Case 3:15-cv-05128-JSC Document 292 Filed 09/13/22 Page 1 of 5
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`RAEF LAWSON,
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`Plaintiff,
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`v.
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`GRUBHUB, INC., et al.,
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`Defendants.
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`Case No. 15-cv-05128-JSC
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`ORDER RE: PLAINTIFF’S MOTION
`FOR PARTIAL SUMMARY
`JUDGMENT
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`Re: Dkt. Nos. 253, 272, 274, 289, 290
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`The Court denied without prejudice Plaintiff’s motion for summary judgment, (Dkt. Nos.
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`253, 260), but construes the relevant portions as a motion for partial summary judgment on the
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`legal question of whether the ABC test applies to Plaintiff’s expense reimbursement claim, (Dkt.
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`No. 253 at 22–25; Dkt. Nos. 269, 272, 274).1 See Lawson v. Grubhub, Inc., 13 F.4th 908, 917 (9th
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`Cir. 2021) (“[W]e allow the trial court to decide in the first instance whether the ABC test applies
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`to Lawson’s expense reimbursement claim.”). The Court also ordered supplementary briefing on
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`the Ninth Circuit’s recent decision in Bowerman v. Field Asset Services, Inc., 39 F.4th 652 (9th
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`Cir. 2022). (Dkt. Nos. 287, 289, 290.) Having carefully considered the parties’ briefing, and with
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`the benefit of oral argument on July 7, 2022, the Court DENIES Plaintiff’s motion. The Borello
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`standard applies to Plaintiff’s expense reimbursement claim.
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`BACKGROUND
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`The operative complaint includes a claim for failure to reimburse business expenses in
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`violation of California Labor Code § 2802 and associated penalties. (Dkt. No. 41 at 8–10.) Under
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`Section 2802, “[a]n employer shall indemnify his or her employee for all necessary expenditures
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`1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the
`ECF-generated page numbers at the top of the documents.
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`Case 3:15-cv-05128-JSC Document 292 Filed 09/13/22 Page 2 of 5
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`or losses incurred by the employee in direct consequence of the discharge of his or her duties, or
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`of his or her obedience to the directions of the employer.” Cal. Lab. Code § 2802(a). Plaintiff
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`alleges that because Defendants misclassified him as an independent contractor, they failed to
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`reimburse him for expenses, such as use of his vehicle and cell phone, as required if he were
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`properly classified as an employee.2 A threshold question on this claim is whether Plaintiff was
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`properly or improperly classified as an independent contractor for purposes of Section 2802.
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`As of 2020, the ABC test governs whether a worker is an employee for purposes of a
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`Section 2802 claim. Bowerman, 39 F.4th at 665 n.11; Lawson, 13 F.4th at 917; see Cal. Lab.
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`Code §§ 2775(b), 2785(c). Previously, and at least prior to the California Supreme Court’s
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`decision in Dynamex Operations West v. Superior Court, 416 P.3d 1 (Cal. 2018), the Borello
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`standard applied. Estrada v. FedEx Ground Package Sys., Inc., 64 Cal. Rptr. 3d 327, 335 (Cal. Ct.
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`App. 2007); see S.G. Borello & Sons, Inc. v. Dep’t of Indus. Relations, 769 P.2d 399 (Cal. 1989).
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`Dynamex focused on employee classification in the context of California’s wage orders. 416 P.3d
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`at 5, 26, 40; see id. at 5 n.3 (explaining that “wage orders are constitutionally-authorized, quasi-
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`legislative regulations that have the force of law”). Dynamex “express[ed] no view” on the
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`question whether “the Borello standard is applicable to [a] cause of action under section 2802
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`insofar as that claim seeks reimbursement for business expenses other than business expenses
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`encompassed by the wage order.” Id. at 7 n.5; see Gonzales v. San Gabriel Transit, Inc., 253 Cal.
