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As to contracting agencies, the PERL gives the term no special meaning, stating simply that “employee” means “[a]ny person in the employ of any contracting agency.”  (§ 20028, subd. (b).)  In this circumstance—a statute referring to employees without defining the term—courts have generally applied the common law test of employment.  “ ‘[W]here Congress uses terms that have accumulated settled meaning under . . . the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms.’  [Citations.]  In the past, when Congress has used the term ‘employee’ without defining it, we have concluded that Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.”  (Community for Creative Non-Violence v. Reid (1989) 490 U.S. 730, 739-740, italics added; accord, People v. Palma (1995) 40 Cal.App.4th 1559, 1565-1566 [“as a general rule, when ‘employee’ is used in a statute without a definition, the Legislature intended to adopt the common law definition and to exclude independent contractors”].)  California courts have applied this interpretive rule to various statutes dealing with public and private employment.[5]  The federal courts have applied it specifically to the question of qualification for retirement benefits.[6]  Unless given reason to conclude the Legislature must have intended the term to have a different meaning in section 20028, subdivision (b), we also can only adhere to the common law test.  We proceed to consider MWD’s and the labor suppliers’ arguments for a contrary reading of the PERL.  
METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA,  v THE SUPERIOR COURT OF LOS ANGELES COUNTY, S102371-Filed 2/26/04

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