Case Number: BC579970??? Hearing Date: February 01, 2017??? Dept: 37
CASE NAME: Herzig v. Regina L. Edmond, M.D., Inc., et al.
CASE NUMBER: BC579970
HEARING DATE: 2/1/17
CALENDAR NUMBER: 7
DATE FILED: 4/27/15
TRIAL DATE: 2/21/17
NOTICE: OK
PROCEEDING: Motion for Summary Judgment and Summary Adjudication of Issues
MOVING PARTY: Defendants Regina L. Edmond, M.D., Inc. and Regina L. Edmond, M.D.
OPPOSING PARTY: Plaintiff Esther Herzig
COURT?S TENTATIVE RULING
The motion for summary adjudication brought by the professional corporation is denied. The motion for summary judgment brought by Dr. Edmond in her individual capacity is granted. The evidentiary objections are overruled in part and sustained in part, as set forth below. The request for judicial notice is granted. Counsel for Defendants to give notice.
STATEMENT OF THE CASE
This action arises out of the discharge of Plaintiff Esther Herzig?s employment. As set forth in the complaint, the facts of the case are as follows. Plaintiff alleges that she is a 68-year-old woman who, from 2010 until her termination in 2014, worked as the receptionist for Regina L. Edmond, M.D.?s professional medical corporation. Plaintiff alleges that Dr. Edmond terminated her employment because of Plaintiff?s age and because in August 2014 Plaintiff took a leave of absence as a result of Achilles- and foot-related injuries. During the leave of absence, Dr. Edmond allegedly hired a 27-year-old receptionist to replace Plaintiff. Plaintiff alleges that Dr. Edmond terminated her employment shortly thereafter on the ground that Plaintiff had attempted to solicit Dr. Edmond?s patients to Plaintiff?s new place of business. Based on these facts, and in addition to certain wage-and-hour violations of the Labor Code, Plaintiff alleges seven causes of action that are based on California?s Fair Employment and Housing Act (FEHA): (1) age discrimination; (2) failure to prevent discrimination; (3) retaliation; (4) disability discrimination; (5) failure to provide reasonable accommodation; (6) failure to engage in the interactive process; and (7) wrongful termination in violation of public policy.
The professional corporation directs its motion for summary adjudication to the FEHA causes of action. Specifically, the corporation contends that it is not an ?employer? within the meaning of the FEHA because it did not employ the requisite number of employees for the requisite number of weeks during the applicable calendar years. (See Gov. Code, ? 12926, subd. (d); Cal. Code Regs., tit.2, ? 11008, subd. (d)(1).) For the reasons set forth below, while the court generally agrees with the corporation?s approach to analyzing the issue, the court disagrees that the corporation is entitled to summary adjudication of the first through seventh causes of action.
Additionally, Dr. Edmond moves for summary judgment. Because her personal liability is premised entirely on the allegation that she is the alter ego of her medical corporation, Dr. Edmond moves for summary judgment on the ground that there is no triable issue of material fact as to whether she is the corporation?s alter ego and is therefore entitled to judgment as a matter of law. As set forth below, Plaintiff fails to raise a triable issue of material fact as to whether Dr. Edmond is the alter ego of the professional corporation, and the court agrees that Dr. Edmond is entitled to summary judgment as a matter of law.
DISCUSSION
I. Legal Standard
The law of summary judgment provides courts ?a mechanism to cut through the parties? pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.? (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) In reviewing a motion for summary judgment, courts employ a three-step analysis: ?(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent?s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.? (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.) The moving party bears the initial burden of production to make a prima facie showing of the nonexistence of any triable issue, in which case the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue. (Code Civ. Proc., ? 437c, subd. (p)(2).) To show a triable issue of material fact exists, the opposing party may not rely on the mere allegations or denials of the pleadings, but instead must set forth the specific facts showing that a triable issue exists as to that cause of action or a defense thereto. (Aguilar, at p. 849.) Courts ?liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.? (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)
II. Plaintiff?s Evidentiary Objections
Plaintiff objects to certain statements in Dr. Edmond?s declaration. Objection 1 is sustained, but objections 2-3 are overruled.
III. Defendants? Request for Judicial Notice
Defendants request that the court take judicial notice of certain facts from the following documents: (1) the minute order in this case dated September 27, 2016; (2) Defendant?s Supplemental Responses to Requests for Admission; (3) the California Senate Judiciary Committee, Senate Bill 588 (April 28, 2015); and (4) the California Assembly Floor Analysis, Senate Bill 588 (September 4, 2015). The request is granted. (Evid. Code, ?? 452, subds. (c), (d), (h), 453.)
