October 13, 2025|Franchise Frontlines
October 13, 2025 | Washington Court of Appeals, Division I | Unpublished Opinion
Executive Summary
In an unpublished decision, Judge Díaz of the Washington Court of Appeals affirmed the City of Seattle’s enforcement of its labor standards ordinances against Newway Forming, Inc. Newway sought a statutory writ of review after the Office of Labor Standards (OLS) and the City’s Hearing Examiner found it jointly liable with a subcontractor for multiple wage-and-hour violations across several construction worksites. Newway argued the examiner “acted illegally” by concluding it was a joint employer, asserting that the examiner’s decision was contrary to Washington law. The appellate court rejected that argument, holding that the examiner applied the correct legal standard, that the factual findings were supported by substantial evidence, and that Newway failed to meet the demanding threshold for a statutory writ. The court’s decision reinforces both the deferential standard of review that applies to administrative joint-employer findings and the narrow availability of extraordinary remedies under RCW 7.16.040.
Relevant Background
According to the administrative record summarized by the court, Newway Forming is a concrete-forming contractor that entered an oral subcontract with Baja Concrete USA Corp. in 2018 to provide labor at multiple Seattle construction worksites. The Office of Labor Standards began investigating both companies in 2020 following complaints from workers. OLS interviewed employees of both entities, reviewed timekeeping and payroll practices, and evaluated whether Newway and Baja complied with Seattle’s municipal wage, sick leave, meal-and-rest break, wage theft, and recordkeeping ordinances. Based on the evidence it gathered, OLS determined that Newway and Baja functioned as joint employers under the Seattle Municipal Code and that numerous workers were entitled to unpaid wages, liquidated damages, and related financial remedies. OLS ordered Newway to pay more than two million dollars as part of what it described as a complete financial remedy for the violations.
Newway appealed OLS’s determination to the Office of the Hearing Examiner. The examiner conducted a fourteen-day evidentiary hearing, received testimony from affected workers, and considered additional documentary evidence regarding daily supervision practices, site-level direction, the use of Newway’s timekeeping system, and the extent to which Newway and Baja coordinated hiring, assignments, and payment processes. The examiner reviewed the evidence de novo, applied the thirteen-factor economic-reality test adopted in Becerra Becerra v. Expert Janitorial, and ultimately affirmed OLS’s findings. Newway then petitioned the superior court for a statutory writ of review, arguing that the examiner’s joint-employer conclusion was legally erroneous and therefore “illegal” under RCW 7.16.040. The superior court denied the writ after concluding there were no legal errors in the administrative record, and Newway appealed to the Washington Court of Appeals.
Decision
The appellate court began by explaining the narrow purposes of statutory writs. RCW 7.16.040 authorizes a writ only when an inferior tribunal exercising judicial functions exceeds its jurisdiction, acts illegally, or conducts a proceeding not according to the course of common law, and when the petitioner shows there is no adequate remedy at law. Citing Holifield and subsequent cases, the court emphasized that an inferior body “acts illegally” only if it commits an obvious error that would render further proceedings useless, commits a probable error that substantially alters the status quo or limits a party’s freedom to act, or so departs from the usual course of proceedings that revisory intervention is required. These standards are intentionally “very demanding,” and a statutory writ is not a mechanism to relitigate factual disputes or correct ordinary legal error.
Newway argued the examiner acted illegally because, in its view, the joint-employer conclusion was wrong as a matter of law. The appellate court disagreed at multiple levels. First, the court observed that Newway had conceded, both in briefing and at oral argument, that the examiner applied the correct legal test. The examiner used the thirteen-factor “economic reality” analysis defined in Becerra, which itself incorporates principles from the Fair Labor Standards Act and Washington’s Minimum Wage Act. Because Newway did not challenge the legal framework used by the examiner, its writ request rested only on a disagreement about how the examiner applied that test to the facts. Under Washington law, such disagreements do not constitute illegal action within the meaning of RCW 7.16.040.
Second, the court explained that Newway had not attempted to satisfy any of the three Holifield standards. It did not argue that the examiner committed an obvious error that would render further proceedings useless, nor that the decision substantially altered the status quo, nor that the examiner strayed from accepted adjudicative procedure. Instead, Newway relied on an outdated interpretation of “acting illegally,” one that had been expressly rejected by the Washington Supreme Court. Because a mere allegation of legal error is insufficient, Newway’s argument failed.
Finally, the appellate court held that even if it reached the merits of Newway’s claim, the examiner’s factual findings were supported by substantial evidence. The examiner identified worksite-level decisions, supervisory practices, use of Newway-owned tools and equipment, timekeeping control, and daily direction of workers as factors supporting joint-employer status. The examiner also found that certain workers performed tasks integral to Newway’s business, that Newway communicated hiring needs to Baja, and that Newway reviewed timesheets and invoices before Baja could pay workers. Although Newway argued some factors pointed the other way, the court noted that the economic-reality test is not a tallying exercise, and a finding of joint employment turns on the totality of circumstances rather than a mechanical count. Because substantial evidence supported the examiner’s findings, and because Newway failed to provide the required hearing transcript on appeal, the court treated many unchallenged findings as verities. The superior court therefore acted properly in refusing to issue the writ.
Looking Forward
This decision illustrates how municipal labor-enforcement agencies apply joint-employment principles in multi-entity work arrangements, and why courts are highly deferential when reviewing administrative findings. For franchisors, the ruling underscores the importance of understanding how “economic reality” factors are evaluated in contexts where more than one business is involved in directing or benefiting from labor. Although the facts in this case arose from a construction subcontracting relationship—not a franchise—the analysis reflects how plaintiffs and enforcement bodies may attempt to characterize operational interactions between separate entities. The outcome also demonstrates that courts will treat the joint-employment test as fact-intensive and case-specific, and nothing in the opinion signals a broader shift in how Washington views operational relationships within franchise systems. Instead, the decision reinforces long-standing principles that findings rest on the particular record before the agency and do not apply mechanically across industries.
The case further highlights that businesses challenging administrative decisions must create and preserve a complete evidentiary record. Newway’s failure to provide a transcript of the underlying hearing limited its ability to demonstrate factual or procedural error. For franchisors facing local or state labor investigations, maintaining clear documentation regarding operational roles, brand standards, and the separation of responsibilities can be critical. This record-based approach not only supports regulatory compliance but also places franchisors in a stronger position if a dispute later arises. Finally, the opinion reiterates that statutory writs are not substitutes for appeals and will not be granted to revisit factual determinations. That procedural reminder may help franchisors and other employers evaluate when to seek review and what relief is realistically available when challenging administrative outcomes.
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 APC 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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