello’s common law test, all three IWC tests likewise hinge on therightof control: 1. The “common law employment relationship” test (Martinez, supra, 49 Cal.4th at p. 64) is the same commonlawtest articulated by this Court in Borello. (ABOM 54 [plaintiffs explaining that IWC’s “ ‘common law employment relationship’ ” test “is defined by the commonlawcriteria included in the Borello factors test”]; see also ACB 23.) 2. The “exercises control over the wages, hours, or working conditions” of workers test focuses on actual control of the work. (Martinez, supra, 49 Cal.4th at pp. 71-74.) This IWC test is therefore narrower than Borello’s common law test, which focuses on the hirer’s right to control the work. (Ayala, supra, 59 Cal.4th at pp. 531-532.) Because the right to exercise control necessarily precedes the actual exercise of control, the IWC’s “exercises control” test is subsumed within the Borello commonlaw test. (ACB 29-30.) 3. The “suffer, or permit to work” test hinges on the extentofthe hirer’s right to control the work, because an employer “suffers or permits... work by failing to prevent it” only “while having the powerto do so.” (Martinez, supra, 49 Cal.4th at p. 69.) In other words, the hirer’s right to control the workeris required under the “suffer, or permit to work” test, and this Court has therefore held that mere knowledge that plaintiffs were working and that plaintiffs’ work benefited defendants does not create employer status underthat test. (Id. at p. 70; see also ACB 25-29.) Thus, both Section 28 et seq. of the DLSE Manual and past Supreme Court precedent are consistent with harmonizing all 14 possible tests for determining independent contractor status, including those discussed in Martinez, becausetheyall hinge on the extent to which the hirer has the right to control the work. Thatis exactly the approach taken in Bradley v. Networkers Internat., LLC (2012) 211 Cal.App.4th 1129, 1147, which held that “under the Borello or Martinez tests ... , the focusis not on the particular task performed by the employee, but the global nature ofthe relationship between the worker and the hirer, and whether the hirer or the worker had the right to control the work.” (Emphasis added.) In other words, undereither the Borello commonlawtest or the IWC tests, class treatment should depend on whether there is common proof of a right of control that is “uniform throughout theclass.” (Ud. at pp. 1146-1147.) B. The DLSE opinion letters further clarify that the commonlaw and IWCtests should not be meaningfully different in application when determining whois an independent contractor. In addition to its Manual, the DLSE has issued several opinionletters providing guidance on determining when a workeris an employee or an independent contractor. While relying on the Borello common law test as providing the general framework for making that determination, two of the DLSEopinionletters also include references to the IWC tests. But in doing so, the opinion letters focus on the right of control as the propertest for assessing whether workers are independent contractors. In other words, the 15 DLSE opinion letters, like the DLSE Manual, confirm that in practical application the IWC tests, even if applicable to determining independent contractor status, should not lead to different results than the Borello commonlaw test when those tests are properly construed. The DLSEopinionletters, “while not controlling upon 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, fn. 11, internal quotation marks omitted; accord, Augustus v. ABMSecurity Services (Dec. 22, 2016, $224853) __ Cal.5th _—« [2016 WL 7407328, at p. *6; Harris v. Superior Court (2011) 53 Cal.4th 170, 190.) The DLSE’swebsite contains links to several opinion letters that focus on the control test for determining whois an employee. As an example, an opinion letter on independent contractor status was issued on May17, 2000 after this Court’s Martinez decision. (Cal. Dept. of Industrial Relations, DLSE Opn. Letter No. 2000.05.17-1 (May 17, 2000) [as of Jan. 18, 2017].) In analyzing whether certain registered nurses are employees or independentcontractors, the letter focuses extensively on the common law test in Borello, and in particular on the right of control. But the letter also discusses andapplies one of the IWCtests analyzed in Martinez— the “exercises control over the wages, hours, or working conditions” of workers test. (E.g., id. at p. 3.) The letter focuses on right of control and stresses that “control over the means and mannerin 16 which the workis performed remainsthe mostsignificant factor in determining whether an employmentrelationship exists.” (Id. at p. 5.) Thus, the letter further confirms that right of control remains the proper test for assessing whether workers are independent contractors, and that in practical application, the Borello common law test and the IWCtests, properly construed, should lead to the sameresult. Other DLSEopinionletters likewise confirm the importance of the right of control test. (See, e.g., Cal. Dept. of Industrial Relations, DLSE Opn. Letter No. 1994.04.11 (Apr. 11, 1994) p. 2 [as ofJan. 