Cal-Peculiarities: How California Employment Law is Different 2022 Edition

©2022 Seyfarth Shaw LLP  www.seyfarth.com 2022 Cal-Peculiarities | 389 18 Ayala v. Antelope Valley Newspapers, Inc., 59 Cal. 4th 522, 528, 533 (2014) (“Whether a common law employer-employee relationship exists turns foremost on the degree of a hirer’s right to control how the end result is achieved. [Internal citations omitted.] In turn, whether the hirer’s right to control can be shown on a classwide basis will depend on the extent to which individual variations in the hirer’s rights vis-à-vis each putative class member exist, and whether such variations, if any, are manageable.” “Significantly, what matters under the common law is not how much control a hirer exercises , but how much control the hirer retains the right to exercise.”) (emphasis in original). The Supreme Court concluded that the trial court had erred in denying certification based on an analysis of the actual control the newspaper asserted over the carriers. The Supreme Court also noted, however, that class certification might be denied if there were significant variations among the class members as to various secondary factors of employment (which are to be considered in addition to the primary “right to control” factor). The Supreme Court left undisturbed another appellate decision, Sotelo v. Medianewsgroup, 207 Cal. App. 4th 639 (2012), which affirmed the denial of class certification to another group of newspaper carriers, given the variations among carriers that existed regarding factors that one considers in deciding whether an individual is an employee or an independent contractor: “Even though the court found variability among the class in only a few of the factors, the court observed that the multifactor test ‘requires that the factors be examined together.’ Thus, even if other factors were able to be determined on a classwide basis, those factors would still need to be weighed individually, along with the factors for which individual testimony are required. We find no failure to use proper criteria or improper legal assumptions in this determination.” Id. at 660. 19 Lab. Code § 2783(h)(1), (4) (extending to Jan. 1, 2025 the exemption from the ABC test applicable to newspaper carriers). 20 Dynamex Operations West, Inc. v. Superior Court , 230 Cal. App. 4th 718 (2014), rev. granted , No. S222732, 341 P.3d 438 (Cal. 2015). The California Supreme Court ruled in 2018. Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903 (2018). 21 Ruiz v. Affinity Logistics Corp., 754 F.3d 1093, 1103-05 (9th Cir. 2014). 22 Alexander v. FedEx Ground Package Sys. , 765 F.3d 981, 997 (9th Cir. 2014). 23 Garcia v. Seacon Logix, Inc. , 238 Cal. App. 4th 1476, 1478-79, 1488 (2015). 24 O’Connor v. Uber Techs., Inc. , 311 F.R.D. 547, 568 (N.D. Cal. 2015), rev’d and remanded , 904 F.3d 1087 (9th Cir. 2018). 25 An order of class certification in that case was reversed because certain arbitration agreements were enforceable. O’Connor v. Uber Techs., Inc. , 904 F.3d 1087, 1094-95 (9th Cir. 2018) (“The class as certified includes drivers who entered into agreements to arbitrate their claims and to waive their right to participate in a class action with regard to those claims. … [T]he question of whether those agreements were enforceable was not properly for the district court to answer. The question of arbitrability was designated to the arbitrator.”). 26 Dynamex Operations West, Inc. v. Superior Court , 4 Cal. 5th 903 (2018). 27 Borello , 48 Cal. 3d 341, 342-43 (1989). 28 See 8 Cal. Code Regs § 11130, Section 2(D). 29 28 Cal. App. 5th 558, 575-76 (2018). 30 Id. at 575. 31 Lawson v. Grubhub, Inc. , No. 15-cv-05128-JSC, 2018 WL 6190316, at *7 (N.D. Cal. Nov. 28, 2018) (declining to rule on retroactivity while noting defendant’s argument that retroactive application would raise issues of due process); Lawson v. Grubhub, Inc. , No. 18-15386, 2019 WL 5876923, at *1 (9th Cir. Sept. 26, 2019) (proceedings stayed pending the California Supreme Court’s decision on whether its Dynamex ruling applies retroactively). 32 Gonzales v. San Gabriel Transit, Inc. , 40 Cal. App. 5th 1131, 1156 (2019) (citing “usual rule of retroactive application” and wrongly asserting that “ Dynamex did not establish a new standard.”), rev. granted , 456 P.3d 1 (Cal. 2020). 33 In Vazquez v. Jan-Pro Franchising Int’l, Inc. , No. S258191 (Cal. Nov. 20, 2019), the California Supreme Court—accepting a request by the Ninth Circuit, 939 F.3d 1045 (9th Cir. 2019)—agreed to decide: “Does the decision in Dynamex Operations West Inc. v. Superior Court (2018) 4 Cal.5th 903, apply retroactively?” 34 No. S258191 (Cal. Nov. 20, 2019), accepting accepted a request by the Ninth Circuit to decide the question, “Does the decision in Dynamex Operations West Inc. v. Superior Court (2018) 4 Cal.5th 903, apply retroactively?” 35 Vazquez v. Jan-Pro Franchising Int’l, Inc. , 10 Cal. 5th 944 (2021). 36 Id ., slip op. at 15. 37 Id., slip op. at 16. 38 AB 5, 2019 bill amending Lab. Code § 3351, adding Lab. Code § 2750.3, and amending Unemp. Ins. Code §§ 606.5, 621. 39 People v. Uber Technologies, Inc. , 56 Cal. App. 5th 266 (2020). 40 Bus. & Prof. Code §§ 7448 et seq. 41 However, Proposition 22 was deemed unconstitutional and unenforceable because it limits the power of a future legislature to define the employment status of gig workers . Castellanos v. State of Calif. , No. RG21088725, 2021 WL 3730951, at *3-5 ( Super. Ct. for Alameda Cty. Aug. 10, 2021) . This ruling is now on appeal. Even if Proposition 22 survives legal challenges, in order to take refuge in the law, gig companies will still have to prove that they are providing app-based drivers with the promised Proposition 22 protections, such as health care benefits, 120% of minimum wage for “engaged time” (while drivers are actively transporting riders or making deliveries), and some expense reimbursement. See James v. Uber Techs., Inc. , 2021 WL 254303 (N.D. Cal. Jan. 26, 2021). 42 Lawson v. Grubhub, Inc. , 13 F.4th 908 (9th Cir. 2021). 43 The AB 5 exemptions appeared in Lab. Code § 2750.3(b)-(h), while the AB 2257 exemptions appear in Lab. Code §§ 2776-2784. 44 S.G. Borello & Sons, Inc. v. Dep’t of Indus. Relations , 48 Cal. 3d 341, 342-43 (1989). 45 Lab. Code § 2776.