©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 395 Affinity Logistics Corp.,22 the Ninth Circuit held as a matter of law that a class of delivery drivers had been improperly classified as independent contractors, even though the trial court had deemed them independent contractors. Also in 2014, in Alexander v. FedEx Ground Package Systems,23 the Ninth Circuit considered the status of package delivery drivers who claimed to be employees misclassified as independent contractors. The trial court had granted summary judgment against the drivers on the ground that they were independent contractors, as a matter of law, but the Ninth Circuit, on the same facts, held that the drivers were employees, as a matter of law. The Ninth Circuit emphasized that the drivers had to wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx appearance standards, and that FedEx told drivers what packages to deliver, on what days, and at what times. Although drivers could operate multiple delivery routes and hire helpers to get the work done, they could do so only with FedEx’s consent. In 2015, in Garcia v. Seacon Logix, Inc.,24 the Court of Appeal affirmed a bench trial ruling that truck drivers classified as independent contractors were really employees who were entitled to reimbursement of their expenses. And again in 2015, in O’Connor v. Uber Technologies, Inc.,25 a federal district court held that on-call personal transportation drivers could proceed with a class action arguing that they were employees misclassified as independent contractors.26 This judicial revolution culminated in a 2018 California Supreme Court decision, which the Legislature then codified in statutory provisions effective in 2020 (see § 19.6). 19.6 California’s “ABC Test” The Dynamex decision. In 2018 the California Supreme Court, in Dynamex Operations West, Inc. v. Superior Court, introduced new law on whether companies can contract with workers as independent contractors instead of employees.27 Truck drivers sued Dynamex on wage and hour claims, contending that they were employees misclassified as independent contractors. At issue was whether their status should be determined under the common law test the California Supreme Court applied in S.G. Borello & Sons, Inc. v. Department of Industrial Relations28 (emphasizing the right to control manner and means of performance and some secondary factors) or under a broader test of employment found in the Wage Orders (“engage, suffer or permit to work”).29 Dynamex took this opportunity to rewrite California law without the need for any new legislation. Dynamex held that “engage, suffer or permit to work” determines employee status for Wage Order claims, requiring a defendant disputing employee status to prove (A) the worker is free from control and direction of the hirer in connection with performing the work, both under contract and in fact, (B) the worker performs work outside the usual course of the hiring entity’s business, and (C) the worker customarily engages in an independently established trade, occupation, or business of the same nature as the work performed for the hirer. Particularly difficult for a business to satisfy is Part B—that the worker performs work beyond the usual course of the defendant’s business. Contracted workers who provide services in a role comparable to that of the defendant’s existing employee will likely be viewed as working in the usual course of the hiring entity’s business. Further examples of services within the hiring entity’s usual course of business would include (i) a clothing manufacturing company hiring work-at-home seamstresses to make dresses from cloth and patterns supplied by the company that the company will then sell and (ii) a bakery retaining cake decorators to work on a regular basis on the bakery’s custom-designed cakes. Examples of services not part of the hiring entity’s usual course of business would include (i) a retail store retaining an outside plumber to repair a bathroom leak on the retailer’s premises and (ii) a retailer retaining an outside electrician to install a new electrical line.
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