# Woods v. American Film Institute

> California Court of Appeal · December 17, 2021

URL: https://www.frixlaw.com/law-library/cases/5136023

## Case

- **Court:** California Court of Appeal
- **Decided:** December 17, 2021
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

Filed 12/17/21
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

LAURIE WOODS, B307220

Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC697649)
v.

AMERICAN FILM INSTITUTE,

Defendant and Respondent.

APPEAL from an order of the Superior Court of Los
Angeles County. Daniel J. Buckley, Judge. Affirmed.
Setareh Law Group, Shaun Setareh and Thomas Segal for
Plaintiff and Appellant.
Akin Gump Strauss Hauer & Feld, Gary M. McLaughlin,
Aileen M. McGrath, Jonathan P. Slowik and Victor A. Salcedo for
Defendant and Respondent.
_________________________________
Laurie Woods appeals from an order denying certification
of a class of persons who worked without pay for respondent
American Film Institute (AFI). Since 1987, AFI has presented an
annual film festival in Los Angeles (the Festival) for which it
uses volunteer workers. Woods contends that those volunteers
were actually employees because AFI is not permitted to use
unpaid labor under California law. Woods filed a putative class
action alleging that such workers were therefore denied benefits
that California employers are required to provide to employees,
such as minimum and overtime wages, meal and rest breaks, and
wage statements.
The trial court denied class certification on the ground that
common issues would not predominate over individual ones. The
court reasoned that a worker cannot be classified as an employee
unless the worker expects some compensation. Determining
whether any particular class members expected compensation
would therefore require separate, individual mini-trials. The
court also found that whether AFI had an unlawful meal and rest
break policy that it uniformly applied to its workers could not be
determined through common proof.
We affirm based upon the trial court’s first reason for
denying certification. The trial court correctly decided that
putative class members who expected no compensation were not
employees under California law. The class that Woods moved to
certify is broad enough to include persons who expected to be
paid. Thus, if the case were to proceed as a class action, the trier
of fact would need to decide whether each class member expected
to be paid or was in fact a volunteer. The trial court acted within
its discretion in finding that the need to decide such individual
issues would preclude common issues from predominating.

2
BACKGROUND
1. Woods’ Allegations
Woods’s operative First Amended Complaint (Complaint)
alleges that AFI has solicited thousands of volunteers to work at
its Festival “under the false pretense that volunteers will get to
enjoy the event in exchange for their services.” In reality, the
volunteers are required to work and do not have an opportunity
to attend the event. Thus, the volunteers “do not receive any
compensation for their ‘employment’ and in many cases incur
expenses for which they have not been reimbursed by [AFI].”
The Complaint alleges that the volunteers’ hours are
controlled by a volunteer manager, and that the volunteers are
typically asked to arrive earlier and stay later than their
assigned shift. AFI imposes requirements such as a mandatory
orientation and a minimum number of shifts that volunteers
must work. The Complaint alleges that “[b]ecause volunteers
were expected to, and in fact did, spend the vast majority of their
time performing job duties under [AFI’s] direction, supervision
and control, the promise of free admission was illusory.”
Woods claims that she worked as a volunteer at the
Festival for four days in November 2017. She alleges that she
worked between 12 and 14 hours each of those days. She claims
that members of the putative class regularly worked more than
eight hours per day and more than 40 hours per week.
The Complaint asserts claims for unpaid wages, unpaid
overtime, missed meal and rest periods, failure to reimburse
expenses, and failure to provide wage statements.
2. Woods’s Class Certification Motion
Woods filed a motion seeking certification of a class
consisting of “[a]ll persons who worked at the AFI Festival from

3
March 20, 2014 through the date of class certification who were
not paid for their work.” In support of the motion, Woods
submitted declarations from a number of volunteer workers and
provided evidence concerning AFI’s agreements with Festival
sponsors.
The volunteers described their hours of work and their job
responsibilities. The volunteers’ jobs included tasks such as
ushering guests, handing out tickets and ticket forms, answering
phones, controlling lines for events, working in the box office, and
running errands. Several of the declarants testified that they
worked longer than eight hours per day on occasion. None of the
volunteers were paid, and none testified that they expected
payment.
Evidence concerning the Festival sponsors showed that AFI
received tens of thousands of dollars each from movie studios and
film producers as well as sponsorship contributions from
companies such as Coca-Cola, American Airlines, Dolby, and
others. In return, AFI agreed to show the producers’ films,
coordinate events surrounding the screenings and after parties,
and provide transportation using vehicles from the event’s
automotive sponsor. AFI also agreed to acknowledge the
corporate donors as sponsors and to recognize their sponsorship
in various ways at the events.
Woods’s motion claimed that AFI is not a charitable
organization that is permitted to use volunteers under California
law. Rather, Woods asserted that AFI’s Festival simply “operates
as a marketing operation for the film industry.” Woods argued
that the question whether AFI could lawfully use volunteers for
the Festival was itself an “overarching common issue that will
determine the claims of the class.”

