Businesses are constantly challenged by the ever-evolving landscape of labor and employment law, with new legislation and judicial developments occurring almost daily fueling a seemingly never-ending stream of litigation. For companies operating in multiple states, complying with this patchwork of federal, state, and local laws and developments can be daunting. Knowing these issues are a top concern for management and in-house counsel, Morrison Foerster keeps pace with this rapidly evolving landscape. MoFo ELC equips our clients with the most up-to-date and relevant information on employment and labor law issues covering key judicial, litigation and legislative developments, their implications for employers, and strategies to ensure compliance and avoid lawsuits.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Andrew co-chairs the firm’s Global Employment and Labor Group. He represents companies on a broad range of labor and employment litigation and counseling matters, successfully defending clients in number complex matters before federal and state courts and administrative agencies. A primary focus of his practice involves helping companies navigate the unique employment issues that arise when doing business with the federal government, such as:<ul><li>OFCCP compliance</li><li>Creating and implementing affirmative action plans</li><li>Defending OFCCP audits and onsite investigations</li><li>Conducting mock pay equity audits</li><li>Drafting and developing business ethics policies and programs</li><li>Complying with the Service Contract Act, E-Verify, and the Drug Free Workplace Act</li></ul>He is also well-versed in defending clients against claims alleging trade secret misappropriation, breach of post-employment restrictions, wage-and-hour violations, discrimination, and retaliation.Andrew routinely develops practical, proactive strategies to help employers minimize risk on various human resource matters. Andrew regularly advises clients on:<ul><li>EEO and diversity</li><li>Wage-and-hour</li><li>High-stakes employee terminations</li><li>Executive disputes</li><li>Reductions in force</li><li>Leaves of absence</li><li>Accommodations</li><li>Pay equity</li><li>Employee selection processes</li><li>Employment testing</li><li>Contingent workers </li><li>Policy development and application</li></ul>In addition, Andrew advises on a wide range of employment transactional matters, such as drafting and negotiating executive employment agreements and separations, overseeing internal investigations and audits of employment issues, and conducting employment diligence on mergers, acquisitions, and other corporate transactions.He has significant experience advising technology and other companies on protecting against the loss of trade secrets, proprietary information, and current and prospective clients. Andrew also represents employers in matters involving union avoidance, negotiating and drafting collective bargaining agreements, handling union grievances, and avoiding and defending unfair labor practice charges.<h4>Federal Contractor Experience</h4><ul><li>Defended numerous OFCCP audits, including closing audits with a finding of no violations against a major accounting firm, a language learning software provider, and a technology consulting company</li><li>Obtained complete dismissal of a significant OFCCP complaint against a large aerospace and space transport company</li><li>Performed mock SCA audits for various contractors</li><li>Led labor and employment diligence for $1 billion acquisition of international security firm</li><li>Developed and overhauled numerous affirmative action plans and EEO training programs</li><li>Analyzed subcontractor status for numerous companies to determine OFCCP coverage, including for a large semiconductor manufacturer</li><li>Conducted E-Verify and I-9 audit for a national dispute consulting contractor</li><li>Performed “single entity” analysis for one of the largest mutual life insurance companies</li><li>Conducted pay equity audits for contractors, including for a software and consulting company</li><li>Obtained DOL approval under the SCA for self-funded fringe benefit program of an aviation and space contractor</li><li>Advised a multinational package delivery company on establishing program to conduct denied party screening under lists maintained by OFAC and BIS while minimizing risk of discrimination claims and compliance with background check laws</li><li>Advised a global coffee and coffeehouse chain on establishing hiring processes to avoid discrimination claims while complying with ITAR/EAR</li><li>Developed business ethics policies and programs for a large pharmaceutical manufacturer</li></ul><h4>Other Representative Experience</h4><ul><li>Defended education association against claims by former employers of two executives alleging breach of restrictive covenants and theft of trade secrets and confidential information</li><li>Obtained preliminary injunction enforcing a noncompetition agreement and other restrictive covenants against a former senior sales executive of a technology firm</li><li>Led internal investigation of sexual harassment claims against COO of a public real estate firm</li><li>Advised a global food manufacturer in avoiding litigation while terminating employee threatening whistleblower claims based on employer’s confidential information</li><li>Defended former senior executives of a global manufacturer of performance fabrics against allegations of misappropriation of trade secrets and breach of noncompetition agreements</li><li>Advised an entrepreneur in creating startup while minimizing risk of his former employer pursuing enforcement of restrictive covenants </li><li>Assisted a property management firm in navigating internal investigation of whistleblower claims related to alleged fraud, ethics violations, and sexual harassment by senior executive</li><li>Won motion for reconsideration convincing court to grant summary judgment in gender discrimination and retaliation case against a large DC employer </li><li>Obtained terminating sanctions and attorneys’ fees and costs for discovery violations in a discrimination suit against a large utility provider </li><li>Obtained favorable arbitration decision for a software company in claims by former executive alleging breach of his employment agreement</li><li>Advised a company board in navigating termination of CEO and successfully defended CEO’s breach of contract and wage claims</li><li>Defended numerous EEOC charges, including against a national event planner, a multinational professional services company, and an operator of research and development centers for the government</li><li>Defended and settled over 30 unfair labor practice charges against a national call center operator</li><li>Negotiated new collective bargaining agreements with four separate unions in bankruptcy of an international maritime shipping company</li><li>Awarded pro bono achievement award for defending a non profit in litigation and several administrative audits before the EEOC and state agencies related to a former employee’s whistleblower and discrimination claims, including defending multiple onsite investigations</li><li>Oversaw validation of pre-employment tests for a national food service distributor</li></ul>Prior to joining MoFo, Andrew was a human resources manager for an Inc. 500 company, ranked as one of the fastest-growing private companies in the United States.Andrew is a member of the steering committee and actively involved in the Washington Metro Industry Liaison Group. He is also a member of the firm’s global Environmental, Social, and Governance (ESG) steering committee.<h4>Rankings</h4><ul><li>Recommended for Government Contracts – Legal 500 US 2019 </li></ul>

