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Is Dynamex Retroactive? – Not so Fast
Major Change in Independent Contractor Definition May Not Apply Backwards After All
In Vazquez v. Jan-Pro Franchising International, the Ninth Circuit federal appeals court ruled California’s new “ABC” test for deciding independent contractor legitimacy was retroactive – i.e., it was to be applied to relationships before that test existed. See Making Dynamex Retroactive (May 2019)
The Ninth Circuit has now withdrawn that decision, referring the issue back to the California Supreme Court which had announced the three-prong ABC test April 30, 2018 in Dynamex Operations West, Inc. v. Superior Court.
The Ninth Circuit’s referral offers a glimmer of hope to the businesses and many who choose to work as independent contractors that the Dynamex ruling may not apply to their pre-Dynamex relationships.
Meanwhile, the California Assembly has passed Assembly Bill (AB)-5 codifying the ABC test if also passed by the state senate and signed by the governor. It exempts certain industries from Dynamex such as accountants, lawyers, engineers, financial advisers, healthcare workers, and real estate professionals. However, various other industries, such as gig economy workers and truck drivers, would remain subject to the new standard. For example, this could bar motor carriers from arrangements with owner-operators as independent contractors — a common relationship in the industry.
As currently written, AB-5 would make Dynamex retroactive, thus taking the ultimate decision on this issue out of the Supreme Court’s hands.
See also:
Helena Kobrin
July 25, 2019
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