62 Cal.App.5th 692
Cal. Ct. App.2021Background
- Four owner-operator truck drivers (Appellants) sued East Coast Transport alleging misclassification as independent contractors and asserted Labor Code and UCL claims tied to IWC Wage Order No. 9.
- Each driver signed an Independent Contractor Agreement, owned trucks (purchased from a company affiliated with East Coast), set their own hours to some extent, and were paid per job with expense reimbursements.
- At a bifurcated bench trial the court applied the Borello multifactor test (not Dynamex/ABC), found drivers were independent contractors, and entered judgment for East Coast, dismissing the remaining claims.
- The trial court ruled Dynamex did not apply retroactively and refused to use the ABC test; East Coast also argued federal preemption under the FAAAA.
- The Court of Appeal held Dynamex applies retroactively (per Vazquez), rejected FAAAA preemption, reversed the judgment, and remanded for the trial court to determine worker status under the ABC test and to proceed on the remaining claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dynamex/ABC test applies retroactively | Dynamex should govern since it interprets wage-order language and applies to nonfinal cases | Borello was relied on; retroactive ABC application would be unfair and violate due process | Dynamex applies retroactively (Vazquez controls); trial court erred rejecting retroactivity |
| Whether FAAAA preempts state application of the ABC test to motor carriers | ABC test is a general labor rule and may be applied to trucking companies | Applying ABC to motor carriers is preempted because it relates to motor carrier prices/routes/services | No preemption; FAAAA does not bar applying ABC (Pac Anchor and Cal Cartage dispositive) |
| Whether Appellants were independent contractors under ABC (prong B: work outside hiring entity’s usual course) | Drivers argued their work (drayage/trucking) is within East Coast’s usual business, so ABC B fails for East Coast | East Coast argued factual defenses and that ABC analysis raises new issues not litigated | Court declined to decide as a matter of law; remanded for the trial court to apply ABC factually |
| Whether judgment may stand despite legal error in standard applied | Appellants: wrong legal standard requires reversal/remand | East Coast: alternative grounds (preemption) or affirm on facts under Borello | Judgment reversed and remanded; appellate court refused to affirm on Borello grounds |
Key Cases Cited
- Dynamex Operations West, Inc. v. Superior Court, 4 Cal.5th 903 (Cal. 2018) (adopted ABC test for worker status under IWC wage orders)
- Vazquez v. Jan‑Pro Franchising Int’l, Inc., 10 Cal.5th 944 (Cal. 2021) (held Dynamex applies retroactively)
- S. G. Borello & Sons, Inc. v. Dept. of Industrial Relations, 48 Cal.3d 341 (Cal. 1989) (articulated multifactor independent-contractor test used historically)
- People ex rel. Harris v. Pac Anchor Transportation, Inc., 59 Cal.4th 772 (Cal. 2014) (FAAAA does not preempt state UCL/labor enforcement against motor carriers)
- People v. Superior Court (Cal Cartage Transportation Express, LLC), 57 Cal.App.5th 619 (Cal. Ct. App.) (rejected FAAAA preemption argument against application of ABC test)