Filed 10/8/19
                           CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                             FIRST APPELLATE DISTRICT

                                      DIVISION ONE


BILLY R. HENDERSON,
        Plaintiff and Appellant,
                                                  A151626
v.
EQUILON ENTERPRISES, LLC,                         (Contra Costa County
                                                  Super. Ct. No. MSC10-02259)
        Defendant and Respondent.


        Plaintiff and appellant Billy R. Henderson brought a civil action for wage and hour
violations against defendant and respondent Equilon Enterprises, LLC, doing business as
Shell Oil Products US (Shell), under a “joint employer” theory of liability. Henderson’s
causes of action consisted of failure to pay overtime compensation, failure to pay for
missed break periods, and unfair business practices (Bus. & Prof. Code, § 17200). The
trial court found Shell was not Henderson’s joint employer and granted Shell’s motion
for summary judgment. We affirm the judgment.

                    FACTUAL AND PROCEDURAL BACKGROUND
     A. Procedural History
        Henderson commenced this lawsuit as a class action in July 2010. The trial court
stayed the action under the common law doctrine of exclusive concurrent jurisdiction due
to the earlier filing of a related class action lawsuit. In April 2016, Henderson filed a
second amended complaint removing the class action allegations and stating individual
claims for unpaid wages, statutory wage and record-keeping penalties and interest, as
well as restitution, injunctive, and declaratory relief under Business and Professions Code
section 17200 et seq. Henderson alleged he had been employed as the station manager of
several Shell-owned gasoline stations operated by Danville Petroleum, Inc. (Danville).
He claimed he worked overtime and missed off-duty meal and rest breaks without
receiving compensation. He further alleged that while he had been hired by Danville,
Shell was liable as his “joint employer” because Shell “both directly and indirectly
controlled the wages, hours or working conditions” of Danville’s employees.
       Shell moved for summary judgment, asserting it could not be held liable because
Danville was Henderson’s sole employer. (See Martinez v. Combs (2010) 49 Cal.4th 35,
49 (Martinez) [“only an employer can be liable”].) Henderson settled his claims against
Danville and opposed Shell’s motion for summary judgment. After a hearing conducted
on January 12, 2017, the trial court issued its opinion and order granting Shell’s motion.
Judgment in favor of Shell was entered on March 30, 2017. This appeal followed.
   B. Relevant Facts
       As the parties acknowledge in their appellate briefs, the relevant facts are largely
undisputed. Danville is a California corporation formed in 1997. Danville is a
third-party service station operator. Henderson worked as a station manager for Danville
from approximately 1998 to 2008, when he was fired following an accusation of sexual
harassment. Henderson managed as many as seven of Danville’s Shell-branded gas
stations between 2001 through 2008. During this time, he was never directly employed
by Shell.
       Prior to August 2003, Danville operated Shell-branded service stations as a
franchisee under a Contractor Operated Retail Outlet (CORO) Agreement.1 Under these
franchise agreements, third-party operators like Danville ran convenience stores and/or
car washes at Shell-branded gas stations, retaining the proceeds from those activities
while selling fuel for Shell. Shell charged the operators a royalty on convenience store
sales and paid the operator a set fee for each gallon of gasoline sold.
       In 2003, Shell discontinued the CORO program and adopted a Multi-Site Operator
(MSO Agreement) structure. Under the MSO Agreement, Shell supplied the stations


       1
           Henderson worked as the manager at two of these CORO stations.

                                              2
with fuel products and set fuel prices. Danville facilitated the collection of customer
payments for fuel purchases and the transmission of these payments to Shell. Shell
compensated Danville for this service and reimbursed Danville for certain expenses. In
connection with the fuel sale business, Danville also agreed to survey and report the fuel
prices charged by competitors, change fuel prices as directed by Shell, keep the station
open for specified hours, use specified equipment for recording and reporting all sale
transactions to Shell, and abide by certain standards to protect the Shell brand. From
August 2003 to 2008, Danville operated as many as 39 gas stations for Shell under an
MSO Agreement, employing hundreds of people at those stations.
       Danville and Shell also entered into a Multi-Site Non-Petroleum Facility Lease
(MSO Lease) in connection with the operation of convenience stores, car washes, and
quick service restaurants on Shell gas station sites. Under the MSO Lease, Danville
operated these endeavors for its own benefit and was responsible for most of the
associated expenses. Danville paid Shell a monthly rent for the leased facilities. The
MSO Agreement and MSO Lease expressly disclaim any franchise relationship between
Danville and Shell.
       The MSO Agreement required Danville to comply with all applicable employment
laws. Danville alone made decisions with respect to recruiting, interviewing, hiring,
disciplining, promoting and terminating its employees. Danville had sole control over
employee payroll functions, including whether employees would be deemed exempt from
overtime regulations. Danville had its own employee handbook and set its own meal and
break policies. Shell retained the right to ask Danville to “remove” an employee from a
Shell-owned station “for good cause shown,” but the MSO Agreement provided that
Danville had sole authority to terminate its employees.2
       The MSO Agreement also required Danville to operate gas stations in conformity
with Shell’s operational standards. Shell provided Danville with station operation
manuals, including the MSO Site Operations Manual (MSO Manual), the Enhanced


