Ayala v. Antelope Valley Newspapers, Inc.
In a misclassification class action, the decisive common question is the hirer’s right to control the manner and means of work — not how that control was actually exercised over each worker — and that right can often be shown by common proof.
Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522
Misclassification
Independent Contractors
Class Certification
Right to Control
Affirmed
In brief. The Court clarified the class-certification analysis in independent-contractor misclassification cases. Because employee status under the common-law test “turns foremost on the degree of a hirer’s right to control” the manner and means of the work, the certification question is whether that right to control can be shown on a classwide basis. (Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522, 528, 533.) The trial court erred by denying certification based on variations in how the hirer exercised control over individual workers rather than on the common right to control. (Id. at pp. 533–540.)
Facts
Maria Ayala and other newspaper carriers delivered the Antelope Valley Press for Antelope Valley Newspapers, Inc., under standardized form contracts that classified them as independent contractors. (59 Cal.4th at pp. 526–527.) The carriers sued, alleging they were misclassified employees entitled to overtime, expense reimbursement, and other protections, and moved to certify a class of carriers. (Ibid.) They contended the company’s right to control their work — reflected in the common contract and standard practices — could be adjudicated on a classwide basis. (Id. at pp. 527–528.)
Procedural history
The trial court denied class certification, concluding that common questions did not predominate because resolving employee status would require individualized inquiry into how much control the company actually exercised over each carrier. (59 Cal.4th at pp. 528–529.) The Court of Appeal reversed in part, and the Supreme Court granted review and affirmed the Court of Appeal, holding the trial court had applied the wrong analysis. (Id. at pp. 529, 540–541.)
Issue
In deciding whether to certify a class of alleged misclassified workers, should the court focus on the hirer’s right to control the manner and means of the work (amenable to common proof) or on the actual exercise of control over each worker (potentially individualized) — and did the trial court err by relying on the latter? (59 Cal.4th at pp. 528, 532–533.)
Holding
The certification inquiry centers on the right to control. “Whether a common law employer-employee relationship exists turns foremost on the degree of a hirer’s right to control how the end result is achieved.” (59 Cal.4th at p. 531.) Because the trial court “principally rejected certification based not on differences in [the company’s] right to control . . . but on . . . how that right was exercised, its decision cannot stand.” (Id. at pp. 533–534.) The right to control can frequently “be shown on a classwide basis” through common contracts and policies, though the mere existence of a right to control “does not in itself determine whether that right is amenable to common proof.” (Id. at pp. 533, 538–540.) Affirmed. (Id. at p. 541.)
Reasoning
1. Certification asks whether the elements can be proved in common. The Court reaffirmed that the certification question is not the merits but “whether . . . the elements of the claim[] . . . are susceptible of common proof.” (59 Cal.4th at pp. 529–530.) For misclassification, the central merits element is employee status, so the court must ask whether that question can be answered with classwide evidence. (Ibid.)
2. The common-law test centers on the right to control. Under S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, the “most significant” factor in distinguishing employees from independent contractors is “the hirer’s right to control the manner and means of accomplishing the result desired.” (59 Cal.4th at pp. 531–532.) What matters is the right to control — “not how much control [the hirer] exercised” — supplemented by secondary Borello factors. (Ibid.)
3. The trial court asked the wrong question. The trial court had denied certification because the carriers’ day-to-day operations varied and the company’s actual supervision differed among them. (59 Cal.4th at pp. 533–536.) That was error: variations in the exercise of control do not defeat commonality where the right to control derives from a common source. The proper inquiry was whether the company’s right to control — as defined by the standardized carrier contracts and policies — could be established classwide. (Ibid.)
4. Right to control is often common, but not automatically. The Court cautioned that recognizing the centrality of the right to control “does not in itself determine whether that right is amenable to common proof.” (59 Cal.4th at pp. 538–540.) Where the operative contracts and practices are uniform, the right to control is typically a common question; where contracts or retained rights genuinely differ across the class, individualized issues may remain. (Ibid.) The Court remanded for the certification analysis to proceed under the correct framework, including the secondary factors. (Id. at pp. 540–541.)
Significance
Ayala is the leading California authority on class certification in independent-contractor misclassification cases. By directing courts to focus on the hirer’s right to control — usually established by common contracts and policies — rather than the individualized exercise of control, it made certification more attainable for misclassified-worker classes and curbed a common defense tactic of pointing to operational variation. Although Ayala applied the Borello common-law test, its certification methodology remains important after Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 adopted the ABC test for wage-order claims (and after Assembly Bill 5 codified and extended it): the ABC test’s factors are likewise generally susceptible to common proof, reinforcing certifiability. Ayala is routinely cited in gig-economy and contractor-classification class litigation. See the Review’s coverage of the misclassification line.
Key quotes
“Whether a common law employer-employee relationship exists turns foremost on the degree of a hirer’s right to control how the end result is achieved.” (Ayala, supra, 59 Cal.4th at p. 531.)
Because the trial court rejected certification “based not on differences in [the] right to control . . . but on . . . how that right was exercised, its decision cannot stand.” (Id. at pp. 533–534.)
Recognizing the centrality of the right to control “does not in itself determine whether that right is amenable to common proof.” (Id. at p. 533.)
Read the full opinion (California Supreme Court — full text) →
Practice pointer
Frame certification around the common right to control. In a misclassification class action, build the certification motion on the uniform sources of the hirer’s right to control — the standard contract, policies, handbooks, and operating procedures — and argue that employee status can be adjudicated on that common evidence under Ayala. Do not let the defense defeat commonality by pointing to day-to-day operational variation; under Ayala, the exercise of control is not the test. After Dynamex and AB 5, also frame the ABC test’s prongs (especially prongs B and C) as common questions for wage-order claims. Where contracts genuinely differ across the proposed class, narrow the class or use subclasses. Defendants should marshal evidence of genuinely divergent retained rights, not mere operational differences.
Open questions
How Ayala’s right-to-control certification methodology maps onto the Dynamex/AB 5 ABC test — which asks different substantive questions — continues to be worked out, though the ABC factors are generally even more amenable to common proof. Courts also continue to litigate when contractual or operational differences are significant enough to defeat commonality, and how secondary Borello factors bear on certification where the ABC test does not apply.