California Court Of Appeal Affirms That Dynamex's ABC Independent Contract Test Is Limited To Claims Arising Under Wage Orders

In Jesus Cuitlahuac Garcia v. Border Transportation Group, LLC, et al, the California Court of Appeal, Fourth Appellate District has held that the ABC test set forth in Dynamex Operations West, Inc. v. Superior Court, 4 Cal.5th 903 (2018) applies only to causes of action brought under wage orders.

Plaintiff Garcia was a taxicab driver for several years with Border Transportation Group ("BTG"). In 2015, a year after ceasing work for BTG, he sued BTG and two individual defendants for various wage and hour violations.

The trial court granted defendants' motion for summary judgment on the basis that plaintiff Garcia was an independent contractor, not an employee. The trial court considered defendant's evidence which established various ways in which it did not exercise control over Garcia, including evidence concerning the "secondary indicia" set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989), that bear on employment status.

While on appeal, the California Supreme Court issued its ruling in Dynamex, which adopted the "ABC test" to determine the employee-independent contractor question as to wage order claims.

The Court of Appeal Diverges from Massachusetts's Formulation of Part C of the ABC Test

BTG argued in supplemental briefing that even under Dynamex, Garcia was an independent contractor because the Supreme Court adopted the Massachusetts version of the ABC Test, and a 2015 Massachusetts case, Sebago v. Bos. Cab Dispatch, Inc., 28 N.E.2d 1139, applied that same version of the ABC test to find that taxicab lessees were independent contractors.

The Fourth Appellate District rejected the ABC Test as set forth in Sebago because the court there defined the "critical inquiry" in Part C of the ABC test as whether "the worker is capable of performing the service to anyone wishing to avail themselves of the services or, conversely, whether the nature of the business compels the worker to depend on a single employer for the continuation of the services." However, Dynamex makes clear that the question in part C is not whether the employer prohibited or prevented a worker from engaging in an independently established business. The Court of Appeal stated that "[t]he Massachusetts test is simply not the formulation of part C articulated in Dynamex." Instead, the appropriate inquiry under part (C) is whether the person engaged in covered employment "actually has such an independent business, occupation, or...