02 Nov 2018

California: Does Dynamex Apply to Workers’ Compensation Proceedings?

Since the California Supreme Court recently decided the Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal. 5th 903, 83 Cal. Comp. Cases 817 case, there has been a great deal of discussion as to what is, for purposes of California law, the correct standard to be applied in determining whether a worker is an employee or independent contractor. The controversy centers on the fact that the California Supreme Court in Dynamex, a California wage order case, set forth a fairly straight-forward “ABC” standard to be applied to these disputes. The question is whether the more straight-forward standard applies, including to workers’ compensation cases, or whether the much more complex multi-factorial analysis set for the California Supreme Court’s workers’ compensation case of S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 54 Cal. Comp. Cases 80, continues to control in workers’ compensation proceedings.

In Perkins v. Don L. Knox, 2018 Cal. Wrk. Comp. P.D. LEXIS – (cite pending), a panel of commissioners with the Workers’ Compensation Appeals Board (WCAB) gave a strong indication as to how the WCAB may view the dispute. Indeed, in Perkins, a panel case signed by the Chairwoman of the WCAB, the commissioners concluded that the Dynamex Court specifically noted “ABC” standard was only to be applied in one specific context, California wage order disputes. As it relates to the applicable standard in other legal proceedings, the panel observed that the Dynamex Court did not overturn Borello and found that the Borello standard continues to apply to workers’ compensation disputes.

While it can be argued that Perkins represents only one panel case and only carries a very limited precedential value, not only is this panel decision signed by the Chairwoman of the WCAB, but the decision itself appears to be very well reasoned. Thus, in a workers’ compensation case where there is a dispute over employment as to the employee/independent contractor status of the injured worker, you should be prepared to present and defend the case utilizing both the Dynamex ABC test as well as the specific Borello factors. Counsel should be prepared to present both approaches until a higher court determines whether or not the ABC test applies to workers’ compensation cases. This is why the WCAB panel in Perkins remanded the case back to the administrative law judge to hold a further hearing to obtain evidence using the Borello factors.

The PDF for Perkins is located at the end of this article.

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