Delivery drivers who went from being classified as employees to independent contractors can rely on the California Industrial Welfare Commission's definition of “employee” for claims that fall within the scope of its wage orders, California's 2nd District Court of Appeal ruled.

For all other claims, the court ruled on Wednesday that the common-law definition of “employee” must be applied.

When Charles Lee and Pedro Chevez began working for Dallas, Texas-based Dynamex Operations West Inc. as same-day delivery drivers in California, they were considered employees and compensated according with California's wage and hour laws, court records show.

However, in 2004, Dynamex began considering its drivers independent contractors instead of employees, according to records.

Mr. Lee filed a lawsuit in April 2005 on behalf of himself and about 1,800 drivers, alleging that the drivers “continued to perform the same tasks as they had when classified as employees” and that “the reclassification of Dynamex drivers violated California law,” records show.

The motion for class certification was denied by a Los Angeles Superior Court judge in November 2006, but the 2nd District Court of Appeals later reversed the ruling, according to records.

Mr. Lee filed a second motion for class certification in June 2009, which was granted, records show.

Dynamex unsuccessfully moved to decertify the class twice within the new couple of years, records show.

The company then petitioned the appeals court for a writ of mandate, arguing that the Los Angeles Superior Court judge “had improperly adopted the definition of 'employee' found in Industrial Welfare Commission wage orders to ascertain the status of class members … and had failed to use the common law test for distinguishing between employees and independent contractors.”

According to the Industrial Welfare Commission's Wage Order No. 9 for the transportation industry, an “employee” is any person employed by an employer.

A three-judge 2nd District Court of Appeal panel on Wednesday ruled that Mr. Lee should rely on the Industrial Welfare Commission's definition of “employee” for claims that fall within the scope of the Industrial Welfare Commission's wage orders. Such claims include unfair business practices, unlawful business practices, failure to pay overtime compensation, failure to provide accurate wage statements, and failure to fully compensate for business expenses, records show.

“Dynamex has failed to convince us the superior court erred as a matter of law in denying its motion to decertify the class with respect to claims falling within the scope of Wage Order No. 9,” the ruling states.

However, for claims that are not violations of the Industrial Welfare Commission's wage orders, the common law definition of “employee” should be used, the ruling states.

“Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done,” according to the Internal Revenue Service.