Nasiri v. T.A.G. Security Protective Services Inc. et al

Filing 164

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT. Re: Dkt. No. 141 . Signed by Judge Nathanael Cousins. (lmh, COURT STAFF) (Filed on 9/3/2020)Any non-CM/ECF Participants have been served by First Class Mail to the addresses of record listed on the Notice of Electronic Filing (NEF)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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ELIAS NASIRI,

United States District Court
Northern District of California

Plaintiff,
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v.
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T.A.G. SECURITY PROTECTIVE
SERVICES, INC., et al.,

Case No. 18-cv-01170-NC

ORDER GRANTING
DEFENDANT’S MOTION
FOR SUMMARY
JUDGMENT
Re: Dkt. No. 141

Defendants.

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Before the Court is defendant Personnel Staffing Group, LLC’s (“PSG”) motion for

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summary judgment. See Dkt. No. 141. According to PSG, it only provided payroll and

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workers’ compensation services to co-defendant T.A.G. Security Protective Services, Inc.

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(“TAG”) and is therefore not liable for TAG’s alleged violations of California and federal

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labor laws. Nasiri disagrees and argues that there is a genuine dispute of material fact as to

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whether PSG was his employer. The Court concludes that PSG was not Nasiri’s employer

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for purposes of California and federal labor laws. Accordingly, the Court GRANTS PSG’s

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motion for summary judgment.

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I.

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Background
A.

Factual Background1

TAG is a security guard and patrol services company. See Dkt. No. 142, Ex. 7. In

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June 2015, TAG hired Nasiri as a security guard. See Dkt. No. 155-3 (“Nasiri Decl.” ) ¶ 2.

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TAG provided Nasiri with training and work assignments during the term of his

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employment. See Dkt. No. 157-2 (“Murga Depo.”) at 103:13–16, 113:11 – 114:2.2 No

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other company, including PSG, had the right to control TAG’s activities. See id. at

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105:20–106:9.
PSG is a back-office solutions company. See Dkt. No. 155-2, Ex. E (“Grottolo

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Depo.”) at 17:7–13, 18:16–19. It provides a range of services including payroll processing

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United States District Court
Northern District of California

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and financing. Id. at 18:20–19:17. PSG also contracts with staffing companies to issue

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workers’ compensation insurance on their behalf. Id. at 20:12–23.
On October 1, 2016, PSG began providing payroll processing for TAG and secured

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workers’ compensation insurance for TAG employees. See Dkt. No. 141-2 (“Grottolo

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Decl.”) ¶ 3.3 As part of that relationship, PSG became a named employer for Nasiri for

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payroll and workers’ compensation purposes. See id. ¶ 5. PSG did not control any day-to-

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day aspects of Nasiri’s employment, including wages, working conditions, termination,

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and supervision. Id. at 110:5–112:15. Nonetheless, Nasiri signed an employment

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The following facts are undisputed except where otherwise indicated. The Court will
also address each parties’ objections to the evidence where necessary.
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Nasiri objects to this exhibit, arguing that this deposition constitutes new evidence
presented for the first time in a reply. See Dkt. No. 159. This deposition, however, is not
evidence presented to Nasiri for the first time. Rather, the deposition was part of a Courtordered compromise to allow Nasiri to obtain additional evidence in support of his
opposition to PSG’s motion. See Dkt. Nos. 153, 154. Accordingly, the Court
OVERRULES Nasiri’s objection.
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Nasiri objects to this assertion, claiming lack of foundation and personal knowledge. See
Dkt. No. 155-1 at 1. Grottolo is PSG’s Director of Managed Services and oversees PSG’s
managed services business relationships. See Grottolo Decl. ¶ 1; see also Grottolo Depo.
at 17:7–21. In that capacity, Grottolo would have personal knowledge of when PSG
begins business relationships with its clients, such as TAG. Nasiri provides no evidence to
contradict Grottolo’s assertion. Accordingly, the Court OVERRULES Nasiri’s objection.
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agreement with PSG on October 27, 2016. See id., Ex. 4. That agreement provided that

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Nasiri was an at-will employee for PSG. See id. PSG ended its relationship with TAG on

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October 29, 2016. See Grottolo Decl. ¶¶ 4, 5.4

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B.

Procedural History

On May 22, 2019, Nasiri filed his second amended complaint alleging claims for

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(1) failure to pay overtime, Cal. Lab. Code § 510; (2) violation of the Fair Labor Standards

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Act (“FLSA”), 29 U.S.C. § 207; (3) failure to provide meal and rest breaks, Cal. Lab. Code

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§§ 226.7, 512; (4) failure to pay timely wages, Cal. Lab. Code § 204; (5) failure to furnish

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complete and accurate itemized wage statements, Cal. Lab. Code§§ 226(a), 226.3; (6)
failure to pay all wages upon termination, Cal. Lab. Code §§ 201, 202; (7) failure to

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United States District Court
Northern District of California

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reimburse for business expenses, Cal. Lab. Code § 2802; (8) failure to pay wages for split

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shifts, Industrial Wage Commission (“IWC”) Order 4-2001(4)(C); and (9) violation of

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California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et seq.

