State high court will hear another Dynamex case

The California Supreme Court announced Friday it will hear a second case questioning whether the 2018 decision in Dynamex Operations West Inc. v. Superior Court applies retroactively.

The high court said it will hear arguments in Gonzales v. San Gabriel Transit, Inc. on whether wage order violations in a class action alleging misclassification can be retroactively applied. The appeal was granted after the 2nd District Court of Appeal reversed a lower court order denying certification for a class of more than 550 drivers working for the passenger transit company as independent contractors, Gonzales v. San Gabriel Transit, Inc., S259027.

In Los Angeles County Superior Court, Judge Maren E. Nelson "did not evaluate [the] individual causes of action," and instead found plaintiffs failed to show the necessary "community of interest or typicality among [San Gabriel Transit] drivers under" previously-held legal standards, the appellate court ruled.

Pending the appeal, the state high court ruled on Dynamex, establishing the employee-presumptive, three-prong "ABC" test in wage order claims. Using Dynamex as the standard, the state appellate court ruled the ABC test applied retroactively in wage and hour claims, reversed Nelson's decision and remanded the case, court documents show.

In remanding last October, the three-justice panel ordered the lower court to determine which claims alleged wage order violations and apply Dynamex's "ABC" test to those claims. Claims that don't should use the earlier standard set in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3rd 341 (1989).

The state high court also announced it would defer briefing on the case until it has reached a decision in Vazquez v. Jan-Pro Franchising International, Inc., S258191, which questions if Dynamex applies retroactively in all labor disputes.

Vazquez has bandied across state and federal courts over the past year. Initially, the 9th U.S. Circuit Court of Appeals ruled retroactivity applied back in May before retracting its decision a few months later.

The federal appellate court then kicked it to the state Supreme Court in September, requesting an answer to a "question of state law" under the agreement it would abide by the state high court's decision if it agreed to hear the case, according to court documents. The state Supreme Court agreed to hear the case in November, court records show.

The court will not consider and rule on Gonzalez until if resolves Vazquez under the court's "grant and hold" procedure, said Cory L. Webster, senior counsel in Dykema Gossett PLLC's Los Angeles office.

"Once the Supreme Court agreed to answer the question in Vazquez, it was virtually certain that review would be granted in Gonzalez because the two cases raise the same issue," Webster said in an email. "Once it issues a decision in Vazquez, the court will likely issue a summary order in Gonzalez either affirming or reversing, depending on which way it rules in Vazquez."