Filed 11/7/17; Certified for Publication 11/29/17 (order attached)




              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                   FOURTH APPELLATE DISTRICT

                                              DIVISION THREE


HEATHER TURMAN et al.,

    Petitioners,                                                     G051871

         v.                                                          (Super. Ct. No. 30-2010-00425532)

THE SUPERIOR COURT OF ORANGE                                         OPINION
COUNTY,

    Respondent;

KOJI’S JAPAN INCORPORATED et al.,

    Real Parties in Interest.



                  Original proceedings; petition for a writ of mandate to challenge orders of
the Superior Court of Orange County, Nancy Wieben Stock and Robert J. Moss, Judges.
Granted. Motion for partial dismissal of appeal. Denied.
                  Bryan Schwartz Law and Bryan Schwartz; Altshuler Berzon and Michael
Rubin for Petitioners.
                Pope, Berger, Williams & Reynolds and Timothy G. Williams for
California Employment Lawyers Association as Amicus Curiae on behalf of Petitioners.
                Legal Aid Society—Employment Law Center, Katherine Fiester and Carole
Vigne; Los Angeles Alliance for a New Economy and Jean H. Choi; National
Employment Law Project and Anthony Mischel; Wage Justice Center, Zachary Ritter and
Matt Sirolly for Asian Americans Advancing Justice—Los Angeles, Asian Americans
Advancing Justice—Asian Law Caucus, Centro Legal de la Raza, Legal Aid Society—
Employment Law Center, Los Angeles Alliance for a New Economy, National
Employment Law Project, Wage Justice Center, Women’s Employment Rights Clinic of
Golden Gate University School of Law as Amici Curiae on behalf of Petitioners.
                No appearance for Respondent.
                Law Office of Stephen A. Madoni and Stephen A. Madoni for Real Parties
in Interest.
                                 *             *             *
                                      INTRODUCTION
                Former restaurant employees sued their former employer, Koji’s Japan, Inc.
(Koji’s), Koji’s president, sole shareholder and director Arthur J. Parent, Jr. (Parent), and
A.J. Parent Company, Inc., which is otherwise known as America’s Printer (America’s
Printer), of which Parent is also the president, sole shareholder and director. The plaintiff
employees alleged wage and hour claims under the Labor Code and the Fair Labor
Standards Act of 1938 (29 U.S.C. § 201 et seq.) (FLSA), claims under the unfair
competition law (Bus. & Prof. Code, § 17200), and a claim under the Labor Code Private
                                                                        1
Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2699 et seq.).
                The plaintiffs challenge four rulings: The denial of their revised motion to
compel further responses to a set of document requests; the concomitant issuance of


1
    All further statutory references are to the Labor Code unless otherwise specified.

                                               2
discovery sanctions against plaintiffs’ counsel; an order only partially granting plaintiffs’
motion to certify a class action; and the trial court’s statement of decision determining
that Parent and America’s Printer were not Koji’s alter egos and Parent was not liable to
plaintiffs as a joint employer with regard to their state law claims.
               We resolve doubts about our appellate jurisdiction by exercising our
discretion to treat plaintiffs’ appeal as a petition for a writ of mandate. We grant writ
relief with regard to each challenged ruling and hold:
               1. The trial court erred by granting the motion to certify a class as to
plaintiffs’ claims against only Koji’s because the court applied improper criteria in
determining Parent’s potential liability as a joint employer on a class-wide basis.
               2. The trial court prejudicially erred by denying plaintiffs’ revised motion
to compel further responses to a set of document requests, and also by sanctioning
plaintiffs’ counsel.
               3. Because, as set forth in the disposition, we direct the trial court to vacate
its order denying the revised motion to compel further responses to discovery on alter ego
issues, we direct the court to also vacate its findings that Parent and America’s Printer
were not Koji’s alter egos. Even if we did not direct the trial court to vacate its alter ego
findings because of the court’s error in denying the revised motion compel, we would
nevertheless order the court to vacate those findings because the court applied incorrect
legal standards for alter ego liability.
               4. Although the court’s statement of decision correctly cites Martinez v.
Combs (2010) 49 Cal.4th 35 (Martinez) as setting forth the three alternative definitions of
“employer” applied in analyzing certain violations of the Labor Code and the Industrial
Welfare Commission’s (IWC) wage orders, the statement of decision misapplied those
definitions. In addition, the trial court failed to address whether Parent might be a joint
employer under the definitions of the term “employer” applicable to plaintiffs’ claims
under the unfair competition law, the tip misappropriation statute, and PAGA.

                                               3
                                      BACKGROUND
               In 2000, Koji’s was incorporated by Parent and, at all times relevant to this
case, Parent has been Koji’s president, sole shareholder, and director. Koji’s owned one
sushi and shabu-shabu restaurant in Hollywood, and another such restaurant in Orange
County. Each individually named plaintiff was employed by Koji’s and worked at one or
both of its restaurants at some point during November 2006 through February 2012.
Koji’s was not a profitable business and, by early 2012, had closed both restaurants.
                                              I.
    PLAINTIFFS INITIATE THIS ACTION; PLAINTIFFS FILE THE THIRD AMENDED COMPLAINT.
               In November 2010, Amanda Quiles, Heather Turman, and Kimberly Dang
(plaintiffs), as individuals and “on behalf of all others similarly situated, and on behalf of
the general public,” filed a proposed class action against, inter alia, Koji’s and Parent,
asserting several state and federal wage and hour claims, and violation of California’s
unfair competition law. (Quiles v. Koji’s Japan (Apr. 3, 2015, G049238) [nonpub.
opn.].)
               In December 2012, plaintiffs filed their “third amended class and collective
action complaint for damages, restitution and injunctive relief” against Koji’s and Parent,
                              2
and added America’s Printer as a defendant. The third amended complaint contained
claims for (1) failure to pay overtime wages in violation of sections 510, 1194, and 1198,
and IWC wage order No. 5-2001 (Cal. Code Regs., tit. 8, § 11050) (IWC wage order No.
5-2001) (first cause of action); (2) failure to pay earned wages upon discharge and
waiting time penalties in violation of sections 201 through 203 (second cause of action);
(3) failure to provide timely, accurate, and itemized wage statements in violation of
section 226 (third cause of action); (4) failure to provide rest breaks and meal periods in

2
 America’s Printer was incorporated by Parent in 1998 and is in the business of providing
printing services. As is the case with Koji’s, Parent is America’s Printer’s sole
shareholder, president, and director.

