The Critical Case Recap: Week of October 13, 2014

The Critical Case Recap: Week of October 13, 2014

Dynamex v. Superior Court (California Court of Appeal, Second Appellate Division):

What It’s About:  Employer Dynamex appealed the trial court’s denial of its motion to decertify, arguing that the court improperly adopted the definition of “employee” from IWC Wage Orders to determine the status of class members, instead of using the common law definition of employee.  The Court of Appeal denied the petition in part, holding that “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 Wage Order No. 9-2001” and that the common law definition of employee would control for all claims outside the scope of Wage Order No. 9.

Why It’s Important:  The Supreme Court’s recent Ayala decision left open the potential application of the IWC’s definition of employee status to wage and hour claims, including independent contractor issues.  The Dynamex decision will not be the last court attempting to answer that open question.

Langston v. 20/20 Communications, Inc. (Central District of California):

What It’s About:  The district court granted the defendant’s motion to compel arbitration of all of the plaintiffs’ claims, including their representative PAGA claims, holding that the California Supreme Court’s Iskanian ruling treats arbitration agreements unfavorably in violation of the FAA.  Because the court based its decision on its interpretation of the FAA, a federal statute, it determined that it was not bound by the Iskanian decision.

Why It’s Important:  Although Iskanian seemed like the final word on the arbitrability (or lack thereof) of representative PAGA claims, this is the third California federal court decision that has since begged to differ, suggesting that plaintiffs who do not wish to end up in arbitration may be well advised to remain in state court, if possible.