Appeals court to rehear gig workers’ AB5 case

The U.S. Court of Appeals for the Ninth Circuit will soon hear another case involving California’s controversial worker classification law, AB5.

Earlier this week, the appeals court agreed to rehear a case from Uber and Postmates against the state law, which makes it difficult for a worker to be considered an independent contractor. The full 11-judge panel is expected to hear oral arguments in March.

California signed AB5 into law in 2019 with the stated goal of stopping businesses from classifying workers who should be considered employees as independent contractors. AB5 is based on the ABC Test, which requires a business to demonstrate three factors are established before a worker can be deemed an independent contractor.

Businesses in a variety of industries, including food delivery, trucking and freelance writing, have complained that the law is too stringent. The “B prong,” in particular, prevents companies from deeming a worker an independent contractor if the job involves the usual course of business. For example, it appeared to stop a trucking company from considering a truck driver an independent contractor regardless of the company’s level of control or any other factors.

This past March, a three-judge panel sided with Uber and Postmates that AB5 violated the Equal Protection Clause of the U.S. Constitution. The panel cited comments from then Assemblywoman Lorena Gonzalez to suggest that the AB5 was specifically targeting app-based companies such as Uber and Postmates.

AB5 in trucking

Although the gig companies’ lawsuit is distinct from the one filed by the California Trucking Association and Owner-Operator Independent Drivers Association, there are potential overlaps in some of the constitutional arguments. In addition, the Uber and Postmates case could affect the timing of a lower court’s ruling.

The U.S. District Court of the Southern District of California heard oral arguments in the California Trucking Association and OOIDA’s case against AB5 on Nov. 13.

The two trucking groups argue that the law eliminates the independent contractor driver business model in the trucking industry and that it violates the U.S. and California constitutions.

“OOIDA readily concedes that there are bad actors in the trucking industry, as in many industries, who misclassify and exploit workers,” the Association wrote in its brief. “But defendants can’t justify eliminating the independent contractor driver business model, needlessly reclassifying genuine independent contractors as employees.” LL