October 13, 2025|Franchise Frontlines
October 13, 2025 | Court of Appeals of Washington, Division I | Published Opinion
Executive Summary
In a published decision, the Washington Court of Appeals affirmed a Seattle Hearing Examiner’s determination that Newway Forming, Inc., a concrete-forming contractor, was a joint employer of workers supplied by a subcontractor and therefore liable for more than $2 million in unpaid wages, interest, liquidated damages, and penalties under Seattle’s municipal labor ordinances. Applying the Washington Supreme Court’s 13-factor “economic reality” test articulated in Becerra Becerra v. Expert Janitorial, LLC, 181 Wash. 2d 186, 332 P.3d 415 (2014), the court held that substantial evidence supported the examiner’s findings and rejected the contractor’s attempt to reweigh the evidence. The court also clarified that a statutory writ of review under RCW 7.16.040 is an “extraordinary remedy” and may not be used to correct mere errors of law.
Relevant Background
Newway orally subcontracted with Baja Concrete USA Corp. to provide labor at Seattle construction sites from 2018 through 2020. Following an investigation, the Seattle Office of Labor Standards (OLS) determined that Newway and Baja were joint employers and that workers were denied overtime, paid sick leave, meal and rest breaks, and statutory minimum wages. OLS issued an order exceeding $2 million in monetary remedies.
After a 14-day evidentiary hearing, the Seattle Hearing Examiner affirmed OLS’s order. Newway sought review in superior court through a statutory writ under RCW 7.16.040, arguing the examiner acted “illegally.” The superior court denied the writ, and the Court of Appeals affirmed.
Decision
The appellate court addressed two central issues: whether the examiner acted “illegally” for purposes of a statutory writ and whether substantial evidence supported the joint employer finding under Washington’s economic realities framework.
Under RCW 7.16.040, a statutory writ is available only where an inferior tribunal has exceeded its jurisdiction or acted illegally and no adequate remedy at law exists. The court emphasized that “acting illegally” requires more than mere error; it applies only where the tribunal committed an obvious or probable error rendering further proceedings useless, substantially altered the status quo, or departed from accepted judicial practice. The court reiterated that writ review is an “extraordinary remedy” to be used sparingly and not as a substitute for ordinary appellate review. Because the examiner applied the correct legal standard and did not depart from accepted procedure, the writ was properly denied.
The core issue was whether Newway was a joint employer under Washington law. The Washington Supreme Court in Becerra adopted a 13-factor economic realities test derived from federal FLSA jurisprudence. These factors include the nature and degree of control, degree of supervision, power to determine pay rates, right to hire or fire, payroll preparation, use of employer premises and equipment, and whether the work is integral to the employer’s business.
The Court of Appeals emphasized that the test is fact-intensive, nonexclusive, and must be applied under a totality-of-the-circumstances approach. It rejected Newway’s argument that insufficient factors supported the finding, explaining that courts are not to apply the test mechanically or count factors.
The examiner found that eight of the 13 factors supported joint employment, including that Newway supervisors assigned and corrected workers’ tasks; workers used Newway’s timeclock and equipment; work performed was integral to Newway’s construction projects; Newway reviewed time records before payroll processing; and workers performed services exclusively at Newway worksites. The appellate court held that this evidence satisfied the substantial evidence standard and declined to reweigh competing testimony.
Looking Forward
Although arising in the construction context under municipal wage ordinances, the opinion carries broader lessons for franchisors and multi-entity operators.
Joint employer determinations remain highly fact-dependent. Courts will focus on operational reality—control, supervision, integration, and economic dependence—rather than formal contractual structure alone. Centralized timekeeping systems, supervisory oversight, and work integral to a core business function weigh heavily in joint employer analysis. Entities that require subcontracted or affiliated workers to use company equipment or reporting systems should evaluate whether such practices create exposure.
Appellate courts will defer to administrative fact-finding when supported by substantial evidence. Once a hearing examiner develops a detailed record, reversing that determination becomes difficult.
Finally, the court’s refusal to mechanically tally factors reinforces that joint employer liability is not defeated simply because some factors cut the other way. The inquiry turns on economic reality and totality of circumstances.
For franchisors operating in jurisdictions with aggressive local labor enforcement regimes, this decision underscores the importance of structural clarity and disciplined operational boundaries when interacting with franchisee or subcontracted labor.
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.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
