On April 30, 2018, the California Supreme Court issued a long-awaited opinion in which it considered which test should be used to decide whether a worker asserting claims under a California Wage Order is an employee or an independent contractor. The following Seyfarth One Minute Memo summarizes the case and what it means for employers.
Seyfarth Synopsis: The California Supreme Court, in Dynamex Operations v. Superior Court, 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.
The Trial Court Decision
Delivery drivers Charles Lee and Pedro Chevez sued Dynamex Operations West for unlawfully classifying them and 1,800 other drivers as independent contractors. To argue that they were really employees, they cited California’s Industrial Welfare Commission Wage Order No. 9. Their motion for class certification argued that, under Martinez v. Combs (2010), they were employees in that Dynamex knew that they provided services and had negotiated their rates. The trial court certified a class. Dynamex petitioned the Court of Appeal for a writ of mandate.