Kevin Sullivan, Associate in the Employment, Labor & Workforce Management practice, in the firm’s Los Angeles office, was quoted in Law360, in “Dynamex Applies to Older Claims, Calif. Panel Says,” by Braden Campbell. (Read the full version – subscription required.)

Following is an excerpt:

A 2018 California Supreme Court decision making it harder for businesses to classify workers as independent contractors under the state’s “wage orders” applies retroactively, but only covers Labor Code claims directly tied to these quasi-statutes, a California appeals court said Tuesday.

The Second Appellate District ordered a Los Angeles state court to reconsider a decision declining to certify a proposed class action accusing a paratransit company of misclassifying its drivers and underpaying them, saying the state high court’s Dynamex decision applies to claims that predate it, such as those of Francisco Gonzales brought against San Gabriel Transit. The California Supreme Court did not initially say whether its decision applies retroactively, but may do so soon after the Ninth Circuit asked it to.

The panel also tackled the question of whether the “ABC test” that the Dynamex decision imposed on wage order-based claims also applies to unrelated claims brought under the state’s labor laws, which largely overlap with wage orders but can cover other ground.

To the extent that a Labor Code claim incorporates the wage orders, Dynamex applies, the panel said Tuesday. But "as to Labor Code claims that are not either rooted in one or more wage orders, or predicated on conduct alleged to have violated a wage order, the Borello test remains appropriate," the panel said, kicking the case back to the Los Angeles County Superior Court to figure out which of the drivers’ claims fall into which bucket.

Tuesday’s order comes as California employers that use independent contractors remain largely in a holding pattern amid questions about the Dynamex decision’s scope, including whether it applies retroactively. …

Kevin Sullivan, an attorney in management-side employment firm Epstein Becker Green’s Los Angeles office, said Tuesday’s order echoes the Fourth Appellate District’s decision in the Garcia case.

“The Garcia court held that the widely used Borello standard applies to non-wage-order claims for determining whether workers are employees or independent contractors. And that is what the Gonzales court concluded yesterday,” he said.

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