IV. The Corporation?s Motion for Summary Adjudication (Causes of Action 1-7)
The medical corporation moves for summary adjudication of the first through seventh causes of action on the ground that it is not an ?employer? within the meaning of the FEHA. The term ?employer? is defined as ?any person regularly employing five or more persons, or any person acting as an agent of an employer, directly or indirectly,? with certain exceptions that are not relevant here. (Gov. Code, ? 12926, subd. (d).) Implementing regulations define the term ?regularly employing? to mean ?employing five or more individuals for each working day in any twenty consecutive calendar weeks in the current calendar year or preceding calendar year . . . .? (Cal. Code Regs., tit. 2, ? 11008, subd. (d)(1).) The medical corporation contends that because Dr. Edmond?as the sole shareholder and director of the professional corporation?does not qualify as an ?employee? under the FEHA, the corporation did not employ the requisite number of employees for the requisite number of weeks during the applicable calendar years.
Thus, the issue raised by the corporation?s motion for summary adjudication is whether, as a factual matter, Dr. Edmond is an ?employee? within the meaning of the FEHA. The corporation acknowledges that during 2014 it employed four individuals (excluding Dr. Edmond) at the same time for the required twenty consecutive calendar weeks. These individuals are:
1. Plaintiff (who was employed from January 1, 2014 through September 20, 2014);
2. Marina Veranian (who was employed for the entire 2014 calendar year);
3. Claudia Mendez (who was employed from January 1, 2014 through September 29, 2014); and
4. Dale Perry (who was employed from April 1, 2014 through September 15, 2014).
(Defendants? Separate Statement (DSS) 6.) Accordingly, whether the corporation is subject to the FEHA?s antidiscrimination provisions turns on whether Dr. Edmond is an ?employee? of the corporation, as the term is defined by the FEHA.
As an initial matter, Plaintiff emphasizes the Legislature?s direction that courts broadly construe the FEHA?s terms to give effect to its antidiscrimination purposes. (Gov. Code, ? 12993, subd. (a).) As Plaintiff points out, ?[b]ecause the FEHA is remedial legislation, which declares ?[t]he opportunity to seek, obtain and hold employment without discrimination? to be a civil right [citation], and expresses a legislative policy that it is necessary to protect and safeguard that right [citation], the court must construe the FEHA broadly, not . . . restrictively.? (Robinson v. Fair Employment and Housing Com. (1992) 2 Cal.4th 226, 243 (Robinson).)
However, in this case there is a countervailing consideration?namely, the fact that the Legislature exempted small businesses from the FEHA?s scope. The primary reason for the small-business exemption is to ensure that the resources available to the Fair Employment and Housing Commission (FEHC)?which is the state agency responsible for enforcing the FEHA?can be used most efficiently to benefit the broadest possible segment of the working population. (See Robinson, supra, 2 Cal.4th at pp. 239-240 [?The commentators uniformly explain the reasons for the exemptions as relieving the administrative body of the burden of enforcement where few job opportunities are available, and as keeping the agency out of situations in which discrimination is too subtle or too personal to make effective solutions possible?].) In light of this countervailing consideration, the court cannot find Dr. Edmond to be an employee solely on a broad construction of the term ?employee.?
Instead, the court looks to general principles of statutory construction to give effect to the Legislature?s intent. Generally, statutory construction begins with the language of the statute or, in this case, the implementing regulation, and to resolve an ambiguity the court looks to the purpose of the statute, as expressed in the legislative history or other sources. (Brown v. Superior Court (1984) 37 Cal.3d 477, 485-486.) ?If there is ambiguity that is not resolved by the legislative history of the FEHA or other extrinsic sources, [the court is] required to construe the FEHA so as to facilitate the exercise of jurisdiction by the FEHC.? (Robinson, supra, 2 Cal.4th at p. 243.)
