The US 9th Circuit Court of Appeals rejected a challenge to California’s AB 5 law by Uber Technologies, Postmates (which Uber acquired in 2020) and two gig workers. AB 5 was approved by the California Legislature in 2019 and aims to get tough on independent contractor misclassification.
Postmates, Uber and two individuals had filed suit against AB 5 and brought forward the appeal. However, the en banc ruling by the 9th Circuit Court of Appeals affirmed the district court’s dismissal of the case and denial of injunctive relief.
June 10’s opinion was released en banc — by the full appellate court. An earlier ruling by a three-judge panel of the court had decided in Uber’s favor.
“Plaintiffs have failed to carry that burden here,” according to the opinion. “There are plausible reasons for treating transportation and delivery referral companies differently from other types of referral companies, particularly where the legislature perceived transportation and delivery companies as the most significant perpetrators of the problem it sought to address — worker misclassification.”
AB 5 put in place an “ABC” test for determining whether a worker is correctly classified as an independent contractor.
SIA has reached out to Uber for comment.
Classification of delivery and rideshare drivers in California is also influenced by Prop. 22, which took effect in December 2020. It allowed firms such as Uber to continue classifying rideshare and delivery drivers as independent contractors. Though the 9th Circuit opinion noted the current case remained significant despite the voter-approved Prop. 22.
“As a preliminary matter, we agree with the parties that the passage of Prop. 22 does not moot this appeal,” according to the opinion. “There are ongoing state enforcement actions seeking retrospective relief, including civil penalties, for Uber’s and Postmates’ alleged violations of AB 5 that transpired prior to Prop. 22’s effective date.”
CalMatters also reported the decision on AB 5 could have an impact as the California Supreme Court is set to rule on Prop. 22.
Lydia Olson; Miguel Perez; Postmates; Uber Technologies v. state of California Rob Bonta, US Court of Appeals for the Ninth Circuit, 2:19-cv-10956-DMG-RAO