18, 2017] [“suggest[ing] that [the recipient of the opinion letter] review the case ofBorello[, supra,] 48 Cal.3d 341 . . . for an overview of the relationship of employer/employee versus independent contractor/principal”]; Cal. Dept. of Industrial Relations, DLSE Opn. Letter No. 1997.05.27 (May 27, 1997) p. 2 [as ofJan. 18, 2017] [“It seemsthe differentiation between paid extras and what [the recipientof theletter] call[{s] promotional extras comes down to a matter of control”].) CONCLUSION For the reasons explained above, this Court should hold either that the common law test as explicated in Borello remains the exclusive test for determining independent contractor status, or should harmonize the three tests set forth in Martinez by holding 17 that the Borello factors associated with the right of control are determinative underall three tests. January 20, 2017 HORVITZ & LEVY LLP JOHN A. TAYLOR,JR. JEREMY B. ROSEN FELIX SHAFIR » flaylf John Af’Taylor, Jr. Attorneys for Amici Curiae CHAMBER OF COMMERCE FOR THE UNITED STATES OF AMERICA; CALIFORNIA CHAMBER OF COMMERCE 18 CERTIFICATE OF WORD COUNT (Cal. Rules of Court, rule 8.204(c)(1).) The text ofthis brief consists of 4,038 words as counted by the Microsoft Word version 2010 word processing program used to generate thebrief. Dated: January 20, 2017 JohyfA. Taylor, Juf ‘ 19 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES At the timeof service, I was over 18 years of age and nota partyto this action. I am employed in the County of Los Angeles, State of California. My business address is Business Arts Plaza, 3601 West Olive Avenue, 8th Floor, Burbank, California 91505-4681. On January 20, 2017, I served true copies of the following document(s) described as SUPPLEMENTAL BRIEF OF CHAMBER OF COMMERCE OF THE UNITED STATES OFAMERICAAND CALIFORNIA CHAMBER OF COMMERCEontheinterested parties in this action as follows: SEE ATTACHED SERVICELIST BY MAIL: I enclosed the document(s) in a sealed envelope or package addressed to the persons at the addresses listed in the Service List and placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with Horvitz & Levy LLP’s practice for collecting and processing correspondencefor mailing. On the same day that the correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. I declare underpenalty ofperjury underthe lawsofthe State of California that the foregoingis true and correct. Executed on January 20, 2017, at Burbank, California. Ville Cty, a Millie Co ley SERVICE LIST Dynamex Operations West, Inc. v. The Superior Court ofLos Angeles County Case No. S222732 Robert G. Hulteng Damon M.Ott Littler Mendelson PC 333 Bush Street, 34th Floor San Francisco, CA 94104 Attorneysfor Petitioner DYNAMEX OPERATIONS WEST, INC. Ellen M. Bronchetti Paul S. Cowie Sheppard Mullin Richter & Hampton LLP Four Embarcadero Center, 17th Floor San Francisco, CA 94111 Attorneys for Petitioner DYNAMEX OPERATIONS WEST, INC. A. Mark Pope Pope, Berger, Williams & Reynold LLP 401 West B Street, Suite 2000 San Diego, CA 92101 Attorneys for Real Parties in Interest CHARLES LEE and PEDRO CHEVEZ Kevin Ruf Glancy, Prongay & Murray 1925 Century Park East, Suite 2100 Los Angeles, CA 90067 Attorneys for Real Parties in Interest CHARLES LEE and PEDRO CHEVEZ Jon R. WilliamsBoudreau Williams LLP666 State Street .San Diego, CA 92101 Attorneys for Real Parties in InterestCHARLES LEE and PEDROCHEVEZ Della Burnett Impact Fund 2210 K Street, Suite 201 Sacramento, CA 95816 Anthony Mischel National Employment Law Project 405 14th Street, Suite 401 Oakland, CA 94612 Jean H. Choi Los Angeles Alliance For A New Economy 464 Lucas Avenue, Suite 202 Los Angeles, CA 90017 Attorneys for Amicus Curiae CALIFORNIA RURAL LEGAL ASSISTANCE FOUNDATION; NATIONAL EMPLOYMENT LAW PROJECT; LOS ANGELES ALLIANCE FOR A NEW ECONOMY; LA RAZA CENTRO LEGAL; LEGAL AID SOCIETY- EMPLOYMENT LAW CENTER; ASIAN AMERICANS ADVANCING JUSTICE-LA; IMPACT FUND; ALEXANDER COMMUNITY LAW CENTER; UCLA CENTER FOR LABOR RESEARCH; WOMEN’S EMPLOYMENTRIGHTSCLINIC; WORKSAFE MoniqueOlivier Duckworth Peters Lebowitz Olivier LLP 100 Bush Street, Suite 1800 San Francisco, CA 94104 Attorneys for Amicus Curiae CALIFORNIA EMPLOYMENT LAWYERS ASSOCIATION Michael Rubin Altshuler Berzon LLP 177 Post Street, Suite 300 San Francisco, CA 94108 Attorneys for Amicus Curiae SERVICE EMPLOYEES INTERNATIONAL UNION; UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION; INTERNATIONAL BROTHERHOOD OF TEAMSTERS Andrew R.Livingston Orrick Herrington & Sutcliffe 405 HowardStreet San Francisco, CA 94105 Lauri A. Damrell Orrick Herrington & Sutcliffe 400 Capitol Mall, Suite 3000 Sacramento, CA 95814 Attorneys for Amicus Curiae CALIFORNIA EMPLOYMENT LAW COUNCIL; EMPLOYERS GROUP Hon. Michael L. Stern Los Angeles Superior Court 111 N. Hill Street, Dept. 62 Los Angeles, CA 90012 Case No. BC332016 California Court of Appeal Second Appellate District, Division Seven 300 S. Spring Street, 2nd Floor North Tower Los Angeles, CA 90013 Case No. B249546 Attorney General Appellate Coordinator Office of the Attorney General Consumer Law Section 300 S. Spring Street Los Angeles, CA 90013-1230 Service Required by Bus. & Prof. Code, § 17209 and Cal. Rulesof Court, rule 8.212(c) District Attorney’s OfficeCounty of Los Angeles320 West Temple Street, #540Los Angeles, CA 90012 Service Required by Bus. & Prof.Code, § 17209 and Cal. RulesofCourt, rule 8.212(c)\ \