Ninth Circuit Determines That The "ABC" Test For Determining Whether Workers Are Employees

The Ninth Circuit Court of Appeal ruled yesterday that the "ABC test" used for determining whether workers are employees adopted by the California Supreme Court in Dynamex Operations West v. Superior Court applies retroactively. (See, Vazquez v. Jan-Pro Franchising International, Inc. - filed May 2, 2019 - 2019 S.O.S. 17-16096.)

In reaching its decision, the Ninth Circuit vacated a district court’s dismissal on summary judgment of a complaint brought by a putative class against a defendant international business that had developed a sophisticated “three-tier” franchising model, seeking a determination whether workers were independent contractors or employees under California wage order laws; and remanded for further proceedings. In a decision post-dating the district court’s decision, the California Supreme Court in Dynamex Ops. W. Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018), adopted the “ABC test” for determining whether workers are employees under California wage order laws. The test requires the hiring entity to establish three elements to disprove employment status: (A) that the worker is free from the control of the hiring entity in connection with work performance – both under the performance contract and in fact; (B) that the worker performs work outside the hiring entity’s usual business; and (C) that the worker is customarily engaged in an independent business of the same nature as the work performed. The panel held that Dynamex applied retroactively, that none of the defendant-hiring entity’s other efforts to avoid reaching the merits were viable, and that the case must be remanded to the district court to consider the merits in light of Dynamex. (See, Vazquez v. Jan-Pro Franchising International, Inc. - filed May 2, 2019 - 2019 S.O.S. 17-16096.)


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