Like the term ?employer,? the regulations implementing the FEHA define the term ?employee.? Specifically, ?employee? includes ?[a]ny individual under the direction and control of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written.? (Cal. Code Regs., tit. 2, ? 11008, subd. (c).) The parties acknowledge that the regulatory definition of ?employee? is ambiguous with respect to Dr. Edmond and not particularly useful in evaluating whether she is an employee of her own professional corporation. Defendants focus on the phrase ?under the direction and control of,? arguing that because the evidence shows Dr. Edmond is the only person who directs and controls the corporation, she cannot be an employee of the corporation. (DSS 7.) However, the definition also covers individuals ?under any appointment or contract of hire,? and while there is no evidence Dr. Edmond had an express written contract of employment with the corporation, there is evidence to support an implied contract?namely, the fact that Dr. Edmond received a salary from the corporation?s payroll like the other employees; was issued a W-2 for her salaried earnings for tax years 2013 and 2014; received health insurance through the corporation?s employer-based health plan offered to employees; and undertook to provide medical services to clients on behalf of and for the benefit of the corporation. (Plaintiff?s Additional Statement (PAS) 7-9.) Thus, the regulatory definition of ?employee? is ambiguous with respect to a person in Dr. Edmond?s position?i.e., the sole shareholder and director of a professional corporation.
Clackamas Gastroenterology Associates, P.C. v. Wells (2003) 538 U.S. 440 [123 S.Ct. 1673] (Clackamas) is persuasive authority on the issue. Defendants contend that although Clackamas concerned federal law?namely, the Americans with Disabilities Act of 1990 (ADA) (42 U.S.C. ? 12101 et seq.)?the issue before the Clackamas Court was identical to that in this case, and the Court?s reasoning and holding should therefore apply with equal force here. California courts often consider federal decisions examining federal antidiscrimination laws to be persuasive authority when interpreting the FEHA. (Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383, 1386 [?The language, purpose and intent of California and federal antidiscrimination acts are virtually identical. Thus, in interpreting FEHA, California courts have adopted the methods and principles developed by federal courts in employment discrimination claims?].)
Clackamas involved a suit for disability discrimination by a bookkeeper against the medical clinic that employed her. The issue was whether four physicians who actively engaged in medical practice as shareholders and directors of the professional corporation should be counted as ?employees? for purposes of applying the ADA?s small-business exemption. (Clackamas, supra, 538 U.S. at p. 441-442.) Similar to the FEHA, under the ADA, an ?employer? includes only those whose work force includes ?15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year? (42 U.S.C. ? 12111(5)), and the district court granted the medical clinic summary judgment on the ground that the four physician-shareholders who owned the professional corporation and constituted its board of directors should not be counted as employees, meaning the clinic did not employ the requisite number of people for the requisite period of time and was not an ?employer? under the ADA. (Clackamas, at p. 442.) The U.S. Court of Appeals for the Ninth Circuit reversed, and the U.S. Supreme Court granted certiorari. (Id. at pp. 442-443.)
The Clackamas decision began with the premise that where Congress uses, without defining, the term ?employee,? it intends ? ?to describe the conventional master-servant relationship as understood by common-law agency doctrine.? ? (Clackamas, supra, 538 U.S. at pp. 444-445.) Looking to common-law principles, the Court determined that ?the common-law element of control [was] the principal guidepost that should be followed in this case,? and adopted the Equal Employment Opportunity Commission (EEOC)?s framing of the issue: ? ?[i]f the shareholder-directors operate independently and manage the business, they are proprietors and not employees; if they are subject to the firm?s control, they are employees.? ? (Id. at p. 448.) The Court advised that each of the following six factors, as stated by the EEOC, were relevant to determine whether a shareholder-director is an employee:
[1] ?Whether the organization can hire or fire the individual or set the rules and regulations of the individual?s work [2] ?Whether and, if so, to what extent the organization supervises the individual?s work [3] ?Whether the individual reports to someone higher in the organization [4] ?Whether and, if so, to what extent the individual is able to influence the organization [5] ?Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts [6] ?Whether the individual shares in the profits, losses, and liabilities of the organization.?(Id. at pp. 449-450.) In endorsing the EEOC?s standard, the Clackamas Court determined that no single factor was decisive and that, ultimately, whether a shareholder-director is an employee ?depends on ? ?all of the incidents of the relationship.? ? ? (Id. at p. 451.) Thus, neither a title nor a document styled ?employment agreement? is conclusive. (Id. at pp. 450-451.) Instead, ?an employer is the person, or group of persons, who owns and manages the enterprise. The employer can hire and fire employees, can assign tasks to employees and supervise their performance, and can decide how the profits and losses of the business are to be distributed.? (Id. at p. 450.)
