Last year, we questioned whether California’s new restrictions on independent contractors would apply retroactively. Yesterday, the Ninth Circuit decided that the landmark ruling in Dynamex Operations West, Inc. v. Superior Court should be applied retroactively.

The new test established in Dynamex upended the Borello test, a multi-factor test that had been in use since 1989. The “ABC test” established in Dynamex makes it much harder for a hirer to classify a worker as an independent contractor, requiring the hirer to prove that the worker is: a) free from the control and direction of the hirer; b) the worker performs work outside of the usual course of the hirer’s business; and c) the worker is customarily engaged in an independently established trade of the same nature as the work performed. With the Ninth Circuit holding that Dynamex should be applied retroactively, an employer must now face the possibility that its once valid and correct classification of a worker is now improper.

Generally, judicial decisions are given retroactive effect. It has been an open question as to whether the Supreme Court’s Dynamex test would apply retroactively after the Supreme Court denied a petition for rehearing to consider that very issue. Considering the magnitude of this decision, employers should not only make sure that new workers are classified correctly according to Dynamex, but should revisit existing independent contractor agreements to verify they conform to the standards established by Dynamex.

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Photo of Tony Oncidi Tony Oncidi

Anthony J. Oncidi heads the Labor & Employment Law Group in the Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection. A substantial portion of Tony’s practice involves the defense of employers in large class actions, employment discrimination, harassment and wrongful termination litigation in state and federal court as well as arbitration proceedings, including FINRA matters.

Photo of Cole Lewis Cole Lewis

Cole Lewis is an associate in the Labor & Employment Department.

Cole graduated from UCLA School of Law, where he worked as a law clerk for Public Counsel of Los Angeles and advocated for benefit recipients in the Department of Public Social Services. He has also previously worked as a summer associate in Proskauer’s Labor & Employment Department.

Prior to law school, Cole received his Bachelor’s degree in Journalism at Indiana University, where he graduated cum laude.