Martinez v. Combs, 49 Cal. 4th 35 (2010)

Plaintiffs are seasonal agricultural workers whom Munoz & Sons had employed during the 2000 strawberry season. The employees sued Munoz and two produce merchants (through whom Munoz sold strawberries) for alleged minimum wage violations. Following Munoz’s bankruptcy, plaintiffs contended that the produce merchants were joint employers along with Munoz; that plaintiffs were the third-party beneficiaries of the contract between Munoz and the merchants; and that they were parties to an oral employment agreement with one of the merchants. The California Supreme Court held that although the Industrial Wage Commission’s (“IWC”) wage orders do generally define the employment relationship in actions to recover unpaid minimum wages, the IWC’s definition of “employer” does not impose liability on individual corporate agents acting within the scope of their agency.

The Court held that the merchants did not “suffer or permit” the employees to work on their behalf and did not “exercise control over their wages, hours or working conditions.” Furthermore, the employees were not third-party beneficiaries of any contract to which Munoz was a party. See also Schmidt v. Burlington N. & Santa Fe Ry. Co., 605 F.3d 686 (9th Cir. 2010) (Burlington Northern may have been employer for purposes of Federal Employers Liability Act claim); Valladolid v. Pacific Operations Offshore, LLP, 604 F.3d 1126 (9th Cir. 2010) (workers’ compensation benefits provision of the Outer Continental Shelf Lands Act applies to any injury resulting from operations on the outer continental shelf regardless of the site of the injury).