A U.S. appeals court on Thursday said a test adopted by the California Supreme Court making it easier for workers to prove they are a company’s employees and not independent contractors applies retroactively, a potentially costly outcome for “gig economy” companies and other industries that rely on contract work.
A unanimous three-judge panel of the 9th U.S. Circuit Court of Appeals said the California Supreme Court’s decisions typically have a retroactive effect, and its 2018 ruling in Dynamex Operations West Inc v. Superior Court was no different. The court revived a 2016 lawsuit accusing janitorial services company Jan-Pro Franchising International Inc of misclassifying its franchisees as independent contractors.
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