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FRIDAY FLURRY: UPDATES ON NEWS FOR THIS WEEK
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- Written by Jizell Lopez
Dynamex “ABC” Independent Contractor Test Applies Retroactively
On Thursday, the Ninth Circuit ruled that Dynamex Operation West, Inc., v. Superior Court., (“Dynamex”) the California Supreme Court landmark decision which made it significantly more difficult for employers to classify workers as independent contractor, applies retroactively.
As we previously reported here, in May of 2018 the California Supreme Court abandoned its previous multi-factor independent contractor standard that required a worker to demonstrate an employer had sufficient control to find that there is an employee-employer relationship. Rather, the California Supreme Court now embraces a standard that presumes all workers are employees instead of independent contractors, and places the burden on the employer classifying an individual as an independent contractor to establish that such classification is proper under the “ABC” test. As such, an employer now bears the burden that a worker satisfies all 3 factors of the “ABC” test in order to be properly classified as an independent contractor: A) the individual is free from the employer’s control and direction; B) the individual performs work that is outside the usual course of the employer’s business; and C) the individual has an independently established trade, occupation, or business.
Employer Wins Right To Compel Individual Arbitration After Litigating All The Way To The Supreme Court
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- Written by Rebecca A. Hause-Schultz
After many years of litigation, employer Lamps Plus successfully defended its arbitration agreement all the way to the U.S. Supreme Court (“SCOTUS”), when the Court’s conservative majority ruled that a court may not compel class-arbitration unless the parties’ arbitration agreement shows that the parties agreed to that process.
In the case at issue, Varela v. Lamps Plus an employee sued its employer, Lamps Plus, over a data breach issue where 1,300 employees’ tax information was released by a hacker. The employee sued on behalf of himself and other employees whose information was released. The employer sought to enforce its arbitration agreement with employee, arguing that the case should be compelled to individual arbitration—meaning that the employee could arbitrate his claim only. The District Court compelled the claim to arbitration, but authorized the employee to pursue the claims as a class representative—meaning that the case would proceed as a class-action in arbitration. The employer appealed, saying that the employee could not pursue a class claim in arbitration, and that only the employee’s individual claim should be pursued. The issue was heard by the Ninth Circuit, who agreed again with the employee that class treatment in arbitration was appropriate because the arbitration agreement was ambiguous on the issue of class arbitration.