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US – decision applying Dynamex independent contractor test retroactively withdrawn

Written by
FordHarrison LLP, nationwide U.S. law firm with a singular focus on HR law.
In a recent ruling, the Ninth Circuit has withdrawn its decision to apply the Dynamex test for whether a worker is an independent contractor or an employee retroactively. 

Executive summary

On 22 July 2019, the Ninth Circuit withdrew its recent decision (covered here) applying the landmark employee/independent contractor classification case, Dynamex, retroactively and indicated that it will be certifying the question to the California Supreme Court.

On 30 April 2018, the California Supreme Court issued its decision in Dynamex Operations West, LLC v. Superior Court of California, which established the ‘ABC test’ for determining who qualifies as an independent contractor under California’s Wage Orders. Generally, this ABC test makes it more difficult to classify workers as independent contractors, opening employers to exposure for employee benefits that would not otherwise be owed to independent contractors.

On 2 May 2019, the Ninth Circuit applied the ABC test retroactively in Vasquez v. Jan-Pro Franchising International, Inc, vacating the district court’s ruling and remanding the case for reconsideration using the newly established ABC test.

That decision has now been withdrawn and the question of whether Dynamex applies retroactively will be certified to the California Supreme Court. This is good news for employers, as the retroactive application of the more stringent ABC test is lifted, at least for now.