A critical ruling in the world of franchising, in Haitayan v. 7-Eleven, Inc., 2021 WL 4078727 (C.D. Cal. Sept. 8, 2021), the U.S. District Court for the Central District of California applied the so-called Borello test to find that franchisees were independent contractors, instead of employees, for purposes of their claims for unpaid business expense reimbursements under California’s Labor Code section 2802.
Continue Reading 7-Eleven Franchisees are Independent Contractors Under Borello Test
Last month, a judge out of the Alameda County Superior Court ruled California’s Proposition 22 unconstitutional, constituting a significant legal obstacle to this young statute.
Proposition 22 (formally the Protect App-Based Drivers and Services Act, Bus. & Prof. Code, §§ 7448, et seq.) was a ballot initiative passed by a majority of California voters in the November 2020 election, which primarily aimed to classify application-based transportation and delivery companies’ drivers as independent contractors rather than employees. Proposition 22 arose in response to Assembly Bill 5, 2019 legislation codifying the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court, which created a new “ABC” test for determining whether workers are properly classified as independent contractors.
Continue Reading Alameda Superior Court Judge Rules Proposition 22 Unconstitutional
The First Appellate District’s recent decision in Subcontracting Concepts, LLC v. DeMelo, A152205 (April 10, 2019) applies well-established unconscionability principles to an arbitration agreement signed by an employee of an independent contractor. The doctrine of unconscionability refers to an absence of meaningful choice with respect to the terms of a contract, usually the result of unequal bargaining power between the parties.
Continue Reading California First Appellate District Reminds Employers: Check Arbitration Provisions for Unconscionability
On May 2, 2019, the Ninth Circuit ruled in Vazquez v. Jan-Pro Franchising International, holding that the new independent contractor test established by the California Supreme Court in its 2018 decision in Dynamex v. Superior Court applies retroactively to franchisors. As a result of this decision, employers and franchisors who have classified workers as independent contractors may see an increase in wage and hour class actions alleging that the workers are or have been misclassified. Additionally, the decision has serious implications for any California companies that operate under a franchise business mode
Continue Reading Ninth Circuit Determines that Dynamex Independent Contractor Test Applies Retroactively to Franchisors
In a rare win for plaintiffs seeking to avoid arbitration, the U.S. Supreme Court rejected a trucking company’s attempt to compel arbitration in a driver’s proposed minimum wage class action. The Court held that the Federal Arbitration Act’s exemption for interstate transportation workers applies not only to employees, but also to those classified as independent contractors.
Continue Reading SCOTUS Rejects Employer’s Attempt to Compel Arbitration of Independent Contractor’s Class Claim
Andrea Mickles filed a complaint against her employer Country Club Inc., alleging it had violated the Fair Labor Standards Act (FLSA) by improperly classifying her and other employees as independent contractors and failing to pay them minimum wage and overtime. She filed her case as a collective action, and others opted into the case before any ruling on conditional certification.
Continue Reading Who’s Invited to the Party?: The Status of Collective Action Opt-Ins
In a press release issued this morning, the Department of Labor has announced that it is withdrawing two administrative interpretations issued by the Department of Labor under the Obama administration in 2015 and 2016 relating to misclassification of independent contractors and joint employment.
Continue Reading Department of Labor Announces a Rollback of Obama Administration Policies on Joint Employment and Employee Classification
The issue of whether workers are properly classified as independent contractors rather than employees is a common dispute in the gig economy, particularly in newer, technology-based industries, such as ride-sharing. That issue just became a much simpler one in Florida.
Continue Reading Florida Legislation Establishes That Ride-Sharing Drivers Are Independent Contractors, Not Employees
Across the country, worker misclassification issues continue to be a significant risk for employers. One hot button issue is whether workers in newer, technology-based industries, such as ride-sharing, are properly classified as independent contractors rather than employees. Last week, an appellate court in Florida considered whether Uber drivers are properly classified as independent contractors or employees for purposes of benefits under Florida’s unemployment insurance statute.
Continue Reading Florida Court Finds Uber Drivers are Independent Contractors, Not Employees
On July 15, 2015, the Department of Labor (“DOL”) issued guidance which it claims is designed to reduce the misclassification of employees as independent contractors under the Fair Labor Standards Act (“FLSA”).
Continue Reading DOL Issues Guidance Claiming Most Workers Are Employees – Not Independent Contractors – Under the FLSA