California Labor &
Employment Law Blog

Feb. 3 2015

California Supreme Court Grants Review in Independent Contractor Misclassification Case

Topics: Court Decisions, Wage & Hour Issues

Last week the California Supreme Court granted the employer’s petition for review in Dynamex v. Superior Court, an independent contractor misclassification case in which the Court of Appeal held that the test for independent contractor versus employee status depends on whether the employee is alleging a violation of wage order provision or not.  If alleging a violation of a wage order (e.g. failure to pay required overtime, failure to reimburse expenses specified in the applicable wage order), then the definitions of “employ” and “employer” in the wage order apply to determine whether a worker is an “employee” or an independent contractor.  Of course, the wage orders generally define these terms extremely broadly to include anyone “suffered or permitted to work.”  Under that definition, it is difficult to conceive how any worker would not qualify as an “employee” rather than an independent contractor.  Application of these definitions also makes it much easier to obtain class certification in a case challenging misclassification of a group of workers.

The Dynamex decision is contrary to the well-established multi-factor framework courts traditionally have used to analyze employee versus independent contractor status. That test, known as the Borello test, focuses primarily on the extent to which the employer has a right to control the details of the work.  It also considers factors, including but not  limited to whether the employer or the worker pays for tools and equipment, whether the worker has a right to hire others to assist with the work, the length of the worker’s service, whether the work is unique or is part of the employer’s regular course of business, and whether the worker performs work for other entities as well or is restricted to working only for the employer.  This multi-factor test provides for a fairer assessment than the wage order definitions and in many cases makes class certification inappropriate because application of the factors varies from worker to worker.

Employers with independent contractors will want to monitor this case as it develops before the California Supreme Court.  

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For over 25 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

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About the Editor

Robin Largent has a regular presence in California state and federal courts and has been lead defense counsel and appellate counsel for large and small California employers in litigation (and arbitration) ranging from individual discrimination and harassment claims to complex wage and hour representative and class actions. She also leads the firm’s appellate practice, having substantial experience and success handling appeals, writ petitions, and amicus briefs in both state and federal court on issues such as class certification (particularly in the wage and hour arena), manageability and due process concerns associated with class action trials, exempt/non-exempt misclassification issues, meal and rest break compliance, trade secret/unfair competition matters, and the scope of federal court jurisdiction under the Class Action Fairness Act.
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