       2
           Shell never asked for any Danville employee to be removed.

                                             3
Customer Value Proposition Reference Guide (CVP Reference Guide), and the Health,
Safety and Environmental Reference Manual (Blue Book). Danville directed its
employees as to how to comply with the provisions of these manuals, and the record
indicates that Danville never required Henderson to read the MSO Manual. While the
standards in these manuals appear extensive, the CVP Reference Guide specifies, among
other things, that Danville “may use different methods [or] frequencies [than] those
recommended here.”
       Both Danville and Shell conducted station inspections. Shell’s inspections were
referred to as “CVP inspections.” Shell’s representatives would give their inspection
reports to Danville, and Danville would discuss any concerns with Henderson. Shell’s
representatives did not directly tell Henderson or other station employees how to perform
their work. Danville performed its own audits of the convenience stores managed by
Henderson. Henderson was instructed by Danville to contact Danville representatives for
any questions about operating his stations. Shell was not involved in the decision to
terminate Henderson’s employment.
                                        DISCUSSION
   I. Standard of Review
       The standard for reviewing a grant of summary judgment is well established.
Summary judgment is appropriate if “there is no triable issue as to any material fact and
. . . the moving party is entitled to judgment as a matter of law.” (Code Civ. Proc.,
§ 437c, subd. (c).) To meet its initial burden in moving for summary judgment, a
defendant must present evidence that either “conclusively negate[s] an element of the
plaintiff’s cause of action” or “show[s] that the plaintiff does not possess, and cannot
reasonably obtain,” evidence necessary to establish at least one element of the cause of
action. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853–854.) Once the
defendant satisfies its initial burden, “the burden shifts to the plaintiff . . . to show that a
triable issue of one or more material facts exists as to the cause of action or a defense
thereto.” (Code Civ. Proc., § 437c, subd. (p)(2).) When considering an appeal from a
grant of summary judgment, we independently review the record, “liberally construing


                                                4
the evidence in support of the party opposing summary judgment and resolving doubts
concerning the evidence in favor of that party.” (Miller v. Department of Corrections
(2005) 36 Cal.4th 446, 460.)
   II. Joint Employment Relationships in Wage and Hour Claims
       Henderson’s wage and hour claims are based on the Industrial Welfare
Commission’s (IWC) wage order No. 7-2001 (Cal. Code Regs., tit. 8, § 11070 (Wage
Order No. 7).) Wage Order No. 7 defines “Employer” as a person or business “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, § 11070, subd. 2(F).) An “Employee” is defined as “any person employed by an
employer.” (Id., subd. 2(E).) “Employ” is defined as “engag[ing], suffer[ing], or
permit[ting] to work.” (Id., subd. 2(D).)
       In Martinez, the Supreme Court evaluated wage and hour claims brought by
seasonal agricultural workers against a farmer who was their direct employer and two of
the produce merchants through whom the farmer sold his strawberries. (Martinez, supra,
49 Cal.4th at p. 48.) The plaintiffs’ suit was predicated on a theory that both the farmer
and the produce merchants were their joint employers. The plaintiffs argued that in an
action for unpaid and overtime wages under Labor Code section 1194, the court should
look to the alternative definitions of “employ” and “employer” as set forth in IWC Wage
Order No. 14 to determine who is a potentially liable employer. (Martinez, at p. 51). The
Supreme Court examined “the question of how employment should be defined” and
concluded “the IWC’s wage orders do generally define the employment relationship, and
thus who may be liable.” (Martinez, at pp. 50, 52.) The court held: “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 [taken from the IWC definition of
‘employer’], or (b) to suffer or permit to work [taken from the IWC definition of
‘employ’], or (c) to engage,” which the court construed as the common law definition of
an employment relationship. (Id. at p. 64.) The Court concluded the produce merchants



                                             5
could not properly be found to be an employer under any of the alternative definitions of
employment found in the wage order. (Id. at pp. 68–77.)
       In examining the first definition of an employment relationship—exercising
control over wages, hours, or working conditions—the Martinez court recognized that the
produce merchants could leverage their business relationship to influence the farmer.
(Martinez, supra, 49 Cal.4th at pp. 72, 74–75.) However, while the merchant’s
representatives would explain to the agricultural workers “how the merchant wanted
strawberries packed,” would “check the packed containers as workers brought them from
the field,” and “would also sometimes speak directly to the workers, pointing out
mistakes in packing such as green and rotten berries,” these interactions were insufficient
to establish that the merchants exercised control over the plaintiffs’ working conditions.
No evidence suggested that the farm workers viewed the merchants’ representatives as
their supervisors, and the farmer’s contracts with the produce merchants gave the
merchants no right to direct the farmers’ employees. (Id. at pp. 76–77.) And while the
produce merchants paid the farmer an advance, that fact alone was not sufficient to
establish that the produce merchants controlled the workers’ wages and were the
workers’ employers. (Id. at pp. 72, 74–75.)
       Under the second definition—“to suffer or permit to work”—“the basis of liability
is the defendant’s knowledge of and failure to prevent the work from occurring.”
(Martinez, supra, 49 Cal.4th at p. 70.)3 No employment relationship was found under
this test because while the produce merchants were undoubtedly aware that the farmer
used laborers to satisfy his contracts, the produce merchants had no authority to prevent
such work from occurring. “Neither [produce merchant] suffered or permitted plaintiffs

       3
         As the Martinez court explained, the IWC language concerning an employer
suffering or permitting a person to work was derived from child labor laws and was
intended to impose civil or criminal liability for injuries sustained by children in a work
setting even when no common law employment relationship existed between the minor
and the defendant. (Martinez, supra, 49 Cal. 4th at p. 58 [“Not requiring a common law
master and servant relationship, the widely used ‘employ, suffer or permit’ standard
reached irregular working arrangements the proprietor of a business might otherwise
disavow with impunity.”)