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See Dkt. No. 80 (“SAC”).
On June 10, 2020, PSG moved for summary judgment. See Dkt. No. 141. The

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parties conducted further discovery before Nasiri filed his opposition. See Dkt. Nos. 149,

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153, 154, 155. All parties have consented to the jurisdiction of a magistrate judge. See

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Dkt. Nos. 8, 21, 28, 108, 109.

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II.

Legal Standard

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Under Federal Rules of Civil Procedure 56(a), a court “shall grant summary

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judgment if the movant shows that there is no genuine dispute as to any material fact and

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the movant is entitled to judgment as a matter of law.” Under Rule 56, the moving party

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bears the initial burden to demonstrate the absence of a genuine issue of material fact.

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Once the moving party meets its burden, then the non-moving party must cite “particular

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parts of materials in the record” showing that there is a genuine issue for trial. Fed. R. Civ.

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Nasiri objects to this assertion, again claiming lack of foundation and personal
knowledge. See Dkt. No. 155-1 at 1. The Court OVERRULES Nasiri’s objection for the
same reasons stated in footnote 1.
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P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). A “genuine issue” exists if a

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reasonable jury could find for the non-moving party. E.g., Open Text v. Box, Inc., No. 13-

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cv-04910-JD, 2015 WL 428365, at *1 (N.D. Cal. Jan. 30, 2015). On summary judgment,

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the Court does not make credibility determinations or weigh conflicting evidence, as these

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determinations are left to the trier of fact at trial. Bator v. State of Hawaii, 39 F.3d 1021,

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1026 (9th Cir. 1994).

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III. Discussion

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The primary issue here is whether PSG was Nasiri’s employer for purposes of his

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claims under California’s labor laws and the FLSA. The Court concludes that PSG was

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United States District Court
Northern District of California

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not.
A.

Employment under California Labor Laws
California law applies three alternative definitions of employment for purposes of

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its labor laws. See Futrell v. Payday California, Inc., 190 Cal. App. 4th 1419, 1429 (2010)

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(citing Martinez v. Combs, 49 Cal. 4th 35, 64 (2010)). Employment means: “(a) to

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exercise control over the wages, hours or working conditions, or (b) to suffer or permit to

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work, or (c) to engage, thereby creating a common law employment relationship.” Id.

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First, there is no evidence suggesting that PSG exercised any control over Nasiri’s

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wages, hours, or working conditions. In his declaration, PSG’s Director of Managed

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Services Darron Grottolo stated that PSG had no authority to and did not set Nasiri’s

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wages, hours or working conditions. See Grottolo Decl. ¶ 9.

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Nasiri contends that Grottolo’s declaration should not be credited because he lacks

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personal knowledge of those assertions. Specifically, Nasiri points to deposition testimony

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where Grottolo stated that he had no personal knowledge of whether KBS Staffing

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provided staffing services or set Nasiri’s pay, work schedule, or working conditions. See

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Dkt. No. 155 at 10–11. Although PSG occasionally did business under the name KBS

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Staffing, Grottolo’s deposition makes clear that the line of questioning relied upon by

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Nasiri referenced a different business entity, not PSG:

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Q: Well, did KBS Staffing ever provide services to TAG Security Protective
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Services, Inc.?

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A: Okay. Yes.Yes.

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Q: And when did KBS Staffing begin providing services to TAG Security?

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A: I don’t know.

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Q: And what services did KBS Staffing provide to TAG Security?

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A: I believe they were the payroll provider for them. They provided payroll
services.

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Q: And did they provide any other services other than payroll services?

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A: I don’t know.
…

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United States District Court
Northern District of California

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Q: Did you have any responsibility over any functions at KBS Staffing in

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October 2016?

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A: No.

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Q: Who did?

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A: Nobody would. They were a customer.

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Grottolo Depo. at 28:12–21, 29:21–25. In that same deposition, Grottolo later made clear

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that PSG provided only payroll processing and worker’s compensation for TAG. Id. at

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62:7–13, 62:20–63:5.