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Co-Chair, Global Employment and Labor Practice

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Andrew Turnbull represents companies on a broad range of labor and employment litigation and counseling matters. He has successfully defended clients in complex employment litigation before federal and state courts and administrative agencies. A primary focus of his practice involves helping companies navigate the unique employment issues that arise when doing business with the federal government, including advising on all aspects of OFCCP compliance, creating and implementing affirmative action plans, defending OFCCP audits and onsite investigations, conducting mock pay equity audits, drafting and developing business ethics policies and programs, and complying with the Service Contract Act, E-Verify, and the Drug Free Workplace Act.

Andrew Turnbull

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MoFo ELC equips our clients with the most up-to-date and relevant information on employment and labor law issues, covering key judicial, litigation, and legislative developments, their implications for employers, and strategies to ensure compliance and avoid lawsuits. To learn more about our capabilities, please visit the <a href="https://www.mofo.com/capabilities/employment-labor" target="_blank">Employment + Labor</a> practice page and read about our <a href="https://www.mofo.com/people?practices=Employment%20%2B%20Labor" target="_blank">Team</a>.

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On April 30, 2018, the California Supreme Court issued its highly anticipated opinion in Dynamex Operations West, Inc. v. Superior Court, clarifying the standar

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Dynamex v. Superior Court: California Supreme Court Clarifies Standard for Independent Contractor Classification Under California Wage Orders

Dynamex v. Superior Court: California Supreme Court Clarifies Standard for Independent Contractor Classification Under California Wage Orders | Employment Law Commentary

Dynamex v. Superior Court: California Supreme Court Clarifies Standard for Independent Contractor Classification Under California Wage Orders | MoFo ELC | Latest Employment Law Developments and Commentary

