Last month, the US Court of Appeals for the Ninth Circuit ruled that Walmart classified a freelance model as an independent contractor in good faith and therefore was not subject to waiting time penalties under California Labor Code Section 203 for failing to pay the model immediately after photo shoots.

The ruling represented a rare victory for employers in independent contractor classification disputes in California, attorneys for Perkins Cole wrote in a JD Supra blog post.

The model, Bijon Hill, appeared in 10 photo shoots for a total of 15 days organized by Walmart between July 2016 and August 2017. Hill, claiming misclassification, sued Walmart for its failure to pay her immediately after each photo shoot ended and sought more than $540,000 in penalties in accordance with California labor code Section 203, which provides for penalties to workers who are not paid all wages due at the time of their termination, or within 72 hours of their resignation.

Walmart engaged Hill’s services through Scout Talent Management Agency; Walmart had a contract with Scout whereby it agreed to pay Scout a daily flat rate for each day of modeling services, which was to be passed along to Hill. Scout was required to send Walmart invoices, which were payable within 30 days. Walmart and Scout’s contract specified that Scout and its “personnel” were independent contractors.

While a lower court ruled Hill’s misclassification claims against Walmart can proceed, it determined Walmart believed Hill to be an independent contractor in good faith and granted summary judgment on Walmart’s good-faith defense. The Ninth Circuit concurred.

A “good faith dispute” 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. A good faith dispute remains separate from independent contractor classification determinations; an ultimate finding of misclassification will not preclude a finding that a “good faith dispute” did exist if the defense was reasonable and presented in good faith.

The case is Bijon Hill v. Walmart.