Applying the EEOC standard to the facts of the case, the Clackamas Court determined that further proceedings were necessary in light of a conflicting factual record. (Clackamas, supra, 538 U.S. at p. 451.) The Court noted that some of the district court?s findings weighed in favor of finding that the four director-shareholder physicians were not employees of the medical clinic?namely, the physicians controlled the clinic?s operations, shared the profits, and were personally liable for malpractice claims. (Ibid.) On the other hand, the Court noted that there ?may . . . be evidence in the record that would contradict those findings or support a contrary conclusion,? citing the fact that the physicians received salaries, were obligated to comply with the standards established by the clinic, and reported to a personnel manager. (Id. at p. 451 & fn. 11.) The Court thus reversed the judgment of the Court of Appeals and remanded for further proceedings consistent with its opinion. (Id. at p. 451.)
The Clackamas opinion is persuasive authority on the standard to be applied to the question at issue here, though not on the specific answer to that question in the circumstances of this particular case. The Clackamas Court did not hold that shareholder-directors are never ?employees? of their professional corporations, as that term is construed under the federal antidiscrimination statutes. Instead, the Court adopted a method of analyzing the issue, focusing on the common-law element of control as ?the principal guidepost,? but also discussing certain other relevant factors and dorecting that the totality of the circumstances should be considered. Clackamas stands for the proposition that control?though very important?is not the only factor, or even necessarily the decisive factor. The Court specifically noted that, as with ?applying common-law rules to the independent-contractor-versus-employee issue,? ?the answer to whether a shareholder-director is an employee depends on ? ?all of the incidents of the relationship . . . with no one factor being decisive.? ? ? (Clackamas, supra, 538 U.S. at p. 451, emphasis added.) The decision to remand the case?based on apparent conflicts in the evidence?demonstrates the factual nature of the inquiry.
Applying Clackamas to this case yields a triable issue of fact as to whether Dr. Edmond is an ?employee? of the corporation for purposes of the FEHA. Defendants focus on the element of control, and the evidence establishes that Dr. Edmond has sole control over the direction and operations of her professional corporation. It is undisputed that Dr. Edmond is the Chief Executive Officer, Secretary, Chief Financial Officer, sole director and sole shareholder of her professional corporation, and that she is the only person who has control over the direction and operations of the corporation. (Plaintiff?s Responsive Statement (PRS) 2, 7.) It also is undisputed that Dr. Edmond does not report to anyone higher in the corporation, and that she is the only person with authority to hire and fire employees, assign tasks to employees, and supervise the performance of employees. (PRS 7.) If control were the only consideration, or perhaps if it were even the decisive consideration, summary adjudication would be appropriate.
However, control of the corporation is not the only consideration, and Clackamas stands for the proposition that there is no single decisive factor. Of particular relevance to this case is the fifth factor under the EEOC standard?namely, whether the parties intended Dr. Edmond to be an employee. There is evidence in the record of an implied employment agreement: Dr. Edmond received a salary from the corporation?s payroll like the other employees; was issued a W-2 for her salaried earnings for tax years 2013 and 2014; received health insurance through the corporation?s employer-based health plan offered to employees; and undertook to provide medical services to clients on behalf of and for the benefit of the corporation. (Defendants? Responsive Statement (DRS) 7-9.) It is also undisputed that the corporation assumed responsibility for the building lease, owned all medical equipment and records, and employed the staff. (DRS 6.) It is for the trier of fact to consider the totality of these circumstances and determine whether Dr. Edmond is an employee of the corporation.
Defendants do not persuasively respond to two issues raised by Plaintiff?s opposition. First, with respect to the W-2, there is a rebuttable presumption that ?employer? under the FEHA ?includes any person or entity identified as the employer on the employee?s Federal Form W-2.? (Gov. Code, ? 12928.) Thus, the W-2 issued to Dr. Edmond raises a presumption that the corporation is Dr. Edmond?s employer within the meaning of the FEHA. Second, with respect to health insurance, Dr. Edmond represented herself to be an employee of the corporation on various insurance documents. (PAS 37.) Although Defendants note that the form cited by Plaintiff includes ?owners/officers? as ?Employees,? it is the ?employee? designation that Dr. Edmond availed herself of in order to obtain health insurance.