                                              6
to work because neither had the power to prevent plaintiffs from working. [The farmer]
and his foremen had the exclusive power to hire and fire his workers, to set their wages
and hours, and to tell them when and where to report to work.” (Id. at p. 70.) That the
produce merchants derived a benefit from the plaintiffs’ labor was insufficient to make
them employers, for under such a broad standard the grocer who purchases the
strawberries from the defendants or the consumer who buys strawberries at the grocery
store could conceivably become employers under this theory of liability. (Ibid.)
       Finally, under the third IWC definition—“to engage”—the Martinez court
concluded no common law employment relationship existed between the plaintiffs and
the produce merchants. “ ‘[T]he principal test of [a common law] employment
relationship is whether the person to whom service is rendered has the right to control the
manner and means of accomplishing the result desired.’ ” ( S.G. Borello & Sons, Inc. v.
Department of Industrial Relations (1989) 48 Cal.3d 341, 350 (Borello); see Ayala v.
Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522, 533 (Ayala) [“Whether a right
of control exists may be measured by asking ‘ “ ‘whether or not, if instructions were
given, they would have to be obeyed’ ” ’ on pain of at-will ‘ “ ‘discharge[] for
disobedience.’ ” ’ ” The plaintiffs in Martinez asserted that the produce merchants were
joint employers by virtue of the control they exercised over the quality of the produce
picked and packaged by the agricultural workers. In rejecting plaintiffs’ quality-control
theory, the Martinez court noted that the farmer alone decided which fields to harvest on
any given day, he alone had the power to hire and fire his workers, and no evidence
suggested that the produce merchants ever supervised or exercised control over his
employees. (Martinez, supra, 49 Cal.4th at pp. 70, 72, 76–77.)
III.   No Triable Issues of Material Fact Demonstrate an Employment Relationship
       Between Plaintiff and Shell
       Our analysis in the present case is greatly informed by Curry v. Equilon
Enterprises, LLC (2018) 23 Cal.App.5th 289 (Curry), an opinion recently issued by our
colleagues in Division Two of the Fourth District Court of Appeal. In Curry, the plaintiff
brought a class action suit against Shell asserting the same claims as the ones presented


                                             7
here: failure to pay overtime compensation, failure to pay for missed break periods, and
unfair business practices. (Id. at pp. 292–293.) Curry involved the same MSO
Agreement at issue here, and the named plaintiff in that case, like Henderson, was a
station manager hired by a third-party operator (identified as “ARS”) to manage a Shell-
branded gas station. (Id. at pp. 293–295.) Like Henderson, the plaintiff in Curry alleged
that Shell was her joint employer. (Id. at p. 296.)
       Shell moved for summary judgment, contending it did not have an employment
relationship with the plaintiff. As here, Shell argued that while ARS and Shell were in a
contractual relationship, ARS alone managed and controlled “ ‘every aspect of its
employment relationship with its gas station employees . . . .’ ” (Curry, supra,
23 Cal.App.5th at p. 297.) In opposing summary judgment, the plaintiff asserted a
reasonable jury could find that Shell was her joint employer because it “mandates how
[the fuel business] will be operated primarily by service station employees . . . .” (Id. at
p. 298.) The trial court granted Shell’s motion, finding that Shell was not Curry’s
employer, either solely or jointly. (Id. at p. 299.)
       The Court of Appeal affirmed, concluding no triable issues of fact were presented
demonstrating a joint employer relationship between Shell and the plaintiff under any of
the definitions set forth in Martinez. Addressing the first prong of the Martinez test, the
Curry court first considered whether any triable issues had been raised as to whether
Shell exercised control over the plaintiff’s wages, hours, or working conditions. (Curry,
supra, 23 Cal.App.5th at p. 301.) Answering in the negative, the court concluded that
ARS had sole control over the plaintiff’s wages and hours because it “ ‘was responsible
for hiring, firing, disciplining, training, and compensating’ ” her, and “was responsible
for determining her work schedule.” (Id. at pp. 302–303.) The undisputed facts also
showed that ARS was solely responsible for the plaintiff’s working conditions because
only ARS could “direct [the plaintiff] to perform a particular task” and only ARS
“maintained control over the daily work of its own employees.” (Id. at p. 303.)
       The Curry court rejected plaintiff’s assertion that the MSO Agreement and Shell’s
various operating manuals detailing her daily tasks created a triable issue of fact. While


