Retroactive ABC Test Liability at Stake for California Companies (Corrected)

California’s highest court will consider on Election Day whether a worker classification standard that’s rankled the gig economy, franchises, and other businesses should apply to lawsuits filed years before it was created.

The California Supreme Court is poised to hear arguments Nov. 3 over the retroactivity of a three-part “ABC” test—created by the justices’ 2018 ruling in Dynamex Operations West v. Superior Court— that makes it harder for companies to classify workers as independent contractors rather than as employees entitled to wage protections and other employment benefits.

Business groups have fought against retroactive application of the rigid standard, which they ...