4
In opposition, AFI argued that common questions would
not predominate over individual issues for the claims that Woods
sought to certify. AFI argued that Woods was wrong in claiming
that AFI is precluded from using volunteer labor. AFI provided
evidence that it is a tax-exempt, nonprofit organization dedicated
to the film industry. AFI claimed that, as such, it is permitted to
use volunteers under California law, and that individual
members of the class would therefore have a claim only if they
expected to be paid as employees. AFI argued that proving such
an expectation by particular class members would require
individual proof. AFI also argued that Woods failed to show that
AFI uniformly applied an unlawful break policy to class members
and failed to provide any common means to determine which
class members worked more than eight-hour days for purposes of
Woods’s overtime claim. Finally, AFI claimed that Woods was
not a proper class representative.
3. The Trial Court’s Ruling
The trial court denied certification on the ground that “any
common questions present here are inundated and overwhelmed
by the litany of unmanageable individualized inquiries that
would be necessary to establish AFI’s liability to any putative
class member.” The trial court rejected Woods’s argument that
AFI was not permitted to use volunteers under California law.
The court reasoned that “both employment and independent
contractor relationships always contemplate an expectation of
monetary compensation in exchange for services rendered.” In
particular, the definitions in the wage order that governs working
conditions in the motion picture industry “overwhelmingly
support an interpretation of ‘work’ that interposes a threshold
requirement that the ‘employee’ . . . expects at least some level of

5
monetary compensation.” The court concluded that, under
Woods’s interpretation of the law, “volunteerism in California
would grind to a halt overnight.”
The trial court concluded that, because workers are not
employees unless they expect compensation for their services,
determining whether particular class members were actually
employees would create individual issues that would dominate
the trial. “[E]ach individual class member would be required to
testify that they did, or did not, expect payment in return for
their services provided during the AFI film festival. This would
splinter any potential class action into hundreds of individual
trials.”
The trial court also found that Woods had failed to provide
evidence of an unlawful meal and rest period policy that AFI
uniformly applied to the class. The court explained that Woods
alleged only that AFI had no written meal and rest period policy.
However, the evidence showed that AFI had an “unwritten policy
encouraging and authorizing volunteers to take as many meal
and rest breaks for however long they wanted . . . . Thus,
individualized inquiries permeate and overwhelm Plaintiff’s meal
and rest period claims.” The court also found that individual
proof concerning the hours that each class member worked would
be unmanageable.
In light of these findings, the trial court did not reach AFI’s
argument that Woods was not a proper class representative.
DISCUSSION
1. Standard for Class Certification and Standard
of Review
A lawsuit may proceed as a class action “when the question
is one of a common or general interest, of many persons, or when

6
the parties are numerous, and it is impracticable to bring them
all before the court.” (Code Civ. Proc., § 382.) To certify a class,
“[t]he party advocating class treatment must demonstrate the
existence of an ascertainable and sufficiently numerous class, a
well-defined community of interest, and substantial benefits from
certification that render proceeding as a class superior to the
alternatives.” (Brinker Restaurant Corp. v. Superior Court (2012)
53 Cal.4th 1004, 1021 (Brinker).) The community of interest
factor in turn has three requirements: (1) common questions of
fact or law that predominate over individual issues; “ ‘ “(2) class
representatives with claims or defenses typical of the class; and
(3) class representatives who can adequately represent the
class.” ’ ” (Ibid.)
Where, as here, the class certification requirement at issue
is predominance, the trial court must determine whether “ ‘the
issues which may be jointly tried, when compared with those
requiring separate adjudication, are so numerous or substantial
that the maintenance of a class action would be advantageous to
the judicial process and to the litigants.’ ” (Brinker, supra, 53
Cal.4th at p. 1021, quoting Collins v. Rocha (1972) 7 Cal.3d 232,
238.) To answer this question, a court must “examine the
allegations of the complaint and supporting declarations
[citation] and consider whether the legal and factual issues they
present are such that their resolution in a single class proceeding
would be both desirable and feasible.” (Brinker, at pp. 1021–
1022.)
In addition to deciding whether common issues
predominate, a court considering class certification must
determine whether the remaining individual issues can be
resolved “fairly and efficiently.” (Duran v. U.S. Bank National

