On September 10, 2021, the California Court of Appeal broadened the test for joint employment in California, lowering the bar for what constitutes sufficient control by business over its vendor’s employees’ wages and working conditions and opening these businesses up to potential liability.
The Decision: Santiago Medina vs Equilon Enterprises, LLC
Equilon Enterprises, LLC is a subsidiary of Shell Oil Company that operates as a “Multi-Site Operator” or “MSO” model. Under the MSO model, Shell entered into nonnegotiable form agreements with “MSO operators” that operated the station. These agreements required each station to pay monthly rent and have its employees perform all work at the station. Shell had the right to terminate the contract with notice, and Shell could add or withdraw stations from the operator’s cluster at any time, for any reason. Shell also had the right to access the operators’ bank accounts to withdraw fuel revenue from the account and deposit revenue from convenience store sales and car washes.
Plaintiff sued the MSO operator and Shell, alleging violations of the Labor Code and arguing that Shell was his joint employer, based upon the level of control Shell exercised over the operations of its gas stations. The Court distinguished the prior decisions that Shell was not a joint employer in the MSO context in Curry v. Equilon Enterprises, LLC, 23 Cal.App.5th 289 (2018) (Curry) and Henderson v. Equilon Enterprises, LLC, 40 Cal.App.5th 1111 (2019) (...
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