Narayan v. EGL, Inc., 616 F.3d 895 (2010)

Mohit Narayan and two other drivers for EGL (a global transportation, supply chain management and information services company headquartered in Texas) were California residents who provided services to EGL pursuant to independent contractor agreements that contained a Texas choice-of-law provision. Narayan and the other drivers filed a lawsuit against EGL in California alleging they were in fact employees of EGL who were deprived of overtime wages, reimbursement for business expenses, meal compensation, etc. EGL removed the case to federal court and obtained summary judgment after the district court applied Texas law and concluded plaintiffs were independent contractors and not employees. The district court also concluded the result would be the same under California law.

On appeal, the Ninth Circuit reversed, holding that the lower court had erred in failing to apply the multi-faceted California test for determining whether an employment relationship existed between the drivers and EGL. Compare Murray v. Principal Fin. Group, Inc., 2010 WL 2902512 (9th Cir. 2010) (insurance agents are independent contractors and not employees and thus may not sue for sex discrimination under Title VII); Garcia v. W&W Cmty. Dev., Inc., 186 Cal. App. 4th 1038 (2010) (foster family agency is not vicariously liable for foster parent’s conduct because the latter is an independent contractor and not an employee of the former); United States v. Graf, 610 F.3d 1148 (9th Cir. 2010) (independent consultant was a “functional employee” of company who did not hold a personal attorney-client privilege with respect to his communications with company’s attorneys).