Federal Appeals Court Hands Win to Gig Workers in Prop 22 Case

On Monday, the Ninth Circuit handed gig workers a win, invalidating a ruling that a Grubhub driver should be classified as an independent contractor. The Court ruled that the lower court must look at the case again because the California Supreme Court has now held that the Dynamex “ABC” test applies retroactively. Under the ABC test, a worker is presumed to be an employee unless the employer can prove that the worker: (A) was not subject to the employer’s control, (B) provided services outside of the employer’s usual course of business, and (C) did not have their own independent business.

The three-judge appellate panel remanded to the district court to apply the ABC test to plaintiff Raef Lawson’s minimum wage and overtime claims. The panel rejected Grubhub’s argument that Prop 22, which was passed last year and allows some app-based drivers to be classified as independent contractors, applies retroactively. “We conclude without difficulty that Proposition 22 does not apply retroactively,” the Court wrote. The panel also rejected Grubhub’s argument that Prop 22 somehow “abates” or nullifies wage claims that accrued before Prop 22 went into effect. This is the first time a court has ruled that Prop 22 is not retroactive, and that Prop 22 does not abate previously-existing wage claims.

On remand, the lower court must determine whether Lawson is an employee under the ABC test, and also whether Lawson is exempt from the ABC test under one of the exemptions provided for by AB5, the landmark legislation that codified the ABC test after Dynamex was decided. The AB5 exemptions are retroactive. We will be following this case closely to see if the lower court will find that Lawson is an employee or an independent contractor.

If you believe you have been misclassified as an independent contractor, contact Teukolsky Law today for a free consultation.