                                               8
Shell exercised control over ARS, and ARS exercised control over the plaintiff, the
plaintiff did not explain how Shell exercised control over her own working conditions.
(Curry, supra, 23 Cal.App.5th at p. 303.) The court observed that while Shell required
certain tasks to be performed by ARS under the contract, it “did not mandate who or how
many employees execute the tasks.” While Shell required, for example, that the gas
station managed by plaintiff be open 24 hours a day, seven days a week, Shell did not
control how many employees ARS used to staff the station. (Id. at pp. 303–304.) In
addition, Shell had no control over the plaintiff’s wages because there was no evidence
that her wages were affected by reimbursements Shell made to ARS for its reasonable
expenses related to maintenance of the fueling station. (Id. at p. 304.)
       Henderson, whose counsel is the same attorney that represented the plaintiff in
Curry, raises essentially the same arguments in the instant appeal. He contends Shell
exercised control over his working conditions because the MSO Agreement required
Danville to “ ‘ensure’ ” that its employees perform specific tasks and Danville directed
Henderson to perform many of those tasks because he “was the on-site manager with
generally only one cashier on duty with him.” Shell allegedly controlled Henderson’s
hours because the MSO Agreement required “all of Danville’s assigned stations to be
open 24/7/365. This requirement alone required Henderson to cover shifts when a
cashier was missing.” Henderson also contends he was required to be at work every
morning Monday through Saturday to perform the gas survey, complete mandatory fuel
sales reports and make bank deposits for the benefit of Shell’s motor fuel business. As to
Shell’s control over his wages, he states, “While Shell did not set each employee’s
compensation, Shell unilaterally determined how much it would reimburse Danville for
all motor fuel related labor.”
       We reject these contentions for the same reasons explained in Curry. The record
is undisputed that Danville alone set Henderson’s wages, determined which employees
would be deemed exempt from overtime regulations, and was solely responsible for
Danville’s payroll function and compliance with labor laws. Danville alone set its meal
and rest break policies, enforced its own employee handbook, and determined


                                             9
Henderson’s work schedule and the number of employees who worked at a particular
station. That Danville may have understaffed its service stations, requiring Henderson to
cover shifts for other employees and work longer hours, are working conditions that
Danville created and Shell had no contractual authority to control or alter. Danville alone
dictated the day-to-day tasks Henderson was required to perform and the conditions
under which he performed them. Henderson’s contention that Shell’s reimbursement of
reasonable expenses amounted to indirect control of his wages is equally unavailing. No
evidence was presented that Henderson’s wages were affected by or connected to the
reimbursement amounts set by Shell. The evidence does not reflect, for example, that
Henderson was paid less for a shift if the reimbursement amount came in lower than
expected. (See Curry, supra, 23 Cal.App.5th at p. 304.) In short, while Danville was
required by Shell to perform certain tasks under the MSO Agreement, Danville alone
dictated how those tasks would be performed by its employees and controlled the
day-to-day operations of the service stations. We conclude Henderson has failed to raise
a triable issue of fact concerning Shell’s ability to control his wages, hours, or conditions
of employment, and Shell is therefore entitled to judgment as a matter of law as to all
claims based upon the IWC’s definition of an “employer.”
       Under the second Martinez test for joint employment, whether Shell suffered or
permitted Henderson to work, the Curry court explained this test “was derived from a
desire to prevent evasion from liability by a claim that a person was not employed in a
traditional master/servant relationship.” (Curry, supra, 23 Cal.App.5th at pp. 310–311.)
The definition has been interpreted to mean “ ‘the employer “shall not . . . permit by
acquiescence, nor suffer by a failure to hinder.” ’ ” (Id. at p. 311.) The Curry court
concluded “the undisputed evidence reflects [the plaintiff’s] hiring, firing, and daily tasks
were ARS’s responsibility. Thus, Shell did not acquiesce to [the plaintiff’s] employment
because Shell was not in a position to terminate [her] or hire a different person to perform
the tasks [she] performed.” (Id. at p. 311.)
       We find Curry’s analysis of this test dispositive of the question before us. The
MSO Agreement provides that Danville had the exclusive right to recruit, interview,


                                               10
train, hire, discipline, promote, and terminate its employees, and Danville maintained
control over their daily work activities. While Shell retained the right to ask Danville to
“remove” an employee from a Shell-owned station “for good cause shown,” Henderson
does not dispute that Shell had no right to fire him. As the trial court below found,
“[r]emoval cannot be synonymous with discharge when the subsequent sentence [in the
MSO Agreement] provides that Shell “shall not select, hire, discharge, supervise, or
instruct any of [Danville]’s employees.” (Italics added.) Shell cannot have acquiesced to
Henderson’s employment because Shell had no power to fire plaintiff, hire his
replacement, or prevent him from working for Danville. (See Curry, supra,
23 Cal.App.5th at p. 311; Martinez, supra, 49 Cal.4th at p. 70.)
       Nor has Henderson raised a triable issue of material fact with respect to whether
Shell suffered Henderson’s employment by failure to hinder. As the Curry court
observed, Shell never exercised the option to remove an ARS employee from a service
station and has not evoked the “good cause” that must precede any such removal.
(Curry, supra, 23 Cal.5th at p. 311.) The same applies with respect to any Danville
employee. Because Shell has not established the good cause required to remove
Henderson from a service station, it had no power to hinder his work, and, by extension,
could not have failed to hinder his work.
       Henderson contends the IWC’s “suffer or permit” definition is applicable because
Shell failed to keep the claimed violations—unpaid overtime and missed meal and rest
break compensation—from occurring. He misapprehends this test. The “suffer or
permit” test does not concern whether the alleged joint employer failed to hinder or
acquiesced to a violation. As discussed ante, the test concerns an alleged employer’s
failure to hinder the alleged employee’s work by failing to prevent the work from
occurring. (Martinez, supra, 49 Cal. 4th at pp. 69–70.) Because Shell had no role in
either allowing or preventing Henderson from working for Danville, we conclude
Henderson’s causes of action fail under the “suffer or permit” definition of employment.
       Under the third Martinez test, which concerns whether Shell was the plaintiff’s
employer under the common law definition of employment, the Curry court explained


