Uber Loses Appeal in California Gig Worker Law Battle
CALIFORNIA, CA (June 11, 2024) — Uber has recently lost a significant legal battle to overturn California Assembly Bill 5 (AB 5), which mandates that ride-hailing and delivery drivers be treated as employees rather than independent contractors.
This decision by the 9th U.S. Circuit Court of Appeals could greatly influence the gig economy, depending on an upcoming ruling from the California Supreme Court on a related matter.
The controversy centers around AB 5, which implements a strict criterion, known as the ABC test, to determine employee status and ensure worker benefits. This contrasts with a more lenient standard applied to other gig services. Uber and Postmates, which Uber owns, challenged the bill, claiming it unfairly targeted them and violated the Equal Protection Clause by exempting similar businesses.
However, the full 11-judge panel of the appeals court, led by Judge Jacqueline Nguyen, upheld the distinction, noting the significant role that transportation and delivery companies play in worker misclassification issues. This ruling reinforces the state’s ability to enact laws addressing corporate impacts on labor without breaching constitutional rights.
This Uber gig worker lawsuit gains additional significance as the California Supreme Court deliberates on Proposition 22, an industry-backed measure exempting companies like Uber from AB 5 by allowing them to classify workers as independent contractors while providing certain benefits. This initiative, strongly supported financially by gig companies, reflects their intent to maintain flexible working models.
The implications of these legal decisions are vast, affecting over 1.4 million gig workers in California and potentially setting precedents for labor laws nationwide. If Proposition 22 is overturned, companies could face significant changes in their operational models and financial liabilities for past worker classification discrepancies. The state Supreme Court is expected to issue its decision by the end of August.
If you are a gig worker affected by these legal changes or have questions about your employment status, contact the California employment lawyers at RTM Law Firm. Our team is dedicated to providing gig workers with the expert legal assistance they need to navigate these complex issues. Reach out to us for support in understanding your rights and securing the benefits you deserve.
