AB 5, Codifying Dynamex and Broadening the ABC Test’s Application, Passes California Legislature

Executive Summary: After months of debate and negotiations, the California State Legislature passed the controversial AB 5 on Wednesday, September 11, 2019, bringing it one step closer to being law. If passed, the new law is expected to impact and clarify the use of independent contractors throughout the state. It is now on Governor Newsom’s desk. If signed, it will go into effect on January 1, 2020. Continue reading

Ninth Circuit Applies Dynamex Retroactively

Executive Summary: In 2018, the California Supreme Court adopted the “ABC test” for determining whether workers are independent contractors under California wage orders (the Dynamex decision). For a discussion of that decision, please see our May 3, 2018 Alert. The ABC test makes it more difficult in many cases for companies to classify a worker as an independent contractor than under the prior generally-applied common law test. As such, the adoption of the ABC test increases many California employers’ exposure for minimum wage, overtime, meal and rest periods, and other benefits owed to employees but not to independent contractors. On May 2, 2019, in Vasquez v. Jan-Pro Franchising International, Inc., the Ninth Circuit concluded that the ABC test should be applied retroactively to situations that arose before the Dynamex decision came out. Continue reading

After the Scare: Sixth Circuit says Insurance Agents Are Still Independent Contractors

Close, Grant - 300dpi
Grant Close

Last week, many insurance carriers breathed a sigh of relief when the Sixth Circuit Court of Appeals held that more than 700 American Family Life Insurance agents were properly classified as independent contractors, not employees.  The case is Jammal v. American Family Life Insurance Company, 2019 U.S. App. LEXIS 2905.  Continue reading

Ninth Circuit Holds That The FAAA Does Not Preempt California’s Common Law Independent Contractor Test, But Holds The Door Open For Preemption Of The More Restrictive “ABC” Test

Boughton, Ross - 300dpi
Ross Boughton

Executive Summary:  In recent years, courts throughout the nation have grappled with the interplay and potential conflict between state employment laws and the Federal Aviation Administration Authorization Act (“FAAAA”), which generally prohibits states from enforcing any law  “related to” a motor carrier’s “price, route, or service. . . with respect to the transportation of property.”  49 U.S.C. § 14501(c)(1).  The issue typically arises when a state employment law imposes employee requirements or restrictions that have an actual or potential impact on how a motor carriers operate or the price they charge.    Continue reading