Wage and Hour Case Notes

• Publication year: 2021
• Author: By Leonard H. Sansanowicz

Wage And Hour Case Notes

By Leonard H. Sansanowicz

Leonard H. Sansanowicz is the principal of Sansanowicz Law Group, P.C. and represents employees in all aspects of employment law. He is a member of the Executive Board of the California Employment Lawyers Association, as well as the Executive Committee of the Labor and Employment Section of the Los Angeles County Bar Association. He can be contacted at: leonard@ law-slg.com.

DYNAMEX APPLIES RETROACTIVELY BECAUSE IT WAS A CASE OF FIRST IMPRESSION AND DID NOT CHANGE A SETTLED RULE

Vazquez v. Jan-Pro Franchising Int'l, Inc., 10 Cal. 5th 944 (2021)

The Ninth Circuit certified this question to the California Supreme Court: "Does the decision in Dynamex Operations West, Inc. v. Super. Ct., 4 Cal. 5th 903 (2018) apply retroactively?" The California high court answered "Yes." No decision prior to Dynamex had addressed how the "suffer or permit to work" language in the California wage orders should apply to work for a business by putative independent contractors. The California Supreme Court intended its decision in Dynamex to apply retroactively, because the "suffer or permit" language had been included in wage orders for over 100 years and had been given the broadest definition of employment since at least 1937.

Defendant argued that prior to Dynamex, it had reasonably relied on the common law standard set forth in S.G. Borello & Sons v. Dept. of Indus. Relations, 48 Cal. 3d 341 (1989). Defendant asserted that businesses could not have anticipated that California would have adopted the "ABC" test for classifying workers according to the wage order definition. As to defendant's reasonable reliance, the high court distinguished Borello from Dynamex in that Borello had not analyzed the employee/independent contractor issue under California's wage orders. Vasquez further noted that twice in the past decade the Court had indicated the classification issue should remain an open question. Ayala v. Antelope Valley Newspapers, Inc,. 59 Cal. 4th 522 (2014); Martinez v. Combs, 49 Cal. 4th 35 (2010). Well before its decision in Dynamex, employers were on notice that the "suffer or permit" standard could be used in the employee/independent contractor analysis. The Court also highlighted Dynamex's criticism of the numerous Borello factors, including that such a standard made it "difficult for both hiring businesses and workers to determine in advance how a particular category of workers would be classified." Therefore, as a practical matter, defendant overstated its case.

As to the argument that businesses could not have anticipated California would adopt the ABC test as the appropriate standard, the Supreme Court noted that adoption of the ABC test was reasonably foreseeable based on prior decisions.

Finally, because there was no settled rule, the high court found Dynamex did not unfairly prejudice defendant and other businesses. In...