News & Commentary

March 29, 2021

Mackenzie Bouverat

Mackenzie Bouverat is a student at Harvard Law School.

Business groups have initiated a legal challenge to to delay a Trump-era rule that would clear the way for businesses to classify more workers as independent contractors. In a complaint filed Friday in the Beaumont Division of the U.S. District Court for the Eastern District of Texas, the Coalition for Workforce Innovation alleged the Biden Labor Department’s decision to delay implementation of the rule violates the Administrative Procedure Act because the U.S. Labor Department failed to provide a substantive justification or a meaningful comment period for its decision to delay the rule; the business coalition seeks a declaration that the Trump-era rule went into effect March 8.

In the wake of a California Supreme Court January ruling in Vazquez v. Jan-Pro Franchising Int’l , applying the “ABC test” for the determination of whether a worker is an independent contractor applies retroactively, the California Court of Appeal, Second District has revived the misclassification complaints issued by transport truck drivers for East Coast Transport Inc. The drivers sued the company in 2017, alleging that their misclassification as independent contractors had deprived them of the statutory protections to which they are entitled as employees. The Los Angeles County Superior Court found the drivers were independent contractors under the multi-factor standard set forth in 1989’s S.G. Borello & Sons Inc. v. Department of Industrial RelationsPer the Superior Court, East Coast met its burden of showing the company did not supervise the drivers and exerted limited control over them. Per the Vazquez holding, however, the trial court will now apply the ABC test to the drivers’ claims.

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