                                             11
that the “essence of the common law employment test “ ‘is the “control of details”—that
is, whether the principal has the right to control the manner and means by which the
worker accomplishes the work,’ ” along with eight other secondary factors.4 (Curry,
supra, 23 Cal.App.5th at pp. 304–305.) After a detailed analysis of all the factors, the
court concluded that while Shell, along with ARS, had provided the plaintiff with a place
to work and the equipment with which she performed her job, “one could not reasonably
conclude that Shell controlled the manner and means by which Curry accomplished her
work” (id. at p. 308) because none of the other factors applied. (Id. at pp. 304–308.)
Undisputed facts showing the absence of a common law employment relationship
included the following: (1) while Shell required various tasks to be performed by ARS,
“there is nothing indicating that Shell required [the plaintiff] to be the person to perform
those tasks” (id. at p. 305), (2) “Shell did not have input on the hiring process or [the
plaintiff’s] job duties” (ibid.), (3) while Shell could request that an employee be removed
from a station, Shell could not terminate the plaintiff’s employment (id. at pp. 306–307),
(4) the plaintiff was not paid by Shell (id. at p. 307), and (5) unlike ARS, Shell was not in
the business of operating fueling stations; instead it was in the business of owning gas
stations (id. at pp. 307–308).
       Henderson does not point to any record evidence that distinguishes this case from
Curry or persuades us to depart from the Court of Appeal’s reasoned analysis. Shell

       4
         These factors are: “ ‘(1) whether the worker is engaged in a distinct occupation
or business, (2) whether, considering the kind of occupation and locality, the work is
usually done under the principal’s direction or by a specialist without supervision, (3) the
skill required, (4) whether the principal or worker supplies the instrumentalities, tools,
and place of work, (5) the length of time for which the services are to be performed,
(6) the method of payment, whether by time or by job, (7) whether the work is part of the
principal’s regular business, and (8) whether the parties believe they are creating an
employer-employee relationship. [Citations.] The parties’ label is not dispositive and
will be ignored if their actual conduct establishes a different relationship.’ ” (Curry,
supra, 23 Cal.App.5th at pp. 304–305.) This multifactor test was first articulated in
Borello, supra, 48 Cal.3d at pages 350–351. The significance of these factors will vary,
and certain factors, such as the “ ‘ownership of the instrumentalities and tools’ of the job”
(Ayala, supra, 59 Cal.4th at p. 539), may take on less importance in an overall evaluation
of the right to control. (See id. at p. 540.)

                                             12
required Danville to perform certain tasks under the MSO Agreement and MSO Lease
but left the execution of those tasks to Danville, and neither contract gave Shell authority
to hire, fire or direct the work of Danville’s employees. (See Ayala, supra, 59 Cal.4th at
p. 531 [“the strongest evidence of the right to control is whether the hirer can discharge
the worker without cause, because ‘[t]he power of the principal to terminate the services
of the agent gives him the means of controlling the agent’s activities’ ”], quoting Malloy
v. Fong (1951) 37 Cal.2d 356, 370.) Although Shell supplied detailed station operation
manuals, including the MSO Manual, the CVP Reference Guide, and the Blue Book,
Danville was responsible for directing its employees’ compliance with these manuals.
Indeed, Danville never required Henderson to read the MSO Manual. And while both
Shell and Danville conducted station inspections and audits, Shell’s inspection reports
were delivered directly to Danville—Shell had no formal communications with
Henderson or other Danville employees. (Compare Martinez, supra, 49 Cal.4th pp. 75–
76 [direct input from merchant representatives to plaintiffs concerning the quality and
packaging of produce did not establish a supervisory or control relationship with farm
worker plaintiffs].)
       The Curry court distinguished two cases relied on here by Henderson, RWJ Cos. v.
Equilon Enters., LLC (S.D.Ind., Dec. 28, 2005, Civ. A. No. 1:05-cv-1394-DFH-TAB)
2005 U.S.Dist. Lexis 38329, an unpublished federal court case from Indiana, and
Castaneda v. The Ensign Group, Inc. (2014) 229 Cal.App.4th 1015 (Castaneda). As the
Curry court noted, the RWJ case involved whether the MSO Agreement amounts to a
franchise agreement. (Curry, supra, 23 Cal.App.5th at p. 309.) In its analysis, the
federal district court stated: “ ‘The evidence in this case shows that Shell retained
extensive control over the marketing of fuel and every aspect of the filling station
operation, as well as substantial control over the marketing of convenience store products
and services. When reading cases addressing this issue, it is important to recognize that
RWJ operates only Shell-branded filling stations and that RWJ’s convenience stores are
associated very closely with both the filling station operations and the Shell brand.’ ”
(Curry, at p. 309.) The Curry court properly found the case inapposite, as the issue in