7
Assn. (2014) 59 Cal.4th 1, 28–29.) “In considering whether a
class action is a superior device for resolving a controversy, the
manageability of individual issues is just as important as the
existence of common questions uniting the proposed class.” (Id.
at p. 29.)
Our review of the trial court’s class certification ruling is
“narrowly circumscribed.” (Brinker, supra, 53 Cal.4th at p. 1022.)
We review the trial court’s ruling only for abuse of discretion.
“ ‘A certification order generally will not be disturbed unless (1) it
is unsupported by substantial evidence, (2) it rests on improper
criteria, or (3) it rests on erroneous legal assumptions.’ ” (Id. at
p. 1022, quoting Fireside Bank v. Superior Court (2007) 40
Cal.4th 1069, 1089 (Fireside).)
2. The Trial Court Acted Within Its Discretion in
Denying Certification of the Proposed Class
a. The trial court properly considered legal
issues necessary to decide whether class
certification was appropriate
Class certification is a procedural issue separate from the
merits of the plaintiff’s case. Thus, “resolution of disputes over
the merits of a case generally must be postponed until after class
certification has been decided [citation], with the court assuming
for purposes of the certification motion that any claims have
merit.” (Brinker, supra, 53 Cal.4th at p. 1023.) However, “[w]hen
evidence or legal issues germane to the certification question bear
as well on aspects of the merits, a court may properly evaluate
them.” (Id. at pp. 1023–1024, italics added.) Indeed, “[t]o the
extent the propriety of certification depends upon disputed
threshold legal or factual questions, a court may, and indeed
must, resolve them.” (Id. at p. 1025.) If resolution of an issue

8
concerning the merits is necessary to decide class certification,
the court’s review should be limited to “ ‘those aspects of the
merits that affect the decisions essential’ to class certification.”
(Id. at p. 1024, quoting Schleicher v. Wendt (7th Cir. 2010) 618
F.3d 679, 685.)
Here, the dispositive legal issue is whether AFI could
lawfully use volunteer workers for its Festival. The issue in
dispute is even narrower. Woods does not dispute that workers
may volunteer for some types of nonprofit organizations without
becoming employees under California law. The parties also agree
that a person who works for such a qualifying nonprofit might
actually be an employee if that person expects to be paid. Thus,
the parties disagree only on the question of whether AFI falls
within the category of nonprofit organizations that may lawfully
use volunteer labor.
Consideration of that issue was essential for deciding class
certification. Only by determining the applicable legal standard
could the trial court decide whether the issue of liability was
amenable to resolution through common proof.
As mentioned, Woods sought to certify a class consisting of
“[a]ll persons” who worked at the Festival “who were not paid for
their work.” If Woods is correct that AFI may not use volunteer
labor under California law, then the question whether class
members were employees could be answered on a common basis
because each class member was entitled to compensation whether
or not they expected to be paid.
However, the converse is not true. If AFI is correct that it
may properly use voluntary labor, it would not be liable to class
members who expected no compensation. But the class is defined
more broadly than such persons. The proposed class of persons

9
“who were not paid for their work” includes persons who did not
expect to be paid as well as any class members who expected
payment but did not receive it. The persons who expected
payment might be entitled to compensation as employees. The
trial court reasonably concluded that whether particular class
members expected payment would need to be resolved through
individual proof that would predominate over common issues.
Woods claims that this is a manufactured issue. She
explains that she “made clear that she did not intend to argue
that either she, or anyone else who worked at the AFI [Festival]
expected to be paid.” She argues that the legal issue of whether
AFI could use volunteers was therefore itself a common issue
that the trial court should have deferred to the merits stage of
the litigation. Woods’s theory is apparently that, if she did not
claim that any class members expected payment, the trial court
could ignore the possible individual issues and the case could be
resolved on the common legal issue alone.
However, the relevant question is not what Woods intended
to argue but rather what persons the class contains. If a class
were certified and the case were litigated to resolution, class
members who were given notice and did not opt out would be
bound by the outcome. (See Fireside, supra, 40 Cal.4th at
p. 1083.)1 Unless the individual expectations of class members

1 Indeed, the rule that members of a certified class are
bound by the outcome of the lawsuit is the reason for the
principle that the class certification ruling should precede a
decision on the merits whenever possible. (Fireside, supra, 40
Cal.4th at p. 1081.) Doing so prevents the problem of “ ‘ “ ‘one-
way intervention,’ ” ’ ” where class members may “ ‘ “ ‘elect

10
were considered at trial, class members who actually expected
payment would see their claims extinguished if AFI prevailed.
The trial court properly rejected the invitation to ignore the
individual interests of unnamed class members.2
Thus, the trial court’s ruling that individual issues would
predominate was reasonable if some class members actually
expected payment and therefore might be considered employees.
Neither party provided any evidence on the question
whether the class in fact included persons who expected to be
paid. Each of the putative class members who submitted
declarations in support of certification identified himself or
herself as “a former employee” of AFI. Each explained their job
duties and each testified that they were not paid. However, none
stated whether they expected compensation.3

whether to join in the action depending upon the outcome of the
decision on the merits.’ ” ’ ” (Ibid., quoting Green v. Obledo (1981)
29 Cal.3d 126, 146–147.)
2 Doing so might have made class certification
inappropriate for other reasons. If Woods simply abandoned the
claims of unnamed class members, she may not have been an
adequate representative. (See Evans v. Lasco Bathware, Inc.
(2009) 178 Cal.App.4th 1417, 1432 [“A proposed representative
must adequately represent the class, and a trial court may
conclude that requirement is not met if the class member ‘fail[s]
to raise claims reasonably expected to be raised by the members
of the class’ ”], quoting City of San Jose v. Superior Court (1974)
12 Cal.3d 447, 464.)
3AFI provided a declaration from Michael Lumpkin,
Director of AFI Festivals, stating that “[t]o AFI’s knowledge, no
volunteer besides Laurie Woods (when she filed this lawsuit) has

