Ninth Circuit Withdraws Decision Applying Dynamex Retroactively

Executive Summary: On July 22, 2019, the Ninth Circuit withdrew its recent decision applying the landmark employee/independent contractor classification case, Dynamex, retroactively and indicated that it will be certifying the question to the California Supreme Court.

On April 30, 2018, the California Supreme Court issued its decision in Dynamex Operations West, LLC v. Superior Court of California, which established the “ABC test” for determining who qualifies as an independent contractor under California’s Wage Orders. Generally, this ABC test makes it more difficult to classify workers as independent contractors, opening employers to exposure for employee benefits that would not otherwise be owed to independent contractors. For a discussion of Dynamex, see the May 3, 2018 Alert authored by Ross Boughton and Alexandria Witte, available here.

On May 2, 2019, the Ninth Circuit applied the ABC test retroactively in Vasquez v. Jan-Pro Franchising International, Inc. There, pre-Dynamex, the district court granted Jan-Pro’s motion for summary judgment. Post-Dynamex, the Ninth Circuit vacated the district court’s ruling and remanded the case for reconsideration utilizing the newly established ABC test. For a discussion of Jan-Pro, see the May 8, 2019 Alert authored by Ross Boughton and Stefan Black, available here.

That decision has now been withdrawn and the question of whether Dynamex applies retroactively will be certified to the California Supreme Court. This is good news for employers as the retroactive application of the more stringent ABC test is lifted, at least for now.

If you have any questions regarding Dynamex or other labor or employment issues impacting California employers, please contact Daniel Lymandlyman@fordharrison.com, an associate in our San Francisco office or Ross Boughtonrboughton@fordharrison.com, partner in our San Francisco office. Of course, you may also contact the FordHarrison attorney with whom you usually work.

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