Castillo v. Amos Michael Faraon

Background

Celeste Castillo, Natacha Damphousse, and Agustin Arganaraz sued Amos Michael Faraon and Reed Mountain Pharms LLC over unpaid compensation for work performed on Faraon’s cannabis farm in Humboldt County, California, between October and November 2023. The workers said they had been promised hourly and piece-rate compensation but were not paid. Their complaint asserted seven claims, including a claim under the Fair Labor Standards Act (FLSA) and California claims for overtime wages, minimum wages, late-payment penalties, individual liability, unfair business practices, and penalties under the Private Attorneys General Act (PAGA).

The plaintiffs moved for summary judgment under Rule 56 on all claims. Reed Mountain Pharms LLC did not oppose the motion, and Faraon filed a response that did not dispute the plaintiffs’ factual evidence.

Federal Wage Claim

The court denied the plaintiffs’ motion on their FLSA claims and granted summary judgment for Faraon. The FLSA requires an employee to establish that the law covers the employment, either because the employee engaged in interstate commerce or because the employer met the requirements for enterprise coverage. The court found that the plaintiffs’ work on the California cannabis farm did not involve interstate movement of people or goods. It also found that the plaintiffs provided no evidence establishing enterprise coverage. The court therefore concluded that FLSA coverage had not been established.

Employee Status and PAGA Claim

The court applied California’s “ABC” test, under which a worker is presumed to be an employee unless the hiring business proves three conditions: the worker was free from the business’s control, performed work outside the business’s usual course, and operated an independently established business of the same type.

The court held that Faraon did not establish those conditions. The undisputed evidence showed that he drove the plaintiffs to the farm, gave them daily instructions, and ran the farm’s operations. Faraon also provided no evidence showing that the plaintiffs’ work was outside the usual course of his business or that they operated independent businesses of the same type. The court therefore granted summary judgment for the plaintiffs on whether they were employees.

The court did not grant judgment on whether Faraon willfully misclassified them as independent contractors. Under the applicable statute, willful misclassification requires voluntarily and knowingly avoiding employee status. The court found that the plaintiffs had not provided evidence establishing willfulness. It held that a factual issue remained and denied summary judgment on that issue. The court stated that PAGA damages could be considered after a bench trial on willfulness.

Individual and Corporate Liability

The court treated the plaintiffs’ claim under California Labor Code section 558.1 as a means of imposing individual liability for the other California Labor Code violations, rather than as a separate stand-alone claim. It held that section 558.1 can impose liability on an owner, director, officer, or managing agent who violates or causes violations of specified wage provisions.

The court found that Faraon was the plaintiffs’ employer and was responsible for employment policies and decisions, including assigning their daily tasks. It therefore held that both Faraon and Reed Mountain Pharms LLC could be held liable for the California Labor Code violations at issue.

California Wage Claims

The court granted summary judgment on the plaintiffs’ California overtime claim. It found that the plaintiffs established that they worked overtime and were not paid, and that Faraon submitted no employment records or other evidence creating a genuine dispute of material fact. The court held that Faraon and Reed Mountain Pharms LLC were jointly and severally liable for violations of California Labor Code sections 510 and 1198.

The court also granted summary judgment on the California minimum-wage claim based on the evidence that Faraon refused to pay the plaintiffs for their work. It held that the defendants were jointly and severally liable under California Labor Code sections 1197 and 1194. In this subsection, however, the opinion describes the ruling as granting the motion on the “overtime claim,” even though the surrounding analysis concerns minimum wages.

The court granted summary judgment on the claim for waiting-time penalties. It found that Faraon intentionally failed or refused to pay wages when required and that he did not claim a good-faith dispute about whether the wages were owed. The defendants were therefore held jointly and severally liable for violations of California Labor Code sections 201 through 203.

The court granted summary judgment on the claim under California’s unfair competition law. It found that the defendants’ failure to pay wages and other Labor Code violations constituted unlawful business practices. The plaintiffs could not recover the same unpaid-wage damages twice, so damages would be awarded under only one overlapping claim.

Damages and Further Proceedings

The court did not calculate the final damages award. It found that the plaintiffs’ evidence was helpful in estimating hours worked but insufficient to calculate overtime and piece-rate damages. The plaintiffs had not adequately supported their use of agricultural overtime phase-in rules, had not explained how to treat work that may have occurred after harvest, and had not supplied sufficient information about the number of employees. They also lacked adequate legal support for their method of calculating overtime for mixed hourly and piece-rate compensation.

The court further noted that the plaintiffs’ requested totals differed among their motion, declarations, and spreadsheets, and that they had not provided the formulas underlying the totals. It concluded that the plaintiffs had not yet proved the amount of damages. After the bench trial on PAGA damages, the plaintiffs would be required to submit additional briefing and evidence addressing these problems.

Disposition

The court concluded that the motion for summary judgment was granted in part and denied in part. The plaintiffs obtained judgment on employee status and several California wage claims, while Faraon obtained summary judgment on the FLSA claims and the plaintiffs did not obtain judgment on willful misclassification. The court stated that the plaintiffs were entitled to damages, reasonable attorney’s fees, and costs, but left the amount of damages for later proceedings. The parties were ordered to meet and confer and file a joint statement within thirty days addressing the timing of a bench trial, further damages briefing, and a motion for attorney’s fees.