11
Despite the absence of direct evidence, there was a
reasonable basis for the trial court’s implicit finding that the
class included persons who expected payment. First, as
mentioned, the class definition included all persons who worked
at the AFI Festival and who did not receive payment, regardless
of their expectations. Based on this definition, the class might
include persons with a variety of intentions, including those who
freely volunteered; those who were promised compensation; and
those who believed that they would receive some compensation
based upon particular communications or other individual
circumstances of their work.4

ever demanded payment for volunteering. Rather, AFI’s
understanding is that volunteers know that they are helping the
organization without pay.” Lumpkin’s statement about the state
of mind of all AFI volunteers may fairly be characterized as
speculative. His statement that “to AFI’s knowledge,” no
volunteer had ever demanded compensation could support an
inference that volunteers generally did not expect compensation.
But Lumpkin did not describe the basis for “AFI’s knowledge.”
And, even if true, the lack of any demand for payment of wages
does not foreclose the possibility that some class members
expected some form of compensation that they did not receive.
Especially in light of Woods’s own case theory (described below),
this evidence did not preclude the trial court from reaching a
reasonable conclusion that the class might contain persons who
expected compensation.
4 Whether a particular class member was actually an
employee might depend upon factors in addition to an expectation
of payment. But whether or not such an expectation of payment
was sufficient to establish an employment relationship, under
AFI’s interpretation of the governing legal standard it was

12
Second, Woods’s own allegations support the conclusion
that the class included persons who expected compensation.
Regardless of what Woods intended to argue at trial, the theory
of her Complaint is that volunteers were duped into working for
AFI through promises of valuable compensation in the form of
event passes that they were never actually given the opportunity
to use. The Complaint alleges that AFI solicited volunteers
“under the false pretense” that they would get to enjoy the event.
The Complaint further alleges that AFI misrepresented the value
of admission to the events, “such that Plaintiff and members of
the putative class reasonably believed such compensation would
have value commensurate with the value of the services rendered
to Defendants.”
Such allegations of promised compensation, if proved,
might support contract or estoppel theories of employment. As
our Supreme Court has explained, the employment relationship
is fundamentally contractual, “meaning it is governed in the first
instance by the mutual promises made between employer and
employee. [Citations.] The promise to pay money in return for
services rendered lies at the heart of this relationship.” (Voris v.
Lampert (2019) 7 Cal.5th 1141, 1148 (Voris).) However, “[e]ven
in the absence of an explicit promise for payment, the law will
imply one, and thus authorize recovery, when circumstances

necessary. (Cf. Talley v. County of Fresno (2020) 51 Cal.App.5th
1060, 1083 (Talley) [“The existence of remuneration alone does
not prove an individual is an employee . . . , but the lack of
remuneration precludes such a finding”].) Thus, individualized
proof would be required to determine at least if class members
expected compensation, and perhaps to determine other
characteristics of employment as well.

13
indicate that the parties understood the employee was not
volunteering his or her services free of charge.” (Ibid.)
Third, Woods bore the burden to establish the “community
of interest” requirement, including the need to show
“ ‘ “predominant common questions of law or fact.” ’ ” (Brinker,
supra, 53 Cal.4th at p. 1021.) The trial court was permitted to
consider the “ ‘theory of recovery’ ” described in Woods’s own
Complaint in assessing whether Woods had met that burden.
(Id. at pp. 1021–1022.) That theory suggested that individual
class members might have claims that they were employees
based upon their own expectations in agreeing to work for AFI.
Thus, the trial court properly considered the governing legal
standard in concluding that common issues would not
predominate at trial.
Quoting Hall v. Rite Aid Corp. (2014) 226 Cal.App.4th 278,
Woods argues that “at the class certification stage, as long as the
plaintiff’s theory of liability is amenable to resolution on a
classwide basis, the court should certify the action for class
treatment even if the plaintiff’s posited theory is ultimately
incorrect at its substantive level.” (Id. at p. 293.) In Hall, the
court concluded that a class could be certified despite a dispute
between the parties concerning the proper interpretation of the
rule governing the employment practice at issue.5 However, in
that case, the court concluded that common issues would
predominate regardless of which party’s interpretation of the

5 The interpretation issue was whether section 14 of Wage
Order No. 7-2001—which requires an employer to make seats
available to employees depending on the nature of the work—
should be analyzed based on an employee’s job as a whole or in
relation to specific common tasks.