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`Rptr. 3d 681, 701 (Cal. Ct. App. 2019) (“Dynamex did not reach the question of whether the ABC
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`test applies to non-wage order related Labor Code claims.”), petition for review granted, 456 P.3d
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`1 (Cal. 2020), and dismissed, 481 P.3d 1144 (Cal. 2021).
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`Plaintiff worked for Defendants in 2015 and 2016, a period for which, as the Ninth Circuit
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`explained when it remanded this case, the relevant legal standard was not “clearly settle[d].”
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`Lawson, 13 F.4th at 917. Thus, the issue on this motion for partial summary judgment is whether
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`the Borello standard or the ABC test explicated in Dynamex governs Plaintiff’s Section 2802
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`claim.
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`2 (See Dkt. No. 41 at 10; Dkt. No. 253 at 22 n.10 (representing that he seeks reimbursement of
`expenses related to use of vehicle, not purchase or rental).)
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`Northern District of California
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`United States District Court
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`Case 3:15-cv-05128-JSC Document 292 Filed 09/13/22 Page 3 of 5
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`DISCUSSION
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`The Ninth Circuit’s recent decision in Bowerman settles the legal question here. There, the
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`plaintiffs worked for a company that “contracts with vendors who perform” “pre-foreclosure
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`property preservation for the residential mortgage industry.” 39 F.4th at 657. They alleged the
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`company willfully misclassified them as independent contractors rather than employees, resulting
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`in a “failure to pay overtime compensation and to indemnify them for their business expenses.”
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`Id.
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`Considering which employment test would resolve the threshold question of
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`misclassification, the Ninth Circuit explained:
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`Dynamex did not purport to replace the Borello standard in every
`instance where a worker must be classified as either an independent
`contractor or an employee for purposes of enforcing California’s
`labor protections. Rather, Dynamex was clear that it addressed only
`the issue of how to distinguish between employees and independent
`contractors with regard to those claims that derive directly from the
`obligations imposed by a wage order.
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`Id. at 664 (cleaned up). It then turned to the expense reimbursement claims:
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`Here, the class members’ expense reimbursement claims are not
`based on a California wage order, but on California Labor Code §
`2802. Nor are they “rooted in” a California wage order, even though
`the class members belatedly invoked Wage Order 16-2001 in their
`class certification briefing.
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`Id. at 665 (cleaned up).
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`Wage Order 16, similarly to other wage orders, requires that “[w]hen the employer
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`requires the use of tools or equipment or they are necessary for the performance of a job, such
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`tools and equipment shall be provided and maintained by the employer.” Cal. Code Regs. tit. 8, §
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`11160(8)(B). The court explained that the “tools and equipment” provision was not equivalent to
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`Section 2802, and thus the provision did not operate to lend Wage Order 16’s ABC test to the
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`Section 2802 claims:
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`Wage Order 16-2001 does not “cover most of the section 2802
`violations alleged,” and its provisions are not “equivalent or
`overlapping” with section 2802. Gonzales, 253 Cal. Rptr. 3d at 702,
`704. Although section 2802 covers “all necessary expenditures or
`losses incurred by the employee in direct consequence of the
`discharge of his or her duties,” Wage Order 16-2001 covers only
`“tools or equipment.” Indeed, many expenses for which class
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`members sought and recovered reimbursement at trial, including
`insurance, cellphone charges, dump fees, and mileage/fuel, are
`covered only by section 2802—not by Wage Order 16-2001’s “tools
`and equipment” provision. Thus, Borello, not Dynamex, applies to
`the expense reimbursement claims.
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`39 F.4th at 665 (cleaned up). Thus, because the plaintiffs’ Section 2802 claims were not based on
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`or rooted in a wage order, the Borello standard applied.
