This Week At The Ninth: Abatement And Discharge

• Published date: 28 September 2021
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Morrison & Foerster LLP
• Author: Mr James R. Sigel and Lena H. Hughes

This week, the Court considered the retroactivity of California's Proposition 22'which designates 'app-based drivers' as independent contractors under certain conditions'and addressed the requirements for Clean Water Act citizen suits.

LAWSON v. GRUBHUB, INC.

The Court holds that California's Proposition 22 does not apply retroactively or abate preexisting wage-and-hour claims.

The panel: Judges W. Fletcher, Watford, and Collins, with Judge Fletcher writing the opinion.

Key highlight: 'Grubhub argues that the phrase in Proposition 22 that reads '[n]otwithstanding any other provision of law, including . . . the Labor Code' abolished the ABC test. Cal. Bus. & Prof. Code ' 7451. But Proposition 22 did not wholly abolish causes of action under the ABC test. Rather, it crafted a conditional and prospective exemption from the test for some workers. Proposition 22 neither changed the underlying Labor Code provisions governing these claims nor 'changed the portion of AB-5 that set forth the ABC test itself.''

Background: Plaintiff Raef Lawson had worked as a food delivery driver for Grubhub. Lawson brought suit for violations of the California Labor Code, claiming he had been improperly classified as an independent contractor rather than an employee. The district court granted Grubhub's preemptive motion to deny class certification, then, at a bench trial, concluded that Lawson had been properly classified as an independent contractor. In reaching that conclusion, the district court applied the then-applicable test set forth by S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 769 P.2d 399 (Cal. 1989). After the district court's decision, the California Supreme Court adopted the 'ABC' test for determining whether an individual is an independent contractor or an employee (Dynamex Operations W., Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018)) and subsequently made it retroactive, the California Legislature codified that test in part, and California voters passed Proposition 22 making 'app-based drivers' independent contractors if certain conditions are met.

Result: The Ninth Circuit affirmed in part and vacated in part. First, the Court of Appeals concluded that the district court had not abused its discretion in denying class certification. As the Court explained, nearly all the members of Lawson's putative class of delivery drivers had signed agreements waiving their rights to participate in any class action-the sole exceptions being Lawson and one...