14
governing standard was correct. (Id. at pp. 294–295.) As
discussed above, that is not the case here. Thus, unlike in Hall,
Woods’s theory of liability here was not amenable to resolution on
a classwide basis.
b. The trial court correctly found that class
members were not employees if they did not
expect compensation
To determine whether common issues would predominate,
the trial court needed to analyze the applicable law only to the
extent of deciding whether AFI was precluded from using
volunteer labor as a matter of law. If so, then the legal standard
would not be an impediment to deciding liability on a common
basis, because each member of the class would theoretically be
entitled to compensation.6 However, if AFI was not precluded
from using volunteer labor as a matter of law, then the trial court
would need some mechanism for determining whether individual
class members were volunteers or employees.
The trial court correctly concluded that AFI was not
precluded from using volunteer labor as a matter of law. The
trial court’s reasoning was broad. As mentioned, the trial court
concluded that “both employment and independent contractor
relationships always contemplate an expectation of monetary
compensation in exchange for services rendered.” (Italics added.)

6 Even if the legal standard permitted proof on a classwide
basis that class members were employees, other obstacles to
certification might remain, such as the trial court’s alternative
findings concerning individual issues associated with proof of lost
wages and missed meals and breaks. Because of our disposition,
we need not consider these other potential obstacles.

15
There is some support in the cases for this general
conclusion. As explained above, our Supreme Court has stated
that the “heart” of the contractual employment relationship is the
“promise to pay money in return for services rendered.” (See
Voris, supra, 7 Cal.5th at p. 1148.) In addition, several Courts of
Appeal have decided that the receipt of compensation is a
threshold requirement for a person to be considered an employee
under the California Fair Employment and Housing Act (FEHA,
Gov. Code, § 12900 et seq.). (See Talley, supra, 51 Cal.App.5th at
p. 1083 [“[t]he common law factor analysis utilized by federal and
California courts alike, in the context of the FEHA and other
similar antidiscrimination statutes, considers remuneration a
dispositive threshold factor to determine whether an individual
may qualify as an employee”]; Mendoza v. Town of Ross (2005)
128 Cal.App.4th 625, 637 (Mendoza) [“compensation of some sort
is indispensable to the formation of an employment
relationship”]; Estrada v. City of Los Angeles (2013) 218
Cal.App.4th 143, 151 (Estrada) [same].)
However, we need not decide whether the trial court was
correct in suggesting that the expectation of compensation is a
necessary condition to be an employee in all contexts. We need
only consider whether persons may volunteer for an organization
such as AFI without becoming employees.
i. Volunteers for nonprofit entities are not
employees
The Labor Code does not provide a direct answer to the
question whether the minimum standards that protect employees
under California law must be extended to those who volunteer
their time for nonprofit organizations. The article of the Labor
Code that governs the payment of wages defines the terms

16
“wages” and “labor,” but does not define “employee.” (See Lab.
Code, § 200.)7 Section 1194—which establishes the right for “any
employee receiving less than the legal minimum wage or the
legal overtime compensation” to sue for the unpaid balance—also
“does not define the employment relationship nor does it specify
who may be liable for unpaid wages.”8 (Flowers v. Los Angeles
County Metropolitan Transportation Authority (2015) 243
Cal.App.4th 66, 74.) Rather, as discussed further below,
“[s]pecific employers and employees become subject to the
minimum wage requirements only through and under the terms
of wage orders promulgated by the [Industrial Welfare
Commission (IWC)], the agency formerly authorized to regulate
working conditions in California.” (Ibid.)
But the Labor Code does contain several analogous
provisions supporting the conclusion that volunteers for nonprofit
entities are not employees for purposes of the wage and hour
rules. For example, California’s “prevailing wage law” (§ 1720
et seq.) is a minimum wage provision that applies to those
employed on “public works.” (Busker v. Wabtec Corp. (2021) 11
Cal.5th 1147, 1153.) This law was among those adopted during
the Great Depression to “ensure that workers employed on public
building programs would be paid daily wages commensurate with

7Subsequent undesignated statutory references are to the
Labor Code.
8Section 1194 applies “[n]otwithstanding any agreement to
work for a lesser wage.” Woods cites this provision as support for
the proposition that the right to be paid the minimum wage
cannot be waived. But the section cannot reasonably be read to
prohibit volunteer labor. An agreement to work “for a lesser
wage” is not an agreement to work for no wage.