                                              4
violation of IWC wage order No. 5-2001, and sections 226.7 and 512 (fourth cause of
action); (5) failure to compensate for all hours worked in violation of sections 221 and
223 and IWC wage order No. 5-2001 (fifth cause of action); (6) misappropriation of tips
by the employer and the employer’s agents in violation of section 351 and Business and
Professions Code section 17200 (sixth cause of action); (7) failure to pay the minimum
wage in violation of sections 1182.11, 1182.12, 1182.13, 1194, and 1997, and “the
California Minimum Wage Order, MW-2001” (Cal. Code Regs., tit. 8, § 11000) (seventh
cause of action); (8) violation of the FLSA (29 U.S.C. §§ 206, 207, 216) (eighth cause of
action); (9) violation of the unfair competition law (Bus. & Prof. Code, § 17200) (ninth
cause of action); and (10) recovery of civil penalties pursuant to PAGA (twelfth cause of
           3
action).
               The third amended complaint alleged Parent was a joint employer of
plaintiffs and putative class members, and alleged Parent’s involvement in Koji’s
operations as its president and sole shareholder by which Parent directly or indirectly
employed or exercised control over wages, hours, and working conditions and “suffered
and/or permitted” employment. The third amended complaint also alleged facts
supporting its assertion Parent and America’s Printer were alter egos of Koji’s.
                                     II.
THE TRIAL COURT GRANTS PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION ONLY AS TO
             KOJI’S BUT NOT AS TO PARENT OR AMERICA’S PRINTER.
               In January 2013, plaintiffs filed an amended notice of motion for class
certification seeking an order that the case proceed as a class action under section 382 of
the Code of Civil Procedure. Plaintiffs sought certification of the following class: “All

3
  The third amended complaint also contained as the tenth and eleventh causes of action
individual claims for retaliation for engaging in protected activity in violation of section
98.6 and in violation of the FLSA (29 U.S.C. § 215(a)(3)), and for retaliation for filing a
FLSA complaint. Those two causes of action were solely applicable to plaintiff Quiles,
were separately adjudicated, and are not at issue in this case. During the pendency of this
appeal, Quiles was dismissed as an appellant.

                                             5
persons who were employed by Defendants as servers, hosts/hostesses, floor managers,
sushi chefs, assistant general managers, bussers, dishwashers, bartenders, kitchen helpers,
and ‘barbacks,’ at any time from November 16, 2006, to the date of the final disposition
of this case.” Plaintiff also sought certification of a tip misappropriation subclass: “All
persons who were employed by Defendants as servers, hosts/hostesses, floor managers,
assistant general managers, bussers, dishwashers, bartenders, and ‘barbacks,’ at any time
from November 16, 2006, through the date of the final disposition of this action.”
              In February 2013, the trial court certified the class as to “Koji’s . . . only as
employer of the class and only as to those causes of action derivative of the alleged meal
and rest violations,” namely the first through fifth, ninth, and twelfth causes of action. A
class was not certified as to the seventh or eighth causes of action for violation of the
wage order setting the minimum wage or for violation of the FLSA. The court also
certified a tip-pooling subclass defined as “[a]ll persons who were employed by
Defendant Koji’s as servers, hosts/hostesses, bussers, bartenders, and ‘barbacks,’ at any
time from November 16, 2006, through the date of the final disposition in this action.”
              The court explained its reasoning for partially denying the motion for class
certification in a minute order dated February 22, 2013: “The Plaintiffs have stated that
their only employer was Koji’s, not Mr. Parent, and based on that and the fact that no
cause of action is stated against Mr. Parent for joint employer liability the Motion for
Class Certification is only granted as to Koji’s. The Motion only establishes a basis for
class certification concerning the issues of meal and rest breaks and tip-pooling and does
not address the other claims or Causes of Action asserted by the Plaintiffs and therefore
the Motion is only granted as to those issues, and the derivat[iv]e claims arising from




                                              6
them. There is insufficient evidence to establish that a tip-pooling claim can be pursued
                                                                           4
by employees other than servers, and so, a sub-class will be certified.”
              Following the court’s ruling on the motion for class certification, only the
named plaintiffs’ individual claims against Parent (as a joint employer or alter ego of
Koji’s) and against America’s Printer (as an alter ego of Koji’s) survived.
                                       III.
      THE TRIAL COURT DENIES PLAINTIFFS’ REVISED MOTION TO COMPEL FURTHER
    RESPONSES TO DOCUMENT REQUESTS AND ALSO SANCTIONS PLAINTIFFS’ COUNSEL.
              The trial court stayed discovery relating to the class action claims, but
permitted discovery on the discrete issue of alter ego liability. Plaintiffs filed a motion
for an order compelling further responses from Parent regarding their request for
production of documents.
              At the hearing on the motion to compel, the trial court and the parties’
counsel discussed the court’s tentative decision to deny the motion to compel on the
ground its supporting separate statement was incomplete. The court found the separate
statement procedurally defective because it set forth the factual and legal reasons for
granting the motion in one place instead of stating the factual and legal reasons following
each request and response. The court also noted that no meet and confer process
appeared to have taken place after plaintiffs received Parent’s supplemental responses
and document production.
              Plaintiffs’ counsel described the parties’ extensive meet and confer efforts
leading up to the plaintiffs’ receipt of what they considered inadequate and incomplete
responses. Plaintiffs’ counsel also explained the short time frame between receiving


4
 In a minute order dated May 6, 2013, the trial court made corrections to its February 22,
2013 minute order nunc pro tunc that are not at issue in this appeal. In the May 6 minute
order, the court confirmed that accuracy of the statement of the court’s reasoning for
partially denying the motion for class certification set forth in the February 22 minute
order.

                                              7
those responses and the deadline to file the motion to compel. The trial court stated that
the motion to compel would be denied “without prejudice” because if counsel provided a
separate statement that reiterated the legal and factual analysis for each request, it “might
produce a different result.” After confirming the futility of further meet and confer
efforts with counsel for the parties, the trial court stated it was “not going to require you
to further meet and confer, let’s put it that way, if somebody wants to bring a motion”
and reiterated that the order denying the motion to compel would say “without
prejudice.”
              Notwithstanding the trial court’s assurances, it appears the court signed its
tentative order without stating that no further meet and confer efforts would be required
and that the motion would be denied without prejudice. Plaintiffs revised their separate
statement and filed a revised motion the same day as the hearing on the original motion to
compel.
              Before the hearing on the revised motion to compel, the case was assigned
to a new trial judge. In a January 2014 minute order, the court denied the revised motion
to compel and awarded defendants $960 in sanctions against plaintiffs’ counsel “for
bringing this Motion which again fails to meet the requirements of the Discovery Act and
this Court’s prior Order.” Noting that the trial court had denied the original motion to
compel on the ground plaintiffs and their counsel failed to provide a complete and proper
separate statement in support of that motion and failed to meet and confer with regard to
the supplemental responses, the court denied the revised motion on the ground it
“contains no evidence that such meet and confer process has taken place. It therefore
must be denied again. In fact, Plaintiff’s counsel filed this Motion the very same day the
Court made its prior ruling, December 6, 2013, showing a complete disregard for this
Court’s prior Order.”




                                              8
                                       IV.
    FOLLOWING A BENCH TRIAL ON THE ISSUES OF JOINT EMPLOYER AND ALTER EGO
 LIABILITY, THE TRIAL COURT ISSUES A STATEMENT OF DECISION CONCLUDING PARENT
 IS A JOINT EMPLOYER ONLY AS TO PLAINTIFFS’ INDIVIDUAL CLAIMS UNDER THE FLSA
   AND THAT NEITHER PARENT NOR AMERICA’S PRINTER IS AN ALTER EGO OF KOJI’S.

