California Supreme Court Says Dynamex Should be Applied Retroactively

In Vazquez v. Jan-Pro Franchising International, Inc., 2021 Cal. LEXIS 1 (Jan. 14, 2021), the Supreme Court of California held its earlier Dynamex decision [Dynamex Operations West, Inc. v. Superior Court, (2018) 4 Cal.5th 903, 232 Cal. Rptr. 3d 1, 416 P.3d 1], which sets forth an “ABC” test for distinguishing between employees and independent contractors, should be applied retroactively to all non-final cases that predate the effective date of the Dynamex decision.

Relying primarily on the fact that Dynamex addressed an issue of first impression, the Court stressed that its Dynamex decision did not change a settled rule on which the parties below had relied. It also noted that no decision of the court prior to Dynamex had determined how the “suffer or permit to work” definition in wage orders should be applied in distinguishing employees from independent contractors.

There is, of course, substantial question as to the status of the Court’s decision in Dynamex, given the fact that the California electorate favorably responded last November to Proposition 22, which takes most of the teeth out of AB 5, which was essentially a codification of the Dynamex decision. For extensive treatment of Proposition 22, click here.