The Dynamex saga is back for a sequel. In a brief yet temporary win for employers, the Ninth Circuit Court of Appeals depublished its Vasquez opinion.
Remember, in Dynamex Operations West v. Superior Court, the California Supreme Court adopted a new test, called the “ABC” test, for evaluating whether workers are properly classified as independent contractors.
As previously reported, the U.S Ninth Circuit then ruled that the ABC test applied retroactively (Vazquez v. Jan-Pro Franchising Int’l). This meant that federal courts should apply the test to all pending claims, regardless of when the claim originated. Even if employers legitimately relied upon and properly applied the law as it existed at the time, and the employers classified its workers as independent contractors, the federal courts could apply the new ABC test to all claims pending before them.
Depublishing means that the Ninth Circuit’s Vasquez ruling is no longer binding on federal courts. Instead, the Ninth Circuit will certify a question to the California Supreme Court asking it to determine whether Dynamex should apply retroactively.
Before California employers can breathe any sigh of relief, the California Supreme Court may still determine that Dynamex applies retroactively. The California Supreme Court has already indicated how it may resolve this issue when it denied a petition for a hearing last year, asking it to state that Dynamex should only apply to cases originating after the decision.
For now, we continue to wait and see how the courts will fully resolve the serious questions the California Supreme Court created with its Dynamex decision. Although employers cannot change past classification decisions, employers should tread with caution moving forward when classifying workers as independent contractors and should consult legal counsel when contemplating the use of independent contractors.
CalChamber members can test their knowledge on whether a person is classified as an independent contractor or employee in the Independent Contractor Quiz. Not a member? See what a CalChamber membership can do for you.