Former restaurant employees sued their former employer, Koji’s Japan, Inc. (Koji’s), Koji’s president, sole shareholder and director Arthur J. Parent, Jr. (Parent), and A.J. Parent Company, Inc., which is otherwise known as America’s Printer (America’s Printer), of which Parent is also the president, sole shareholder and director. The plaintiff employees alleged wage and hour claims under the Labor Code and the Fair Labor Standards Act of 1938 (29 U.S.C. § 201 et seq.) (FLSA), claims under the unfair competition law (Bus. & Prof. Code, § 17200), and a claim under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2699 et seq.).
The plaintiffs challenge four rulings: The denial of their revised motion to compel further responses to a set of document requests; the concomitant issuance of discovery sanctions against plaintiffs’ counsel; an order only partially granting plaintiffs’ motion to certify a class action; and the trial court’s statement of decision determining that Parent and America’s Printer were not Koji’s alter egos and Parent was not liable to plaintiffs as a joint employer with regard to their state law claims.
We resolve doubts about our appellate jurisdiction by exercising our discretion to treat plaintiffs’ appeal as a petition for a writ of mandate. We grant writ relief with regard to each challenged ruling and hold:
1. The trial court erred by granting the motion to certify a class as to plaintiffs’ claims against only Koji’s because the court applied improper criteria in determining Parent’s potential liability as a joint employer on a class-wide basis.
2. The trial court prejudicially erred by denying plaintiffs’ revised motion to compel further responses to a set of document requests, and also by sanctioning plaintiffs’ counsel.
3. Because, as set forth in the disposition, we direct the trial court to vacate its order denying the revised motion to compel further responses to discovery on alter ego issues, we direct the court to also vacate its findings that Parent and America’s Printer were not Koji’s alter egos. Even if we did not direct the trial court to vacate its alter ego findings because of the court’s error in denying the revised motion compel, we would nevertheless order the court to vacate those findings because the court applied incorrect legal standards for alter ego liability.
4. Although the court’s statement of decision correctly cites Martinez v. Combs (2010) 49 Cal.4th 35 (Martinez) as setting forth the three alternative definitions of “employer” applied in analyzing certain violations of the Labor Code and the Industrial Welfare Commission’s (IWC) wage orders, the statement of decision misapplied those definitions. In addition, the trial court failed to address whether Parent might be a joint employer under the definitions of the term “employer” applicable to plaintiffs’ claims under the unfair competition law, the tip misappropriation statute, and PAGA.