              The parties agreed to a bench trial on the issues of whether Parent and
America’s Printer were potentially liable as alter egos of Koji’s and whether Parent was
potentially liable as a joint employer with Koji’s. Plaintiffs’ counsel remarked, “there’s
really no case to pursue if there is—if it’s only the corporate entity [Koji’s]. I mean, it’s
a dead case. There’s no solvent entity.” Defendants’ counsel agreed, stating: “If Mr.
Parent is in the case, [plaintiffs’ counsel] can proceed profitably for his clients, for the
class members. If Mr. Parent is not in the case, it’s going to go nowhere because the
corporate defendant Koji’s has no assets and it’s not in business.”
              A bench trial on the issues of alter ego and joint employer status was held
in January and February 2015. The trial court issued a tentative ruling and plaintiffs
requested a statement of decision with 147 requests. Plaintiffs filed 154 objections to the
court’s proposed statement of decision. In April 2015, the trial court issued its “statement
of decision regarding the trial on issues of alter ego and joint employment.”
              In the final statement of decision, the court noted it was not required to
respond point-by-point to the issues posed by plaintiffs but must disclose the court’s
determination as to the ultimate facts and material issues in the case. In the statement of
decision, the court ruled: (1) neither Parent nor America’s Printer was liable as an alter
ego of Koji’s; (2) Parent was not liable as a joint employer as to the causes of action
brought under state law; and (3) Parent was a joint employer for purposes of the FLSA
cause of action.




                                               9
          PARENT AND AMERICA’S PRINTER’S MOTION FOR PARTIAL
                        DISMISSAL OF APPEAL
              Parent and America’s Printer filed a motion requesting that we dismiss
portions of this appeal they contend are not ripe. They argue the only issue that is ripe
for appeal is “the severable portion” of the trial court’s decision that America’s Printer is
not the alter ego of Koji’s, as that determination takes America’s Printer out of the case.
They therefore request the dismissal of plaintiffs’ appeal as to whether Parent is a joint
employer for purposes of state wage claims and is Koji’s alter ego, as Parent is still in the
case as a defendant with regard to the violation of the FLSA claim. They also request
dismissal of the appeal as to the court’s order partially granting the motion for class
certification and the order denying plaintiffs’ revised motion to compel further responses
and issuing sanctions against plaintiffs’ counsel.
              In their opposition, plaintiffs argue that the trial court’s rulings up through
its determination that Parent was a joint employer and Parent and America’s Printer were
not Koji’s alter egos trigger the so-called death knell doctrine, thereby making all the
subject rulings appealable because the putative class members will not be able, as a
practical matter, to pursue their claims given Koji’s insolvent status. Plaintiffs argue, in
the alternative, that this court may treat the appeal as a petition for a writ of mandate.
              We may treat an improper appeal as a petition for a writ of mandate in
unusual circumstances. (Olson v. Cory (1983) 35 Cal.3d 390, 400-401.) It is appropriate
to treat an appeal from a nonappealable judgment as a petition for extraordinary writ
when requiring the parties to wait for entry of final judgment might lead to unnecessary
trial proceedings, the briefs and the record include the necessary elements for a writ of
mandate, there is no indication the trial court would appear as a party in the writ
proceeding, the appealability of the order was not clear, and all parties urge the court to
decide the issue rather than dismiss the appeal. (Ibid.)




                                              10
              Here, the briefs and the record include the necessary elements for a writ of
mandate and there is no indication the trial court would appear in a writ proceeding. The
parties’ counsel have agreed on the record that the trial court rulings have in effect
resulted in preventing a class action from going forward because the remaining certified
class claims are against a single entity (Koji’s) which is insolvent. Requiring the parties
to wait for final judgment following litigation of the remaining issues might lead to
unnecessary trial proceedings. Although defendants would like us to dismiss portions of
the appeal for lack of jurisdiction, on balance the circumstances justify treating plaintiffs’
appeal as a petition for a writ of mandate. Therefore, we deny defendants’ motion for
partial dismissal of this appeal.


                                       DISCUSSION
                                       I.
       THE TRIAL COURT ERRED BY PARTIALLY GRANTING PLAINTIFFS’ MOTION TO
                                CERTIFY A CLASS.
              The trial court certified a class action as to all of the claims contained in the
third amended complaint except plaintiffs’ claims for violation of the FLSA and violation
of the minimum wage order and Quiles’s individual claims for wrongful termination and
retaliation. Plaintiffs do not challenge the court’s class certification order with regard to
the claims that were and were not certified for class action treatment. Rather, plaintiffs
contend the court erred by granting their motion to certify claims against Koji’s only and
thus not including those claims alleged against Parent on a theory of joint employer
liability.
                                              A.
                 General Class Action Principles and Standard of Review
              “Code of Civil Procedure section 382 authorizes class actions ‘when the
question is one of a common or general interest, of many persons, or when the parties are



                                              11
numerous, and it is impracticable to bring them all before the court . . . .’ The party
seeking certification has the burden to establish the existence of both an ascertainable
class and a well-defined community of interest among class members. [Citations.] The
‘community of interest’ requirement embodies three factors: (1) predominant common
questions of law or fact; (2) class representatives with claims or defenses typical of the
class; and (3) class representatives who can adequately represent the class. [Citation.]”
(Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326 (Sav-On ).)
              The question of class certification is essentially procedural and does not
involve the legal or factual merits of the action. (Sav-On, supra, 34 Cal.4th at p. 326.)
The ultimate question in ruling on a class certification motion is whether the issues which
may be adjudicated as a class, when compared with the issues which must be adjudicated
individually, are sufficiently numerous or substantial to make a class action advantageous
to both the litigants and the judicial process. (Ibid.)
              Trial courts have discretion in granting or denying motions for class
certification because they are well situated to evaluate the efficiencies and practicalities
of permitting a class action. (Sav-On, supra, 34 Cal.4th at p. 326.) Despite this grant of
discretion, appellate review of orders denying class certification differs from ordinary
appellate review. Generally, we do not address the trial court’s reasoning and consider
only whether the result was correct. (Kaldenbach v. Mutual of Omaha Life Ins. Co.
(2009) 178 Cal.App.4th 830, 843 (Kaldenbach).) But when denying class certification,
the trial court must state its reasons, and we must review those reasons for correctness.
(Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435-436.) We may only consider the
reasons stated by the trial court and must ignore any unexpressed reason that might
support the ruling. (Id.; Kaldenbach, supra, 178 Cal.App.4th at p. 844; see also Bufil v.
Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193, 1205.)
              We will affirm an order denying class certification if any of the trial court’s
stated reasons was valid and sufficient to justify the order, and is supported by substantial