                                             13
RWJ was whether the RWJ contract with Shell was a franchise agreement by virtue of the
control Shell exercised over RWJ—not the employees of RWJ. (Curry, at p. 309.)5
       In Castaneda, an employee filed a class action suit alleging the defendant
corporation was the alter ego of a rehabilitation center owned by the defendant and
asserting its corporate veil should be pierced. (Castaneda, supra, 229 Cal.App.4th at
p. 1020.) Among other factors distinguishing Castaneda from Curry, the corporation
owned the plaintiff’s employer, set the rate of pay for its employees, and administered the
employee benefits. (Curry, supra, 23 Cal.App.5th at p. 310.) Because those facts are not
present here, we agree that Castaneda does not support the argument Henderson now
advances.
       Henderson also argues that the trial court failed to address the CORO station
structure that was in place prior to August 2003. Under this business arrangement, Shell
and Danville shared the revenue generated by the station, with Shell providing the motor
fuel and Danville providing the products sold in the convenience stores. Henderson
contends a triable issue exists whether the CORO structure amounted to a partnership
between Danville and Shell. Henderson failed to present this issue before the trial court
below. As Shell points out, Henderson never pleaded a partnership theory, adduced no
evidence of a partnership between Shell and Danville, and failed to develop any such

       5
         While the MSO Agreement replaced the CORO franchise agreement, the MSO
Agreement retained many of the attributes of the franchise agreement, including Shell
providing Danville with detailed manuals concerning the dispensing and sale of gasoline,
signage, and condition and maintenance of the property. Henderson places considerable
emphasis on these manuals in arguing Shell exercised control over his employment. We
note, however, that in Patterson v. Domino’s Pizza, LLC (2014) 60 Cal.4th 474, our
Supreme Court held that a franchisor that supplied these same kinds of operations
manuals did not thereby become the joint employer of the franchisee’s employees and
therefore was not liable for the franchisee’s alleged violations under the Fair Employment
and Housing Act (FEHA), specifically for alleged sexual harassment by a supervising
employee of the franchisee. (Patterson v. Domino’s Pizza, LLC, at p. 501.) Like the
wage and hour laws, FEHA provides important employee protections in the workplace.
Thus, the high court’s conclusion that the attributes of a franchise agreement, and
particularly the kinds of controls aimed at protecting a brand, do not create a joint
employer relationship, appears apt in the present context, as well.

                                            14
argument in opposing Shell’s motion for summary judgment. Rather, Henderson hangs
his hat on an evidentiary objection to a supplemental declaration filed by one of the
defendants. We decline to take up a partnership theory of liability for the first time on
appeal when the gravamen of plaintiff’s claims has been joint employer liability. The
argument is forfeited. (North Coast Business Park v. Nielsen Construction Co. (1993)
17 Cal.App.4th 22, 28–29 [“ ‘A party is not permitted to change [its] position and adopt a
new and different theory on appeal. To permit [it] to do so would not only be unfair to
the trial court, but manifestly unjust to the opposing party.’ ”).
 IV. Applicability of Dynamex to Claims of Joint Employer Liability
       While briefing was underway in this appeal, the California Supreme Court issued
its opinion in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903
(Dynamex). Dynamex examined what legal standard should apply to resolve whether a
worker has been properly classified as an independent contractor or employee. Drawing
from the “suffer or permit to work” test articulated in Martinez (see ante at p. 7), the
Dynamex court adopted the “ABC” test to address claims of worker misclassification.
(Dynamex, at pp. 958–963.) Henderson urges us to apply the ABC test and contends that
under such test, Shell cannot establish that Henderson was not its employee. For the
reasons explained below, we conclude that the ABC test in Dynamex does not fit
analytically with and was not intended to apply to claims of joint employer liability.
       In Dynamex, a putative class of delivery drivers brought suit against Dynamex
Operations West, Inc. (Dynamex), a nationwide package and document delivery
company. (Dynamex, supra, 4 Cal.5th at p. 914.) The plaintiffs alleged that Dynamex
had misclassified them as independent contractors and such misclassification allowed
Dynamex to circumvent the requirements of IWC wage order No. 9 and other provisions
of the Labor Code pertaining to employers. (Dynamex, at p. 914.) The drivers argued
that in analyzing whether an employment relationship had been established with
Dynamex, the trial court should apply the three alternative definitions of employment set
forth in the applicable wage order, consistent with Martinez. (Dynamex, at p. 914.)
Dynamex countered that the wage order definitions in Martinez are relevant only to joint


                                              15
employer claims, and the applicable standard for distinguishing employees from
independent contractors is the multifactor common law employment test described in
Borello. (Dynamex, at p. 915; see ante, at p. 12 & fn. 4.) Siding with the plaintiffs, the
trial court found that common issues about the employment relationship predominated
and certified the class. (Dynamex, at p. 915.)
       Following an unsuccessful motion to decertify the class, Dynamex petitioned for
writ of mandate at the Court of Appeal. The Court of Appeal rejected Dynamex’s
contention that two of the three definitions of employment under the wage order are
relevant only to joint employment issues. The court concluded instead that all three
definitions discussed in Martinez may be applied to determine whether a worker is an
employee covered under the wage order or is an independent contractor. (Dynamex,
supra, 4 Cal.5th at p. 915.) The Supreme Court granted review to consider whether the
definitions of “employer” and “employ”—the first and second Martinez tests—are
applicable to determine whether a worker is properly classified as an employee or
independent contractor for purposes of compliance with the IWC wage order. (Id. at
p. 916.)
       The Supreme Court concluded that the “suffer or permit to work” definition of
“employ” under the applicable wage order may be relied upon to evaluate claims that
workers have been misclassified as independent contractors. As Martinez explained, the
suffer or permit to work standard was established by wage order over a century ago and
has its roots in addressing irregular working arrangements and child labor cases, not
simply joint employer claims. (Dynamex, supra, 4 Cal.5th at pp. 944–945, citing
Martinez, supra, 49 Cal.4th at pp. 57–58.) A broad application of the suffer or permit to
work standard is justified as well by the history and remedial purpose of the wage orders
and other social legislation intended to protect the health and welfare of workers, provide
industrywide fair labor practices for law-abiding businesses, and ensure that the costs of
substandard wages and unsafe working conditions are not borne unnecessarily by the
public. (Dynamex, at pp. 952–953.) The high court recognized that a literal application
of the suffer or permit to work standard would characterize all individual workers who


