WinCo Foods operates a supermarket chain with just over 100 locations across the western United States, including California.
When WinCo hires new employees, a Hiring Manager calls successful applicants to extend what WinCo terms a contingent offer of employment. The Hiring Manager informs the applicant of a mandatory drug test as part of the contingent job offer. When an applicant consents, WinCo instructs applicants to report to a testing location. It pays the drug testing facility’s fee, but does not compensate for the travel expenses and time required to undergo the testing.
Plaintiff Alfred Johnson, on behalf of himself and other WinCo employees in California, filed this class action in California state court. Johnson alleges violations of the California Labor Code relating to the payment of wages and business-related expenses and the California Business & Professions Code §§ 17200, et seq., proscribing unfair business practices. WinCo removed the case to federal court under the Class Action Fairness Act, 28 U.S.C. § 1332(d).
The federal district court certified the class, and then entered judgment in favor of WinCo on the ground that under California law, plaintiffs were not yet employees when they took the drug test. Plaintiffs appealed contending that they were employees. The 9th Circuit Court of Appeals affirmed in the published case of Johnson v WinCo Foods 21-55501 (June 2022).
The same issues have arisen in a number of similar cases removed from California state courts to federal district court. The other district courts in those cases have also ruled in favor of the employer. There is as yet, however, no authoritative California state court decision. Thus the 9th Circuit affirmed in a published opinion.
Plaintiffs argue on appeal that because the tests were administered under the control of the employer, plaintiffs must be regarded as employees, as California law applies a control test to determine whether an employment relationship exists. See Martinez v. Combs, 49 Cal. 4th 35, 64 (2010). Second, and alternatively, they contend that under California law the test should be regarded as a “condition subsequent” to their hiring as employees. See Cal. Civ. Code § 1438.
The 9th Circuit rejected both arguments noting that “the class members were not performing work for an employer when they took the preemployment drug test; they were instead applying for the job. They were not yet employees.”
Johnson relies in major part on a workers’ compensation case, Bowen v. Workers’ Compensation Appeals Board, 73 Cal. App. 4th 15 (1999). At issue in Bowen was whether an injured baseball player had been hired in California, where he accepted an offer subject to approval by the Commissioner of Baseball, or out of state, where the Commissioner was located and where the plaintiff worked. Johnson argues that this case is like Bowen and the employment contract was made when the class members accepted a comprehensive offer of employment over the phone.
The 9th Circuit distinguished this case by noting that the “court in Bowen, however, went to great lengths to explain that it was deciding a workers’ compensation case and its decision was guided by the policy of liberally construing contracts in favor of employees in accordance with California workers’ compensation law.”
“The Bowen opinion suggests that if the court had applied California contract law, rather than workers’ compensation principles, there would not have been a contract until all of the conditions were satisfied.”
James Whitlach is a former real estate agent who was affiliated with defendant Premier Valley, Inc., doing business as Century 21 MM,, a real estate brokerage firm