Court extends rights for gig jobs
Dynamex, the groundbreaking California Supreme Court decision that makes it harder for companies to claim workers are not employees, can be applied retroactively, the Ninth Circuit Court of Appeals ruled Thursday in a closely watched case.
The decision, which extends Dynamex’s reach, has implications for the many gig-economy companies that categorize workers, such as Uber and Lyft drivers, as independent contractors rather than employees. Doing so relieves the companies of costly requirements to provide benefits, minimum wage, overtime and other expenses; the companies say they and many workers prefer the flexibility of independent contractor relationships.
The decade-old case, Vazquez v. Jan-Pro, was brought by people who clean office buildings under the auspices of Jan-Pro, which described itself as a franchise, rather than a
cleaning company.
The appeals court rejected that assertion with arguments that could easily apply to other types of companies.
“First, Jan-Pro’s business ultimately depends on someone performing the cleaning,” District Judge Frederic Block wrote. “That work is performed solely by the unit franchisees . ... Second, Jan-Pro earns a percentage of the payment that customers pay for cleaning services. Thus ... Jan-Pro is not indifferent to how much work unit franchisees do or how well they perform that work.”
Block’s decision said the cleaners met the “ABC test” outlined by Dynamex: they were controlled by Jan-Pro; they did work central to Jan-Pro’s business; and they did not have independent businesses of the same nature as the work performed.
Shannon Liss-Riordan, a Boston attorney who represented the plaintiffs in the Jan-Pro case, said the ruling could help her other plaintiffs.
“I’m litigating with many companies in the gig economy and beyond who have built an entire workforce off workers who they claim are running their own businesses and are independent contractors so they don’t have to provide any of the protections that employees have,” she said. “This strong decision will help workers who are challenging those business models. It reinforces that under California law, workers who provide services in a company’s usual course of business are that company’s employees for wage law purposes.”
Liss-Riordan has cases pending against Lyft, Grubhub, Postmates, Amazon, Doordash and Handy, among others. In March, she settled a case on behalf of some California and Massachusetts Uber drivers for $20 million. She’s also handling individual arbitration claims for the thousands of drivers who agreed to forgo their right to class actions when they signed up to work.
In her nationwide case regarding Amazon delivery drivers, Rittmann v. Amazon, the U.S. District Court for the western district of Washington last week ruled that Amazon’s arbitration clause was not enforceable, allowing that case to proceed as a class action.
Jan-Pro, which has three locations in the Bay Area, did not immediately respond to a request for comment.
California legislators are weighing a bill that would codify and expand Dynamex’s applicability. If passed, Assembly Bill 5 potentially could force Uber, Lyft and other companies to reclassify their workers as employees.