Supreme Court of California Expands Definition of “Employees” Who Are Protected by Wage Laws

On April 30, 2018, the Supreme Court of California, the highest court in the State, reached a landmark decision for hourly workers.  In Dynamex Operations West, Inc. v. Lee, the Court denied Dynamex’s appeal of the lower court’s order, which certified a class of delivery drivers who Dynamex argued were independent contractors, and therefore not entitled to the protection of certain wage laws.  This decision is a huge victory for California workers who are classified as mere “independent contractors” and denied overtime and other protections extended to only “employees.”  The Dynamex decision marks a significant departure from other courts nationwide that, in recent years, have narrowed the definition of “employee,” rather than expanding it.

The Dynamex decision lowers workers’ burden of proving their entitlement to protection under certain wage laws – and heightens employers’ burden of proof to deny their workers such protections – in at least two ways.  First, the Supreme Court of California made clear that the employer, and not the worker, bears the burden to prove that:  (i) the worker is free from the employer’s control over the performance of his or her work; (ii) the type of work falls outside of the employer’s usual course of business; and (iii) the worker customarily performs the same kind of work he or she performs for the employer.  Unless the employer can establish all of these factors, the worker should be found to be an employee, not an independent contractor.

Second, the Supreme Court of California permitted the drivers to proceed as a class, whereas other courts have held that cases requiring a determination of whether plaintiffs are employees or independent contractors are too fact-intensive to proceed on a class, as opposed to individual, basis.  Put differently, Dynamex provides new authority for workers who are denied the benefit of certain wage laws based on their alleged “independent contractor” status to litigate their claims together as a class, thereby increasing their leverage with their employer and, hopefully, correcting an unlawful practice for all workers the employer has misclassified.

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Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour, personal injury and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Delaware, Georgia and Pennsylvania.

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About Alex Hartzband

Alex Hartzband's practice is focused on employment litigation. Alex is an associate in the firm's New York office.

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