18th Annual Workplace Class Action Report - 2022 Edition

404 Annual Workplace Class Action Litigation Report: 2022 Edition Vasquez v. Jan-Pro Franchising International , 10 Cal.5th 944 (2021), which held that Dynamex should be applied retroactively. Dynamez established a three-factor test (the "ABC" test) should be used to determine if a worker qualifies as an independent contractor for purposes of California’s wage orders. Id . at *5. One of the requirements of that test is that an independent contractor must perform work that is outside the usual course of the hiring entity’s business. Therefore, on Plaintiffs’ appeal, the Court of Appeal reasoned that Vasquez should apply to Plaintiffs’ claims and therefore the trial court’s ruling must be reversed and remanded to apply the correct legal framework. In Vazquez , the Supreme Court held that its decision in Dynamex applied retroactively to all cases that were not yet final at the time of that decision. Importantly, the Supreme Court explained that "public policy and fairness concerns, such as protecting workers and benefitting businesses that comply with the wage order obligations, favor retroactive application of Dynamex ." Id . at *9. Accordingly, the Court of Appeal determined that it must permit the trial court to consider in the first instance whether Plaintiffs were independent contractors under the ABC test. The Court of Appeal therefore reversed and remanded the trial court’s ruling. People Of The State Of California, et al. v. Maplebear Inc., No. 77380 (Cal. App. 4th Dist. Feb. 7, 2021). The City of San Diego (“the City”) filed an enforcement action alleging that Defendant maintained an unfair competitive advantage by misclassifying its “Full-Service Shoppers” as independent contractors. Id . at 2-3. Defendant, by way of its website and smartphone application, partnered with national, regional, and local retail grocers to provide same-day shopping, pick up, and delivery services to consumers across the United States and Canada. Relying on the ABC test set forth in Dynamex Operations West, Inc. v. Super. Ct. 4 Cal.5th 903 (2018), the City asserted that Defendant could not meet its burden to show the Full-Service Shoppers were independent contractors. The trial court granted the City’s request for a preliminary injunction after finding that the City demonstrated a probability of success on its claim that Defendant was improperly classifying Full- Service Shoppers as independent contractors. The preliminary injunction enjoined and restrained Defendant from failing to comply with California employment laws with regard to its Full-Service Shopper employees within the City of San Diego. On Defendant’s appeal to the California Court of Appeal, the Court of Appeal reversed the trial court’s order granting a preliminary injunction. On appeal Defendant asserted that the trial court lacked authority to issue the preliminary injunction because it had previously filed a motion to compel arbitration and a request to stay the action pending resolution of the motion pursuant to § 1281.4 of the Code of Civil Procedure. Alternatively, Defendant asserted that the trial court erred by granting the preliminary injunction because: (i) the Full-Service Shoppers were motor carriers and the Federal Aviation Administration Authorization Act (“FAAAA”) preempted application of the ABC test to motor carriers; (ii) the City did not prove a probability of success under the ABC test even if it was applicable; and (iii) the balance of harms did not weigh in favor of granting the preliminary injunction. Defendant also argued that the injunction was impermissibly vague. While Defendant’s appeal was pending, California citizens voted to enact Proposition 22, which allows “app-based drivers” to be classified as independent contractors, so long as they meet four express conditions set forth in the statute. Id . at 3. Defendant requested that the Court of Appeal take judicial notice of Proposition 22 and asserted that Proposition 22 was a significant change in the law that directly permitted the classification of the Full- Service shoppers as independent contractors. Defendant argued that the injunction must be reversed and the matter remanded to the trial court for further proceedings in light of Proposition 22. The Court of Appeal was not persuaded that the trial court lacked the authority to rule on the preliminary injunction motion, but agreed that the preliminary injunction as issued was impermissibly vague, particularly in light of the changes to the law effectuated by Proposition 22. For these reasons, the Court of Appeal reversed the trial court’s order granting a preliminary injunction. Quinn, et al. v. LPL Financial LLC, 2021 Cal. Super. LEXIS 7160 (Cal. Super. Ct. March 5, 2021). Plaintiff, a financial advisor, filed a class action on behalf of himself and other financial professionals claiming that they were aggrieved employees who had been misclassified as independent contractors in violation California Labor Code (“CLC”) and the Private Attorneys General Act of 2004 (“PAGA”). Specifically, Plaintiff claimed that Defendant failed to reimburse for business expenses and made unlawful wage deductions. At the same time Plaintiff also claimed that it was unconstitutional for the Legislature to codify the California Supreme Court’s “ABC test,” which it outlined in Dynamex Operations W. v. Superior Court , 4 Cal.5th 903 (2018), to determine the misclassification of workers in § 2785(b) of the CLC, and to statutorily exempt financial professionals from that test pursuant to § 2783(d)(1). Defendant filed a motion for summary judgment on the issues of: (i) whether Plaintiff could pursue a constitutional challenge to § § 2783(d)(1) and 2785(b) against Defendant; (ii) whether