                                              12
evidence. (Sav-On, supra, 34 Cal.4th at pp. 326–327; see also Kaldenbach, supra, 178
Cal.App.4th at p. 844 [“We may not reverse, however, simply because some of the
court’s reasoning was faulty, so long as any of the stated reasons are sufficient to justify
the order”].) We must reverse an order denying class certification if the trial court used
improper criteria or made erroneous legal assumptions, even if substantial evidence
supported the order. (Sav-On, supra, 34 Cal.4th at pp. 326–327; Linder v. Thrifty Oil
Co., supra, 23 Cal.4th at pp. 435–436.) A trial court’s decision that rests on an error of
law is an abuse of discretion. (In re Tobacco II Cases (2009) 46 Cal.4th 298, 311; Pfizer
Inc. v. Superior Court (2010) 182 Cal.App.4th 622, 629.)
                                           B.
    The Trial Court’s Stated Reason for Denying Class Certification of Claims Alleged
                   Against Parent as a Joint Employer Was Improper.
              Here, the trial court granted plaintiffs’ motion to certify a class as to state
law claims against Koji’s only, although the same claims were alleged in the third
                                                             5
amended complaint against Parent and America’s Printer, also. In certifying the class,
the court was required to have found plaintiffs established the existence of both an
ascertainable class and a well-defined community of interest among class members. In
reviewing the court’s decision to deny class certification of these claims as against Parent
on a theory of joint employer liability, based on the authorities discussed ante, we must
consider the reasons stated by the trial court and ignore any unexpressed reason that
might support the ruling.
              Citing Knapp v. AT&T Wireless Services, Inc. (2011) 195 Cal.App.4th 932,
939, plaintiffs contend the trial court committed reversible error by failing to state in the
order its reasons for denying the motion for class certification against Parent. To the
contrary, in Knapp a panel of this court stated: “The trial court was not required to state


5
  Plaintiffs do not challenge the trial court’s ruling on the motion to certify a class with
regard to claims alleged against America’s Printer.

                                              13
its reasons in the order denying the motion. Instead, we review the entire record to
determine whether the trial court’s reasons were expressed.” (Ibid.)
              In any event, here the trial court, in its February 22, 2013 minute order, did
express its reason for declining to certify the class action claims against Parent: “The
Plaintiffs have stated that their only employer was Koji’s, not Mr. Parent, and based on
that and the fact that no cause of action is stated against Mr. Parent for joint employer
liability the Motion for Class Certification is only granted as to Koji’s.”
              The third amended complaint asserts plaintiffs’ claims against all
defendants and specifically incorporates allegations that Parent was liable as a joint
employer into each cause of action. Although it is true the individual plaintiffs’ and
putative class members’ declarations filed in support of the motion for class certification
each began with a statement that each had been employed by Koji’s, that statement is not
inconsistent with plaintiffs’ position that Parent was also liable as a joint employer with
regard to some or all of their claims. The record does not show the trial court refused to
certify claims alleged against Parent because the court concluded such claims could not
be proved or disproved through common facts and law. Indeed, if proven to be a joint
employer, for example, Parent would have had a duty to ensure that all his employees
were being paid properly and provided required rest and meal periods and, like Koji’s, he
would be liable to the class for wage and hour violations. (See Benton v. Telecom
Network Specialists, Inc. (2013) 220 Cal.App.4th 701, 730-731.)
              In their appellate brief, defendants argue: “In this case, the totality of the
record demonstrates the lower court did not abuse its discretion. The various minute
orders . . . the transcript of the February 22, 2013 [hearing] . . . , the references by the
lower court to the Defendant’s authority in both the objection and the demurrers, all point
to the Court denying the Appellants’ motion for certification on the basis that it failed to
prove a community of interest as to the issue of Mr. Parent as ‘joint employer.’ Thus,
Appellants’ claim that the lower court committed reversible error because the lower court

                                               14
did not prove a particularized analysis of its ruling is both factually and legally
incorrect.”
              We have reviewed the portions of the record cited by defendants and do not
agree that they show the trial court’s reason for denying class certification of claims
against Parent included a determination that plaintiffs failed to prove a community of
interest as to the issue of Parent’s liability as plaintiffs’ joint employer. The trial court
stated its reason for its ruling on the motion for class certification in its February 22, 2013
minute order quoted ante—and then reaffirmed that reasoning a few weeks later in its
May 6, 2013 order. The court’s stated reasons did not include any reference to any
failure by plaintiffs to prove a community of interest. To the contrary, the court’s stated
reason for partially denying the motion for class certification was because the putative
class members’ declarations uniformly identified Koji’s as their employer. The appellate
record, including the transcript of the February 22, 2013 hearing, does not show the trial
court’s ruling was based on any other reason. In fact, the court granted class certification
of claims as alleged against Koji’s, thereby impliedly finding the existence of both an
ascertainable class and a well-defined community of interest among class members. We
may only review the trial court’s expressed reasons for partially denying the motion;
because that reasoning was erroneous, we must grant the petition.
              We therefore grant the petition for a writ of mandate as to this issue and
direct the court to vacate its order partially denying the motion for class certification as to
Parent.
                                    II.
  THE TRIAL COURT ERRED BY DENYING PLAINTIFFS’ REVISED MOTION TO COMPEL
  FURTHER RESPONSES ON THE GROUND PLAINTIFFS FAILED TO ENGAGE IN FURTHER
MEET AND CONFER EFFORTS AND ALSO BY SANCTIONING PLAINTIFFS’ COUNSEL FOR THE
                              SAME REASON.
              Plaintiffs argue the trial court “abused its discretion in denying a motion to
compel for failure to meet and confer, after a different judge of the court ordered that no


                                               15
additional meet and confer was required.” (Boldface and capitalization omitted.) We
agree the trial court erred by denying the revised motion to compel and by sanctioning
counsel.
              At a status conference in May 2013, the trial court stayed discovery relating
to the class action claims, but permitted discovery on the discrete issue of alter ego
liability. In October 2013, plaintiffs filed a motion for an order “compelling complete,
un-redacted, and un-excerpted responses” to several requests in plaintiffs’ third set of
requests for production of documents. Plaintiffs also sought sanctions against defendants
and their counsel. The motion was accompanied by plaintiffs’ counsel’s declaration
summarizing, inter alia, meet and confer efforts leading up to defendants’ counsel’s
agreement to produce supplemental responses relating to plaintiffs’ alter ego claims.
When those supplemental responses were received by counsel, they were found to be
incomplete notwithstanding the parties’ “extensive meet and confer efforts.”
              At the hearing on the motion to compel in December 2013, the trial court
directed the parties’ counsel to the court’s tentative decision to deny the motion and the
request for sanctions. That tentative order stated: “The Separate Statement is incomplete
as it does not set forth a statement of the factual and legal reasons for compelling further
responses and production as to each request. [¶] No meet and confer process took place
after the supplemental responses and documents were provided. The process was
therefore, incomplete and not ripe for this Motion. For this reason sanctions are denied to
Defendant. As to Plaintiffs, sanctions are also denied due to lack of any statement in the
Notice of Motion.”
              In response to the tentative decision, plaintiffs’ counsel stated: “Your
honor, as the motion described, . . . we had 16 back-and-forth communications between
June and October about the discovery requests, concluding with one in which we said:
Well, our understanding is you are going to send us stuff by October 10th, and that you
have given us until October 31st to have filed our motion, if we still think it’s incomplete.

