There has been much confusion over the liability of utilizing independent Contractors (IC’s) in this state as a result of the recent State Supreme Court’s Decision.
Below is a summary of the major litigation events and timelines in the Dynamex case. It is a case study in the slow pace of litigation. The decision illustrates the left coast’s philosophy of “legislating from the bench” which is a term of art meaning that a judge’s or judges’ (in this case) rulings are arguably more based on their personal feelings of what the law should be, rather than basing their decisions on interpretation and application of the what the law is.
- 4/15/05 – Class action complaint filed in LA Superior Court.
- 12/12/06 – Class certification denied.
- 6/15/09 – Amended complaint filed, triggering new round of briefing over class certification and discovery disputes.
- 5/18/11 – Final class certification completed.
- 4/22/13 – Motion to decertify class (filed by Dynamex) denied. The issue of class certification, and which test should be used, was the issue that eventually went up to the California Supreme Court.
- 6/24/13 – Petition for Writ of Mandate filed in Second District Court of Appeal by Dynamex challenging the reasoning used by the trial court to certify the class in the first place, and to refuse to decertify the class. This was a procedural mechanism for Dynamex to appeal the class certification issue prior to going through a full blown jury trial.
- 10/15/14 – Court of Appeal opinion issued, largely upholding trial court ruling.
- 11/24/14 – Dynamex files a petition for review in Cal Supreme.
- 2015-2016 – Initial round of briefing, including dozens of amicus briefs, are filed in Cal Supreme. The US and Cal Chambers jointly file a very good Brief. (12-4-15)
- 12/21/16 – Cal Supreme orders supplemental briefing (somewhat unusual).
- 2017 – Parties and amicus submit supplemental briefs. The US and Cal Chambers jointly file a supplemental brief. (12-20-17)
- 12/28/17 – Cal Supreme orders another round of supplemental briefing (very unusual).
- 2/6/18 – Oral argument in Cal Supreme.
- 4/30/18 – Cal Supreme issues decision announcing the landmark A-B-C test decision.
- 5/15/18 – Dynamex files petition for rehearing challenging only the issue of retroactivity. Note: by the terms of the decision, it is retroactive because the decision describes what California law has always been. Retroactive application is limited to “only” 4 years under labor code.
- 5/16/18 – Cal Supreme issues an order granting itself until 7/27/18 to rule on the rehearing petition.
- 6/20/18 – Cal Supreme issues order denying rehearing, and the same day issues the remittitur, effectively closing the case. It is now final and retroactive.
As a Note: The Case will now return to trial court for a trial on the class action as previously certified but will utilize the A-B-C test.
In the mean-time, the law of the land for interpreting who is an employee and who is an independent contractor under the Transportation Wage Order in California is the A-B-C test. Based on the reasoning in the decision, it is likely that the A-B-C test will become the standard in other areas of employment law as well. If a hiring entity fails any one part of the test, for purpose of state labor law, an independent contractor will be considered an employee. Plus companies may face labor law violations for the last 2, 3, or 4 years depending on the applicable statutes of limitation.
Clearly the Supreme Court did not believe or understand the economic consequences of the decision or the limitations on opportunities that it would create for entrepreneurs in this state. In the Court’s view, despite decades of using the Borello standard, the law has really always required the A-B-C test, and the social good of those rightfully employed is better for the citizens of this state.