Both parties raise a number of issues that, by themselves, are not determinative. For instance, Plaintiff notes that in response to a request for admission, Dr. Edmond initially acknowledged that she was an employee of the corporation. However, by stipulation of the parties and order of the court, Dr. Edmond obtained leave to file an amended response denying that she was an employee. (DRS 34.) By virtue of the amendment, the initial response loses its preclusive effect. (See Murillo v. Superior Court (2006) 143 Cal.App.4th 730, 736.) On the other hand, Defendants note that the corporation has elected to be taxed as an S corporation and that Dr. Edmond?s salary is a result of the way in which S corporations are taxed. Defendants conclude that the salary and self-employment tax assessed on the salary are irrelevant because they have no bearing on the element of control. However, as discussed, control is not the only consideration on the issue of whether Dr. Edmond is an employee.
In sum, there is a triable issue of material fact as to whether Dr. Edmond is an employee of the corporation. The motion for summary adjudication is denied.
V. Dr. Edmond?s Motion for Summary Judgment
A. Alter Ego Liability
Dr. Edmond moves for summary judgment on the ground that she is not the alter ego of the professional corporation. Plaintiff premises Dr. Edmond?s personal liability on the theory that, as the alter ego of the corporation, Dr. Edmond is accountable for the corporation?s conduct. (See Compl. ?? 9-21; see also Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300.) Thus, the issue is whether there is a triable issue of material fact as to whether Dr. Edmond is the corporation?s alter ego.
The alter ego doctrine is a rationale for disregarding a corporation?s separate legal existence. The general formulation consists of two components?a unity of interest and ownership between the alter egos such that the corporation?s separate personality no longer exists, and an inequitable result if the alter ego were not held liable. ?Before a corporation?s obligations can be recognized as those of a particular person, the requisite unity of interest and inequitable result must be shown.? (Leek v. Cooper (2011) 194 Cal.App.4th 399, 411 (Leek).) To analyze alter ego liability, courts consider a number of factors, including the commingling of funds and other assets, the holding out by one entity that it is liable for the debts of the other, identical equitable ownership, use of the same offices and employees, use of one as a mere shell or conduit for the affairs of the other, inadequate capitalization, disregard of corporate formalities, lack of segregation of corporate records, and identical directors and officers. (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538-539 (Sonora).) Generally, whether a corporation is an alter ego of an individual is a question of fact. (Misik v. D?Arco (2011) 197 Cal.App.4th 1065, 1072 (Misik).)
As an initial matter, it is not disputed that Dr. Edmond is the corporation?s sole shareholder and, as already discussed, controls and manages the business?s operations. However, ?[a]n allegation that a person owns all of the corporate stock and makes all of the management decisions is insufficient to cause the court to disregard the corporate entity.? (Leek, supra, 194 Cal.App.4th at p. 415.) In addition to ownership, there must be a unity of interest and an unjust result if the corporation is treated as the sole responsible actor. (Ibid.) Thus, although Dr. Edmond?s ownership of all the corporation?s stock is a relevant factor, it is not itself determinative. (See Misik, supra, 197 Cal.App.4th at p. 1073.)
Dr. Edmond carries her burden to show that there is no triable issue as to whether there is a sufficient unity of interest between herself and the corporation to warrant a trial on the issue of alter ego liability. She submits evidence that all of the corporation?s revenues are deposited into a business checking account with One West Bank, and that the account is used to pay all of the corporation?s business expenses. (Declaration of Regina L. Edmond, M.D. ? 6.) Dr. Edmond also states that she has never commingled her personal funds with the corporation?s fund or used the corporate account to pay for personal expenses. (Ibid.) Additionally, the corporation has followed corporate formalities: with the assistance of a business attorney, Dr. Edmond created Articles of Incorporation which were filed with the California Secretary of State; Dr. Edmond, as discussed, is the CEO, Secretary, CFO, sole director, and sole shareholder of the corporation; and since its inception the corporation has elected to be taxed as an S Corporation. (Id., ? 4, Exh. A.) These facts are sufficient to make a prima facie showing that Dr. Edmond does not have such a unity of interest with the corporation to justify disregarding the corporation?s separate existence.
Plaintiff fails to raise a triable issue of material fact. Plaintiff does not dispute Dr. Edmond?s evidentiary showing or submit additional facts on the issue of Dr. Edmond?s alter ego liability. Instead, Plaintiff contends that Dr. Edmond?s ownership and control of the corporation creates an alter ego relationship. As discussed, however, ownership and control are, in themselves, insufficient to establish alter ego liability. (Leek, supra, 194 Cal.App.4th at p. 415.) Plaintiff also contends that ?[t]he Corporation?s records are clearly inadequate and ambiguous, and reflect only Dr. Edmond?s use of the Corporation as a front to protect herself personally from her own misconduct (including claims of discrimination), while funneling every dollar through the corporate entity into her pockets.? (Opposition 10:9-12.) However, argument is not a substitute for admissible evidence, and Plaintiff does not show how, as a factual matter, the corporation?s records are inadequate or ambiguous. Thus, there is no factual dispute in the evidentiary record as to Dr. Edmond?s alleged alter ego status.
