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California Test for Independent Contractors Remains Retroactive

March 18, 2021, 1:10 AM

The California Supreme Court on Wednesday declined to review a case that makes it difficult to classify workers as independent contractors, letting stand a state appellate court ruling upholding the law.

Justices refused to consider San Gabriel Transit Inc.’s appeal of a ruling that the three-part test, known as the “ABC” test, for classifying workers as contractors and not employees applies retroactively.

The California 2nd District Court of Appeal had reversed the Los Angeles County Superior Court’s denial of class certification in a lawsuit former bus driver Francisco Gonzales filed against the transit company.

The case sought a class-action determination to cover 500 San Gabriel drivers who Gonzales alleged were misclassified as independent contractors. His appeal of the class certification denial was pending when the California Supreme Court in its 2018 ruling in Dynamex West Operations v. Superior Court created the ABC test.

Workers under the test are presumed employees and not contractors based on employer control over how work is performed, whether the services are within the company’s normal course of business, and whether workers have an independently established role. The test in 2019 was later added to California labor law.

Justices in January 2020 granted San Gabriel Transit’s petition to review and held off further action pending their ruling in a separate case involving franchise janitorial workers. The court’s decision in January was the first to hold that the classification standard applies retroactively.

The bus drivers’ case will return to the trial court.

The case is Gonzales v. San Gabriel Transit, Inc., Cal., No. S259027, review denied 3/17/21.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editors responsible for this story: Tina May at tmay@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com

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