Janitors were employees, not independent contractors | Manatt, Phelps & Phillips, LLP

Janitors were wrongly classified as independent contractors when they were in fact employees, a California federal court judge has ruled in a long-running dispute.

When a trio of janitors sued Jan-Pro International for minimum wage, overtime, expense reimbursement and other compensation, the company argued it was not in the janitorial business. , but rather in the field of sales and support of the main franchises.

The district court initially sided with Jan-Pro, granting summary judgment on the misclassification claim. The workers appealed.

On appeal, the California Supreme Court decided Dynamex Operations West, Inc. v. Superior Court, where the court adopted the ABC test to determine employee classification for claims governed by California wage orders. The state’s highest court then ruled that Dynamex has retroactive application.

In accordance with the ABC test, workers are presumed to be employees and can only be classified as independent contractors if the hiring entity demonstrates that the individual meets the following three conditions:

(A) The Worker is free from the control and direction of the Lessee in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(B) The worker performs work that is not part of the normal course of business of the hiring entity.

(VS) The worker is usually engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.

In reviewing the ABC test, the Ninth US Circuit Court of Appeals identified three relevant considerations, US District Court Judge William Alsup explained: whether the employee’s work is necessary or merely incidental to that of the tenant; if the lessee permanently performs work for the lessee; and in which company the tenant declares to be.

“Here, as a matter of common sense, unit franchisees remained at all times necessary to defendant’s business,” he wrote. “Defendant’s business depended on franchisees of units performing cleaning services. Without a steady supply of Unit Franchisees, Defendant’s business would have failed. And, Defendant earned four percent of all cleaning revenue Master Franchisees collected from Unit Franchisees. The defendant’s income therefore depended on the amount of work performed by the unit franchisees. »

In addition, the unit franchisees performed cleaning services continuously – not occasionally – and Jan-Pro was in the cleaning business, the court heard, presenting itself as a cleaning company in public advertisements and websites. .

“Defendant was clearly selling cleaning services,” Alsup wrote. “To find otherwise would be to ignore the entire basis of defendant’s business.”

Because Jan-Pro failed Part B of the ABC test, Alsup granted summary judgment in favor of plaintiffs on the misclassification claim.

To read the command Roman vs. Jan-Pro Franchising International, Inc.., Click here.

Why is this important: Originally filed in 2008 in Massachusetts, the lawsuit has gone down in history Dynamex decision, which resulted in a complete reversal of summary judgment in favor of Jan-Pro in summary judgment in favor of plaintiffs on the issue of misclassification. A class-wide damages trial will take place in 2023.

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