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California Supreme Court Limits Use of Independent Contractors

On April 30, 2018, the California Supreme Court issued its long-awaited opinion in Dynamex Operations West, Inc. v. Superior Court, clarifying the standard for determining whether workers in California should be classified as employees or as independent contractors for purposes of the wage orders adopted by California’s Industrial Welfare Commission (“IWC”).  The Court held that there is a presumption that individuals are employees.  The Court held further, that an entity classifying an individual as an independent contractor bears the burden of establishing that such a classification is proper.

After reviewing the major relevant cases, the Court acknowledged that a worker is an employee if he or she is “employed” by an “employer,” and “employ” is defined as: “ (a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work, or (c) to engage, thereby creating a common law employment relationship.” If any of these standards are met, the worker is an employee and not an independent contractor.  However, the Court indicated that the “suffer or permit to work” standard is a “term of art” that cannot be interpreted literally because it would obviously encompass workers who are traditional independent contractors (e.g. plumbers).  Thus, the Court interpreted the scope of “suffer or permit to work” by adopting the “ABC test.”

The ABC Test

Under the ABC test, a worker will be deemed to have been “suffered or permitted to work,” and thus, an employee for wage order purposes, unless the alleged employer proves:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

Note that each of these requirements need to be met in order for the presumption that a worker is an employee to be rebutted, and for a court to recognize that a worker has been properly classified as an independent contractor.  Following Dynamex, California businesses that treat some workers as independent contractors should probably review their relationship under the “ABC test” to determine whether any or all such workers should be reclassified.  In summary, the Court has imposed a burden on businesses to now defend their classification of workers as independent contractors.

– All Rights Reserved © 2018 by Michael L. Mau, Esq. and The Mau Law Firm

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Short Term Rental Legislation in San Francisco

February 2, 2015 Leave a comment

New legislation in the City and County of San Francisco is taking effect that allows qualified residents to legally rent their units through the Short-Term Residential Rental Registry via the San Francisco Planning Department.  San Francisco Ordinance No. 218-14 was signed to amend the Administrative and Planning Codes to allow permanent residents of residential properties to conduct short-term rentals.  This essentially attempts to legalize what has already been an ongoing practice via services like AirBnB.

Eligible property owners and tenants can now apply to place their permanent residence on the Short-Term Residential Rental Registry.  Residents may not legally rent their unit (in its entirety or a portion of) as a short-term residential rental until they have received a Short-Term Rental Registration number from the Planning Department.  With a valid Short-Term Residential Registration Number, residents may rent their permanent residential unit for periods of less than 30 nights under certain conditions without violating Chapter 41A of the Administrative Code (the Residential Unit Conversion and Demolition Ordinance) or the Planning Code.  This includes renting a portion of their unit while they are also present for an unlimited number of nights per year, or renting all or a portion of their unit while they are not present, for a maximum of 90 nights per year.  Tenants are prohibited from making more than their monthly rent from fees charged to their guests.  For more information, see the full Press Release from the Planning Department.

– All Rights Reserved © 2015 by Michael L. Mau, Esq. and The Mau Law Firm

9th Circuit Confirms that False Advertising is Distinct from Trademark Infringement

In Wells Fargo Company USA v. v. ABD Insurance & Financial Services, Inc. (No. 13–15625) the 9th Circuit Federal Court of Appeals found an abuse of discretion when a U.S. District Court denied a request for a preliminary injunction. Held, the District Court abused its discretion when it did not separately consider the false advertisement claim. The District Court’s review was under the basis that it found false advertisement to be “derivative of Wells Fargo’s trademark infringement claim.” However, The 9th Circuit found that the two claims are in fact distinct, and require the application of separate tests.

– All Rights Reserved © 2014 by Michael L. Mau, Esq. and The Mau Law Firm

Smoke Detector Compliance Law Change

January 30, 2014 Leave a comment

Commencing July 1, 2014 under SB-745, all smoke alarms including combination smoke alarms, that are solely battery powered shall contain a nonreplaceable, nonremovable battery that is capable of powering the smoke alarm for at least 10 years. This is a slight extension as this change was going to be effective on January 1, 2014. There are also EXCEPTIONS: This section shall not apply to any smoke alarm or combination smoke alarm that has been ordered by, or are in the inventory of, an owner, managing agent, contractor, wholesaler, or retailer on or before July 1, 2014, until July 1, 2015. The amended law is in Health and Safety Code Section 13114.

– All Rights Reserved © 2014 by Michael L. Mau, Esq. and The Mau Law Firm

San Francisco’s Plastic Bag Ban Upheld on Appeal

December 13, 2013 Leave a comment

A unanimous California Court of Appeal upheld San Francisco’s expanded plastic bag ban, marking the latest in a string of victories for local laws phasing out single-use plastic bags. The case is Save the Plastic Bag Coalition v. City and County of San Francisco, No. A137056, decided in an unpublished opinion by the First Appellate District, Division Two. The lawsuit had disputed the procedures San Francisco used to expand its plastic bag ban in 2012 and the legality of banning plastic bags in restaurants. This is the first appellate court to consider the restaurant issue, and was being followed closely by local merchant groups. The ruling sets the stage for more cities to adopt and strengthen local laws phasing out plastic bags, and the decision is the latest in a series of failed legal challenges to plastic bag ordinances. In this action, the Court of Appeals found against the Coalition on their two primary points of appeal, (1) that it had not sufficiently countered the City’s claim of a categorical exemption from CEQA, and (2) it found that the local ordinance was not preempted by the state Retail Food Code.

– All Rights Reserved © 2013 by Michael L. Mau, Esq. and The Mau Law Firm

San Miguel v. State Farm finds No Duty to Defend Non-monetary Claims

October 22, 2013 Leave a comment

In the recently published case of San Miguel Community Assn. v. State Farm General Ins. Co. (October 1, 2013) (Cal.App.4th, No. G047738. Fourth Dist., Div. Three.), a Court of Appeals ruled that when an insurance company issues a liability policy, agreeing to indemnify its insured against a third party claim for damages covered under the policy, and to defend the insured against any such claim, the insurer does not have a duty to defend the insured against a third party lawsuit seeking only injunctive relief but no compensatory damages.  The insurer’s defense obligation requires it to provide the insured with a defense against a claim seeking damages potentially payable under the policy, not to defend the insured’s honor or otherwise assist it in resolving a non-monetary dispute which a claim for pure injunctive relief was.  It is important when tendering claims to your insurance carrier, to check that the claim has potential coverage and to engage experienced business and insurance law counsel to assist.

– All Rights Reserved © 2013 by Michael L. Mau, Esq. and The Mau Law Firm

MacDonald v. State affirms employees must exhaust Administrative Remedies before Suing

August 28, 2013 Leave a comment

In MacDonald v. State of California [No. C069646. Third Dist. Aug. 27, 2013] as just published, a Judgment for defendant-employer on plaintiff’s claim for retaliatory discharge was affirmed. The appeals court held an employee must exhaust the administrative remedy set forth in Labor Code section 98.7 before filing suit in superior court for retaliatory discharge in violation of sections 1102.5 and 6310. Labor Code Section 1102.5 is a whistle-blower statute, the purpose of which is to encourage workplace whistle-blowers to report unlawful acts without fearing retaliation. Though this whistle-blower statute does not itself have an administrative remedy, Labor Code Section 98.7 does reference one and the appeals court held that must be exhausted first, and prior to, filing a lawsuit for retaliatory termination.

– All Rights Reserved © 2013 by Michael L. Mau, Esq. and The Mau Law Firm