17
those prevailing in the local area for work of a similar character.”
(Id. at p. 1155.) Like California’s wage and hour provisions, the
prevailing wage law is intended to prevent employers from taking
unfair advantage of workers. One of the law’s goals is to
“ ‘protect employees from substandard wages that might be paid
if contractors could recruit labor from distant cheap-labor
areas.’ ” (Id. at p. 1156.)
Section 1720.4 states that the prevailing wage law does not
apply to “[a]ny work performed by a volunteer.” (§ 1720.4, subd.
(a).) A volunteer is a person “who performs work for civic,
charitable, or humanitarian reasons for a public agency or
corporation qualified under Section 501(c)(3) of the Internal
Revenue Code as a tax-exempt organization, without promise,
expectation, or receipt of any compensation for work performed.”
(Ibid.)
Similarly, section 3352 excludes volunteers from the scope
of the workers’ compensation law. That section defines
“employee” to exclude any “person performing voluntary service
for a public agency or a private, nonprofit organization who does
not receive remuneration for the services, other than meals,
transportation, lodging, or reimbursement for incidental
expenses.” (§ 3352, subd. (a)(9).)
Finally, as discussed above, cases have also interpreted
“employee” for purposes of the FEHA to exclude volunteers. (See
Mendoza, supra, 128 Cal.App.4th at p. 629 [volunteer community
service officer for a city]; Estrada, supra, 218 Cal.App.4th at
p. 145 [volunteer municipal police reserve officer].)
In addition to these analogous statutory provisions, the
language, history, and purpose of the IWC wage orders also
support the conclusion that persons may volunteer for nonprofit

18
entities without becoming employees. Wage order 12 (Wage
Order), the relevant wage order here, governs wages, hours, and
working conditions in the motion picture industry. (See Cal.
Code Regs., tit. 8, § 11120.)9 The Wage Order defines “employee”
simply as “any person employed by an employer.” An employer is
one who “directly or indirectly, or through an agent or any other
person, employs or exercises control over the wages, hours, or
working conditions of any person.” And “employ” means to
“engage, suffer, or permit to work.” (Wage Order, subds. (2)(D),
(2)(E) & (2)(F).) These definitions are included in all IWC wage
orders governing California industries. (Dynamex, supra, 4
Cal.5th at p. 926, fn. 9.)
Our Supreme Court interpreted this wage order language
in Martinez v. Combs (2010) 49 Cal.4th 35 (Martinez). In that
case, the court considered whether produce merchants who
contracted with a strawberry farmer could be considered
employers of the farmer’s workers. (Id. at pp. 42–44.) The court
explained that California’s wage orders were the result of
legislation passed in 1913 that created the IWC in the context of
“widespread public recognition of the low wages, long hours, and
poor working conditions under which women and children often
labored.” (Id. at p. 53.) The “ ‘suffer, or permit to work’ ”
language in the wage orders was adopted from language in use

9 “In California, wage orders are constitutionally
authorized, quasi-legislative regulations that have the force of
law.” (Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th
903, 914, fn. 3 (Dynamex). We analyze the meaning of the Wage
Order de novo. (Gonzalez v. Downtown LA Motors, LP (2013) 215
Cal.App.4th 36, 44.)

19
throughout the country to reach “irregular working
arrangements” for employing child labor. (Id. at pp. 57–58, 69.)
The language means that a “proprietor who knows that persons
are working in his or her business without having been formally
hired, or while being paid less than the minimum wage, clearly
suffers or permits that work by failing to prevent it, while having
the power to do so.” (Id. at p. 69.)
The definition of “ ‘employer’ ” as one who “ ‘exercises
control’ ” over wages, hours, or working conditions “by its terms
imposes liability on multiple entities who divide among
themselves control over those different aspects of the
employment relationship.” (Martinez, supra, 49 Cal.4th at p. 67.)
Combined with the term “engage,” “[t]o employ, then, under the
IWC’s definition, has three alternative definitions. It means:
(a) to exercise control over the wages, hours or working
conditions, or (b) to suffer or permit to work, or (c) to engage,
thereby creating a common law employment relationship.” (Id. at
p. 64.)
Thus, the history of the definitions of “employ,” “employee,”
and “employer” in the Wage Order suggests that the Wage Order
was meant to apply to persons who are working for pay in
commercial businesses. The “suffer or permit to work” and
“exercises control” standards extend responsibility to businesses
who benefit from and have the power to prevent exploitation of
workers who are working for compensation. And the term
“engage” reaches businesses that form an express or implied
contractual relationship to compensate persons whom they hire.
The purpose of the work standards in the IWC wage orders
also suggests that those standards apply to businesses who
employ workers for pay. In Dynamex, our Supreme Court

20
explained that the “exceptionally broad suffer or permit to work
standard in California wage orders finds its justification in the
fundamental purposes and necessity of the minimum wage and
maximum hour legislation in which the standard has
traditionally been embodied. Wage and hour statutes and wage
orders were adopted in recognition of the fact that individual
workers generally possess less bargaining power than a hiring
business and that workers’ fundamental need to earn income for
their families’ survival may lead them to accept work for
substandard wages or working conditions. The basic objective of
wage and hour legislation and wage orders is to ensure that such
workers are provided at least the minimal wages and working
conditions that are necessary to enable them to obtain a
subsistence standard of living and to protect the workers’ health
and welfare.” (Dynamex, supra, 4 Cal.5th at p. 952.)10
In addition to protecting workers, the wage orders help to
ensure a level playing field among competitors. Industry-wide
wage orders “are also clearly intended for the benefit of those
law-abiding businesses that comply with the obligations imposed
by the wage orders, ensuring that such responsible companies are
not hurt by unfair competition from competitor businesses that

10 As Woods correctly observes, the decision in Dynamex
concerned the standard that applies in determining whether
workers should be classified as employees or as independent
contractors for purposes of the IWC wage orders. (Dynamex,
supra, 4 Cal.5th at pp. 913–914.) While the opinion in that case
is relevant to the proper interpretation of the definitions in the
wage orders, it does not bear directly on the specific issue here,
i.e., whether volunteers for nonprofits should be considered
employees under California law.

