What started as two delivery drivers fighting for their employee status has blossomed into a landmark class-action lawsuit that could have a major ripple effect on employee classification in California and the gig economy in general. In the case of Dynamex Operations West, Inc. v. The Superior Court of Los Angeles County, et al, the California Supreme Court upheld the lower court’s decision that classified a class of delivery drivers as employees rather than independent contractors, as Dynamex had been classifying them. The ruling sets a new precedent for guidelines necessary to determine a workers’ classification that expands the definition of “employee” broader than current standards, according to National Law Review.
The ruling supersedes another made by the court in the case of S.G. Borello & Sons Inc. v. Department of Industrial Relations in 1989, which established a multi-faceted test based on how much control or autonomy an employee had in regards to the company. The new three-point standard, or the ABC standard, established by the ruling is a more commonly used method that simplifies the determining process, but also broadly increases how many workers would qualify as employees across the board. The first point (A) is in line with the previous precedent, in that it speaks specifically to workers functioning outside the control of the employer for the performance of the work; B) worker has other regular work outside the company in question; and C) that they work in an occupation, trade, or business that is independently established. Under these rules, the Supreme Court sided with the former opinion that these drivers should be classified as employees, with all the benefits that come with that. “Employee” has become defined as “all workers who would ordinarily be viewed as working in the hiring business,” according to the CA Supreme Court ruling.