                                             16
directly provide services to a business as employees, encompassing even those
individuals who traditionally serve as independent businesses, such as plumbers and
electricians. (Id. at p. 949.) The court thus adopted the “ABC” test to distinguish
covered employees from traditional independent contractors who would not reasonably
have been viewed as working in the hiring entity’s business.
       The court explained: “The ABC test presumptively considers all workers to be
employees, and permits workers to be classified as independent contractors only if the
hiring business demonstrates that the worker in question satisfied each of three
conditions: (a) that the worker is free from the control and direction of the hirer in
connection with the performance of the work, both under the contract for the performance
of the work and in fact; and (b) that the worker performs work that is outside the usual
course of the hiring entity’s business; and (c) that the worker is customarily engaged in
an independently established trade, occupation, or business of the same nature as that
involved in the work performed.” (Dynamex, supra, 4 Cal. 5th at pp. 955–956.) The
hiring entity’s failure to prove any one of these three elements will be sufficient to
establish that the worker is an employee, and not an independent contractor, covered
under the relevant wage order. (Id. at p. 964.)
       Part A of the ABC test is concerned with whether a worker is subject to the type
and degree of control a business typically exercises over an employee, the equivalent of a
common law employment relationship predicated on the principal’s right to control how
the end results are achieved. (Dynamex, supra, 4 Cal.5th at pp. 958, citing Borello,
supra, 48 Cal.3d at pp. 353–354, 356–357.)6 Part B asks whether the worker is engaged
in services that would ordinarily be viewed as part of the hiring entity’s usual business
operations. (Id. at p. 959.) When a worker provides services which are comparable to
work performed by the hiring entity’s employees or which align with and further the

       6
         As discussed ante, no evidence was presented demonstrating that Shell had a
right to control Danville’s employees in any way, and certainly no evidence that Shell
could terminate or discipline Danville’s employees if its instructions were not followed.
The existence of Shell-provided operations manuals, without more, does not suffice to
create a joint employer relationship with appellant. (See ante, p. 14, fn. 5.)

                                             17
hiring entity’s operations, “the hiring business can reasonably be viewed as having
suffered or permitted the workers to provide services as employees.” (Id. at p. 960.)
Part C asks the related question whether the independent contractor is an “individual who
independently has made the decision to go into business for himself or herself.” (Id. at
p. 962.) This test starts from the premise that a business may not evade the prohibitions
or responsibilities of being an employer by unilaterally determining a worker’s status as
“independent contractor” or by “requiring the worker, as a condition of hiring, to enter
into a contract that designates the worker an independent contractor.” (Ibid.) Part C
therefore requires inquiry into whether the worker has taken steps to establish and
promote his or her independent business, such as through licensing, incorporation,
advertisements, the existence of multiple customers, and other related indicia of
self-employment. (Ibid.)
       At bottom, Dynamex was concerned with the problem of businesses misclassifying
workers as independent contractors so that the business may obtain economic advantages
that result from the avoidance of legal and economic obligations imposed on an employer
by the wage order and other state and federal requirements. “[T]he risk that workers who
should be treated as employees may be improperly misclassified as independent
contractors is significant in light of the potentially substantial economic incentives that a
business may have in mischaracterizing some workers as independent contractors. Such
incentives include the unfair competitive advantage the business may obtain over
competitors that properly classify similar workers as employees and that thereby assume
the fiscal and other responsibilities and burdens that an employer owes to its employees.
In recent years, the relevant regulatory agencies of both the federal and state governments
have declared that the misclassification of workers as independent contractors rather than
employees is a very serious problem, depriving federal and state governments of billions
of dollars in tax revenue and millions of workers of the labor law protections to which
they are entitled.” (Dynamex, supra, 4 Cal.5th at p. 913.)
       Those policy concerns are not present in the instant appeal, or more broadly, in
wage and hour claims arising under a joint employer theory of liability. In a joint


                                             18
employer claim, the worker is an admitted employee of a primary employer, and is
subject to the protection of applicable labor laws and wage orders. The distinct question
posed in such claims is whether “another business or entity that has some relationship
with the primary employer should properly be considered a joint employer of the worker
and therefore also responsible, along with the primary employer, for the obligations
imposed by the wage order.” (Dynamex, supra, 4 Cal.5th at p. 915.) Joint employer
claims raise different concerns, such as when the primary employer is unwilling or no
longer able to satisfy claims of unpaid wages and workers must look to another business
entity that may be separately liable as their employer. (See Martinez, supra, 49 Cal.4th at
pp. 47–48 [claims asserted against putative joint employers after primary employer
defaulted on payment of back wages and statutory penalties]; Guerrero v. Superior Court
(2013) 213 Cal.App.4th 912, 928 [federal and state wage and hour claims asserted against
county for unpaid in-home supportive services under theory that county’s exercise of
control over administration of program rendered it a joint employer].) Given the
substantial differences animating these policy concerns, we see no reason to depart from
the well-established framework for analyzing the joint employment relationship under
Martinez.7
       Further underscoring our conclusion that the Dynamex ABC test was not intended
to apply to joint employer claims is that parts B and C of the ABC test do not fit
analytically with such claims. Part B probes whether a worker is rendering services that
would ordinarily be seen as part of the hiring entity’s usual business operations because

