common law
Common law is law developed through judicial decisions rather than enacted statutes. In the United States, early courts relied heavily on English common law until the American legal system matured and began to develop its own doctrines through precedent or by analogy to decided cases. In Gamble v. United States, 587 U.S. 678 (2019), Justice Thomas, in a concurring opinion, discussed the foundations of common law and the role of stare decisis in shaping it. Although most common law operates at the state level, there is also a limited body of federal common law. Federal courts may create such rules only where “necessary to protect uniquely federal interests.” In Rodriguez v. FDIC, 589 U.S. 166 (2020), the Court unanimously struck down a federal common law rule concerning the distribution of corporate tax refunds, reaffirming the limited scope of federal common lawmaking.
At the state level, legislatures often codify judicially created common law rules, sometimes to make them permanent, sometimes to modify them, or to replace them entirely with statutory law. A well-known example is the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903 (2018), which established a three-part “ABC test” for determining whether workers are employees or independent contractors under California labor law. The California Legislature initially codified this test in Labor Code § 2750.3 through Assembly Bill 5 (AB 5), effective January 1, 2020. Later in 2020, Assembly Bill 2257 (AB 2257) repealed § 2750.3 and replaced it with a new statutory scheme, now codified at Labor Code §§ 2775–2787. This framework preserves the ABC test while adding and refining exemptions for certain occupations and industries.
[Last reviewed in August of 2025 by the Wex Definitions Team]
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