The California State Assembly passes a Bill that codifies the infamous “ABC” test for independent contractor determination — will the Senate follow suit, and will the Governor sign the new legislation into law?

The New Bill

On May 29, 2019, by a 55-11 vote, the state Assembly passed AB 5, a bill that would codify the California’s Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court.  
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Last month, we were honored to have Paul Polman, Chair of the International Chamber of Commerce, The B Team and Vice-Chair of the U.N. Global Compact and Former CEO of Unilever, speak at our Global Employer Forum 2019 in New York.

Paul makes the very strong point that we need to create an economic system

Hiring Entity:  When are gig workers employees?

Four Government Agencies & Courts:  It depends!

Trying to track the employment status of gig workers will make your head spin. Contractors? Employees? Super heroes?

In the last few weeks, four federal and California state agencies and courts — the US Department of Labor, the National Labor Relations Board, the Ninth Circuit Court of Appeals and the California Labor Commissioner — have all weighed in on the debate. And, the answer is — it depends.

Follow our script below to help make sense of the patchy legal landscape.


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In last Thursday’s Vazquez v. Jan-Pro Franchising, the Ninth Circuit made several impactful findings related to the infamous Dynamex decision:

  1. Aligning with several state court decisions supporting retroactivity, the Ninth Circuit ruled that Dynamex’s ABC test applies retroactively.
  2. It also applied Dynamex to a multi-level franchise structure, expanding the test beyond the independent contractor context.
  3. Last, the Court issued guidance to the district court on remand reaffirming the difficulty of “passing” the ABC test.


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Even as IPOs bloom this spring in the technology sector, there exists well publicized macro-economic uncertainty, stemming from Brexit concerns, among other developments. Real threats to free trade and investment flows remain, with the potential for a much more serious outbreak of protectionism and isolation on a global scale. A recession may or may not be looming, depending on the day and your media outlet.

In these uncertain times, the best counsel know to be prepared for everything, including business change. To successfully manage global business change, in-house counsel must identify potential legal roadblocks, plan ahead and provide a strategic approach. Counsel must be prepared for everything, including some tough decisions:

  • Cost-realignment such as furloughs, compensation reduction or benefit forfeitures;
  • Workforce reductions;
  • Reorganizations; and
  • Transfer relocation and seconding of employees.


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In a global survey by WIRED Consulting, in collaboration with Baker McKenzie, we explore the big picture modern workforce questions above and discuss how companies are balancing these risks with the benefits of the flexible age. As frictionless innovations are likely to continue and deepen in the future, what lessons can be learned from corporate

The world is facing yet another year of unprecedented changes and complex challenges making uncertainty the new normal.

In the Global Employer Magazine: 2019 Horizon Scanner we review the key themes and trends that dominated the employment law landscape in 2018, and explore the global trends and issues employers need to know about in 2019.

An update from our neighbors to the north (with thanks to Chris Burkett, partner in our Toronto office):

In January, the Ontario Court of Appeal (in Canada) overturned the lower court’s decision in Heller v. Uber Technologies Inc., 2019 ONCA 1. The Court of Appeal held that an arbitration clause requiring arbitration in the Netherlands of disputes between drivers and Uber to be invalid and unenforceable. Based on the presumption that Uber drivers are employees of Uber, the Court of Appeal found that the arbitration clause was a prohibited contracting out of Ontario’s Employment Standards Act, 2000 (ESA).
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On January 25, 2019, the National Labor Relations Board reaffirmed its adherence to the traditional common law independent contractor test for determining whether a worker is an employee or an independent contractor under the National Labor Relations Act.

In SuperShuttle DFW, Inc., the Board expressly overruled its 2014 FedEx Home Delivery decision. In FedEx, the Board drastically reduced the significance of entrepreneurial opportunity in the determination of independent contractor status. FedEx emphasized the right to control factors relevant to the so-called “economic realities” test and gave weight to whether a worker was in fact “seizing” actual opportunities and rendering services as part of their own independent business.

SuperShuttle DFW, Inc. is significant as it abandons the Obama-era standard and gives a boost to companies using contract labor by elevating the importance of entrepreneurial opportunity in the independent contractor analysis. Insodoing, the Board returns the legal framework to its traditional common law roots and adds the examination of entrepreneurial opportunity. The decision suggests that moving forward, the Board “evaluate the common-law factors through the prism of entrepreneurial opportunity when the specific factual circumstances of the case make such an evaluation appropriate.”


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