Michael S. Kun, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Los Angeles office, was quoted in Law360, in “The Biggest Employment Rulings of 2019: Midyear Report,” by Braden Campbell. (Read the full version – subscription required.)

Following is an excerpt:

Courts and agencies have kept employment attorneys busy so far in 2019, bringing a controversial pay data survey back from the dead, upending precedent on worker classification and clearing up lingering questions about arbitration agreements. Here, Law360 looks at seven rulings from the past six months that employment lawyers ought to be aware of. …

Ninth Circuit Says Ruling Is Retroactive

The California Supreme Court left open an important question in last year’s Dynamex ruling: whether the decision, which made it harder for employers to show their workers are independent contractors under state wage law, applies retroactively. This year, the Ninth Circuit answered in the affirmative in a ruling that may expose some employers to claims for years of wages.

In Dynamex, the California Supreme Court eschewed the state’s existing employment classification test in favor of the stricter “ABC Test.” Under the test, an employer can only classify workers as independent contractors if it shows each of three things: that the workers are free from their hiring entity’s control, work outside its “usual business” and “customarily” do the work they do for their alleged employer as part of an “independent business.”

Cleaning franchisor Jan-Pro had argued the ruling only applied going forward in a bid to beat a proposed class action alleging it wrongly classified its cleaner-franchisees as contractors, denying them overtime and minimum wages. But the Ninth Circuit disagreed, saying the case does not present an exception to the rule that the California Supreme Court’s rulings apply retroactively.

Epstein Becker Green attorney Michael Kun, who co-chairs the management-side firm’s wage practice, said the ruling is frustrating for employers, which may now face legal liability under a test “they had no reason to comply with for the simple reason that it did not even exist.”

“While lawyers may be able to understand why this would be so from a purely legal standpoint — technically, the California Supreme Court was merely ‘clarifying’ the law rather than creating a new law — this is something that likely makes no sense whatsoever to laypersons,” Kun wrote in an email.


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