On April 30, 2018, the California Supreme Court issued its highly anticipated opinion in Dynamex Operations West, Inc. v. Superior Court, clarifying the standard that applies to determine whether a worker is properly classified as an independent contractor for purposes of the Industrial Welfare Commission (IWC) wage orders. Dynamex rejects application of the multi-factor test set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, and instead adopts a three-part “ABC test” for evaluating whether a worker is an independent contractor or an employee covered by the wage orders. Unless the hiring company establishes all three requirements of the ABC test, the worker is an employee.The first requirement of Dynamex’s ABC test (that the worker must be free from the hiring company’s control and direction in connection with the performance of the work, both under the contract and in fact) aligns with the common law “right to control” standard and is not a novel concept. However, the second requirement (that the worker must perform work that is outside the company’s business) and the third requirement (that the worker must be customarily engaged in an independently established trade, occupation, or business of the same nature as the work being performed for the company) will make it more difficult for businesses to classify workers as independent contractors in California.BackgroundDynamex provides on-demand pick-up and delivery services to individual and business customers.  Before 2004, Dynamex classified its California drivers as employees. In 2004, Dynamex converted its drivers to independent contractors after determining the conversion would be economically advantageous.The plaintiffs were former drivers who had independent contractor agreements with Dynamex to provide delivery services.  In their putative wage and hour class action lawsuit, the plaintiffs alleged Dynamex misclassified its California drivers as independent contractors and violated various provisions of the Labor Code and wage orders as a result.Dynamex obtains its own customers and sets the rates to be charged to customers for deliveries. Generally, Dynamex drivers are expected to wear Dynamex shirts and badges when making deliveries, and they are sometimes required to attach a customer’s decals to their vehicle if making a delivery on behalf of a Dynamex customer. Dynamex drivers are generally free to set their own schedules, but they need to notify Dynamex of the days they intend to work. Drivers are assigned deliveries at Dynamex’s sole discretion.  Drivers must complete all deliveries on the date assigned. Typically, drivers are hired for an indefinite period of time, with Dynamex reserving the right to terminate the agreement without cause, on three days’ notice.Dynamex drivers are permitted to hire other individuals to make deliveries Dynamex assigns. Drivers are also free to make deliveries for other delivery companies or on their own behalf, when not making deliveries for Dynamex. Drivers use their own vehicles to make deliveries. Drivers are generally free to determine the routes they take and the sequence in which they make deliveries, unless a customer requires otherwise. Dynamex negotiates driver compensation on an individual basis, and the amounts and manner in which drivers are paid varies from driver to driver.The trial court certified a modified class of Dynamex drivers who were classified as independent contractors, who used their personally owned or leased vehicles that weigh less than 26,000 pounds (Basic Class C License), and who had timely returned a questionnaire sent by the parties. The class specifically excluded (1) drivers for any pay period in which the driver provided services to Dynamex as either an employee or subcontractor of another person or entity or through the driver’s own employees or subcontractors, and (2) drivers who provided services concurrently for Dynamex and for another delivery company that did not have a relationship with Dynamex or for the driver’s own personal delivery customers.In granting the plaintiffs’ motion for class certification, the trial court noted that the parties disagreed regarding the proper legal standard for determining whether a worker is an employee or an independent contractor for purposes of the wage orders. Dynamex argued for the application of the Borello factors. The plaintiffs argued the trial court should apply the broad definition of “employ” articulated in Martinez v. Combs, a case assessing whether an entity that had a relationship with a primary employer was a joint employer under the wage orders. The trial court agreed with the plaintiffs.Dynamex petitioned to the Court of Appeal for a writ of mandate. The Court of Appeal denied the writ petition in part, concluding that the trial court had properly relied upon the Martinez standard with respect to plaintiffs’ claims that fell within the scope of the applicable wage order. The Court of Appeal also granted the writ petition in part, finding that the Borello standard properly applied to claims falling outside the scope of the wage order. Dynamex petitioned to the California Supreme Court for review.The California Supreme Court’s DecisionThe California Supreme Court granted review to consider whether, in a wage and hour class action involving claims that the plaintiffs were misclassified as independent contractors, a class can be certified based on the IWC definition of “employ” as construed in Martinez, or whether the common law Borello test controls.The 82-page unanimous opinion authored by Chief Justice Tani Cantil-Sakauye meticulously reviews the relevant IWC wage order provisions (which define “employ” as meaning “to engage, suffer, or permit to work”) and decades of history of the key California cases evaluating independent contractor classification, including pre-Borello cases, Borello, Martinez, and Ayala v. Antelope Valley Newspapers, Inc.Dynamex interprets Borello as “call[ing] for application of a statutory purpose standard” rather than embodying the common law test or standard for distinguishing employees and independent contractors in California. The Supreme Court concluded that the statutory purpose of the wage orders was best served by adopting the ABC test, which it considered to be a “simpler, more structured test” for determining whether the “suffer or permit to work” standard has been met. The Court viewed the ABC test as offering the advantages