Metropolitan News-Enterprise


Thursday, June 15, 2017


Page 11



Civil Rights: The CIA, Torture, the State Supreme Court and the Fate of Independent Contactors




 (The writer is a prominent California trial and appellant attorney, who specializes in representing victims of childhood and adult sexual abuse. He is the author of several legal articles published in various legal publications. Wall is a former judicial officer for the Los Angeles County Superior Court having been appointed as a Juvenile Court referee, and judge pro temp. He has served on the Ethics committees for the California State Bar and Los Angeles County Bar and has been recognized as an expert in legal ethics by the Los Angeles County Superior Court. He also serves as a securities arbitrator for the Financial Industry Regulator Authority and previously served as a securities arbitrator for the National Association of Securities Dealers.)

After the attack of 9/11, the CIA retained noted psychologists James Mitchell and John Jessen to design and carry out harsh interrogation techniques against suspected terrorists being held by the United States. Mitchell and Jessen entered into written contracts with the CIA for their services.

Recently, two alleged suspected terrorists who sustained substantial injuries, allegedly from the torture inflicted by the CIA and designed by Mitchell and Jessen desired to bring a lawsuit for damages for their injuries. However, their attorneys informed them that under the Military Commissions Act they could not sue the CIA or its agents. Yet, the attorneys believed they might be able to sue Mitchell and Jessen if the psychologists were considered “independent contractors” and not mere agents of the CIA.

The lawsuit was filed in Federal Court and the psychologists promptly sought to have the case dismissed. However, the noted jurist, U.S. District Judge Justin L. Quackenbush, in a landmark ruling, refused to dismiss the case and in another motion held the facts, so far presented, did not establish that the psychologists were agents of the CIA but were independent contractors.

The California Supreme Court has on its docket the case of Dynamex Operations West v. Superior Court (S222732) involving the actual definition of independent contractors and while it does not involve, the CIA or torture, its importance may be far greater than the issues being faced by Quackenbush. The U.S. Chamber of Commerce has warned that the California Supreme Court decision in Dynamex could “effectively eliminate independent contractor status in California.”

‘Common Law Test’

 The California Supreme Court states, the issue before the court is whether defining the difference between distinguishing employees and independent contractors should be the “common law test” as discussed in S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, or should the new test, based on the Industrial Welfare Commission definition which was construed in Martinez v. Combs (2010) 49 Cal.4th 35? And, while the high court has not publically stated, a third option could be a combination of the two tests or perhaps a brand new test.

Since the case has been before the California Supreme Court since November 2014 and is presently awaiting supplemental briefs from the parties, one can surmise the high court understands the importance of its decision. However, perhaps the delay has also been caused by a lack of agreement among the justices as to which test should be adopted, which as discussed previously has been an issue for the justices in prior cases involving the issue of independent contractors.

For example, the present court seems to indicate the majority opinion in Borello (supra) was adopting the common law test regarding the issue. However, a reading of the majority opinion in Borello shows that the members of the court made it clear it was not basing its decision on the common law which it defined as “The distinction between independent contractors and employees arose at common law to limit one’s vicarious liability for the misconduct of a person rendering service to him. The principal’s supervisory power was crucial in that context because “... [t]he extent to which the employer had a right to control [the details of the service] activities was ... highly relevant to the question whether the employer ought to be legally liable for them...”

Majority’s Opinion

The majority opinion felt that, while “control of the worker” was very important to the issue, control was not the only factor and the objectives behind the enactment of the Workers Compensation Act must also be taken into consideration in deciding the issue. The majority understood that the rules and practices of employment relations had changed since the common law enactment of what constitutes an independent contractor. The court’s rejection of the common law test was the reason U.S. Supreme court Justice Marcus Kaufman in his dissenting opinion in Borello wote, “Will Rogers is reported to have articulated the folk wisdom: “If it ain’t broke, don’t fix it.” That is sound advice for any branch of government; it should be adhered to religiously by the judiciary.” The majority, however, felt the system was indeed broken and needed to be fixed.

Interesting is also the concurring opinion of Justice California Supreme Court Justice Ming Chin in Ayala v. Antelope Valley Newspapers, Inc. 59 Cal.4th 522(2014) where he questioned the majority opinion which critized the trial court for apparently following the factors noted in Borello. Chin stated “the trial court here simply did what Borello required it to do.” The majority had held the trial court had asked the wrong questions.

In Martinez v. Combs the issue was not the wrong questions but rather which definition to use.

The unanimous decision has been criticized as confusing or at least showing the difficulty the Court was having with the issue based on a statute enacted almost hundred years ago.

Section 1194

Labor Code §1194 was enacted to allow a person to recover minimum wages not paid to them by their employer. For the very first time, the high court was asked to define the term “employer.” The court, held the definition adopted by the Industrial Welfare Commission (“IWC”) should be used rather than the federal definition. However, the IWC definition is not that simple. While it incorporated the common law definition of employment the IWC used it as only one of three alternatives. As the court stated:

“To employ, then, under the IWC’s definition, 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 at p.35).

One can argue that the alternative definitions allows more flexibility but at the expense of less clarity. Based on what has happened since Martinez one has to wonder if the expense was worth it?

Interesting, the high court in Martinez discussed the Borello decision which plaintiffs had relied on but held, “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.”

Therefore, even though the court felt Borello did not apply, it felt obligated to explain that even if the case did apply, the results would be the same. One can argue that at least some members of the high court was not completely certain the Borello was not applicable.

In Ayala, the majority of the court stated it was waiting for another day to tackle the question whether the IWC Wage order tests for employer status also govern the determination of employee status. The “another day” came when the high court accepted for review the decision by the Court of Appeals for the Second Appellate District, Division 7 in Dynamex. The Court of Appeals based on the Martinez decision had held that claims that fall under the IWC Wage Order are to be resolved under the IWC definition and claims that do not fall under the IWC Wage order are controlled by the definition stated in Borello.

In 1989, the California Supreme Court after reviewing the developments in the employer-employee relationship believed that sufficient changes had occurred which required a reexamination of the term “independent contractor.” In 2017 the California Supreme Court is faced again with changes in the relationship which requires another re-examination of the term “independent contractor.”

Is it time to erase the term “independent contractors” or do they still serve a useful purpose? It is hoped the high court can give the lower courts guidance on this very important issue.


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