Ortolivo v. Precision Dynamics International, LLC

Background

Daniel Ortolivo was the sole owner and sole employee of American Automotive Financial Services, Inc. (“AAFS”), which he founded in 2006. AAFS contracted with consulting and training companies to provide training to automotive manufacturers and dealerships. Precision Dynamics International, LLC (“PDI”) had a contract with Nissan North America to provide dealership training through the NBEST Program. Ortolivo acted as a facilitator for that program from August 2008 through March 2021.

After Nissan required budget reductions, PDI reduced the number of facilitators. PDI offered Ortolivo the Texas market, but he declined. For the following fiscal year, PDI engaged Ashley Carey for that market and used Kevin Minne to cover Ortolivo’s market. PDI said it did not renew Ortolivo’s relationship because there were fewer dealerships in Northern California and because it had concerns about his treatment of PDI staff and other facilitators. When the relationship ended, Ortolivo was 65, Minne was 64, and Carey was 41.

Ortolivo claimed that PDI misclassified him as an independent contractor and thereby violated provisions of California’s Labor Code and applicable wage orders. PDI argued that he was an independent contractor or, alternatively, that the parties had a qualifying business-to-business relationship under California Labor Code section 2776. Ortolivo also claimed that PDI did not renew his contract because of his age, asserting claims under California’s Fair Employment and Housing Act and for wrongful termination in violation of public policy.

Ortolivo’s Motion on Worker Status

The court denied Ortolivo’s motion for partial summary judgment on his status as an employee and on the business-to-business exemption. Summary judgment is appropriate only when there is no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law.

The court discussed two possible tests for deciding whether Ortolivo was an employee or an independent contractor. The first was California’s “ABC test,” under which a worker is presumed to be an employee unless the hiring entity proves all three required factors. The second was the test from S.G. Borello & Sons v. Department of Industrial Relations, which applies under the business-to-business exemption and focuses principally on the hiring entity’s right to control how the work is performed.

The court found genuine disputes of fact concerning several requirements of the business-to-business exemption. Those disputes included whether PDI controlled the way Ortolivo performed his work or only the results, whether he provided services directly to PDI rather than to PDI’s customer, whether AAFS and PDI were engaged in the same type of business, whether Ortolivo could work for other businesses without restriction, and whether he supplied his own tools and could set his own hours and work location. The court found that some other requirements, including the existence of written contracts specifying payment terms and the existence of a business location, were supported by the record. Because many of the business-to-business requirements overlapped with the employee-status tests, the court concluded that factual disputes also remained about whether PDI properly classified Ortolivo as an independent contractor.

PDI’s Motion on Age-Discrimination Claims

The court granted PDI’s motion for partial summary judgment on Ortolivo’s age-discrimination and related claims. The parties agreed that the claims for failure to prevent discrimination and wrongful termination were derivative of the age-discrimination claim.

The court applied the three-stage burden-shifting framework used for employment-discrimination claims. It assumed, for purposes of the motion, that Ortolivo could establish an initial case of age discrimination. PDI then offered nondiscriminatory reasons for not renewing his contract: budget cuts, a reduced number of dealerships in the Northern California market, and concerns about his behavior. Ortolivo did not present evidence disputing the market-based explanation.

The court also considered evidence about who took over Ortolivo’s territory, the age difference between him and Minne, and comments that Ortolivo viewed as age-related “ribbing.” It concluded that the comments were few, lacked a close timing connection to the nonrenewal decision, and were not tied to the decision-maker. Viewing the evidence in the light most favorable to Ortolivo, the court found that he had not produced specific and substantial evidence that PDI did not renew his contract because of his age.

Disposition

The court denied Ortolivo’s motion for summary judgment and granted PDI’s motion for partial summary judgment. It ordered the parties to file a joint case-management conference statement by January 5, 2024, addressing whether additional alternative-dispute-resolution efforts would be useful and proposing pretrial and trial dates.