Pre-Employ Blog

California Sues Itself (Yes, It's True)

Posted by Bob Mather on August 29, 2017

For over 20 years has been accessing court records for employers for pre-employment screening needs. Millions of documents have been retrieved for the criminal record and civil record background check process. This particular record has everyone here scratching their heads in disillusion.

In a bizarre case of big government gone awry, the California Employment Development Department (EDD) is suing itself.

California Sues Itself.jpgAs crazy as that may sound, a lawsuit was filed this week by the Employment Development Department (EDD) in the Sacramento County Superior Court.

The EDD is essentially suing itself in order to make sure that a business is not permitted to use independent contractors. Here are the facts as reported by court documents and Holden Law Group:

EDD audited a company called RedTie Transportation, LLC. RedTie operates as a charter-party carrier providing prearranged passenger transportation (a limousine service). To do so, RedTie maintains a license from the Public Utilities Commission.

Some of the drivers are employees of RedTie and others are independent contractors who merely lease RedTie’s vehicles to provide services using software created by Uber Technologies. Following the audit, EDD determined that the independent contractor drivers were misclassified and should have been classified as employees. EDD hit RedTie with a tax assessment, penalties, and interest.

RedTie appealed the assessment to the Unemployment Insurance Appeals Board (UIAB). The UIAB is a subdivision of EDD with the statutory responsibility of interpreting the California Unemployment Insurance Code and hearing and adjudicating appeals of EDD assessments.

RedTie’s appeal was heard by an Administrative Law Judge. The judge ruled in favor of RedTie. The judge disagreed with EDD’s conclusion that the drivers were employees.

Determined to get its way, EDD appealed the judge’s decision to the full Board for review and reversal. The full Board affirmed the judge’s decision.

Still determined to get its way, EDD filed a petition for writ of mandate this week. Essentially, the enforcement arm of EDD is suing the judicial arm of EDD because the enforcement arm does not like the decision of the judicial arm.

So, while government bureaucrats spend taxpayer money to satisfy their egos and set agenda, a California employer gets dragged along for years of litigation and the privilege of paying attorneys to protect itself from an over-reaching government. No consequence to the government officials; significant consequences to the employer.

This lawsuit has now officially been added to's list of most unbelievable court records ever uncovered. 

Topics: Lawsuits, California Lawsuits, California Employment Development Department, EDD

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