Court Of Appeal Limits Applicability Of The ABC Test

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In Dynamex, the California Supreme Court decided to adopt an “ABC” test to determine whether workers are properly classified as independent contractors. This raised a number of questions concerning how (or if) the test should apply to claims beyond those at issue in Dynamex.

In a modified opinion filed May 18, 2018, the Court of Appeal in Curry v. Equilon Enterprises, LLC answered the question of whether the “ABC” test applies beyond the independent contractor context (Equilon, d/b/a Shell Oil Products US, or Shell).

Curry found that the public policy reasons relied on in adopting the “ABC” test do not apply to other contexts, such as joint employment. The Curry Court held:

[T]he Supreme Court’s policy reasons for selecting the “ABC” test are uniquely relevant to the issue of allegedly misclassified independent contractors. In the joint employment context, the alleged employee is already considered an employee of the primary employer; the issue is whether the employee is also an employee of the alleged secondary employer. Therefore, the primary employer is presumably paying taxes and the employee is afforded legal protections due to being an employee of the primary employer. As a result, the policy purpose for presuming the worker to be an employee and requiring the secondary employer to disprove the worker’s status as an employee is unnecessary in that taxes are being paid and the worker has employment protections.

In conclusion, the “ABC” test set forth in Dynamex is directed toward the issue of whether employees were misclassified as independent contractors. Placing the burden on the alleged employer to prove that the worker is not an employee is meant to serve policy goals that are not relevant in the joint employment context. Therefore, it does not appear that the Supreme Court intended for the “ABC” test to be applied in joint employment cases.

In so holding, Curry rejected the plaintiff’s argument that “ABC” test’s definition of “suffer or permit to work” should be applied to determine whether Shell was a joint employer.

One significant result of this holding is the alleged employee, not the alleged joint employer, will continue to bear the burden of proving joint employment.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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