21
utilize substandard employment practices.” (Dynamex, supra, 4
Cal.5th at p. 952.) Finally, the minimum work standards in wage
orders help to protect the public from the need to assume
responsibility for the “ill effects to workers and their families
resulting from substandard wages or unhealthy and unsafe
working conditions.” (Id. at p. 953.)
All three of these factors—protecting workers from
exploitation; protecting businesses from unfair competition; and
protecting the public from the need to assist workers who were
compelled to labor for substandard pay or in substandard
conditions—apply to businesses that employ paid labor. They do
not apply to persons who intend to volunteer their time to
nonprofit entities.
The language of the Wage Order also supports the
interpretation that it applies to persons who work for
compensation. The Wage Order states that it “shall apply to all
persons employed in the motion picture industry, including extra
players, teachers, and welfare workers, whether paid on a time,
piece rate, commission, or other basis.” (Cal. Code Regs., tit. 8,
§ 11120, subd. 1, italics added.) The reference to the mode of
payment suggests an assumption that the workers subject to the
Wage Order are working for pay. The same language appears in
the section defining the scope of the Labor Code chapter
governing wages and working conditions. (See Lab. Code, § 1171
[“The provisions of this chapter shall apply to and include men,
women and minors employed in any occupation, trade, or
industry, whether compensation is measured by time, piece, or
otherwise”], italics added.)
Importantly, the Division of Labor Standards Enforcement
(DLSE) has also concluded that the IWC wage orders do not

22
apply to volunteers who work for nonprofits.11 In 1988, the
DLSE issued an opinion letter (Opinion Letter) explaining that,
for purposes of the IWC work orders, a person who works for a
“religious, charitable, or similar nonprofit corporation” is not an
employee if he or she “intends to volunteer his or her services for
public service, religious, or humanitarian objectives, not as an
employee and without contemplation of pay.” (See
[as of
Dec. 9, 2021], archived at .)
However, if a person works for a commercial enterprise operated
by such a religious, charitable, or nonprofit corporation (such as a
restaurant or thrift store), the DLSE considers that person to be
an employee. (Ibid.)12 The DLSE has incorporated this opinion
into its Enforcement Policies and Interpretations Manual
(Dec. 2018, § 43.6.7, p. 43-6). (See [as of Dec. 9, 2021], archived
at .)

11“The DLSE is the administrative agency authorized to
enforce California’s labor laws, including applicable wage orders.”
(Dynamex, supra, 4 Cal.5th at p. 945, fn. 18.)
12 The DLSE’s opinion letters, while not controlling on the
courts, “ ‘ “ ‘ “do constitute a body of experience and informed
judgment to which courts and litigants may properly resort for
guidance.” ’ ” ’ ” (Brinker, supra, 53 Cal.4th at p. 1029, fn. 11,
quoting Seymore v. Metson Marine, Inc. (2011) 194 Cal.App.4th
361, 369, fn. 5.) “A court may adopt the DLSE’s interpretation if
the court independently determines that the interpretation is
correct.” (Oliver v. Konica Minolta Business Solutions U.S.A.,
Inc. (2020) 51 Cal.App.5th 1, 27.)

23
ii. Woods’s arguments are unpersuasive
Woods does not dispute that some nonprofit organizations
may use volunteer labor. However, she argues that AFI is not
included in the scope of such organizations because it is not a
religious or charitable organization. Woods argues that only
organizations dedicated to helping the poor or the “ ‘needy or
suffering’ ” fall within the category of charitable organizations
that may use volunteers according to the Opinion Letter.
The language in the Opinion Letter is not so limited. The
letter refers to volunteers working for “public service, religious, or
humanitarian objectives” in a “religious, charitable, or similar
nonprofit organization.” (Italics added.) Woods acknowledges
that this language is apparently derived from section 1720.4.
That section defines “volunteers” more directly as those who work
for “civic, charitable, or humanitarian reasons for a public agency
or corporation qualified under Section 501(c)(3) of the Internal
Revenue Code as a tax-exempt organization.” (Lab. Code,
§ 1720.4, subd. (a), italics added.) There is no dispute here that
AFI is a tax-exempt, Internal Revenue Code section 501(c)(3)
organization.
Other than her strained interpretation of the DLSE
Opinion Letter, Woods does not provide any support for her
argument that only organizations serving the needy may use
volunteers under California law. Consider the implications.
Under Woods’s interpretation, local community theatre
organizations, community orchestras, and other cultural
nonprofit entities would be required to treat all their workers as
employees, even if those workers were dedicated to the mission of
the organization and wished to volunteer their time. Such a rule
would have unforeseen and potentially devastating financial

