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Bijon Hill appeared in ten photo shoots organized by Walmart in San Francisco between July 2016 and August 2017 for a total of fifteen days, in non-consecutive periods of one or two days. Hill claims that this amounted to ten separate instances of employment and that she was “discharged” at the end of each photo shoot.

During this time, Hill was represented by Scout Talent Management Agency. Walmart had a contract with Scout and agreed to pay Scout a daily flat rate for each day of modeling services, which was to be passed along to Hill plus a commission. Walmart and Scout’s contract specified that Scout and its “personnel” were independent contractors.

Hill sued Walmart for its failure to pay her immediately after each photo shoot ended and sought more than $540,000 in penalties pursuant to California Labor Code § 203. Walmart removed the case to federal court based on diversity of citizenship. It also filed a third-party complaint against Scout.

The district court denied summary judgment on Walmart’s defense that plaintiff was an independent contractor outside the protection of the relevant Labor Code provisions due to disputes of material fact. However, it granted summary judgment on Walmart’s good-faith defense. The district court concluded that there was a good-faith dispute about whether plaintiff was an independent contractor that made it objectively reasonable for Walmart to believe plaintiff was not an employee.

The Court of Appeals for the Ninth Circuit affirmed the summary judgment in the published case of Hill v Walmart – 21-15180 (April 26, 2022).

8 C.C.R. § 13520 provides that “A willful failure to pay wages within the meaning of Labor Code Section 203 occurs when an employer intentionally fails to pay wages to an employee when those wages are due. However, a good faith dispute that any wages are due will preclude imposition of waiting time penalties under Section 203.

Moreover, 8 C.C.R. § 13520 explains that “[a] ‘good faith dispute’ that any wages are due occurs when an employer presents a defense, based in law or fact which, if successful, would preclude any recovery on the part of the employee.

It is undisputed that if Hill were an independent contractor, then she would not be an “employee” entitled to an immediate payment of wages upon discharge pursuant to Labor Code § 201(a) or to recover penalties from Walmart pursuant to § 203.

Consequently, Walmart’s argument that Hill was an independent contractor is a “good faith dispute that any wages are due.” See also Amaral v. Cintas Corp. No. 2, 163 Cal. App. 4th 1157, 1202 (2008) (employer had good-faith defense because its “legal obligations” were “unclear,” and the arguments it made for its ultimately incorrect legal position were not “unreasonable or frivolous”); Barnhill v. Robert Saunders & Co., 125 Cal. App. 3d 1, 8 (1981) (legal ambiguity is a valid basis for a good-faith defense).