Francisco Gonzales formerly worked as a driver for San Gabriel Transit, Inc. (SGT), a company that coordinates with public and private entities to arrange transportation services for passengers.
In February 2014, Gonzales filed this putative class action seeking to represent over 550 drivers engaged by SGT as independent contractors from February 2010 to the present.
Among other things, Gonzales alleged that by misclassifying drivers as independent contractors, SGT violated various provisions of the Labor Code and the Industrial Welfare Commission’s (IWC) wage orders, particularly Wage Order No. 9-2001 (codified at Cal. Code Regs., tit. 8, § 11090 [Wage Order No. 9]), which governs the transportation industry, and engaged in unlawful business practices under Business and Professions Code section 17200 (17200).
The trial court did not evaluate individual causes of action. Rather, analyzing the action as a whole, premised on terms contained in several lease agreements in effect during the class period, the court found that Gonzales failed to demonstrate the requisite community of interest or typicality among SGT drivers under the then-prevailing legal test, and denied the motion for class certification.
While this appeal was pending, the California Supreme Court decided Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 (Dynamex), in which it adopted the “ABC test” used in other jurisdictions to streamline and provide consistency in analyzing the distinction between employees and independent contractors for purposes of wage order claims.
The Court of Appeal reversed in the published case of Gonzales v San Gabriel Transit, Inc. Because the trial court did not have the benefit of the Dynamex decision, it remand the matter with directions.
It conclude that: (1) the ABC test adopted in Dynamex is retroactively applicable to pending litigation on wage and hour claims; (2) the ABC test applies with equal force to Labor Code claims that seek to enforce the fundamental protections afforded by wage order provisions; and (3) statutory claims alleging misclassification not directly premised on wage order protections, and which do not fall within the generic category of “wage and hour laws,” are appropriately analyzed under what has commonly been known as the “Borello” test (referring to S.G. Borello and Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello)).
On remand, the trial court shall: (1) evaluate which alleged Labor Code claims enforce wage order requirements, and which do not; (2) as to the Labor Code claims that enforce wage order requirements, apply the ABC test as set forth in Dynamex to determine whether the requirements of commonality and typicality for purposes of certification of a class action are satisfied; (3) as to the Labor Code claims that do not enforce wage order requirements, apply the Borello test to determine whether the requirements of commonality and typicality for purposes of certification of a class action are satisfied; (4) as to the derivative claim under section 17200, apply the ABC or Borello test as appropriate for the underlying alleged unlawful business practice; and (5) in the event the court determines class certification is appropriate for any claims, complete the analysis by determining whether proceeding as a class action would be superior to alternative methods of adjudication.