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In the alternative, Nasiri argues that Anthony Murga, TAG’s CEO and sole

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proprietor, acted as PSG’s agent when he directed Nasiri’s employment. See Dkt. No. 155

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at 8–9. Nasiri points to a set of interrogatories propounded on Grottolo. See id. at 9 (citing

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Grottolo Depo., Ex. 4). But none of the interrogatory responses, however, suggest that

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Murga ever acted as PSG’s agent. Instead, both Murga and Grottolo emphasized in their

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respective depositions that PSG had no control over TAG’s operations. Therefore, PSG

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was not Nasiri’s employer under the control test.

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Second, under the second Martinez test for employment, Nasiri must show that PSG

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“had the power to either cause him to work or prevent him from working” to demonstrate

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that PSG could cause Nasiri “to suffer or permit to work.”
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Futrell, 190 Cal. App. 4th at

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1434. There is no evidence suggesting that PSG had such power. Murga testified that

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PSG had no right to control TAG’s activities. See Murga Depo. at 105:20–106:9. And

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Grottolo testified that PSG played no role in Nasiri’s employment. See Grottolo Decl. ¶ 9.

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Finally, the common law test of employment looks to the “control of details.”

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Futrell, 190 Cal. App. 4th at 1434 (listing factors). This test does not help Nasiri either.

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PSG did not control any aspect of Nasiri’s employment and only handled payroll

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processing and workers’ compensation insurance. Futrell is directly on point. In Futrell,

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the California Court of Appeal held that a payroll processing company’s limited activity,

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i.e., handling payroll services, was insufficient to establish employment over security
guards working for a television production company. See id. at 1432, 1434. So too here.

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United States District Court
Northern District of California

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The fact that Nasiri’s employment agreement with PSG specifies that he was an at-will

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employee of PSG does not change this conclusion. “The parties’ use of a label to describe

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their relationship does not control and will be ignored where the evidence of their actual

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conduct establishes a different relationship exists.” Id. at 1435 (citing Estrada v. FedEx

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Ground Package Sys., Inc., 154 Cal. App. 4th 1, 11 (2007)). Here, there is simply no

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evidence that PSG controlled any aspect of Nasiri’s employment.

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Thus, PSG is not Nasiri’s employer for purposes of California’s labor laws and

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Nasiri’s claims fail. Accordingly, the Court GRANTS PSG’s motion for summary

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judgment on Nasiri’s first, third, fourth, fifth, sixth, seventh, and eighth claims.

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B.

Fair Labor Standards Act

The FLSA defines an “employee” as “any individual employed by an employer,”

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and defines an “employer” as “any person [or entity] acting directly or indirectly in the

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interest of an employer in relation to an employee.” 29 U.S.C. § 203(d), (e)(1). In the

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Ninth Circuit, courts apply an “economic reality” test to determine whether an individual

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was an employee under the FLSA. That test looks to four factors: “whether the alleged

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employer (1) had the power to hire and fire the employees, (2) supervised and controlled

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employee work schedules or conditions of employment, (3) determined the rate and

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method of payment, and (4) maintained employment records.” Dawson v. Nat’l Collegiate
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Athletic Ass’n/Pac-12 Conference, 932 F.3d 905, 910–11 (9th Cir. 2019) (quoting

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Bonnette v. Cal. Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1983)).

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None of those factors are satisfied in this case. TAG, not PSG, had the power to

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hire and fire Nasiri. See Murga Depo. at 103:2–25, 111:11–15. TAG, not PSG, had the

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power to supervise and control Nasiri’s work schedule and conditions of employment. See

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id. at 26:18–21, 111:1–5, 113:11–114:2. Nor did PSG set Nasiri’s pay and maintain his

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employment records. See Grottolo Decl. ¶ 9(b), (o). Thus, PSG was not Nasiri’s employer

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under the economic realities test.
Accordingly, the Court GRANTS PSG’s motion for summary judgment on Nasiri’s

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United States District Court
Northern District of California

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second claim.
C.

Unfair Competition Law

The UCL prohibits any “unlawful, unfair, or fraudulent business act or practice.”

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Cal. Bus. & Prof. Code § 17200; see also Cel-Tech Commc’ns, Inc. v. Los Angeles

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Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999). “Each prong of the UCL is a separate and

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distinct theory of liability.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1127 (9th Cir.

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2009).
Nasiri’s UCL claim is predicated on his labor code claims. See SAC ¶ 74. Because

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Nasiri’s California and federal labor code claims fail, so does his UCL claim.

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Accordingly, the Court GRANTS PSG’s motion for summary judgment on Nasiri’s ninth

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claim.

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IV. Conclusion

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The Court GRANTS PSG’s motion for summary judgment. Because no claims
remain against PSG, the Court directs the Clerk to terminate PSG as a party.
IT IS SO ORDERED.

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Dated: September 3, 2020

_____________________________________
NATHANAEL M. COUSINS
United States Magistrate Judge

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