SAN FRANCISCO — The U.S. District Court for the Northern District of California denied a motion to dismiss a class-action lawsuit filed against a biomedical company accusing it of violating labor laws by misclassifying employees as independent contractors.
The defendants, Zimmer Biomet Holdings of Delaware and Biomet Biologics and Biomet of Indiana, which are medical joint-replacement manufacturers and makers of orthopedic surgical products, are being sued by class plaintiffs led by James Karl.
Karl, a resident of Novato, California, signed an agreement in August 2015 to work as a sales associate with Zimmer and Biomet to represent the companies in California. The agreement classified Karl and other similarly hired representatives as independent contractors.
Karl alleged that the defendants misclassified him and other sales associates, violating rules of the Fair Labor Standards Act (FLSA), Industrial Welfare Commission Wage Order and the California Labor Code for unpaid overtime wages, meal and rest period violations, and that they failed to provide itemized wage statements and to reimburse business expenses.
The defendants moved to have the case dismissed or transferred to Indiana. The court found on Nov. 6 that moving the trial would contravene California’s strong public policy against litigating labor disputes out-of-state. In addition, the costs in transporting witnesses living in California to Indiana would be counterproductive, the court determined.
The court found that a person hired by a company may be considered an independent contractor if the person is free of control of the hiring entity, performs work outside the business’s usual activity, and is independently working in a trade of a similar nature as the work performed.
Karl alleged that he and other personnel were required by Biomet to track and report appointments, to be on-call, and that less than 10 percent of his time was spent on sales functions, and the majority of time devoted instead to on-site customer service tasks.
The court decided against a motion by the defendants to dismiss the case, saying the plaintiff had sufficiently alleged violations of state and federal overtime pay.
“An employee need not allege the overtime compensation owed with mathematical precision, but instead must provide sufficient detail about the length and frequency of his unpaid work to support a reasonable inference that he worked more than 40 hours in a given week,” the court opinion stated.
Karl claimed he routinely worked 50 to 60 hours per week.
The court also determined Karl had sufficiently argued that the company failed to provide adequate meal and rest periods and that expense reimbursements were not paid, including gas, smartphone charges, data plans, travel expenses and other costs.
An attempt by the defendants to strike the benefits compensation as requested by the plaintiff was “speculative,” the court said.
“This argument will be more appropriate on a motion for summary judgement,” the court brief noted.