SAN FRANCISCO – California is navigating a legal minefield under the Dynamex decision and exactly what employers are supposed to do moving forward now that a court has ruled it should be applied retroactively, according to legal observers watching the saga play out in courts.
The U.S. Court of Appeals for the 9th Circuit ruled the ABC test set out by the Dynamex decision, which dictates who is and who is not a contract employee, applied retroactively in Vazquez v. Jan-Pro Franchising International. The court later withdrew the opinion and sent a certified question to the California Supreme Court.
On Oct. 8, California's 2nd Court of Appeal, Division Four also ruled that Dynamex applied retroactively in Gonzales v. San Gabriel Transit Inc., et al.
Paul Grossman, law partner at Paul Hastings LLP of Los Angeles, is the longtime attorney for The California Employment Law Council. Grossman said the 9th Circuit then asked the state Supreme Court to decide if the test could be applied retroactively or not in Vazquez. He says from his viewpoint, the state Supreme Court can only come to one conclusion in the case.
“It would be horribly unfair to apply the new ABC test in Dynamex retroactively,” he said.
Grossman wrote in an amicus brief filed in the 9th Circuit that the decision to make the law retroactive was particularly onerous and created enormous burdens for businesses in the state.
California employers had relied on the prior test called the Borello test, which Grossman pointed out was adopted by the California Labor Commission.
"The Borello test focused on control – who controlled the means and manner of doing the work – as the primary and normally determinative factor," the amicus brief states. "'Control' is factor 'A' in the new Dynamex ABC test. But Borello also identified approximately 10 secondary factors."
The new ABC test ignores several key considerations Borello held important, Grossman said.
“Every employer in the state followed the Borello test,” he said, which used a very different set of standards. “It’s just outrageously unfair to change the rules retroactively.”
In his amicus brief, Grossman also noted the court created this ABC test on its own; not at the request of either party involved in the court case. Finally, he said that he and the Law Council feel that applying the ABC test in Dynamex retroactively would violate constitutional rights of due process and equal protection.