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Dynamex Operations West, Inc. v. Superior Court

Court of Appeal of California, Second Appellate District, Division Seven

October 15, 2014, Opinion Filed

Civil No. B249546

Opinion

 [**71]  PERLUSS, P. J.—Charles Lee and Pedro Chevez were hired by Dynamex Operations West, Inc. (formerly Dynamex, Inc.) (Dynamex), a nationwide courier and delivery service, as drivers to make deliveries of packages, letters and parcels to Dynamex customers. Prior to 2004 Dynamex had classified its California drivers as employees and compensated them subject to this state's wage and hour laws. In 2004 Dynamex converted the status of all drivers from employee to independent contractor. This lawsuit was filed in April 2005 alleging that drivers, as a practical matter, continued to perform the same tasks [****2]  as they had when classified as employees with no substantive changes to the means of performing their work or the degree of control exercised by Dynamex and, as a consequence, the reclassification of Dynamex drivers violated California law. The plaintiff, [***1368]  Charles Lee, sought to represent approximately 1,800 drivers engaged by Dynamex as independent contractors. After its initial denial of class certification was reversed by this court, respondent superior court certified the proposed class in 2011.

 [*722] 

Over the course of the next two years, Dynamex twice moved to decertify the class. When its second motion was denied, Dynamex filed this petition for a writ of mandate, arguing the superior court had improperly adopted the definition of “employee” found in Industrial Welfare Commission (IWC) wage orders1 to ascertain  [**72]  the status of class members (see Martinez v. Combs (2010) 49 Cal.4th 35 [109 Cal. Rptr. 3d 514, 231 P.3d 259] (Martinez)), and had failed to use the common law test for distinguishing between employees and independent contractors discussed in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 [256 Cal. Rptr. 543, 769 P.2d 399] (Borello). According to Dynamex, if the Borello common law test, rather than the IWC standard approved in Martinez, is applied, the class must be decertified because the predominance of individual issues relevant [****3]  to that test would make it infeasible to litigate plaintiffs' claims as a class action.

CA(1)(1) We issued an order to show cause why respondent superior court should not be compelled to vacate its order denying the motion to decertify the class. We now grant the petition in part. We conclude the superior court correctly allowed plaintiffs to rely on the IWC definition of an employment relationship for purposes of those claims falling within the scope of IWC Wage Order No. 9-2001 (Wage Order No. 9). (Cal. Code Regs., tit. 8, § 11090.) With respect to those claims falling outside the scope of Wage Order No. 9, the common law definition of employee will control. As to those claims, we grant the petition to allow the superior court to reevaluate whether, in light of the Supreme Court's recent decision in Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522 [173 Cal. Rptr. 3d 332, 327 P.3d 165] (Ayala), class certification remains appropriate by focusing its analysis “on differences in [the defendant's] right to exercise control” rather than “variations in how that right was exercised.” (Id. at p. 528.)

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230 Cal. App. 4th 718 *; 179 Cal. Rptr. 3d 69 **; 79 Cal. Comp. Cases 1366 ***; 2014 Cal. App. LEXIS 921 ****

DYNAMEX OPERATIONS WEST, INC., Petitioner, v. THE SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent; CHARLES LEE et al., Real Parties in Interest.

Notice: NOT CITABLE—SUPERSEDED BY GRANT OF REVIEW

Subsequent History: Review Granted January 28, 2015

Time for Granting or Denying Review Extended Dynamex Operations W. v. S.C., 2015 Cal. LEXIS 2606 (Cal., Jan. 15, 2015)

Review granted, Depublished by Dynamex Operations West, Inc. v. Superior Court, 182 Cal. Rptr. 3d 644, 341 P.3d 438, 2015 Cal. LEXIS 598 (Cal., Jan. 28, 2015)

Request granted Dynamex Operations West, Inc. v. Lee, 2015 Cal. LEXIS 3297 (Cal., Feb. 23, 2015)

Application granted by Dynamex Operations West, Inc. v. Superior Court, 2015 Cal. LEXIS 2091 (Cal., Apr. 13, 2015)

Request granted Dynamex Operations West, Inc. v. Superior Court, 2015 Cal. LEXIS 6603 (Cal., May 4, 2015)

Request granted Dynamex Operations West, Inc. v. Superior Court, 2015 Cal. LEXIS 4444 (Cal., June 15, 2015)

Request granted Dynamex Operations W. v. Lee S.C., 2015 Cal. LEXIS 8153 (Cal., July 27, 2015)

