Unanswered Questions After Dynamex, And What Lies Ahead

Los Angeles Partner Nina Huerta and New York Partner Richard Reibstein co-authored an article examining the California Supreme Court’s groundbreaking decision in Dynamex Operations West v. Superior Court of Los Angeles County. The Court announced a new test to be used in determining independent contractor status under certain California laws, and the authors note the vast impact of the decision: “This new decision not only impacts companies that have a business model using independent contractors, but also impacts workers who have chosen to be their own bosses, are seeking to grow a business, or wish to supplement income from their primary occupation with fees earned from a 1099 gig during evenings and weekends.”

Huerta and Reibstein address four of the most important questions left open in the Dynamex decision and ultimately note that “what is most likely to follow in the wake of the Dynamex decision is a period of great uncertainty accompanied by a flood of class actions.”  They conclude,  “While many commentators have characterized California as a state where independent contractor relationships can no longer exist, many businesses can establish or maintain such relationships even after Dynamex. Instead of reclassifying, such companies can restructure and re-document their independent contractor relationships, using a process such as IC Diagnostics.™ While the legal landscape has certainly changed following Dynamex, many businesses and individuals that wish to enter into or maintain a sustainable independent contractor relationship can still do so.”