Recent Employment Law Decisions

California Supreme Court

The Dynamex ABC Test Regarding the California Wage Orders’ Independent Contractor versus Employee Analysis Applies Retroactively

VAZQUEZ v. JAN-PRO FRANCHISING INTERNATIONAL, INC.

The Ninth Circuit requested that the California Supreme Court answer the question whether the Dynamex decision applies retroactively. The Supreme Court answered that Dynamex does apply retroactively.

JUDICIAL INTERPRETATION OF STATUTORY OR LEGAL LANGUAGE IS RETROACTIVE BECAUSE IT MERELY EXPLAINS WHAT THE LANGUAGE HAS ALWAYS MEANT

Dynamex noted that the term “independent contractor” was not defined in California’s wage orders. Therefore, the Supreme Court conducted a lengthy review of prior decisions and set forth a test for determining employee versus independent contractor status know as the ABC Test. The ABC test placed the burden on the hiring entity to establish that the worker is an independent contractor not intended to be covered by the wage orders and required the entity to establish each of three factors: (A) the worker is free from the control or direction of the hiring entity in connection with the performance of the work; (B) the worker performs work outside the usual course of the hiring entity’s business; and (C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. The ABC Test set forth how to interpret the phrase “suffer or permit to work” in the California wage orders. Judicial interpretation of language is retroactive under well-established principles. Such interpretation merely provides guidance as to what a statute or law has always meant. Therefore, the ABC test applies retroactively.

CELA INVOLVEMENT

Congratulations to CELA member Shannon Liss-Riordan of Lichten & Liss-Riordan, PC. Thank you to Monique Olivier for drafting an amicus brief on CELA’s behalf.

California Supreme Court. Filed 1/14/21. 10 Cal.5th 944. Opinion by Chief Justice Cantil-Sakauye.

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Legislative Update
By Mariko Yoshihara, CELA Legislative Counsel & Policy Director

New Legislative Session Underway!

Mariko Yoshihara

Over the past couple months, state legislators and advocates have been working to finalize their legislative packages for the year, with still much of the focus on addressing the COVID-19 pandemic. CELA has partnered with several key lawmakers this year to advance a robust legislative agenda to limit confidentiality clauses in employment and settlement agreements; to extend emergency paid sick days to workers who need leave for reasons related to COVID-19 or reasons related to getting the vaccine; to provide a more inclusive and expansive definition of “family” in our sick and family leave laws and to protect those workers with caregiving responsibilities from discrimination; to ensure workers can take time off to grieve the loss of a loved one; to provide critical health and safety protections to California’s domestic workers; and finally, to strengthen protections for workers when employers do not pay their arbitration fees on time. A full description of CELA-sponsored bills is listed below, along with several other key labor and employment bills that we will be tracking and working on this year. We encourage CELA members to reach out if they have any experience with or feedback on the policies contained in any of these bill proposals.

CELA Sponsored & Priority Bills

SB 331 (Senator Leyva) – This bill will expand the prohibition on non-disclosure agreements (“NDA’s”) in settlement agreements involving sexual harassment, sexual assault, and sex discrimination to cover settlement agreements involving all forms of harassment or discrimination. This bill will also expand the prohibition on overly broad confidentiality and non-disparagement clauses in employment agreements to cover workers who are required to sign these types of clauses as part

of a severance agreement. Read some of the great press coverage below:

AB 84 (Assemblymember Ting) /SB 95 (Senator Skinner) – These bills will extend emergency paid sick leave to all workers in California for reasons related to COVID-19 and, additionally, for reasons related to getting a COVID-19 vaccination.

AB 1041 (Wicks) – This bill will expand the definition of “family member” for purposes of paid sick leave, paid family leave, and family and medical leave under the California Family Rights Act, to include individuals related by blood or whose close association with the employee is the equivalent of a family relationship.

AB 1119 (Wicks) – This bill will prohibit discrimination against employees based on their family responsibilities and will ensure working families have access to reasonable accommodations to deal with school and care closures. Specifically, this bill will add “family responsibilities” to the list of protected categories under the Fair Employment and Housing Act (FEHA) and will also provide employees with the right to reasonable accommodations to deal with caregiving responsibilities due to school or care facility closures.

