S. G. Borello & Sons, Inc. v. Department of Industrial Relations
48 Cal. 3d 341, 769 P.2d 399, 256 Cal. Rptr. 543 (1989)
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Rule of Law:
The determination of employee status under the Workers' Compensation Act is not limited to the common law 'control-of-work' test. Courts must also consider the remedial purpose of the legislation, the nature of the work, the overall economic arrangement between the parties, and several secondary factors to determine if the workers are in the class the law is intended to protect.
Facts:
- S. G. Borello & Sons, Inc. (Borello), a grower, used migrant families to harvest its cucumber crop.
- Borello entered into preprinted 'sharefarmer' agreements with the heads of the families, which designated the workers as independent contractors.
- Under the agreement, Borello furnished and prepared the land, planted the crop, and controlled cultivation, fertilization, and spraying.
- The harvesters were responsible for weeding, tending the vines, and picking the cucumbers during the harvest period, using their own simple hand tools and setting their own hours.
- Harvesters were compensated with 50% of the gross proceeds from the sale of the cucumbers they picked, with the price being pre-set by the sole buyer, Vlasic pickle company.
- Borello supplied the bins for the cucumbers and handled the transportation of the harvested crop to Vlasic.
- The contract specified that harvesters could only use members of their own family for the work.
- Borello provided no sanitary facilities for the harvesters.
Procedural Posture:
- The Division of Labor Standards Enforcement issued a stop order and penalty assessment against S. G. Borello & Sons, Inc. for failure to secure workers' compensation coverage for its cucumber harvesters.
- Borello appealed to the Division, which held an administrative hearing and affirmed the citation.
- Borello filed a petition for a writ of mandate in the superior court to review the Division's order.
- The superior court, a trial court, denied the writ, finding the Division's decision was supported by the evidence.
- Borello, as appellant, appealed to the Court of Appeal, an intermediate appellate court.
- The Court of Appeal reversed the superior court's judgment, holding that the harvesters were independent contractors as a matter of law.
- The Supreme Court of California ordered review on its own motion.
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Issue:
Are agricultural laborers working under a written 'sharefarmer' agreement to harvest cucumbers considered independent contractors exempt from the Workers' Compensation Act?
Opinions:
Majority - Eagleson, J.
No. The agricultural laborers are employees for the purposes of the Workers' Compensation Act. The determination of employee status must go beyond the traditional 'control' test to consider the remedial purposes of the protective legislation. Borello exercised pervasive control over the entire agricultural operation, from planting to sale. The harvesters' work was simple manual labor that formed an integral part of Borello's regular business, not a distinct trade or calling. The workers made no capital investment, had no entrepreneurial opportunity for profit or loss beyond a piecework-style payment, and were dependent on farm work for subsistence. Labeling them as 'independent contractors' in a contract is a subterfuge that attempts to carve up a single production process to avoid statutory obligations, and these workers are precisely the class the Act is intended to protect.
Dissenting - Kaufman, J.
Yes. The laborers are independent contractors under established legal tests. The majority disregards the uncontradicted evidence that Borello did not control the manner and means of the harvest; the sharefarmers used their own skill, set their own hours, and made their own decisions about care and irrigation. The workers had an entrepreneurial stake by investing their labor and bearing the risk of crop failure, and unlike employees, they could not be fired at will. The record shows the sharefarmers voluntarily entered into and preferred this arrangement because it allowed them to earn more money. The court should not interfere with a long-standing, mutually beneficial industry practice that is not broken.
Analysis:
This decision significantly broadened the test for determining employee status in California, particularly for workers covered by protective legislation. It moved legal analysis beyond the narrow common law 'right to control' test to a more holistic 'economic realities' test that considers the remedial purpose of the statute. The 'Borello test' makes it much more difficult for employers to classify workers as independent contractors merely by ceding control over minor details of the work or using contractual labels. This precedent has had a far-reaching impact on California employment law, influencing how employee status is determined for wage-and-hour laws, unemployment insurance, and other labor protections.
