Labor & Employment Law Blog

On January 8, a trial court judge in Los Angeles issued an order finding the ABC Test—now used to determine independent contractor status in California—could not be applied to independent contractor truck drivers (“owner-operators”) due to federal pre-emption concerns.  While the decision represents a major victory for trucking companies, it will be subject to challenge.

On October 22, 2018, the California Court of Appeal followed the California Supreme Court’s guidance in Dynamex, and differentiated between a taxi driver’s Industrial Welfare Committee Wage Order claims, and non-Wage Order claims. (Garcia v. Border Transportation Group, LLC (D072521, Court of Appeal, 4th App. Dist. Div. 1).  In line with the Supreme Court’s decision, the Court of Appeal applied the ABC independent contractor test to Wage Order claims, while leaving other wage and hour claims for evaluation under the multi-factor Borello test.  The Wage Orders regulate basic working conditions for California employees, including minimum wage, meal breaks, and rest periods.

On September 25, 2018, the U.S. Ninth Circuit Court of Appeals held that the claims of potentially hundreds of thousands of Uber drivers for misclassification as independent contractors cannot proceed as a class action.  (O’Connor v. Uber Technologies, Ninth Circuit Case No. 16-15595.)  In this case, the drivers signed arbitration agreements containing class action waivers, which the Ninth Circuit initially refused to enforce based on the state of the law at the time.  However, in light of the U.S. Supreme Court’s decision in Epic Systems (Epic Systems Corp. v. Lewis, ––– U.S. ––––, 138 S.Ct. 1612, 200 L.Ed.2d 889 (2018)) which issued in June, the appellate court held that the waivers must be enforced and that the case cannot proceed as a class action.  The court ordered that the arbitration agreements be enforced so that the arbitrations proceed on an individual basis. 

In a decision issued by the U.S. Ninth Circuit Court of Appeals on September 10, 2018, the court rejected a challenge based on federal preemption grounds to the California Labor Commissioner’s use of the Borello standard for determining independent contractor status. The challenge was made based on the motor carrier provisions of the Federal Aviation and Administration Authorization Act of 1994 (“FAAAA”), 49 U.S.C. § 14501, et seq., which prohibit states from enacting or enforcing laws or regulations that relate to “a price, route or service of a motor carrier . . . with respect to the transportation of property.”