Class action alleges California real estate agents not properly paid wages, not reimbursed for expenses

The California Court of Appeal recently ruled that the lower court applied the correct standard to determine whether a real estate salesperson was an independent contractor, not an employee, for the purposes of the Labor Code’s wage and hour provisions.

Premier Valley, Inc. – the defendant in the case of Whitlach v. Premier Valley, Inc. et al. – was a real estate brokerage firm in Oakdale. The plaintiff was a former real estate agent affiliated with Premier Valley. In 2018, he filed a class action complaint claiming multiple violations of California’s Labor Code.

The plaintiff alleged that he was acting on behalf of similarly-situated real estate agents who were misclassified as independent contractors when they should be considered employees, who were not properly paid wages, who were subject to unlawful deductions, and who were not reimbursed for reasonable and necessary business expenses.

In 2019, the plaintiff filed the first amended complaint, which added a representative claim under the Private Attorney General Act of 2004 (PAGA). The trial court dismissed the class claims but not the PAGA claim.

The defendant filed a demurrer. It argued that the plaintiff could not assert a PAGA claim or any derivative Labor Code claim since he was an independent contractor, not an employee. The trial court agreed that the plaintiff was an independent contractor and dismissed the...

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