Cornwell Quality Tools Company Hit with California Misclassification Lawsuit – Again

Florea v. The Cornwell Quality Tools Company

The current lawsuit, filed in in California federal court last month by former dealer George Florea, alleges the company violates California’s Labor Code and Industrial Welfare Commission wage orders by misclassifying employees as independent contractors, who are not entitled to certain legal protections and benefits mandated for employees. The company is also trying to enforce an invalid arbitration agreement, according to court documents. Florea was hired under its “dealer franchise agreement”, and sometimes worked more than 60 hours a week “driving around selling tools and performing certain services”.

Florea states that Cornwell’s California dealers sold tools exclusively for the company from branded trucks, operated within assigned territories, and were required to follow company rules governing pricing, inventory, and sales practices. The dealers wear company uniforms, attend mandatory training and meetings and satisfy certain performance standards or else face termination. Dealers also have to cover the costs of fuel, truck payments and uniforms without reimbursement, according to Law360.

That’s not all. Florea also alleges that Cornwell makes unlawful deductions from dealers’ wages, denies them meal and rest breaks, stiffs them on overtime and minimum wages and provides inaccurate wage statements.

California ABC Test

The lawsuit centers on California’s ABC test, which presumes workers are employees unless a company proves all three elements of the test:

• A: The worker is free from the company’s control
• B: The worker performs work outside the company’s usual course of business
• C: The worker is customarily engaged in an independent trade

Plaintiffs argue Cornwell cannot satisfy any of the above, particularly B, because selling professional tools is the core business of the company. California courts have repeatedly held that workers who perform a company’s central business function are not independent contractors, regardless of contractual labels.

Salinas v. Cornwell Quality Tools Company

Florea also cited Salinas v. Cornwell Quality Tools Co., a California federal court case in which the company tried to enforce identical arbitration provisions, but a judge ruled they could not be enforced because there was no clear agreement about arbitration or forum selection. Former dealer Randy Salinas claimed Cornwell misclassified California dealers and denied them wages, breaks, and expense reimbursements. According to court filings, the 2020 Salinas case was resolved through a class action settlement that received final court approval, and the case was dismissed.

Repeat Performance

Legal observers note that the Florea repeat performance soon after the Salinas settlement highlights a common feature of California misclassification litigation: settling a class action does not necessarily require companies to change their business models. Because settlements typically include no admission of wrongdoing and apply only to specific time periods, companies may face new and similar lawsuits if alleged practices continue. And California courts have applied the ABC test aggressively, particularly against route-based sales and distribution models. Worker advocates argue that these models often resemble employment relationships, with companies maintaining control while shifting operational costs onto workers labeled as “independent.”

Florea’s proposed class action seeks to represent California dealers who worked for Cornwell during the relevant period and asserts claims for unpaid wages, missed meal and rest breaks, unreimbursed business expenses, and statutory penalties. If the Florea plaintiffs succeed in certifying a class, Cornwell could be on the hook for recovery of unpaid wages, premium pay for missed breaks, unreimbursed expenses, penalties, and interest. Maybe it’s time that Cornwell change its classification issues for once and for all, particularly in California.

The case is Florea v. The Cornwell Quality Tools Company, case number 5:25-cv-03343, in the U.S. District Court for the Central District of California.