B. Labor Code section 558.1
Plaintiff also contends that Labor Code section 558.1 requires that Dr. Edmond remain in the case to account for the Labor Code violations asserted in the eighth through thirteenth causes of action. That code section provides:
Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be held liable as the employer for such violation.
(Lab. Code, ? 558.1, subd. (a).) The phrase ?other person acting on behalf of an employer? means ?a natural person who is an owner, director, officer, or managing agent of the employer.? (Id. ? 558.1, subd. (b).) Thus, under the plain language of the statute, Dr. Edmond?as an owner, director, officer, and managing agent of the professional corporation??may be held liable as the employer? for the alleged violations of the Labor Code.
In the reply, Defendants argue that Labor Code section 558.1 does not apply to this case for two reasons. First, section 558.1 did not exist when the alleged Labor Code violations occurred (i.e., in 2014). Second, section 558.1 does not create a private right of action for employees in Plaintiff?s position, only a mechanism for the Labor Commissioner to prevent wage theft. The court agrees with the first argument and therefore does not need to determine whether the second is correct. Section 558.1 did not become effective until January 1, 2016, and it is the general rule in this state that ?a new statute is presumed to operate prospectively absent an express declaration of retrospectivity or a clear indication that the electorate, or the Legislature, intended otherwise.? (Tapia v. Superior Court (1991) 53 Cal.3d 282, 287.) The code provision contains no express language, or other indication, that it operates retroactively.
C. Conclusion
In sum, ?[a]lter ego is an extreme remedy, sparingly used? (Sonora, supra, 83 Cal.App.4th at p. 539), and Plaintiff fails to raise a triable issue of material fact as to whether Dr. Edmond is the alter ego of the professional corporation. In addition, Labor Code section 558.1 does not apply retroactively to the circumstances of this case. Accordingly, Dr. Edmond?s motion for summary judgment is granted.
___________________________
1. The court notes Plaintiff?s notice of errata, which states that Exhibit 7 of the opposition papers initially contained un-redacted personal information of a party and a third party, and that a redacted version has been submitted to replace the un-redacted version.
2. ?The complaint limits the issues to be addressed at the motion for summary judgment. The rationale is clear: It is the allegations in the complaint to which the summary judgment motion must respond.? (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258.)
3. The medical corporation does not move for summary adjudication of the alleged Labor Code violations for (8) unpaid wages; (9) unpaid overtime wages; (10) failure to provide rest periods; (11) failure to provide meal periods; (12) failure to keep and provide accurate itemized wage statements; and (13) waiting time penalties.
4. Defendants also acknowledge that the corporation also employed Raquel Jordan from August 1, 2014 through December 31, 2014; Roxanna Pasos from September 8, 2014 through December 2, 2014; and, after Claudia Mendez was terminated in September 2014, several individuals as medical assistants (though never more than one at a time) from a temporary staffing agency from October 2014 through December 2014. (DSS 6.) However, because these individuals do not collectively constitute at least four employees during twenty consecutive calendar weeks, they do not alter the analysis.
5. The parties assert that there is no published California case authority on the issue. Although neither party cites to the FEHA?s legislative history, Defendants cite two opinions of the FEHC to support their position that Dr. Edmond, as the sole shareholder and director of her own professional corporation, is not an employee of the corporation within the meaning of the FEHA. However, as Plaintiff points out, both opinions concerned sole proprietorships, not corporations. Because the opinions concerned sole proprietorships, it is apparent why the FEHC determined that the sole proprietor was not an employee for purposes of the FEHA?s small-business exemption?namely, there was no separate legal person at issue; the individual, as sole proprietor, was the employer. For this reason, the opinions are not persuasive with respect to the facts of this case.
6. The sixth factor?i.e., whether Dr. Edmond shares in the profits, losses, and liabilities of the corporation?is also relevant. To the extent there are profits to be shared, they appear to have been distributed to Plaintiff as a salary. While the salary might be explained by the election of subchapter S treatment, the salary is nevertheless a relevant factor to be considered in the factual analysis of the ?employee? issue.