In doing so, the court dismissed prior California Supreme Court case law recognizing the “special features” of franchising relevant to conducting a vicarious liability analysis. Jan-Pro Franchising International, Inc., 2 held that Dynamex and the ABC test provide the appropriate standard for determining whether franchise workers were properly classified as independent contractors or instead were employees of a national master franchisor (as distinct from the regional franchisees with which they contracted) for purposes of state wage and hour law. Most recently, in 2019, the federal Ninth Circuit Court of Appeals in Vazquez v. By any measure, the ABC test is a far broader standard than that applied by California courts previously, and its application results in many more workers being classified as “employees” rather than contractors.Ĭourts subsequent to Dynamex have aggressively applied the ABC test. In Dynamex, the court adopted the so-called “ABC test” for determining whether an individual worker was properly classified as an employee or an independent contractor for purposes of the California’s Industrial Welfare Commission’s wage orders. Moreover, as the state legislature entertains proposals to purportedly codify the Dynamex decision, it should expressly clarify that the bill is intended to address the standard for determining only whether a worker is an employee or an independent contractor, and not intended to address joint employment status broadly or change the status of franchise relationships. If courts take up this invitation, it may sound the death knell for the franchise model of business operation in California, imposing joint liability on franchisors with little to no control over the day-to-day activities of their franchisees or of those franchisees’ employees.įor legal, practical, and policy reasons, it is hoped that courts will decline to expand Dynamex, keep the case cabined to its facts and the narrow question presented in it, and instead rely on the well-developed body of state law setting forth standards for establishing joint employment status and vicarious liability in the franchise context. In the wake of Dynamex, however, some have urged courts to expand the scope of the case beyond the narrow confines of independent contractor/employee classification to instead broadly redefine the law of joint employment and vicarious liability generally. 1 Dynamex addressed a single, narrow question: whether certain workers were appropriately classified as independent contractors or were instead properly classified as employees for purposes of the state’s wage and hour laws. In 2018, the Supreme Court of California turned much of the established law regarding worker classification on its head with its decision in Dynamex Operations West Inc. Littler Investigation Toolkit for Employers.We’re ready for your tomorrow – because we’re built for it.Global Workplace Transformation Initiative.Littler Restructuring Assessment Solution.General Data Protection Regulation (GDPR).