On 30 April 2018, the California Supreme Court issued the seminal decision in
Dynamex Operations West, Inc. v. Superior Court, adopting the “A-B-C Test” for determining independent contractor status in the state. The A-B-C Test, which superseded the prior, less stringent common law
Borello test,
1 was later codified by the state legislature in California Assembly Bill 5 (AB-5). Under AB-5, a worker is presumed to be an employee and not an independent contractor unless the entity can establish the following three elements:
(A) The person 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) The person performs work that is outside the usual course of the hiring entity’s business; (C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
9th Circuit Lifts Stay on Labor Law Classifying Truck Drivers as Employees
A federal appellate court on April 28 reversed a ruling that prevented California from enforcing a new labor law that trucking companies contend will force them to discontinue the use of independent owner-operators and classify all drivers as employees.
In a 2-1 decision, a panel of the 9th Circuit Court of Appeals found that a federal judge in San Diego abused his discretion by issuing an injunction that prevented the state labor commissioner from enforcing Assembly Bill 5, passed in 2019.
The legislation codified a Supreme Court ruling that created a strict test for determining whether a worker is an employee or independent contractor and created a presumption that truck drivers are employees unless terms of that test are met.
Shawn Yadon, CEO of the California Trucking Association (CTA), issued the following statement in response to the decision by The U.S. Ninth Circuit Court of Appeals panel to reverse the preliminary injunction granted in January 2020 from the U.S. District Court. That preliminary injunction had blocked the State of California from enforcing Assembly Bill 5 (AB 5) upon motor carriers and independent owner-operators conducting business in the state. The new test was set forth in the Dynamex Operations West, Inc. v. Superior Court (Dynamex) ruling, which was subsequently codified by the California Legislature in the form of AB 5 in 2020:
“We continue to stand by our initial claim that the implementation of AB 5’s classification test is preempted by federal law and is clearly detrimental to the long-standing and historical place California’s 70,000 owner-operators have had in the transportation industry.
atlases.
17 U.S.C. § 101. To be sure, very few of the works for which independent contractors are hired fall into one of these enumerated categories. Where rights are purportedly transferred using a WMFH Clause, ownership of a work that does not qualify as a WMFH would thus remain with the independent contractor. In such situations, the second mechanism – assignment – is required to shift ownership to the employer.
Assignments
Copyright is freely transferable so long as the transfer is in writing and signed by the owner of the rights conveyed. 17 U.S.C. §§ 201, 204. Although the employer would not be deemed the “author” under such a transfer, it would gain all of the rights under copyright law. There is, however, one twist that differentiates an assignment from the ownership resulting from a WMFH: the author (or the author’s heirs) may terminate any assignment at any time during the five-year period beginning at the end of the thirty-fifth year after the t