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. ORDER AND JAN-PRO FRANCHISING AMENDED INTERNATIONAL, INC., OPINION 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District of California William Alsup, District Judge, Presiding Argued and Submitted December 18, 2018 Submission Withdrawn September 24, 2019 Resubmitted January 25, 2021 San Francisco, California Filed May 2, 2019 Amended February 2, 2021 2 VAZQUEZ V. JAN-PRO FRANCHISING INT’L Before: Ronald M. Gould and Marsha S. Berzon, Circuit Judges, and Frederic Block, District Judge.* Order; Opinion by Judge Block SUMMARY ** California State Law / Employment Law Having received the California Supreme Court’s answer to a certified question, the panel amended and reissued its opinion, and vacated the district court’s summary judgment in favor of Jan-Pro Franchising International, Inc. (“Jan- Pro”) in a putative class action involving back wages and overtime claims. Jan-Pro, an international janitorial cleaning business, developed a “three-tier” franchising model to avoid paying its janitors minimum wages and overtime compensation by misclassifying them as independent contractors. The panel held that the test in Dynamex Ops. W. Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018) (adopting the so- called “ABC test” for determining whether workers are independent contractors or employees under California * The Honorable Frederic Block, United States District Judge for the Eastern District of New York, sitting by designation. ** 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 wage order laws), which post-dated the district court’s decision, applied retroactively to this case. In 2008, a putative class action was filed in the District of Massachusetts against Jan-Pro; and in 2017, the First Circuit affirmed the district court’s dismissal of the complaint, but not on the merits. Depianti v. Jan-Pro Franchising Int’l, Inc., 873 F.3d 21 (1st Cir. 2017). The panel rejected Jan-Pro’s argument that the Depianti final judgment was entitled to preclusive effect in this litigation under either the principle of res judicata or the doctrine of law of the case. The panel held that plaintiffs were not in privity with Depianti for res judicata purposes under Massachusetts law; and that Jan-Pro’s law of the case argument was a repackaging of the res judicata argument. The panel also rejected Jan-Pro’s argument that Dynamex should not be applied retroactively. The panel held that California law called for the retroactive application of Dynamex. The panel further held that applying Dynamex retroactively was consistent with due process. Because the district court had no opportunity to consider whether plaintiffs were employees of Jan-Pro under the Dynamex standard, and neither party had the opportunity to supplement the record with regard to the Dynamex criteria, the panel left it to the district court to consider the question in the first instance. The panel offered ...
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