In re Field Asset Services, Inc.

Background

The opinion concerns the continuing litigation captioned Bowerman v. Field Asset Services. The plaintiffs alleged that Field Asset Services, Inc. and the other defendants misclassified workers as independent contractors rather than employees. They sought overtime wages, expense reimbursements, and waiting-time penalties under California law. After earlier class litigation, the individual cases were divided into groups. Chad McLain was one of the remaining Group 2 plaintiffs.

McLain and his wife owned and operated CMD Ventures, doing business as Junk Out, which contracted with Field Asset Services. The record showed that McLain was CMD Ventures’ president, handled administrative functions, performed inspections, personally provided property-preservation services, and paid himself a salary ranging from about $125,000 to about $300,000 in 2011.

Motion and Arguments

The defendants moved for summary judgment on all of McLain’s claims. Summary judgment is a ruling entered without a trial when there is no genuine dispute about a material fact and the moving party is entitled to judgment under the law.

The defendants’ main argument was that McLain could not pursue misclassification claims and instead had to proceed under a joint-employer theory. They also argued that McLain was not employed by Field Asset Services because the company did not control his work; that overtime exemptions applied; that McLain’s control over his own pay supported an unclean-hands defense; and that McLain could not personally recover expenses incurred by CMD Ventures.

Court’s Analysis

The court rejected the argument that McLain’s claims had to be brought as joint-employer claims. It explained that McLain alleged that Field Asset Services classified him, through Junk Out, as an independent contractor. The court stated that the issue for the jury was whether Field Asset Services misclassified McLain, not whether the defendants were liable under a joint-employer theory.

The court also explained that the parties could present evidence concerning California’s business-to-business exception and the applicable employment-classification test. The opinion refers to the Borello test, which considers multiple factors relevant to whether a worker is an employee or an independent contractor. The defendants’ evidence about McLain’s salary, his hiring of other workers, his administrative duties, and the structure of his business could be presented to the jury as part of that analysis.

The court found evidence creating a factual dispute about whether Field Asset Services controlled McLain’s work. It treated the defendants’ arguments about wages, reimbursements, the unclean-hands defense, and expenses as fact-based matters that could be raised at trial. The court declined to address the overtime-exemption argument further at that stage because the defendants had not cited supporting law and the plaintiffs had not addressed it in opposition.

Disposition

The court denied the defendants’ motion for summary judgment. The order did not resolve whether McLain was ultimately an employee, whether Field Asset Services violated California employment law, or what damages, if any, McLain could recover. Those issues remained for further proceedings, including possible consideration by a jury.