Yes, that is true that California law frowns on companies that lay off employees and hire them back as indpendent contractors, if they actually should be classified as employees.
You can read more about the employee vs. independent contractor classification online here:http://www.dir.ca.gov/dlse/faq_independentcontractor.htm
You should make a complaint to the Department of Industrial Relations, Division of Labor Standards Enforcement if you believe you've been misclassified.
Unfortunately, that doesn't change the fact that you're an at-will employee, so you wouldn't have any cause of action against your employer since you can be terminated at any time for any reason with or without any prior notice.
This stems from the employment at-will doctrine, which is codified in California Labor Code Section 2922 and states:
"An employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month."
I sincerely wish I had better news to give you, but I hope you appreciate a direct and honest answer to your question.