Espejo v. Copley Press, Inc.

Newspaper home delivery carriers were properly found to be employees, covered by Labor Code wage, hour, and expense reimbursement provisions, not independent contractors.  Substantial evidence supported the trial court’s finding that newspaper home delivery carriers were employees, not independent contractors, for purposes of Labor Code wage, hour, and expense reimbursement provisions.  The newspaper controlled how the carriers performed their duties.  Though they could be discharged at will, many carriers remained in the paper’s employ for many years, carrying out a necessary part of the paper’s business which was not itself a distinct occupation or business.  To take advantage of the enhanced-compensation defense (to a claim for reimbursement of expenses under Lab. Code 2802) approved in Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal.4th 554, the employer must not only pay the employee more in order to compensate the employee for reimbursable expenses but also at or near the time of payment, provide the employee with a means of apportioning the increased compensation between pay and expense reimbursement.  Here, for the most part, Copley did not provide the required information and so could not defend its non-payment of reimbursable expenses. However, in some instances, the statements it gave its newspaper carriers itemized credits for the carriers’ inclusion of inserts in the delivered papers during the week and debits for Sunday inserts placed by newspaper personnel.  The itemization was sufficient to allow a carrier to determine if the credits (pay) offset the debits (expenses).  Plaintiff failed to prove sufficiently that debits exceeded credits on a classwide basis, so could not recover for this category of expense.  The trial court did not err in holding plaintiffs were entitled to a private attorney general fee award under CCP 1021.5 in a class action for recovery of unreimbursed employment expenses on behalf of a class of newspaper home delivery carriers.  The financial burden of the litigation exceeded the expected recovery at the time the class was certified as shown by the eventual lodestar fee award of $6 million against a class recovery of $3 million.  The trial court also did not abuse its discretion in not separating fees for unsuccessful claims since it ordered that 25% of the fee award be recovered from the common fund recovery and only 75% be recovered in addition from the defendant under CCP 1021.5.  The trial court did not abuse its discretion in not awarding a multiplier on the lodestar amount as it could have found that the quality of representation did not greatly exceed the quality normally expected from equally experienced and compensated attorneys.

California Court of Appeal, Fourth District, Division 1 (McConnell, P.J.); July 7, 2017; 2017 WL 2889186

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