AB 95 (Low) – This bill will require employers with 25 or more employees to grant an employee 10 business days of unpaid bereavement leave upon the death of a family member. Employers with fewer than 25 employees will be required to grant 3 business days of bereavement leave. Sign up to support this bill by clicking here.

SB 321 (Durazo) – This bill will remove the unjust exclusion of domestic workers from California’s health and safety laws.

SB 762 (Senator Wieckowski) – This bill will strengthen recently enacted legislation (sponsored by CELA) that established that an employer is in breach of the arbitration agreement (and waives its right to compel or proceed in arbitration) if the employer does not pay its share of arbitration fees within 30 days of the due date. To ensure compliance, this bill will require the arbitration provider to send both parties a copy of the invoice with the due date.

Other Bills We Are Tracking

For a complete list of bills we are tracking, with descriptions, please visit www.cela.org/legislation

AB 1227    (Levine D) Worker classification: employees and independent contractors: workers in seasonal live theatre.
Current Text: Introduced: 2/19/2021

AB 1433    (Irwin D) Worker classification: employees and independent contractors: trainees in a technology educational program.
Current Text: Introduced: 2/19/2021

AB 55       (Boerner Horvath D) Employment: telecommuting.
Current Text: Introduced: 12/7/2020

AB 1313     (Bigelow R) COVID-19: immunity from civil liability.
Current Text: Introduced: 2/19/2021

AB 1122     (Garcia, Cristina D) Workforce diversity.
Current Text: Introduced: 2/18/2021

AB 1256     (Quirk D) Employment discrimination: cannabis screening test.
Current Text: Introduced: 2/19/2021

SB 238       (Melendez R) Fair employment and housing protections: political affiliation.
Current Text: Introduced: 1/21/2021

SB 665      (Umberg D) Employment policy: voluntary veterans’ preference.
Current Text: Introduced: 2/19/2021

AB 1179    (Carrillo D) Employer provided benefit: backup childcare.
Current Text: Introduced: 2/18/2021

AB 123      (Gonzalez, Lorena D) Paid family leave: weekly benefit amount.
Current Text: Introduced: 12/18/2020

AB 995      (Gonzalez, Lorena D) Paid sick days: accrual and use.
Current Text: Introduced: 2/18/2021

AB 1033    (Bauer-Kahan D) Small employer family leave mediation: pilot program.
Current Text: Introduced: 2/18/2021 

AB 257      (Gonzalez, Lorena D) Fast food industry: working standards.
Current Text: Introduced: 1/15/2021

AB 385      (Flora R) Labor Code Private Attorneys General Act of 2004:
Current Text: Introduced: 2/2/2021

AB 436      (Fong R) Wages: records: inspection and copying.
Current Text: Introduced: 2/4/2021

AB 513      (Bigelow R) Employment: telecommuting employees.
Current Text: Introduced: 2/9/2021

AB 530      (Fong R) Labor Code Private Attorneys General Act of 2004: filing requirements.
Current Text: Introduced: 2/10/2021

AB 676      (Holden D) Franchises.
Current Text: Introduced: 2/12/2021

AB 1023    (Flora R) Contractors and subcontractors: records: penalties.
Current Text: Introduced: 2/18/2021

AB 1028    (Seyarto R) Telework Flexibility Act.
Current Text: Introduced: 2/18/2021

AB 1074    (Gonzalez, Lorena D) Employment: rehiring and retention: displaced workers.
Current Text: Introduced: 2/18/2021

AB 1528    (Santiago D) Wages: final payments.
Current Text: Introduced: 2/19/2021

AB 1530    (Wicks D) Private employment: mass layoffs.
Current Text: Introduced: 2/19/2021

SB 62       (Durazo D) Employment: garment manufacturing.
Current Text: Introduced: 12/7/2020

SB 236     (Ochoa Boghv R) The Labor Code Private Attorneys General Act of 2004.
Current Text: Introduced: 1/21/2021

SB 338     (Gonzalez D) Port drayage motor carriers: customers: joint and several liability.
Current Text: Introduced: 2/8/2021

SB 430     (Borgeas R) Small businesses: reduction or waiver of civil penalties for violation of regulations or statutes.
Current Text: Introduced: 2/12/2021

SB 505     (Hertzberg D) Wages: withholdings: written authorizations.
Current Text: Introduced: 2/17/2021

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