What is an employee under California law?

We are going to spend Tuesday discussing agency law.  The issue comes up in two contexts:  1.  Is a principal liable for the contract entered into by his (or its) agent?  Answer, yes if the agent had authority.  2.  Is a principal liable for the torts of his agents?  Answer, yes if the agent is an employee, maybe (although probably not) if the agent is an independent contractor.

So what is an employee?  That could easily be an entire semester.  The question necessarily includes what is an employer?

The California Supreme Court has recently given us 85 pages of explanation (and history of the issue) of how to figure out whether a person is an employee or independent contractor.

In Dynamex Operations West, Inc., v. Superior Court, 4 Cal.5th 903 (2018), the Supreme Court summarized it with a three part test:

1. Is the worker free from the control and direction of the hiring entity in the performance of the work, both under the contract for the performance of the work and in fact?
2. Does the worker perform work that is outside the usual course of the hiring entity’s business?
3. Is the worker customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity?

It concluded that it is the employer’s burden to establish all three.  “The hiring entity’s failure to prove any one of these three prerequisites will be sufficient in itself to establish that the worker is an included employee, rather than an excluded independent contractor, for purposes of the wage order.”



Is wife liable for hubby’s debts?

NO!  Students (and even most lawyers) are always surprised when I say that my wife is absolutely not liable for my debts – and certainly not because she is my wife.

Property that she and I own may be liable for my debts (i.e., is probably liable for my debts).

A few California Family Code sections:


(a) *** the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regardless of whether one or both spouses are parties to the debt or to a judgment for the debt.

(b) “During marriage” for purposes of this section does not include the period after the date of separation ***.


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Insider trading issues

I received an email from a student re insider trading, specifically re what is a tippee.  Take a look at my post a couple of years ago on the Supreme Court case of Salman v. US.


The Supreme Court clarified that “a tippee’s liability for trading on inside information hinges on whether the tipper breached a fiduciary duty by disclosing the information.   A tipper breaches such a fiduciary duty, we held, when the tipper discloses the inside information for a personal benefit.”

The Supreme Court then said that a “close personal relationship” is enough as far a receiving a personal benefit.

Keep in mind that many cases require “scienter” i.e., bad intent, intent to avoid a law.  Keep in mind also that the information must be “material non-public information.”

The student also asked whether the same transaction could also violate general securities laws, i.e., a sale of a security that is not registered and not otherwise exempt.  Answer:  Of course and that must be considered.

Bridging the Gap – Saturday March 30, 2019

This is a great program

Save the Date: Bridging the Gap—Saturday, March 30, 2019

If you are a recent law school student graduate or young attorney, you will not want to miss Bridging the Gap 2019 – From Books to Billable – A Primer for Success on Saturday, March 30, 2019.  This free one-day program is designed to help first- and second-year attorneys make the transition from law school student to legal professional.  Bridging the Gap features prominent “faculty” with specific area expertise sharing their insights for new attorneys.  We encourage you to take advantage of this free program to expand your professional network with LACBA’s Barristers/Young Attorneys and other section leaders.  Event registration will open in early 2019.  

Response from the Bar Monitor re Whether Lower Bar Pass Rate Will Increase Disciplinary Issues

Thanks to Prof. Robert Barrett for this article.   Prof. Fellmeth is responding to the article by the two Pepperdine professors, When bar exam scores go low, discipline rates go high.   You can access the LA Daily Journal Article by Prof. Fellmeth here.  The Pepperdine professors argue that the bulk of the state bar disciplinary actions are against attorneys who take the bar exam more than once.  Therefore they say, reducing the pass level will increase the number of disciplinary actions in the future.

That’s not right says Prof. Fellmeth for the following reasons:

  • “Bar discipline is not directed at incompetence itself.”   Incompetence is resolved typically through malpractice actions, i.e., the client sues his lawyer and seeks damages.  Of course lowering the pass rate could increase the number of malpractice actions in the future.
  • Bar discipline is minimal in any event.  Professor Fellmeth says that the bar files a Notice of Disciplinary Charge against about 3 lawyers per 1,000 each year.  He says if the Pepperdine study is right, the number of NDCs might increase to 4 per 1,000.
  • He says the high passing score tends to reduce the number of attorneys in active practice which he calls “supply constriction.”  That tends to keep prices high which tends to affect attorney supply for the poor and middle class.  I’m sure that’s right but I have a tough time saying that we should reduce the minimum passing score so that there will be more attorneys, thus more reasonable pricing?
  • He seems to argue that passing a higher percentage of those who take the bar will not lower the overall quality of practicing attorneys in California today.  If he is right about that, I am for reducing the raw pass score.  As I said in my last post, if everyone who scores between 1400 and 1440 eventually passes, then the higher raw score is simply forcing those who fall between those numbers to take the exam more than once.  It does not “weed out” those who are not competent.

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Some Thoughts about the Bar Exam and UWLA

A student sent me the following comment to my last post about whether the bar exam specs should be lowered (no – says I).

what do you think about this argument from two years ago?

The post and the article is thought-provoking and I appreciate the comment.
The article makes the following comments:

  • The bar exam was designed and continues to operate as a mechanism for excluding the lower classes from participation in the legal services market.
  • {T]he bar exam “is an unpredictable and unacceptable impediment for accessibility to the legal profession.”
  • The burden of the bar exam falls disproportionately on low-income earners and ethnic minorities who lack the ability to pay for law school or to assume heavy debts to earn a law degree.  Passing a bar exam requires expensive bar-exam study courses and exam fees, to say nothing of the costly applications and paperwork that must be completed in order to be eligible to sit for the exam.

I have thought about my response for a day or so now.   I personally believe that the people of color in this country “have been given a bad check” as Martin Luther King said in 1963 when I was in grade school.  It is a national shame that we as a country cannot and do not do more to fix this.   That is one reason I continue to teach at UWLA.   (Make no mistake, the biggest reason is the Chatsworth campus is so close to my home.)  But I do enjoy doing my little bit to help people of color and those who want to be an attorney but cannot get into or cannot afford the major schools.  UWLA creates a nice and very much needed niche providing an opportunity to become an attorney to those who, again, cannot get into or cannot afford the major schools. Continue reading

The High Cost of Lowering the Bar

Two professors from Pepperdine wrote this article which “present[s] data suggesting that lowering the bar examination passing score will likely increase the amount of malpractice, misconduct, and discipline among California lawyers.  Our analysis shows that bar exam score is significantly related to likelihood of State Bar discipline throughout a lawyer’s career.”  As you might expect they have received some serious criticism for their conclusions.

Today they responded to those criticisms with an article in the Los Angeles Daily Journal.  They are both good reading.