Noe v. Superior Court

Case Updates

In its decision, the California Court of Appeal, Second Appellate District held that California Labor Code Section 226.8, which deals with willful misclassification of employees, does not create a private cause of action.

Further, the court held that a company does not engage in willful misclassification under Section 226.8 simply by contracting with another company that is alleged to have improperly classified employees as independent contractors. Specifically, the court noted that ““[m]erely employing workers who have been willfully misclassified by a co-employer is, standing alone, insufficient [for liability] … we fail to see how an employer could ‘engage in’ the act of voluntarily and knowingly misclassifying a joint employee without any knowledge that the employee has been misclassified.”

In its brief, the Chamber urged the California Court of Appeal to reject the theory that a company can engage in “willful misclassification” under California Labor Code Sections 226.8 simply because it contracts with another company that is alleged to have improperly classified employees as independent contractors. The brief explains that the plaintiffs’ theory ignores the plain meaning of the statutory text and would unreasonably impose severe liability, including civil penalties, on companies who had no control over the allegedly improper decision.

Michael J. Lotito and Elizabeth Parry of Littler Mendelson, P.C. represented the U.S. Chamber of Commerce as co-counsel to the U.S. Chamber Litigation Center.