Court of Appeal clarifies common law employment test in context of CalPERS rules: Sandhu v. Bd. of Admin. of CalPERS

In Sandhu v. Bd. of Admin. of CalPERS,           Cal.App.5th           (Feb. 19, 2025), the Court of Appeal (Third Appellate District) held that a CalPERS retiree working for a private company was a common law employee of the public agencies that company served, violating CalPERS rules.

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Plaintiff worked for an agency that assigned him to temporary finance roles in several cities. CalPERS determined this violated its rules because he was a common law employee of those cities. After Plaintiff filed a petition for writ of mandate, the trial court upheld the administrative ruling, finding the evidence supported Plaintiff’s status as a common law employee.

On appeal, the Court of Appeal affirmed the denial of Plaintiff’s petition. Following Metropolitan Water Dist. v. Superior Court (2004) 32 Cal.4th 491, it held that temporary workers for companies contracting with public agencies are “employees” under PERL if they meet the common law test for employment. Applying the ‘control of details’ test from S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, the court found that Plaintiff was co-employed by both the contracting company and the cities. Notably, the Court of Appeal found contractual language stating Plaintiff was the agency’s employee and not the cities’ immaterial to his actual employment status.

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