                                             16
And that’s how we proceeded after that. [¶] And I understood the court’s tentative to be
saying that we should have met and conferred further after receiving their supplemental
response. And as such, that the motion was unripe.”
                The trial court responded, “Well, that’s true as to the sanctions part. But
the court was unable to address the motion due to the separate statement. So with a
proper separate statement, the court could have evaluated what exactly was going on. I
just wasn’t able to—so that sort of spilled over into the sanctions area.”
                Plaintiffs’ counsel acknowledged that in their separate statement, they had
“sort of consolidated the arguments into conceptual—here’s the first type of thing we are
arguing about; here is the second type of thing,” instead of reiterating the factual and
legal basis for the motion to compel separately after each request. The court responded,
“Right. The conceptual approach just isn’t going to work. Even though there’s
redundancies involved, we need to have it done separately because the court would be
ruling on each and every individual component of the discovery request. So I will add
the phrase ‘without prejudice’ to the ruling since, obviously, a different separate
statement might produce a different result.”
                Plaintiffs’ counsel asked, “would your honor anticipate that there would be
further meeting and conferring at this point that would be required? I do want to add that
since the tentative . . . we sent communication to opposing counsel indicating . . . we are
willing to meet and confer further if you have an intention of producing more to respond
to the concerns we have raised. And the response was that there is—‘there’s no curing
your failure to follow procedure. You will not get a second bite at the apple. [¶] So I
wanted to be clear whether or not we need to continue that process. It does not seen to be
very fruitful. Or, if we can resubmit with a correct separate statement?”
                The court asked defendants’ counsel, “are you of the opinion that the meet-
and-confer process has reached its final process, and there is nothing to be disclosed in
that regard?”

                                               17
               Defendants’ counsel responded: “The way the request was structured, yes,
we have produced everything responsive to the requests as they were drawn up.” The
court and counsel engaged in the following colloquy:
               “The Court: All right. I really can’t comment on the quality of the meet-
and-confer process. It’s important—I don’t think the meet-and-confer process is going to
prevent the matter from being heard; it just affects the sanctions part.
               “So I really can’t give you any more advice than that. I’m not going to
require you to further meet and confer, let’s put it that way, if somebody wants to bring a
motion.
               “Yes, I do have an order in chambers, so I’ll go ahead and sign and file that
today. Plaintiff to give notice. Anything else?
               “[Defendants’ counsel]: No, I think we are done, your honor. Thank you.
               “[Plaintiffs’ counsel]: No, your honor. I guess, just to be clear, it will say
it’s without prejudice to refile it.
               “The Court: That is correct. It will say ‘without prejudice.’”
               It appears the trial court signed its tentative order without adding the court’s
comments that no further meet and confer efforts would be required or the court’s ruling
that the denial of the motion was “without prejudice.” The same day as that hearing,
plaintiffs filed a revised motion to compel which was accompanied by a separate
statement that included a statement of the factual and legal reasons for compelling further
responses required by rule 3.1345(c)(3) of the California Rules of Court as to each
request for which plaintiffs sought further responses. Plaintiffs also submitted a
transcript of the December 6, 2013 hearing in support of the reply brief supporting their
motion.
               Before the hearing on the revised motion, the case was assigned to a new
trial judge. In a January 31, 2014 minute order, the court denied the revised motion and
awarded defendants $960 in sanctions against plaintiffs’ counsel “for bringing this

                                              18
Motion which again fails to meet the requirements of the Discovery Act and this Court’s
prior Order.” The minute order further stated, “Court finds that on December 6, 2013 this
Court denied the prior Motion to Compel based on the fact that Plaintiffs and their
counsel failed to provide a complete and proper Separate Statement in support of that
Motion and failed to meet and confer with regard to the Supplemental Responses
received with regard to the subject discovery. [¶] This second Motion contains no
evidence that such meet and confer process has taken place. It therefore must be denied
again. In fact, Plaintiff’s counsel filed this Motion the very same day the Court made its
prior ruling, December 6, 2013, showing a complete disregard for this Court’s prior
Order. [¶] This is not a motion for compliance under CCP Section 2031.320, as it
continues to argue regarding the responses themselves and the objections. The objections
are sustained, as no valid motion has been made challenging them. And, Defendant has
not failed to comply with his Responses.”
              Apparently, the trial court was unaware of the prior trial judge’s statements
to counsel at the hearing on the original motion to compel in December 2013 that no
further meet and confer efforts would be required to support a revised motion to compel
and solely relied on the trial court’s minute order that failed to reflect those statements
(although a transcript of that hearing was submitted to the court along with plaintiffs’
reply brief filed in support of the revised motion to compel). Therefore, the trial court’s
ruling denying the revised motion and sanctioning plaintiffs’ counsel on the ground
plaintiffs failed to show further meet and confer efforts was in error.
              In their brief on appeal, defendants do not address the trial court’s stated
reason for denying the revised motion to compel and for sanctioning plaintiffs’ counsel.
Instead, they argue “there was another reason for the denial of the discovery motion:
Appellants attempted to file the motion after the statutory 45 day time limit permitted to
file such motion” set forth in Code of Civil Procedure section 2031.310, subdivision (c).
In other words, defendants argue that once plaintiffs’ original motion to compel was

                                              19
denied on the procedural ground that the separate statement did not place the factual and
legal analyses supporting further responses after each individual response, plaintiffs were
precluded from compelling further responses. Defendants reason that even if plaintiffs
filed a revised motion the same day as the hearing on the original motion, as plaintiffs did
here, such a revised motion was filed more than 45 days after plaintiffs received
defendants’ supplemental responses the previous October.
              The appellate record does not show the original trial judge intended such a
result, as the court denied the original motion to compel without prejudice for refiling and
with the assurance that no further meet and confer efforts would be necessary.
Furthermore, the trial judge who denied the revised motion did so on the ground there
were no further meet and confer efforts, and not on the ground such a motion was time-
barred.
              We construe plaintiffs’ revised motion to compel to constitute the same
motion as their original motion to compel and conclude it is not time-barred under section
2031.310, subdivision (c) of the Code of Civil Procedure. Plaintiffs suffered prejudice as
a result of the court’s order denying the revised motion to compel not only because their
counsel was sanctioned but also because the order deprived them of a ruling on the merits
as to their revised motion seeking further discovery on the alter ego issue—an issue at the
heart of plaintiffs’ case. We direct the court to vacate its order denying the revised
motion to compel and sanctioning plaintiffs’ counsel.
                                     III.
    THE TRIAL COURT’S ALTER EGO FINDINGS MUST BE VACATED IN LIGHT OF OUR
         RULING ON THE REVISED MOTION TO COMPEL FURTHER RESPONSES.
              Plaintiffs argue the trial court erred by concluding after the bench trial that
Parent and America’s Printer were not alter egos of Koji’s. We do not reach the merits of
plaintiffs’ argument regarding alter ego liability in light of our reversal of the trial court’s
order denying the revised motion to compel further responses to plaintiffs’ request for the



