NEW CALIFORNIA INDEPENDENT CONTRACTOR TEST APPLIES RETROACTIVELY ACCORDING TO THE NINTH CIRCUIT

As we have previously reported, the California Supreme Court last year set forth a revolutionary new “ABC test” for determining whether workers are properly classified as employees or independent contractors, making it dramatically more difficult for California employers to lawfully retain independent contractors.

On May 2, 2019, in Vazquez v. Jan-Pro Franchising Int’l, Inc., the Ninth Circuit Court of Appeals determined that the Supreme Court of California’s landmark “ABC” decision, Dynamex Ops. West Inc. v. Superior Court, 4 Cal. 5th 903 (2018), applies retroactively. Vazquezdoes not bind state courts, and employers may still argue that Dynamexdoes not apply in some circumstances (e.g., if a claim does not arise under the wage orders or if the defendant is an alleged joint employer).  But California businesses must be prepared to address the ABC test and consider its retroactive application.

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