24
implications for such groups. Woods’s interpretation lacks any
legal support or policy justification, and we reject it.
Woods also argues that AFI does not qualify to use
volunteers because it is not organized for a “humanitarian”
purpose. In essence, Woods claims that AFI is not a bona fide
nonprofit arts organization but simply exists to promote the films
that it screens and the studios and production companies that
make them.
But Woods did not provide any evidence to support that
theory. Woods does not dispute that AFI is qualified as a tax-
exempt nonprofit. Nor did she provide any evidence that AFI
engaged in promotional or marketing activities that were
inconsistent with its tax-exempt status.13 She points only to
evidence that AFI receives money for its Festival from various
corporate sponsors and from companies who produce the films
that it screens.
Such evidence is not sufficient to show that AFI is a
commercial promotional entity rather than a qualifying
nonprofit. Again, consider the implications. Under Woods’s
theory, a publisher’s contributions to a book fair or a musical

13 To the contrary: The contracts between AFI and the
Festival sponsors that Woods submitted in support of her class
certification motion suggest that AFI sought to remain within the
bounds of promotional conduct that was permitted for an Internal
Revenue Code section 501(c)(3) organization. Sponsors agreed
that, in recognition of AFI’s tax-exempt status, “AFI’s name and
AFI Marks . . . cannot be utilized without written authorization
by AFI and will not be utilized so as to create the impression that
AFI is endorsing, or is otherwise promoting, Distributor or its
products as such an endorsement or promotion could jeopardize
AFI’s tax exempt status.”

25
instrument company’s donations to a music festival might
preclude the use of volunteers for those events. And any
payments by a commercial entity in return for sponsor
recognition would likewise force such events to use paid
employees only. Woods provides neither legal nor factual support
for her argument that AFI must be treated as a commercial
business entity for purposes of its obligations to its workers.
We need not, and do not, decide the obligations of such
commercial entities. We note the DLSE’s opinion that charitable
entities may not use volunteers when they operate commercial
enterprises suggests that the DLSE interprets the IWC wage
orders to apply to all persons working in commercial ventures.
(Opinion Letter, p.1.) The Opinion Letter does not explain the
reason for this interpretation. Presumably it reflects a concern
that commercial employers could take advantage of workers who
agree to forgo pay in the hope of securing future paid employment
or other career benefits.
Woods argues that the demand for career opportunities in
the film industry creates just such a concern. Other courts have
considered similar concerns in the context of deciding whether
unpaid interns should be considered employees. (See, e.g., Glatt
v. Fox Searchlight Pictures, Inc. (2d Cir. 2015) 811 F.3d 528, 535
(Glatt) [“employers can . . . exploit unpaid interns by using their
free labor without providing them with an appreciable benefit in
education or experience”].)
Whether this concern is sufficient to justify treating unpaid
interns or other volunteers in commercial businesses as

26
employees may be subject to debate.14 But we do not find it
compelling here. AFI is not a for-profit commercial business.
Consistent with the DLSE’s Opinion Letter, we hold only that
persons may volunteer for nonprofit entities, including arts
organizations such as AFI, without becoming employees under
California law.

14 For example, the Fair Employment and Housing Council
has issued a regulation defining “ ‘[u]npaid interns and
volunteers’ ” for purposes of the FEHA which concludes that
“[u]npaid interns and volunteers may or may not be employees.”
(Cal. Code Regs., tit. 2, § 11008, subd. (k); see also Glatt, supra,
811 F.3d at pp. 531–532, 536–537 [applying a test to determine
whether interns at a film production company were employees in
which the lack of expectation of payment was only one factor
among others]; Benjamin v. B&H Educ., Inc. (9th Cir. 2017) 877
F.3d 1139, 1146–1147, 1150 [predicting that the California
Supreme Court would likely apply the same multi-factor test
under California law]; but see Mendoza, supra, 128 Cal.App.4th
at p. 636 [citing with approval a federal decision that an unpaid
intern “did not meet the definition of employee for common law
agency”]; Talley, supra, 51 Cal.App.5th at p. 1082 [2014
amendments to the FEHA extending some protections to “unpaid
student interns and other volunteer work situations” did not
mean that such unpaid workers are employees]; Kao v. Holiday
(2017) 12 Cal.App.5th 947, 957 [suggesting in dicta that a
“nonemployee trainee” might not be subject to California wage
and hour laws].

27
DISPOSITION
The trial court’s order denying class certification is
affirmed. American Film Institute is entitled to its costs on
appeal.
CERTIFIED FOR PUBLICATION.

LUI, P. J.
We concur:

CHAVEZ, J.

HOFFSTADT, J.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/5136023. Public record. Not legal advice.