                                               20
production of documents. That set of document requests was focused on the alter ego
issue and we do not know whether additional information on that issue might be
produced after the revised motion to compel is reconsidered on remand. We therefore
direct the trial court on remand to vacate its alter ego findings.
              Plaintiffs argue on appeal that, aside from the discovery issue, the trial
court applied the wrong legal standard for resolving the alter ego issues at trial. Our
review of the appellate record reveals the trial court’s misunderstanding of the applicable
law on alter ego.
              “Ordinarily, a corporation is regarded as a legal entity, separate and distinct
from its stockholders, officers and directors, with separate and distinct liabilities and
obligations. [Citations.] A corporate identity may be disregarded—the ‘corporate veil’
pierced—where an abuse of the corporate privilege justifies holding the equitable
ownership of a corporation liable for the actions of the corporation. [Citation.] Under
the alter ego doctrine, then, when the corporate form is used to perpetrate a fraud,
circumvent a statute, or accomplish some other wrongful or inequitable purpose, the
courts will ignore the corporate entity and deem the corporation’s acts to be those of the
persons or organizations actually controlling the corporation, in most instances the
equitable owners. [Citations.]” (Sonora Diamond Corp. v. Superior Court (2000) 83
Cal.App.4th 523, 538 (Sonora), italics added.)
              Two requirements must be met to invoke the alter ego doctrine:
(1) “[T]here must be such a unity of interest and ownership between the corporation and
its equitable owner that the separate personalities of the corporation and the shareholder
do not in reality exist”; and (2) “there must be an inequitable result if the acts in question
are treated as those of the corporation alone.” (Sonora, supra, 83 Cal.App.4th at p. 538,
                  6
italics added.)
6
 Among the factors to be considered in applying the alter ego doctrine are
(1) commingling of funds and other assets, (2) the holding out by one entity that it is

                                              21
              In its statement of decision, the trial court found plaintiffs failed to prove
the second requirement: “[P]laintiffs must establish that failure to disregard the corporate
entity would sanction a fraud or promote injustice. It is this aspect of the alter ego
doctrine that plaintiff has failed to prove both as regards Mr. Parent and A.J. Parent
Company, Inc.” Later in its statement of decision, the court stated, “Koji’s was a real
business with real purpose and assets and not a sham corporate entity formed for the
purpose of committing a fraud or other misdeeds.” (Italics added.) The trial court’s
statements suggest a misunderstanding of the applicable law. Therefore, on remand at
the retrial, we direct the court to make findings on alter ego liability according to the
requirements set forth in Sonora, supra, 83 Cal.App.4th at page 538, as quoted ante.
              At oral argument on appeal, plaintiffs argued that retrial was unnecessary
because they proved Parent’s and America’s Printer’s alter ego liability as a matter of
law. We decline plaintiffs’ invitation to conclude Parent and/or America’s Printer were
Koji’s alter egos as a matter of law. To do so would require our assessing credibility and
weighing the extensive and conflicting testimony and documentary evidence presented at
trial regarding the factors set forth above, instead of reviewing this issue through the lens
of the applicable standard of review. (See Baize v. Eastridge Companies LLC (2006) 142
Cal.App.4th 293, 302 [a trial court’s alter ego findings are reviewed for substantial
evidence].)




liable for the debts of the other, (3) identical equitable ownership in the two entities,
(4) use of the same offices and employees, (5) use of one entity as a mere shell or conduit
for the affairs of the other, (6) inadequate capitalization, (7) disregard of corporate
formalities, (8) lack of segregation of corporate records, and (9) identical directors and
officers. (Sonora, supra, 83 Cal.App.4th at pp. 538-539.) “No one characteristic
governs, but the courts must look at all the circumstances to determine whether the
doctrine should be applied.” (Id. at p. 539.)

                                              22
                                    IV.
    THE TRIAL COURT ERRED IN CONCLUDING PARENT WAS NOT LIABLE AS A JOINT
           EMPLOYER WITH RESPECT TO PLAINTIFFS’ STATE LAW CLAIMS
              Plaintiffs argue the trial court erred by concluding Parent was not liable as a
joint employer with respect to plaintiffs’ state law claims. For the reasons we will
explain, we agree the trial court erred and direct the court to vacate its findings with
regard to Parent’s joint employer liability on plaintiffs’ state law claims.
                                            A.
               Definition of Employer in IWC Wage Order No. 5-2001 and
                              Martinez, supra, 49 Cal.4th 35.
              IWC wage order No. 5-2001, which applies to the restaurant industry and
thus to plaintiffs as former employees in that industry, defines “Employer” as any person
“who directly or indirectly, or through an agent or any other person, employs or exercises
control over the wages, hours, or working conditions of any person.” (Cal. Code Regs.,
tit. 8, § 11050, subd. 2(H).) That wage order further states the term “employ” means “to
engage, suffer, or permit to work.” (Id., § 11050, subd. 2(E).)
              In Martinez, supra, 49 Cal.4th at page 64, the California Supreme Court
held that the definition of employer contained in IWC wage orders applies to actions
seeking recovery of unpaid minimum wages under section 1194. After analyzing the
history of the wage orders and their language, and applying the rules of statutory
interpretation, the Supreme Court articulated the following definition to determine who
might have liability as an employer for unpaid minimum wages under the Labor Code:
“To employ, then, under the IWC’s definition, has three alternative definitions. It means:
(a) to exercise control over the wages, hours or working conditions, or (b) to suffer or
permit to work, or (c) to engage, thereby creating a common law employment
relationship.” (Martinez, supra, 49 Cal.4th at p. 64.)
              The Supreme Court stated the alternative definitions of employer are
sufficiently broad to encompass a proprietor who employs a worker by contract, permits


                                              23
work by acquiescence, or suffers work to be performed by a failure to hinder. (Martinez,
supra, 49 Cal.4th at p. 69.) Furthermore, “[a] proprietor who knows that persons are
working in his or her business without having been formally hired, or while being paid
less than the minimum wage, clearly suffers or permits that work by failing to prevent it,
while having the power to do so.” (Ibid.)
              Plaintiffs’ first, fourth, fifth, and seventh causes of action involve alleged
violations of the IWC wage order No. 5-2001 and section 1194, to which, under
Martinez, the three alternative definitions of “employer” discussed ante would apply.
                                          B.
 The Statement of Decision Explains the Trial Court’s Reasoning in Finding Parent Not
        Liable as a Joint Employer with Regard to Plaintiffs’ State Law Claims.
              In the statement of decision, the trial court concluded Parent was not liable
as a joint employer under any of plaintiffs’ claims brought pursuant to state law, but was
liable as a joint employer under the FLSA. The court reasoned as follows:
              “Here, plaintiffs contend that since Mr. Parent was sole shareholder, a
director of Koji’s, and president he exercised significant control over plaintiffs. Indeed,
plaintiffs argue that since Mr. Parent hired and fired non-exempt managers of Koji’s,
instructed his managers to ‘get rid of’ Quiles when she filed this action and she was
thereafter fired, and ultimately laid off all employees when the restaurants closed, he
exercised actual control over the employees of Koji’s.
              “Plaintiffs assert that the Court in Martinez held that under California law,
in wage and hour actions, the Industrial Wage Commission’s definition of employer
applies. That definition provides that any person is an employer who is authorized to:
              “1. suffer or permit another to work;
              “2. control wages, hours and working conditions; or
              “3. engage employees.




