Nasiri v. T.A.G. Security Protective Services Inc.

Background

Nasiri alleged that the defendants violated California and federal labor laws. His second amended complaint asserted nine claims: failure to pay overtime under California law; violation of the Fair Labor Standards Act (FLSA); failure to provide meal and rest breaks; failure to pay wages on time; failure to provide complete and accurate wage statements; failure to pay all wages at termination; failure to reimburse business expenses; failure to pay wages for split shifts; and violation of California’s Unfair Competition Law.

TAG hired Nasiri as a security guard in June 2015 and provided his training and work assignments. PSG later began processing TAG’s payroll and securing workers’ compensation insurance for TAG employees. PSG became a named employer for Nasiri for payroll and workers’ compensation purposes, and Nasiri signed an employment agreement with PSG stating that he was an at-will PSG employee. PSG’s relationship with TAG ended two days later.

PSG moved for summary judgment, which is a ruling entered without a trial when the court finds that no genuine dispute over an important fact requires a trial and that the moving party is entitled to judgment under the law. PSG argued that it was not liable because it only provided payroll and workers’ compensation services and did not employ Nasiri. Nasiri argued that a genuine dispute existed over whether PSG was his employer.

California employment claims

The court applied California’s three alternative definitions of employment: control over wages, hours, or working conditions; the power to cause or allow the person to work; and a common-law employment relationship based on control over the details of the work.

The court found no evidence that PSG controlled Nasiri’s wages, hours, working conditions, or other day-to-day employment matters. TAG controlled its own activities, and the evidence did not show that TAG’s chief executive officer acted as PSG’s agent. The court also found no evidence that PSG had the power to cause Nasiri to work or prevent him from working.

Under the common-law test, the court focused on control over the details of employment. PSG handled payroll processing and workers’ compensation insurance but did not control any aspect of Nasiri’s work. The court held that the employment-agreement label did not change the result because the parties’ label does not control when their actual conduct shows a different relationship.

The court therefore held that PSG was not Nasiri’s employer under California labor law and granted PSG’s motion for summary judgment on Nasiri’s first, third, fourth, fifth, sixth, seventh, and eighth claims.

Fair Labor Standards Act claim

For the FLSA claim, the court applied the Ninth Circuit’s economic-reality test. That test considers whether the alleged employer had the power to hire and fire, supervised and controlled work schedules or employment conditions, determined pay, and maintained employment records.

The court found that none of those factors supported treating PSG as Nasiri’s employer. TAG, not PSG, had the power to hire and fire Nasiri and to supervise and control his work schedule and employment conditions. PSG did not set his pay or maintain his employment records. The court therefore granted PSG’s motion for summary judgment on Nasiri’s second claim.

Unfair Competition Law claim and disposition

Nasiri’s Unfair Competition Law claim was based on his labor-law claims. Because the court rejected his California and federal labor-law claims against PSG, it also granted PSG’s motion for summary judgment on the ninth claim.

The court granted PSG’s motion for summary judgment in full. Because no claims remained against PSG, the court directed the Clerk to terminate PSG as a party. The opinion text does not identify the magistrate judge by name.