Uber, Postmates Challenge California Labor Law in Federal Court

(CN) – Uber, Postmates and two independent contractors asked a federal court in California Monday to block a new state law that requires certain gig economy companies to classify workers as employees, making them eligible for minimum wage, overtime and other protections. 

The plaintiffs claim in their suit that Assembly Bill 5 is unconstitutional, would force the mobile app companies to make costly changes to their business models, would deny contractors the flexibility they currently enjoy in their gig jobs and could put those jobs at risk, as well. 

“AB 5 is an irrational and unconstitutional statute designed to target and stifle workers and companies in the on-demand economy,” the complaint states. 

Dozens of supporters of a measure to limit when companies can label workers as independent contractors circle the Capitol during a rally in Sacramento, Calif., on Aug. 28, 2019. (AP Photo/Rich Pedroncelli, File)

The law, approved in September and set to go into effect Jan. 1, 2020, codifies the labor standard established by the California Supreme Court in its 2019 ruling Dynamex v. Superior Court, which made it more difficult for companies to classify workers as independent contractors.

The law exempts real estate agents, doctors, lawyers, insurance agents, hairstylists and other occupations – exemptions which the plaintiffs describe in their suit as “irrational.”

“This targeting of app-based workers and platforms and treating them disparately from traditional workers violates the Equal Protection Clauses of the United States and California Constitutions,” the complaint states. “There is simply no rational basis for subjecting exempt occupations and non-exempt occupations to different rules and burdens.”

Plaintiff Lydia Olson, an Uber driver from Antelope, California, said in a Facebook post Monday that AB 5 has thrown her life and the lives of other drivers into uncertainty and that her rideshare work is “vital,” allowing her the flexibility to supplement her primary income while taking care of her husband who has multiple sclerosis. 

This independent contractor arrangement gives me the peace of mind that I can do what is necessary to take care of my family on my own schedule. I don’t need to check in with a boss, or report to anyone, or get approval in advance,” Olson wrote. 

She criticized the legislative process that created the new law. 

“Many drivers and I met with California lawmakers and staff numerous times to help them understand how devastating this would be to us and the way we want to work,” she wrote. “It became apparent that many were ill-informed of the real consequences of this bill, or they had already made up their minds to support it. My voice and my rights to due process were ignored, as were the rights of the rideshare companies and the hundreds of thousands of Californians who choose this type of work.”

Plaintiff Miguel Perez from Canyon Country, California, is an independent courier for the delivery service Postmates who regularly uses the app to “to earn a more substantial income than he previously did as a trucker, while still making it to all of his son’s little league games,” according to the complaint. 

The author of AB 5, California Assemblywomen Lorena Gonzalez, said in a statement Monday that Uber would “do anything to try to exempt themselves from state regulations that make us all safer and their driver employees self-sufficient.” 

“First, Uber sought not only an exemption from AB 5 but from all California labor laws. Then, they said they wouldn’t abide by AB 5 anyway. Then, they said AB 5 didn’t apply to them because they weren’t a transportation company. Then, they said they would create a ballot initiative to exempt themselves from AB 5. And now Uber is in court bizarrely trying to say AB 5 is unconstitutional,” Gonzalez wrote. 

“In the meantime, Uber chief executives will continue to become billionaires while too many of their drivers are forced to sleep in their cars,” she added. 

Two other groups of independent contractors are also challenging the law in court. The California Trucking Association filed their challenge on behalf of independent truckers in federal court in the state in November, and associations representing freelance writers and photographers filed a suit earlier this month. 

Uber, Postmates, Olson and Perez are asking the court to issue a judgment declaring AB 5 invalid and unenforceable. They are also seeking preliminary and permanent injunctions to block the state, its attorney general Xavier Becerra and other officials from taking any action to enforce the law against the plaintiffs.

The suit was filed in the U.S. District Court for the Central District of California.

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