9th Circuit Says CA Law Trumps Labor Contracts

The 9th U.S. Circuit Court of Appeals has ruled that while workplace contracts may be subject to out-of-state law, actual workplace terms and conditions affecting workers in California are governed by state statutes.

The plaintiffs’ “claims arose under the Labor Code, a California regulatory scheme, and consequently, California law should apply to define the boundaries of liability under that scheme,” District Judge Edward Korman wrote for the unanimous three-judge panel, according to The Recorder. The panel also held that under California law, a jury trial would be necessary to determine whether the plaintiffs were properly designated as independent contractors.  

Three California freight-truck drivers employed by EGL, Inc. alleged they were improperly classified as independent contractors and denied employee benefits, including overtime, business-related expenses, and meal compensation. EGL required the workers to sign contracts acknowledging their status as independent contractors subject to the labor laws of Texas.  

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The news report said plaintiffs’ lawyers claim multistate companies have increasingly tried to designate workers as independent contractors to avoid California’s perceived worker-friendly regulations on overtime and meal-and-rest periods.  

The court’s opinion is here.

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