Dynamex Applied Retroactively By The Ninth Circuit

Two days after the one year anniversary of the California Supreme Court’s Dynamex decision,  the Ninth Circuit issued a blow to companies in California. On May 2, 2019, the Ninth Circuit in Vazquez v. Jan-Pro Franchising International, Inc. held that the Dynamex decision adopting the more difficult to meet ABC test to determine whether workers are employees or independent contractors under the California wage orders applies retroactively. Under the ABC test, a worker is presumed to be an employee unless the company can prove: (A) the worker is free from the control and direction of the company in connection with the performance of the work, both under the contract and in fact, (B) the worker performs work that is outside the usual course of the company’s business, and (C) the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the company. This case arose out of the Northern District of California’s dismissal on summary judgment of a complaint brought by a putative class of janitors based on a determination that they were properly classified as independent contractors prior to the issuance of the Dynamex decision. The Court reasoned in reaching this retroactive application decision that “[g]iven the strong presumption of retroactivity, the emphasis in Dynamex on its holding as a clarification rather than as a departure from established law, and the lack of any indication that California courts are likely to hold that Dynamex applies only prospectively, we see no basis to do so either.” Accordingly, the Ninth Circuit remanded the case to the district court to apply the ABC test to determine whether class members were misclassified as independent contractors.

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