S.G. Borello & Sons, Inc. v. Department of Industrial Relations
California’s multifactor common-law test for employee status: the right to control the manner and means of the work is the principal factor, supplemented by secondary factors read in light of a remedial statute’s protective purpose.
S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341
Misclassification
Independent Contractors
Right to Control
Workers’ Compensation
Affirmed
In brief. The decision that established California’s long-governing common-law test for employee versus independent-contractor status. The “principal” factor is “whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired,” but the analysis also weighs a set of “secondary” factors and must be read in light of the remedial statute’s protective purpose. (S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 350, 354–355.) Applying that test, the Court held the grower’s cucumber “sharefarmers” were employees, not independent contractors. (Id. at p. 360.)
Facts
S.G. Borello & Sons, an agricultural grower, harvested cucumbers using workers under “sharefarmer” agreements. (48 Cal.3d at pp. 345–349.) The agreements labeled the workers independent contractors and paid them a share of the crop’s proceeds rather than wages; the workers and their families tended and picked assigned plots. (Ibid.) But Borello controlled the essentials of the operation: it owned the land, prepared and planted the fields, decided what to grow, dictated cultivation methods, and controlled the timing and sale of the harvest. (Id. at pp. 346–348.) The Division of Labor Standards Enforcement determined the sharefarmers were employees entitled to workers’ compensation coverage; Borello disputed that, contending they were excluded independent contractors. (Id. at pp. 345–346.)
Procedural history
The trial court ruled for Borello, but the Court of Appeal reversed, and the Supreme Court granted review. (48 Cal.3d at pp. 346, 349.) The Supreme Court affirmed the determination that the sharefarmers were employees, holding Borello “failed to demonstrate the cucumber sharefarmers are independent contractors excluded” from workers’-compensation coverage. (Id. at pp. 345–346, 360.)
Issue
By what test is employee status determined for purposes of California’s remedial protective legislation (here, workers’ compensation), and were the cucumber sharefarmers employees or independent contractors under that test? (48 Cal.3d at pp. 349–350.)
Holding
The sharefarmers were employees. The “principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” (48 Cal.3d at p. 350.) The Court also considers secondary factors and reads the inquiry in light of the statute’s remedial purpose; under the totality of these considerations, the sharefarmers were employees, and Borello “failed to demonstrate [they] are independent contractors.” (Id. at pp. 350–360.) Affirmed. (Id. at p. 360.)
Reasoning
1. The right to control is primary. The Court reaffirmed that the “most significant” consideration is the hirer’s right to control the manner and means of the work, including the right to discharge at will without cause. (48 Cal.3d at pp. 350–351.) What matters is the right to control, whether or not exercised. (Ibid.)
2. The secondary factors. The Court enumerated additional factors bearing on the relationship: “(a) whether the [worker] is engaged in a distinct occupation or business; (b) . . . whether [the work] is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating [an] employer-employee relationship.” (48 Cal.3d at pp. 351, 354–355.) No single factor is decisive; they are weighed together. (Ibid.)
3. Economic realities and remedial purpose. Drawing on the federal “economic realities” test and the Restatement, the Court held the inquiry must serve “the remedial purpose of the statute, the class of persons intended to be protected, and the relative bargaining positions of the parties.” (48 Cal.3d at pp. 353–355, 359–360.) The workers’-compensation law is remedial legislation to be construed liberally to extend its protections, and labels the parties attach to their relationship do not control. (Ibid.)
4. Application to the sharefarmers. Measured against these factors, the sharefarmers were employees. (48 Cal.3d at pp. 355–360.) Borello controlled the land, crop, methods, and harvest timing; the sharefarmers performed unskilled, routine agricultural labor that was an integral part of Borello’s regular farming business; they supplied little but their labor; and they had no meaningful independent business or bargaining power. (Ibid.) The “sharefarmer” label and crop-share payment did not transform integral farm laborers into independent entrepreneurs. (Ibid.) Justice Kaufman, joined by Justice Panelli, dissented, emphasizing the parties’ agreement and the secondary indicia of independence. (Id. at pp. 361 et seq. (dis. opn. of Kaufman, J.).)
Significance
Borello supplied the dominant California test for worker classification for nearly three decades and remains highly consequential today. Its right-to-control-plus-secondary-factors framework, read through a remedial lens, governed employee status across many statutes until Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 adopted the ABC test for wage-order claims and Assembly Bill 5 (Lab. Code, § 2775 et seq.) extended the ABC test more broadly. Crucially, Borello did not disappear: it still governs claims outside the ABC test’s statutory reach and, by express legislative design, applies to the many occupational and contractual exemptions from AB 5 (expanded by AB 2257), which “revert” to Borello. The decision also informs class-certification analysis (Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522) and remains essential wherever the ABC test does not apply. See the Review’s coverage of the misclassification line.
Key quotes
The “principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” (Borello, supra, 48 Cal.3d at p. 350.)
The classification inquiry must serve “the remedial purpose of the statute, the class of persons intended to be protected, and the relative bargaining positions of the parties.” (Id. at pp. 359–360.)
Read the full opinion (California Supreme Court — full text) →
Practice pointer
Know when Borello still controls. For wage-order claims and most Labor Code claims, apply the ABC test (Dynamex/AB 5) — but Borello remains the operative test for claims outside that scope and for the numerous AB 5/AB 2257 exemptions, which revert to Borello. When Borello applies, lead with the right to control (including the right to discharge at will), then marshal the secondary factors — integration into the principal’s regular business, lack of a distinct independent enterprise, low skill, employer-supplied tools and workplace, and payment method — all viewed through the statute’s remedial purpose. Labels and contractual recitals of “independent contractor” status do not control. Use Ayala to argue these factors are susceptible to common proof for class treatment.
Open questions
The post-AB 5 landscape leaves recurring questions about which claims and which exempted occupations are governed by Borello rather than the ABC test, and how the multifactor Borello analysis applies to platform and app-based work. The relative weight of the secondary factors, and how Borello interacts with Proposition 22’s carve-out (Castellanos v. State of California (2024)) and with federal classification standards, also continue to be litigated.