California’s rigorous ABC test, which makes it difficult to claim workers are independent contractors, are retrospective, the state Supreme Court ruled on Thursday in a judgment that could hurt Uber, Lyft and other companies. In various cases
The ABC test was issued in an April 2018 decision titled Dynamex, stating that workers must be considered employees unless they (a) work without the control of the employment organization (b) perform their court work in accordance with And (c) an independent business that does that type of work.
“Public policy and fairness concerns such as protecting workers and benefiting businesses meeting wage obligations support retrospective use of Dynamex,” said Chief Justice Tani Cantil unanimous opinion. Sakauye said the Ninth Circuit Court of Appeals in May 2019 had said Dynamex should be retrospective.
Dynamex’s decision supports California’s controversial AB5 gig-work law that processes ABC testing while excluding many careers and expanding its reach beyond wages.
Uber, Lyft, DoorDash and other gig companies classify workers as independent contractors rather than employees, saying they rely on the flexibility of that model. Doing so has also saved them millions of dollars on benefits, minimum wages, overtime pay and other expenses.Gig companies spent $ 220 million to convince voters through Prop 22 of the month. November, which makes their workers independent contractors and excludes them from AB5, starting with adoption in mid-December. Unions sued for overturning measures this week.
Prop. 22 does not prevent retroactive gig companies.They are facing numerous lawsuits over employment classification from both the government agency and their own workers. The Supreme Court ruling means that if gig companies lose those cases, they could face much larger penalties as they could be found liable for action before Dynamex went into effect in April 2018.
The largest, California attorney general and three city attorneys sued Uber and Lyft in May. California labor commissioners sued two car rental companies in August, saying they committed wage theft by misidentifying drivers. Several drivers and couriers have joined forces in lawsuits against Uber, Lyft and other gig companies.
“They’re going to be out of luck,” said Bob Eassa, marketer at San Francisco-based Duane Morris, an administrative law firm. “For any pending event, the testing applied to them will be. It is Dynamex and will go back to as far as the Restrictions Act allows, ”typically three or four years depending on the business code involved.
“Even Uber and Lyft have spent record money writing new laws for their own benefit. But it cannot change the fact that they violated the law many years before Article 22 by not categorizing drivers as employees, ”said John Coté, spokesman for San Francisco Attorney Dennis Herrera, who was a” driver of the law “. One of the plaintiffs in the California Attorney General’s lawsuit against the rental car company “This decision promotes a position we have always maintained.”
Uber and Lyft did not immediately respond to requests for comment. The California Attorney General’s office declined to comment.
Boston attorney Shannon Liss-Riordan, who has filed a series of incorrect classification cases on behalf of gig workers and janitors, said the decision would allow California workers to be compensated for breaches of fees. Before April 2018, she has pending litigation and arbitration against Uber, Lyft, Grubhub, DoorDash, Postmates, Instacart, Shipt and Amazon.
The court “stressed that this rigorous testing was necessary because earlier rigorous standards … led to inconsistent results that did not adequately protect workers,” she said in an email. Addition of Article 22. “
But MC Sungaila, chief of appeals operations at Buchalter, said the new decision could be detrimental to employers.
“Following the outbreak, this raised concerns for small businesses that could be impacted by seemingly lagging wages and hours of lawsuits,” she said in a statement.
In addition to gig workers, the ABC test has implications for other sectors, said Laura Padin, a senior attorney with the National Employment Law Program in Washington.
“We see a lot of (misclassification) in industries mostly worked by people of color, such as janitors, housekeepers and trucks,” she says. “Often these are low-wage industries where workers are powerless. Very secondary “
The verdict will “It makes it much easier to get hold of responsible companies that have been doing these kinds of projects for years,” she said.
For example, Jan-Pro janitor company, in a case that was also under Thursday’s trial, made most of the immigrant workers by requiring janitors to certify that they were independent franchise owners. Pro controls most jobs and they don’t run their own business, ”she says.“ Jan-Pro can bypass workplace protections and reduce the burden, risks and costs of workers as would normally be expected by employers. receive”
Carolyn Said is a staff writer for the San Francisco Chronicle. Email: firstname.lastname@example.org Twitter: @csaid.