Request granted Dynamex Operations West, Inc. v. Superior Court, 2015 Cal. LEXIS 8579 (Cal., Aug. 21, 2015)

Request granted Dynamex Operations West, Inc. v. Superior Court, 2015 Cal. LEXIS 9048 (Cal., Sept. 3, 2015)

Request granted Dynamex Operations W. v. Superior Court, 2015 Cal. LEXIS 6199 (Cal., Sept. 16, 2015)

Request granted Dynamex Operations West, Inc. v. Superior Court, 2015 Cal. LEXIS 10525 (Cal., Oct. 7, 2015)

Request granted Dynamex Operations W. v. Superior Court, 2015 Cal. LEXIS 10157 (Cal., Dec. 10, 2015)

Request granted Dynamex Operations W. v. Superior Court, 2015 Cal. LEXIS 10129 (Cal., Dec. 10, 2015)

Request granted Dynamex Operations West, Inc. v. Superior Court, 2015 Cal. LEXIS 10066 (Cal., Dec. 10, 2015)

Request granted Dynamex Operations W. v. Superior Court, 2015 Cal. LEXIS 10104 (Cal., Dec. 10, 2015)

Request granted Dynamex Operations W. v. Superior Court, 2015 Cal. LEXIS 10158 (Cal., Dec. 10, 2015)

Request granted Dynamex Operations West, Inc. v. Lee, 2015 Cal. LEXIS 11118 (Cal., Dec. 24, 2015)

Later proceeding at Dynamex Operations West, Inc. v. Superior Court, 2016 Cal. LEXIS 11194 (Cal., Dec. 21, 2016)

Request granted Dynamex Operations West, Inc. v. Superior Court, 2017 Cal. LEXIS 127 (Cal., Jan. 18, 2017)

Request granted Dynamex Operations West, Inc. v. Superior Court, 2017 Cal. LEXIS 804 (Cal., Feb. 2, 2017)

Request granted Dynamex Operations West, Inc. v. Superior Court, 2017 Cal. LEXIS 9873 (Cal., Dec. 28, 2017)

Motion granted by, Request granted, in part, Request denied by, in part Dynamex Operations West, Inc. v. Superior Court, 2018 Cal. LEXIS 60 (Cal., Jan. 10, 2018)

Request granted Dynamex Operations West, Inc. v. Superior Court, 2018 Cal. LEXIS 307 (Cal., Jan. 16, 2018)

Request denied by Dynamex Operations West, Inc. v. Superior Court, 2018 Cal. LEXIS 2541 (Cal., Apr. 2, 2018)

Affirmed by Dynamex Operations W. v. Superior Court, 4 Cal. 5th 903, 232 Cal. Rptr. 3d 1, 416 P.3d 1, 2018 Cal. LEXIS 3152 (Apr. 30, 2018)

Time for Granting or Denying Rehearing Extended Dynamex Operations West, Inc. v. Superior Court, 2018 Cal. LEXIS 3610 (Cal., May 16, 2018)

Rehearing denied by, Request denied by Dynamex Operations West, Inc. v. Superior Court, 2018 Cal. LEXIS 4677 (Cal., June 20, 2018)

Prior History:  [****1] Los Angeles County Superior Court No. BC332016—Hon. Michael L. Stern, Judge

Lee v. Dynamex, Inc., 166 Cal. App. 4th 1325, 83 Cal. Rptr. 3d 241, 2008 Cal. App. LEXIS 1436 (Cal. App. 2d Dist., Aug. 26, 2008)

Disposition: Original proceedings in mandate. Petition granted in part and denied in part, peremptory writ of mandate to issue, and parties to bear own costs of this proceeding.

CORE TERMS

wage order, employees, employment relationship, drivers, wages, independent contractor, class certification, trial court, decertify, common law test, common law, purposes, superior court, certification, parties, class member, predominate, falling, definition of employee, common law definition, working conditions, exercise control, common issue, plaintiffs', provisions, unpaid

Civil Procedure, Class Actions, Prerequisites for Class Action, General Overview, Special Proceedings, Appellate Review, Certification of Classes, Labor & Employment Law, Wage & Hour Laws, Scope & Definitions, Definition of Employees, Business & Corporate Compliance, Administrative Proceedings, Enforcement Provisions, Remedies, Private Suits, Definition of Employers, Independent Contractors, Governments, Courts, Judicial Precedent, Dicta, Commonality