NFIB seeks to avoid retroactive application of contractor-employee ruling

By Glenn Minnis | Jan 20, 2019

SAN FRANCISCO — The National Federation of Independent Business’ Small Business Legal Center has filed an amicus brief urging a federal judge to affirm a district court’s limited liabilities ruling in a suit brought to establish the standard for determining if a Grubhub food delivery driver classifies as an independent contractor or an employee of the company.

In conjunction with the Civil Justice Association of California, NFIB filed its legal outline with the Ninth Circuit Federal Court of Appeal earlier this month related to the Lawson vs. Grubhub suit where the court ruled previously that company driver Raef Lawson should legally be considered an independent contractor.

Instead of relying on precedent and adhering to the tenets of an independent contractor classification test standard that has stood for the last three decades, the court adopted a standard branded the "ABC" test that operates on the premise that “workers are employees instead of independent contractors for purposes of state wage orders.”

NFIB’s filing requests that the court’s decision not be retroactively applied, and argues that standards should only apply to wage and hour issues in the state.

“The National Federation of Independent Business Small Business Legal Center and Civil Justice Association of California submit this amici curiae brief in support of Defendants-Appellees,” NFIB said in its filing. 

“As an organization that represents California’s small and independent businesses, amicus NFIB Legal Center has a significant interest in this appeal. The organization files here to emphasize the devastating consequences that retroactive application of the ABC test announced in Dynamex Operations West, Inc. v. Super. Ct., 4 Cal. 5th 903 (2018), would have on smaller and medium-size businesses in California.”

In the original ruling, a key factor proved to be the court’s consideration of the so-called Borello test, which weighs such factors as how critical services rendered are to the company’s everyday functions, the skill level required and whether the services are performed under the eye of a supervisor.  

“Retroactive application of the ABC test to the period prior to April 30, 2018, would put undue hardship on California businesses who reasonably assumed that Borello governed their independent contractor relationships. Under both federal law and California precedent, the question of retroactivity depends upon consideration of fairness and public policy. Given that Borello had long been understood as the applicable test by both businesses and individuals, as well as by California’s Division of Labor Standards Enforcement, there are compelling grounds for prospective application of the ABC test pronounced by the Dynamex decision.”

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Organizations in this Story

Civil Justice Association of California National Federation of Independent Business (NFIB) U.S. Court of Appeals for the Ninth Circuit

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