January 12, 2026|Franchise Frontlines
January 12, 2026 | Court of Appeals of Washington, Division I | Published Opinion
Executive Summary
In a published decision, the Washington Court of Appeals affirmed a superior court’s denial of a statutory writ of review sought by a construction contractor challenging a Seattle enforcement action that imposed more than $2 million in wage and hour remedies. The City of Seattle’s Office of Labor Standards determined that Newway Forming, Inc. was a joint employer with a subcontractor that supplied workers to Newway’s construction sites and that both entities were liable for violations of municipal wage ordinances. Newway argued that the administrative hearing examiner acted “illegally” when concluding that a joint employment relationship existed. The Court of Appeals rejected that argument, holding that the examiner applied the correct legal standard and that substantial evidence supported the factual findings underlying the joint employer determination. Because Newway failed to show the type of extraordinary legal error required for a statutory writ of review, the court affirmed the denial of relief.
Relevant Background
Newway Forming, Inc. is a concrete-forming contractor that operated several construction sites in Seattle. Beginning in 2018, Newway entered into an oral subcontracting arrangement with Baja Concrete USA Corp. to provide laborers at those worksites. Baja supplied workers who performed cement-finishing and related tasks at projects where Newway served as the primary contractor.
In 2020, the Seattle Office of Labor Standards (“OLS”) opened an investigation into employment practices at several Newway construction sites. After interviewing workers and reviewing payroll and other records, OLS concluded that Newway and Baja had violated multiple municipal labor protections. The violations included failure to pay overtime wages, failure to provide paid sick leave, violations of meal and rest break requirements, minimum wage violations, and failures to comply with wage-theft and recordkeeping provisions.
OLS determined that Newway and Baja were joint employers of the affected workers and ordered them to provide a “complete financial remedy,” including unpaid wages, interest, liquidated damages, and civil penalties exceeding two million dollars. Newway appealed the determination to the Seattle Hearing Examiner.
Following a fourteen-day evidentiary hearing that included testimony from workers and company representatives, the examiner conducted a de novo review of the record. The examiner issued detailed findings of fact and conclusions of law affirming OLS’s order and concluding that Newway exercised sufficient control over the workers to qualify as a joint employer.
Newway then sought judicial review in superior court through a statutory writ of review under RCW 7.16.040, arguing that the examiner had acted illegally by misapplying Washington law governing joint employment. The superior court denied the writ and dismissed the petition with prejudice. Newway appealed.
Decision
The Court of Appeals began by addressing the limited scope of statutory writ review under RCW 7.16.040. A statutory writ is an extraordinary remedy available only when an inferior tribunal has exceeded its jurisdiction or acted illegally and when no adequate legal remedy exists. The Washington Supreme Court has defined “acting illegally” as including only narrow categories of error, such as an obvious error rendering further proceedings useless, a probable error substantially altering the status quo, or a departure from the accepted course of judicial proceedings. The court emphasized that a writ is not available simply to correct alleged errors of law.
Applying that framework, the court first rejected Newway’s argument that the hearing examiner applied the wrong legal test. The examiner evaluated joint employment under the “economic reality” framework adopted in Washington case law and derived from federal Fair Labor Standards Act precedent. That analysis requires courts to consider a set of nonexclusive factors examining the totality of the employment relationship, including control over workers, supervision, authority regarding pay and hiring decisions, payroll practices, use of equipment and premises, and whether the workers’ labor is integral to the alleged employer’s business.
The court observed that Newway conceded the examiner applied the correct legal standard. Instead, Newway argued that the examiner improperly applied the law to the facts. The Court of Appeals held that such an argument, even if correct, would not justify the extraordinary remedy of a statutory writ because it would amount only to a claim of legal error rather than illegal action.
The court also concluded that Newway failed to demonstrate that the examiner’s decision satisfied any of the demanding standards for illegality under Washington law. The court noted that Newway did not meaningfully engage with the governing definition of “acting illegally” and instead relied on the incorrect premise that any error of law would justify issuance of a writ.
Finally, the court addressed the examiner’s factual findings supporting the joint employer determination. Under Washington law, the existence and degree of each factor in the economic reality test are factual determinations reviewed for substantial evidence. The Court of Appeals concluded that substantial evidence supported the examiner’s findings that Newway exercised significant control over the workers’ labor.
Among other things, the examiner found that Newway supervisors determined the order and scope of work at the construction sites, provided work assignments through foremen and superintendents, corrected worker errors, and oversaw daily operations. Evidence also showed that Newway required workers to clock in using a timekeeping system located in a trailer at its worksite and reviewed timesheets submitted by the subcontractor before approving payment. The examiner further found that Newway influenced hiring decisions by specifying the number of workers needed and could prevent particular workers from returning to the site. The workers’ cement-finishing labor was also integral to Newway’s core construction operations.
Because the record contained substantial evidence supporting the examiner’s findings across multiple factors, the Court of Appeals held that the examiner did not err in concluding that Newway and Baja functioned as joint employers under the economic reality test. Accordingly, the superior court properly denied Newway’s petition for a statutory writ of review.
Looking Forward
This decision illustrates how courts analyze joint employment allegations in the context of subcontracted labor relationships. Although the case arose under municipal wage ordinances, the court relied on the same economic reality framework frequently applied in federal and state wage-and-hour litigation. The opinion underscores that joint employment determinations are highly fact-specific inquiries focused on the overall economic relationship between the parties rather than any single factor.
The court’s reasoning also highlights the significance of operational control in multi-entity work arrangements. Evidence that a contractor directs the day-to-day activities of workers, supervises their work through on-site managers, reviews time records, and relies on the workers’ labor as an integral component of its operations may weigh heavily in favor of a joint employer finding. At the same time, the decision reinforces that appellate courts give considerable deference to administrative fact-finding when substantial evidence supports those determinations.
For companies operating through subcontractors or other labor-supply arrangements, the case demonstrates the importance of clearly defining supervisory authority and operational responsibilities. Courts evaluating joint employment questions will examine the practical realities of the relationship, including how work is assigned, supervised, and compensated. As this decision illustrates, those operational details can play a decisive role in determining whether multiple entities share legal responsibility for wage and hour compliance.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
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