of avoiding uncertainty and unpredictability with respect to the classification of workers, and preventing abuse by entities seeking to evade responsibilities under the wage and hour laws.The ABC test has been applied in other jurisdictions, primarily (though not exclusively) in the unemployment insurance context. Under the ABC test, the worker is presumed to be an employee, and the hiring entity bears the burden to establish that (A) the worker is free from the control and direction of the hirer in connection with the performance of the work, (B) the worker performs work that is outside the usual course of the hiring entity’s business, and (C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity. Only where the hiring entity establishes all three of these factors will the worker be an independent contractor, rather than an employee, for purposes of the wage orders.The Supreme Court emphasized that its interpretation of the “suffer and permit to work” standard does not expand the reach of the wage orders to “the type of traditional independent contractor who has never been viewed as an employee of a hiring business and should not be interpreted to do so.” The Court agreed with Dynamex that the trial court’s literal interpretation of the “suffer and permit to work” language of the wage orders was too broad and “could potentially encompass the type of traditional independent contractor — like an independent plumber or electrician — who could not reasonably have been viewed as the hiring business’s employee.”Notwithstanding, the Supreme Court concluded that under the B and C parts of the ABC test, the trial court did not abuse its discretion in determining that there was a well-defined community of interest sufficient to certify a class. Under part B of the test, the Court found common issues of fact and law predominated, because the question of whether the work performed by the delivery drivers was within the scope of Dynamex’s business is “clearly amenable to determination on a class basis” and “Dynamex’s entire business is that of a delivery service.” Under part C, the Court determined that the question of whether the drivers in the certified class were “customarily engaged in an independently established trade, occupation, or business” was an issue that could be resolved on a class basis.  Dynamex had reclassified its drivers from being employees to independent contractors in 2004, and the certified class excluded drivers who performed delivery services for another delivery service or for their own personal customers, and who had employees of their own. The Court suggested that in many cases, factors B and C are easier to determine and should be considered first.Implications for Businesses in CaliforniaThe Dynamex ruling has significant implications for all entities that engage independent contractors in California.Businesses should carefully examine each of their independent contractor relationships and review the language of each of their independent contractor agreements to determine whether the relationships meet the ABC test articulated in Dynamex.  Part A (whether the worker is free from the control and direction of the hiring entity, both under the contract and in fact) aligns with the common law “right to control” standard. Thus, many businesses will want to pay particular attention to parts B (whether the work performed is outside the hiring entity’s business) and C (whether the worker is customarily engaged in an independently established trade, occupation, or business), which had previously been relevant considerations in assessing independent contractor status under Borello, but are now strict requirements under Dynamex.In a footnote, Dynamex states there is “no question” that the “suffer and permit to work” standard is intended to cover joint employer relationships, where an entity has a relationship with a worker’s primary employer, such as larger businesses that contract out some of their operations but retain substantial control over the work. However, Dynamex also makes clear that this does not mean that the larger business is prohibited from entering into subcontractor relationships or from obtaining benefits that may result from outsourcing certain services to a separate entity. So long as it is authorized by contract, the larger business can seek reimbursement for any such liability from the subcontractor. Accordingly, in reviewing their independent contractor agreements, businesses should look closely at indemnification provisions, to ensure they are appropriately protective.While the Dynamex opinion may trigger a rise in wage and hour class actions alleging independent contractor misclassification, it is important to note that the decision is limited in subtle, but important, ways:<ul><li>The ABC test adopted in Dynamex applies only with respect to the IWC wage orders.  The Supreme Court specifically declined to extend its reach to other contexts, including other provisions of the Labor Code that are not dependent on the wage orders, such as Labor Code section 2802.</li></ul><ul><li>Dynamex argued that both the “exercise control over wages, hours or working conditions” and “suffer and permit to work” standards articulated in Martinez are applicable only in determining whether an entity is a joint employer.  Because it found that the “suffer and permit to work” standard applies to determine worker classification and supported the trial court’s certification order, the Supreme Court specifically declined to consider whether the exercise of control over wages, hours, or working conditions applies outside of the joint employer context.</li></ul><ul><li>The certified class in Dynamex contained several key exclusions that significantly narrowed the size and scope of the class and addressed issues that might otherwise have prevented certification.  Even under the ABC test, a plaintiff seeking to certify an overly broad putative class of allegedly misclassified independent contractors might still not be able to establish the community of interest required for class certification, if individualized issues predominate each of the three parts of the test.</li></ul>Entities that engage independent contractors should consult with legal counsel to determine how the standard articulated in Dynamex will impact their business, and how best to implement any steps they may take in response.

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