                                             24
              “Plaintiffs argue that since Mr. Parent had all of these attributes, he should
be considered a joint employer with plaintiffs’ direct employer, Koji’s.
              “The problem with plaintiffs’ theory in this regard is similar to the problem
with their alter ego theory. If Mr. Parent is an ‘employer’ by virtue of his control as sole
shareholder and president of Koji’s, then all owners of all closely held corporations
would suffer the same fate. They all have ultimate control of the corporation, whether
they delegate that control to managers o[r] not. It would mean that in every wage and
hour case against a closely held corporation, the individual shareholder(s) would be liable
as a joint employer. In this set of cases, limited liability would become the rule, not the
exception.
              “While Martinez did hold that IWC’s definition applies to wage and hour
cases brought under the Labor Code, the facts of that case were different than the facts of
this case. In Martinez, plaintiffs were not seeking to inculpate corporate officers, board
members or shareholders. Rather, plaintiffs sought to invoke the joint employer doctrine
against separate companies, merchants who purchased produce from plaintiffs’ direct
employer. Parenthetically, the Court in Martinez affirmed the granting of summary
judgment in defendants’ favor, finding that even under the IWC’s broad definition of
employer, defendants were not liable.
              “More appropriate authority controlling our case is found in Reynolds v.
[Bement] (2005) 36 Cal.4th 1075, a case cited with approval in Martinez. In that case
Plaintiffs sought to enforce labor code violations against officers, shareholders, directors
and managers of a closely held corporation. On demurrer, the Court in Reynolds held
that ‘under the common law corporate agents acting within the scope of their agency are
not personally liable for the corporate employer’s failure to pay its employees . . . Had
the legislature meant in section 1194 to expose to personal civil liability any corporate
agent who “exercises control” over an employee’s wages, hours, or working conditions, it



                                             25
would have manifested its intent more clearly than by mere silence after the IWC’s
promulgation of Wage Order No. 9.’ [Citations.]
              “For these reasons, the court finds that Mr. Parent was not an employer
under California state law.”
                                         C.
 The Trial Court’s Determination that Parent Was Not Liable as a Joint Employer with
  Regard to Plaintiffs’ State Law Claims Was Based on a Misapplication of the Law.
              Although the trial court correctly identified the Supreme Court’s decision in
Martinez as controlling authority, it appears from the court’s comments in its statement of
decision that the court concluded Martinez is factually distinguishable from the instant
case and therefore its three alternative definitions of employer are inapplicable here. The
court ultimately concluded the determination of the definition of the term employer set
forth in Reynolds v. Bement (2005) 36 Cal.4th 1075 (Reynolds) is more apt; applying that
definition, the court determined Parent was not liable as a joint employer on plaintiffs’
state law claims.
              In Martinez, the Supreme Court analyzed and significantly limited its
holding in Reynolds: “Against this background we consider the significance of Reynolds,
supra, 36 Cal.4th 1075, and whether that decision governs this case. In Reynolds we
looked to the common law rather than the applicable wage order to define employment in
an action under section 1194 seeking to hold a corporation’s directors and officers
personally liable for its employees’ unpaid overtime compensation. [Citation.] We
conclude Reynolds does not govern this case. Wage Order No. 14, and not the common
law, properly defines the employment relationship in this action under section 1194.”
(Martinez, supra, 49 Cal.4th at p. 62.)
              In Reynolds, supra, 36 Cal.4th at page 1082, the plaintiff worked for a
corporation that owned and operated automobile painting shops. The plaintiff sued to
recover unpaid overtime compensation under section 1194 and the IWC’s applicable



                                             26
wage order. (Reynolds, supra, at p. 1083.) The plaintiff sued, inter alia, eight of his
employer’s officers and directors in their individual capacities. (Id. at pp. 1082-1083.)
The Supreme Court affirmed the order sustaining a demurrer to the claims against the
officers and directors on the ground plaintiff failed to state a cause of action against them.
(Id. at pp. 1083, 1087-1088.)
              The Supreme Court in Martinez, supra, 49 Cal.4th at pages 62 to 63,
acknowledged that in Reynolds, it had held that the common law rather than the
applicable wage order defined the employment relationship for purposes of a claim under
section 1194—a holding the court expressly disavowed in Martinez. The Martinez court
stated: “Were we to define employment exclusively according to the common law in
civil actions for unpaid wages we would render the commission’s definitions effectively
meaningless.” (Martinez, supra, at p. 65.)
              The Martinez court, however, added: “This is not to say the common law
plays no role in the IWC’s definition of the employment relationship. In fact, the IWC’s
definition of employment incorporates the common law definition as one alternative. As
defined in the wage orders, ‘“[e]mployer” means any person . . . who . . . employs or
exercises control over the wages, hours, or working conditions of any person,’ and
‘“[e]mploy” means to engage, suffer, or permit to work.’ [Citation.] The verbs “to
suffer” and “to permit,” as we have seen, are terms of art in employment law. . . . In
contrast, the verb ‘to engage’ has no other apparent meaning in the present context than
its plain, ordinary sense of ‘to employ,’ that is, to create a common law employment
relationship. This conclusion makes sense because the IWC, even while extending its
regulatory protection to workers whose employment status the common law did not
recognize, could not have intended to withhold protection from the regularly hired
employees who undoubtedly comprise the vast majority of the state’s workforce. To
employ, then, under the IWC’s definition, has three alternative definitions. It means: (a)
to exercise control over the wages, hours or working conditions, or (b) to suffer or permit

                                             27
to work, or (c) to engage, thereby creating a common law employment relationship.”
(Martinez, supra, 49 Cal.4th at p. 64, fn. omitted.)
              The Supreme Court in Martinez, supra, 49 Cal.4th at page 66, concluded:
“In sum, we hold that the applicable wage order’s definitions of the employment
relationship do apply in actions under section 1194. The opinion in Reynolds, supra, 36
Cal.4th 1075, properly holds that the IWC’s definition of ‘employer’ does not impose
liability on individual corporate agents acting within the scope of their agency.
[Citation.] The opinion should not be read more broadly than that.”
              Here, in its statement of decision, the trial court expressed concern that if
Parent were held liable by virtue of his control as sole shareholder and president of
Koji’s, then all owners of all closely held corporations would suffer the same fate. But
Parent’s status as sole shareholder and president of Koji’s cannot insulate him, or any
other sole owner of a closely held corporation, from liability as a joint employer if his
actions meet any one of the three definitions set forth in Martinez. (See Castaneda v.
Ensign Group, Inc. (2014) 229 Cal.App.4th 1015, 1017-1018 [“A corporation with no
employees owns a corporation with employees. If the corporation with no employees
exercises some control over the corporation with employees, it also may be the employer
of the employees of the corporation it owns”]; Guerrero v. Superior Court (2013) 213
Cal.App.4th 912, 950 [an entity that controls the business enterprise may be an employer
even if it did not “directly hire, fire or supervise” the employees].)
              Parent was not a remote sole shareholder and president who was never
involved in Koji’s operations. In the statement of decision, in support of its finding that
plaintiffs had proven the first prong of the alter ego doctrine and thereby showed Parent
“dominated or controlled” Koji’s, the trial court noted Parent was the “big boss” to Koji’s
employees and “had the ability to control [Koji’s and America’s Printer], whether he
chose to delegate that responsibility to managers or not.” The court acknowledged
plaintiffs’ contentions that “since Mr. Parent hired and fired non-exempt managers of

