FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT GERARDO VAZQUEZ, GLORIA No. 17-16096 ROMAN, and JUAN AGUILAR, on behalf of themselves and all other D.C. No. similarly situated, 3:16-cv-05961- Plaintiffs-Appellants, WHA v. OPINION JAN-PRO FRANCHISING INTERNATIONAL, INC., Defendant-Appellee. Appeal from the United States District Court for the Northern District of California William Alsup, District Judge, Presiding Argued and Submitted December 18, 2018 San Francisco, California Filed May 2, 2019 Before: Ronald M. Gould and Marsha S. Berzon, Circuit Judges, and Frederic Block, District Judge.* Opinion by Judge Block * The Honorable Frederic Block, United States District Judge for the Eastern District of New York, sitting by designation. 2 VAZQUEZ V. JAN-PRO FRANCHISING INT’L SUMMARY ** California State Law / Employment Law The panel vacated the district court’s dismissal on summary judgment of a complaint brought by a putative class against a defendant international business that had developed a sophisticated “three-tier” franchising model, seeking a determination whether workers were independent contractors or employees under California wage order laws; and remanded for further proceedings. In a decision post-dating the district court’s decision, the California Supreme Court in Dynamex Ops. W. Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018), adopted the “ABC test” for determining whether workers are employees under California wage order laws. The test requires the hiring entity to establish three elements to disprove employment status: (A) that the worker is free from the control of the hiring entity in connection with work performance – both under the performance contract and in fact; (B) that the worker performs work outside the hiring entity’s usual business; and (C) that the worker is customarily engaged in an independent business of the same nature as the work performed. The panel held that Dynamex applied retroactively, that none of the defendant-hiring entity’s other efforts to avoid reaching the merits were viable, and that the case must be ** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. VAZQUEZ V. JAN-PRO FRANCHISING INT’L 3 remanded to the district court to consider the merits in light of Dynamex. The panel held that under Massachusetts law, prior related decisions rendered by federal courts located in Massachusetts did not have preclusive effect on this case under the doctrines of either res judicata or law of the case. The panel held that Dynamex should be applied retroactively. Specifically, the panel held that California law calls for the retroactive application of Dynamex. The panel also held that applying Dynamex retroactively was consistent with due process. The panel held that Dynamex expanded the definition of “suffer or permit” for California wage order cases. The panel offered guidance for the district court on remand. The panel held that the district court should consider all three prongs of the ABC test. The panel also held that the district court need not look to Patterson v. Domino’s Pizza, LLC, 333 P.3d 723 (Cal. 2014) (involving a ...
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