Quinn v. LPL Fin. LLC, 91 Cal. App. 5th 370 (2023)
Alleging misclassification, John Quinn brought a PAGA action on behalf of a class consisting of securities broker-dealers and investment advisers against his employer LPL Financial. Quinn brought the PAGA action prior to the enactment of AB 2257, which exempted the occupations identified in Quinn’s PAGA action from the “ABC test” as set out in Dynamex Operations W. v. Superior Ct., 4 Cal. 5th 903 (2018). Instead, exempt occupations are analyzed according to the standard in S.G. Borello & Sons, Inc. v. Dep’t of Indus. Relations, 48 Cal. 3d 341 (1989). The parties stipulated that Cal. Lab. Code § 2750.3(i)(2) would apply the exemption retroactively; however, Quinn challenged the constitutionality of the exemption and its retroactivity.
The trial court rejected Quinn’s challenge and the Court of Appeal affirmed. First, the court concluded the law survived equal protection scrutiny because the legislature had a rational basis to exempt financial professionals given their higher skill and bargaining power and, therefore, less vulnerability to exploitation by misclassification. This holding joins the equal protection analysis of other courts which have upheld the exemption as applied to real estate agents and freelance writers and photographers. Next, the Court rejected the due process claim, holding that Quinn was not deprived of any right because there is no vested right in application of a particular legal test or presumption. In so holding, the court declined to follow Hall v. Cultural Care USA, 2022 WL 2905353 (N.D. Cal. July 22, 2022), which held that application of a different standard would deprive a putative employee of the vested right to wages and therefore could support a due process challenge. The court rejected Hall’s reasoning because whether Quinn had a vested right depended on whether he was an employee, and that question was not decided.