LOS ANGELES – A pro-business advocacy group is hoping the California Supreme Court will find a law passed earlier this year that could potentially reclassify millions of gig economy workers as employees should not be retroactively applied.
California Employment Law Council (CELC) had previously sent an amicus brief to the high court concerning whether Assembly Bill 5, based on a landmark California Supreme Court decision last year, should be retroactive.
CELC is supporting "a basic fairness ruling that it's not retroactive, that it doesn't apply to years when it wasn't the law," General Counsel Paul Grossman said in a telephone interview.
CELC is a nonprofit organization that advocates for a better legal climate for California employers.
Last week, the Supreme Court announced it would decide the retroactivity question in its decision in Dynamex Operations v. Superior Court of Los Angeles, issued in April 2018.
The Supreme Court’s determination is expected to have a significant impact on California companies who employee independent contractors.
It is the CELC's position that the decision should not be retroactive but the organization otherwise is taking no public position in the matter, Grossman said.
"All we've been doing is fighting the retroactivity issue," Grossman said. "We've taken no other positions on AB 5 other than Dynamex and AB 5 should not be retroactive."
That doesn't mean CELC likes any other part of the Dynamex decision or AB 5, Grossman said.
"We think it's a horrible public policy. It's going to kill the gig economy," Grossman said. "But that's what the legislature and the governor did."
AB 5, called the "gig worker bill," codifies the landmark California Supreme Court decision in Dynamex, issued in April of last year. In Dynamex, California’s Supreme Court said a three-pronged “ABC Test” must be used to determine worker classification in wage-order claims.
Under the ABC test, someone working for a California employer is presumed to be an employee of that employer and the burden falls to the employer to prove the worker is an independent contractor.
Gov. Gavin Newsom signed AB 5 into law in September. The legislation is supposed to go into effect in January.
The following month, the U.S. District Court for California's Ninth District Court for California's Northern District ruled in Vazquez v. Jan-Pro Franchising International that the Supreme Court's decision in the Dynamex case applies retroactively.
Grossman said the Ninth District decision was notable because "the defendant had not breached the issue."
Shortly after, CELC filed an amicus brief with the Ninth District asking for reconsideration and rehearing.
"And then they withdrew the decision on retroactivity and certified the question to the California Supreme Court," Grossman said
In October, CELC filed an amicus brief with the Supreme Court asking the high court to accept the certification from the Ninth Circuit.
Last month, the California Trucking Association (CTA) and two California independent owner-operator truck drivers filed a lawsuit in U.S. District Court for California's Southern District seeking to prevent application of AB 5.