LOS ANGELES—A senior sales representative who worked for Ontario, Calif.-based Baby Trend Inc. for 17 years June 30 was awarded a total of $8.4 million in damages after the company allegedly fired him for complaining about payroll deductions from his commissions, his attorney told BNA July 9 (Gardner v. Baby Trend Inc., Cal. Super. Ct., No. 05cc11681, 6/30/09).
A California Superior Court jury in March rejected Baby Trend’s assertion that Robert Gardner, who worked for the company from 1988 until his firing in June 2005, was an independent contractor, and instead unanimously found that he was an employee under California’s Labor Code, Irvine, Calif.-based attorney Steven R. Young said. As a result, the jury found that Gardner was wrongfully terminated in violation of public policy, and awarded him more than $8.4 million in damages, one of the largest single employee “misclassification” verdicts in history, Young said. While the verdict and jury award took place in March, the judge in the case entered the judgment June 30, Young told BNA.
Worker Alleged He Was Shorted on Commissions
Gardner had an agreement with Baby Trend that paid him a commission on all sales to major retailers Toys R’ Us and Babies R’ Us, but at a certain point, Baby Trend began “shorting” him on his commissions, Young said. After Gardner complained, the company ordered him to attend a June 30, 2005, meeting, which he said he could not make, Young added. He then was fired from his job. The company argued that because Gardner was an independent contractor, it could deduct whatever it wanted from his commissions, but under California labor law, the determination of whether a worker is an independent contractor or an employee largely turns on the measure of control the employer has over that worker, Young said.
Jury Found Sufficient Control
The jury had been convinced that by ordering Gardner to the June 30 meeting, and then firing him when he could not attend, Baby Trend had sufficient control to classify Gardner as an employee, Young said. The judgment assessed $6.9 million in damages jointly against Baby Trend and its owner, including economic damages of $5.1 million, lost earnings of $1.5 million, and mental suffering of $275,000; and another $1.5 million against Baby Trend, including failure to reimburse, $1.0 million; waiting time, $165,231; and breach of contract, $306,137. The jury also found that Baby Trend and its owner acted with malice, oppression and fraud, but the jury then deadlocked on punitive damages, Young said. However, motions for attorneys’ fees and costs, and supplemental penalties, could push the judgment to more than $10 million, he said in a July 7 statement.
Daniel J. Gonzalez, an attorney with Horvitz & Levy in Encino, Calif., who represented Baby Trend, told BNA July 9 that he had no comment. James Finberg, an employment law specialist with Altshuler Berzon LLP in San Francisco, agreed that the judgment was “certainly one of the largest I’ve heard of” for employee misclassification. The “control issue” is key in determining whether a worker is an employee or an independent contractor, he added.