       7
         The Curry court similarly concluded that the ABC test in Dynamex was not
intended to apply in joint employment cases. “[T]he Supreme Court’s policy reasons for
selecting the ‘ABC’ test are uniquely relevant to the issue of allegedly misclassified
independent contractors.” (Curry, supra, 23 Cal.App.5th at p. 314.) In the “joint
employment context, the alleged employee is already considered an employee of the
primary employer; the issue is whether the employee is also an employee of the alleged
secondary employer.” (Ibid.) The Curry court reasoned that “the ‘ABC’ test set forth in
Dynamex is directed toward the issue of whether employees were misclassified as
independent contractors. Placing the burden on the alleged employer to prove that the
worker is not an employee is meant to serve policy goals that are not relevant in the joint
employment context.” (Ibid.)

                                            19
such activity would indicate that the worker is in actuality a misclassified employee. But
a worker whose primary employer has a contractual relationship with another business
entity is in a different situation. As an existing employee, he or she already performs
work that furthers the interests of the primary employer and is protected under wage and
hour laws. Thus, asking whether that employee’s work is “outside the usual course of
business” of a secondary employer makes little sense if one wants to determine whether
the secondary employer has suffered or permitted the employee to work for them. The
relevant inquiry is instead whether the secondary entity has the power to control the
details of the employee’s working conditions, or indeed, the power to prevent the work
from occurring in the first place. (See Martinez, supra, 49 Cal.4th at p. 70.) As a
practical matter, applying Part B to claims of joint employer liability might result in the
end of many service contracts or other joint venture agreements between two business
entities that happen to be in the same line of work (unless one business is willing to
oversee the human resources and payroll departments of the other company). We do not
believe that was the intended effect of Dynamex.8
       Trying to apply Part C of the ABC test to joint employer claims recalls the
proverbial square peg in a round hole. The basic premise of a joint employer claim is that
the plaintiff is already employed by a primary employer and is seeking to establish that
another business entity is separately responsible for obligations imposed under the wage
order and other requirements. The primary thrust of Part C, on the other hand, is to
determine whether the plaintiff is an independent contractor who has chosen the burdens


       8
          In an abundance of caution, the Curry court applied the ABC test and concluded
that no triable issues of fact demonstrated an employment relationship between Shell and
the plaintiff under those factors. With respect to Part B, the court found that Shell was
not in the business of operating fuel stations but was instead in the business of owning
real estate and fuel. (Curry, supra, 23 Cal.App.5th at p. 315.) We believe appellant has
the better of the argument and that Shell is in the business of furnishing and selling fuel
to retail customers—the same or similar work performed by appellant. But as discussed
ante, this similarity should not, by itself, transform Shell into appellant’s joint employer
in the absence of any evidence that Shell has the right to exercise control over appellant’s
wages, hours, or conditions of employment.

                                             20
and benefits of self-employment. (Dynamex, supra, 4 Cal.5th at p. 962.) The factors
relevant to Part C, whether the worker has taken steps to establish his or her independent
business, have no application in the instant appeal because appellant elected to work for
his primary employer, Danville, and had no reason to establish an independent
occupation or trade. The same circumstance would seem to apply to many, if not most,
joint employer wage and hour claims. A literal application of Part C in the context of
joint employment questions would result in the absurdity that a secondary business entity
is deemed a joint employer merely because the plaintiff is already employed by the
primary employer. We conclude the Dynamex ABC test does not apply in the joint
employment context, and the governing standard is found in Martinez.
                                     CONCLUSION
       Appellant Henderson has not presented any triable issues of fact demonstrating the
existence of a joint employment relationship between Shell and appellant under the three
alternative definitions of employment set forth in Wage Order No. 7. Dynamex does not
alter our conclusion because the ABC test was adopted to address claims that workers
have been misclassified as independent contractors rather than covered employees, and
was not intended to apply to claims of joint employer liability. The governing standard
for determining the existence of a joint employment relationship remains Martinez.
Because no evidence demonstrates that Shell was appellant’s employer, either solely or
jointly, summary judgment was properly granted.
                                     DISPOSITION
       The judgment is affirmed. Equilon is to recover costs on appeal.




                                            21
                                                     _________________________
                                                     Sanchez, J.


WE CONCUR:


_________________________
Margulies, Acting P.J.


_________________________
Banke, J.




A151626 Henderson v. Equilon Enterprises, LLC


                                                22
Trial Court:          Contra Costa County Superior Court

Trial Judge:          Hon. Barry P. Goode

Counsel:

      Bleau Fox, PLC, Samuel T. Rees, Lichten & Liss-Riordan, P.C., Shannon E.
Liss-Riordan, for Plaintiff and Appellant

      Lafayette & Kumagai LLP, Gary T. Lafayette, Syusan T. Kumagai, Barbara L.
Lyons, for Defendant and Respondent




A151626 Henderson v. Equilon Enterprises, LLC



                                                23