                                              28
Koji’s, instructed his managers to ‘get rid of’ Quiles when she filed this action and she
was thereafter fired, and ultimately laid off all employees when the restaurants closed, he
exercised actual control over the employees of Koji’s.”
              The trial court did not suggest it disbelieved the evidence of Parent’s
involvement in Koji’s beyond that of remote sole shareholder and president.
Nevertheless it failed to apply the Martinez three-part definition of “employer” to
determine whether such evidence proved joint employer liability. Instead, solely relying
on Reynolds, supra, 36 Cal.4th 1075, the court concluded Parent was immune from such
liability notwithstanding such activity, because he was simply a corporate agent acting
within the scope of his agency. If that were the rule, no sole shareholder and officer of a
closely-held corporation would ever be liable as a joint employer for wage violations,
even if he or she suffered or permitted another to work, controlled wages, hours and
working conditions, or engaged employees.
              The trial court found Parent had joint employer liability as to plaintiffs’
federal claims under the FLSA: “The definition of employer is broader under federal
labor law than under California law. Indeed, under the FLSA it has been held that under
certain circumstances a shareholder/officer of a closely held corporation can be liable for
violations along with the corporate employer. [Citation.] Under the FLSA, an employer
includes ‘any person acting directly or indirectly in the interest of an employer in relation
                    7
to an employee.’”
              The determination of liability for violations of the FLSA for failure to pay
wages depends on whether there is an employer-employee relationship under the so-
called “‘economic reality test.’” (Futrell v. Payday California, Inc. (2010) 190


7
  See Guerrero v. Superior Court, supra, 213 Cal.App.4th at p. 945 (“Martinez rejected
the defendants’ contention that the narrower federal standard governed the definition of
employer”). But see Bonnette v. California Health & Welfare Agency (9th Cir. 1983)
704 F.2d 1465, 1470 (referring to “the FLSA’s liberal definition of ‘employer’”).

                                             29
Cal.App.4th 1419, 1435.) The FLSA’s test, though distinct from the IWC’s wage orders’
definition of the term ‘“employ”’ (Martinez, supra, 49 Cal.4th at pp. 59-60), ordinarily
involves the consideration of similar factors (Futrell v. Payday, Inc., supra, p. 1435). In
applying the FLSA’s test, courts “evaluate ‘“the economic realit[y] of the work
relationship”’ . . . ‘“whether the alleged employer (1) had the power to hire and fire the
employees, (2) supervised and controlled employee work schedules or conditions of
employment, (3) determined the rate and method of payment, and (4) maintained
employment records.”’” (Guerrero v. Superior Court, supra, 213 Cal.App.4th at pp.
928-929.) Our concern that the trial court misapplied state law in determining Parent’s
joint employer liability deepens given the similar factors applicable to determining
federal joint employer liability, notwithstanding the separate definitions of the term
employer under state and federal law.
              We therefore direct the trial court to vacate its finding that Parent was not
liable as a joint employer with regard to plaintiffs’ claims involving violations of section
1194 and IWC wage order No. 5-2001, and, on retrial, reconsider this issue by applying
each of the three alternative definitions set forth in Martinez, supra, 49 Cal.4th at pages
59 to 60, to the evidence presented in this case.
                                           D.
     The Statement of Decision Does Not Address the Legal Standard Applicable to
Determining Joint Employer Liability as to Plaintiffs’ Sixth, Ninth, and Twelfth Causes of
                                        Action.
              Although raised by plaintiffs in their objections to the proposed statement
of decision, plaintiffs argue and we agree the statement of decision fails to address the
legal standard applicable to joint employer liability for plaintiffs’ claims not involving an
alleged violation of section 1194 and/or IWC wage order No. 5-2001, namely plaintiffs’
sixth, ninth, and twelfth causes of action. We therefore direct the court on remand to
address the applicable legal standards for joint employer liability with regard to these
claims.

                                             30
                   The sixth cause of action alleges defendants violated section 351, which
prohibits an employer or agent from collecting, taking, or receiving a gratuity left for an
employee by a patron, and based on that statutory violation, also alleges a violation of the
unfair competition law. Section 350, subdivision (a) provides its own definition of the
term employer: “[E]very person engaged in any business or enterprise in this state that
has one or more persons in service under any appointment, contract of hire, or
apprenticeship, express or implied, oral or written, irrespective of whether the person is
the owner of the business or is operating on a concessionaire or other basis.”
                   The ninth cause of action alleges a separate violation of the unfair
competition law, which provides that “an owner or officer of a corporation may be
individually liable under the [UCL] if he or she actively and directly participates in the
unfair business practice.” (Bradstreet v. Wong (2008) 161 Cal.App.4th 1440, 1458.)
                   The twelfth cause of action is brought pursuant to PAGA which plaintiff
argues authorizes recovery of penalties under section 558, subdivision (a), which
provides: “Any employer or other person acting on behalf of an employer who violates,
or causes to be violated, a section of this chapter or any provision regulating hours and
days of work in any order of the Industrial Welfare Commission shall be subject to a civil
penalty . . . .”




                                                 31
                                       DISPOSITION
              The petition for a writ of mandate is granted. Let a writ of mandate issue
directing the trial court to vacate its orders (1) granting plaintiffs’ motion for class
certification as to Koji’s only, (2) denying plaintiffs’ revised motion to compel further
discovery responses, (3) issuing sanctions against plaintiffs’ counsel in connection with
the filing of plaintiffs’ revised motion to compel further discovery responses, (4)
concluding neither Parent nor America’s Printer were alter egos of Koji’s, and (5)
concluding Parent cannot be held liable as a joint employer with regard to plaintiffs’ state
law claims. Petitioners shall recover costs on appeal.




                                                   FYBEL, J.

WE CONCUR:



ARONSON, ACTING P. J.



IKOLA, J.




                                              32
Filed 11/29/17




                       CERTIFIED FOR PARTIAL PUBLICATION

             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                             FOURTH APPELLATE DISTRICT

                                     DIVISION THREE


HEATHER TURMAN et al.,

    Petitioners,                                     G051871

        v.                                           (Super. Ct. No. 30-2010-00425532)

THE SUPERIOR COURT OF ORANGE                         ORDER GRANTING PARTIAL
COUNTY,                                              PUBLICATION

    Respondent;

KOJI’S JAPAN INCORPORATED et al.,

    Real Parties in Interest.



                 Petitioners Heather Turman et al., amicus curiae Legal Aid at Work
(formerly the Legal Aid Society—Employment Law Center), and amicus curiae
California Employment Lawyers Association have each requested that our opinion, filed
on November 7, 2017, be certified for partial publication. Amici curiae Asian Americans
Advancing Justice—Asian Law Caucus, Centro Legal de la Raza, Los Angeles Alliance
for a New Economy, National Employment Law Project, Wage Justice Center, and the
Women’s Employment Rights Clinic of Golden Gate University School of Law, along
with UCLA Labor Center, have joined Legal Aid at Work’s request for partial
publication.
               It appears that portions of our opinion meet the standards set forth in
California Rules of Court, rule 8.1105(c)(2) through (8). The requests for partial
publication are GRANTED pursuant to California Rules of Court, rule 8.1110.
               The opinion is ordered published in the Official Reports with the exception
of parts I and II of the Discussion.




                                                  FYBEL, J.

WE CONCUR:



ARONSON, ACTING P. J.



IKOLA, J.




                                              2