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`Bowerman means that a Section 2802 claim is not “based on” a wage order. Nor is it
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`“rooted in” a wage order if the applicable wage order does not require the employer to cover the
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`expenses that are the basis for the Section 2802 claim. Here, Plaintiff’s expense reimbursement
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`claim is based on Section 2802, not the wage order applicable to his industry, Wage Order 9. (See
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`Dkt. No. 41 at 8–10 (complaint citing Section 2802).) And Wage Order 9’s potentially applicable
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`provision substantially echoes Wage Order 16’s: “When tools or equipment are required by the
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`employer or are necessary to the performance of a job, such tools and equipment shall be provided
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`and maintained by the employer . . . .” Cal. Code Regs. tit. 8, § 11090(9)(B). Accordingly,
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`Bowerman’s holding that expenses such as “cellphone charges” and “mileage/fuel” are not
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`covered by Wage Order 16’s “tools and equipment” provision applies equally to Wage Order 9’s
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`provision.
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`Plaintiff attempts to distinguish Bowerman by distinguishing Wage Order 16, which covers
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`“on-site” workers in the construction, drilling, logging, and mining industries, from Wage Order 9,
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`which covers the transportation industry and workers like Plaintiff. See Cal. Code Regs. tit. 8, §§
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`11090, 11160. But Bowerman’s analysis was based on the language of the “tools and equipment”
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`provision, not on the industrial context. Therefore, Bowerman’s interpretation of the provision
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`applies equally to another wage order with a nearly identical provision.
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`The Court acknowledges that Bowerman did not cite the basis for its conclusion that
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`expenses including “insurance, cellphone charges, dump fees, and mileage/fuel, are covered only
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`by section 2802—not by Wage Order 16-2001’s ‘tools and equipment’ provision.” 39 F.4th at
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`665. And the Court is not aware of authority specifically concluding that Wage Order 9’s “tools
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`and equipment” provision would exclude claimed expenses for use of a vehicle and cell phone.
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`Compare Gonzales, 253 Cal. Rptr. 3d at 706 (noting allegations that plaintiffs had to “install
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`Case 3:15-cv-05128-JSC Document 292 Filed 09/13/22 Page 5 of 5
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`equipment and provide tools to access [the] dispatch system,” “obtain insurance,” and “perform
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`maintenance”), 701–04 (explaining that “failure to reimburse expenses . . . in violation of section
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`2802 is encompassed by Wage Order No. 9,” but remanding to the trial court to consider in the
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`first instance whether the plaintiffs’ expense reimbursement claim was so encompassed), with
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`Salter v. Quality Carriers, Inc., No. CV 20-479-JFW(JPRx), 2021 WL 5049054, at *8 (C.D. Cal.
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`Oct. 27, 2021) (holding that a vehicle itself is not a “tool” under Wage Order 9), appeal docketed,
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`No. 21-56291 (9th Cir. Nov. 30, 2021), and Estrada, 64 Cal. Rptr. 3d at 344–47 (same).
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`Nonetheless, the Court is bound by Bowerman. See Hart v. Massanari, 266 F.3d 1155,
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`1170–71 (9th Cir. 2001). No California Court of Appeal has since issued a conflicting decision,
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`nor has the California Supreme Court. See Owen ex rel. Owen v. United States, 713 F.2d 1461,
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`1464 (9th Cir. 1983) (“Our interpretation [of California law] was only binding in the absence of
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`any subsequent indication from the California courts that our interpretation was incorrect.”).
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`Accordingly, the Borello standard applies to Plaintiff’s expense reimbursement claim
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`* * *
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`under Section 2802.
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`CONCLUSION
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`Plaintiff’s motion for partial summary judgment, (Dkt. No. 253 at 22–25), is DENIED.
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`The Court will hold the further case management conference at 9:00 a.m. on September 15, 2022,
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`by Zoom video.
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`This Order disposes of Docket No. 272 (Defendants’ opposition).
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`IT IS SO ORDERED.
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`Dated: September 13, 2022
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`JACQUELINE SCOTT CORLEY
`United States District Judge
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