Breaking News: Ninth Circuit Withdraws Opinion Holding That Dynamex Applies Retroactively
In May of this year, the Ninth Circuit issued a significant opinion in Vazquez v. Jan-Pro Franchising Int’l, holding that the California Supreme Court’s 2018 decision in Dynamex Operations West v. Superior Court applies retroactively. In Dynamex, of course, the California high Court created a brand new, and very narrow, test for determining when a worker properly may be classified as an independent contractor as opposed to an employee under state law. Because the test was new to California employers, it rather obviously would be unfair to hold an employer liable for not classifying workers according to that new test prior to the test’s existence. However, no published state court decision has been issued answering the question of whether the new test applies retroactively. Plaintiffs’ attorneys litigating claims against companies for independent contractor misclassification (using statute of limitations periods that go back 4 years, pre-dating the Dynamex decision) unsurprisingly argue that Dynamex applies retroactively. In May of this year, the Ninth Circuit agreed and held that the decision applies retroactively. The employer in that case, Jan-Pro franchising, responded by petitioning the Ninth Circuit for rehearing. Today, the Ninth Circuit granted that petition and issued an order withdrawing its original opinion and indicating that it would be certifying the question of retroactivity to the California Supreme Court.
Today’s action by the Ninth Circuit is a significant development for employers litigating claims of independent contractor misclassification. It seems likely that the California Supreme Court will accept certification of this question of Dynamex retroactivity. Employers will need to stay tuned for further developments in this regard while continuing to litigate the issue of retroactivity on a case-by-case basis until this issue is resolved.