Federal Judge Rejects AB5 Challenge By Uber and Postmates

A federal judge has ruled that Uber and Postmates failed to demonstrate that they were unconstitutionally targeted by AB 5, the new law that requires most California workers to be classified as employees rather than independent contractors.

The lawsuit, Lydia Olson et al v. State of California et al, alleged that AB 5 violated the equal protection clause because it targeted workers of app-based companies like Uber and Postmates, while exempting numerous other types of workers like hairdressers and real estate agents.

In her ruling, issued September 18, 2020, U.S. District Judge Dolly M. Gee rejected this claim, finding that lawmakers were attempting to address the rampant misclassification of employees and to ensure that workers received the "basic rights and protections they deserve under the law, the attendant problems, such as a lack paid sick leave,  including a minimum wage, workers’ compensation if they are injured on the job, unemployment insurance, paid sick leave, and paid family leave."

Judge Gee ruled that Uber and Postmates did not prove that app-based companies were targeted because of animus, reasoning that AB5 maintains the traditional exemption of workers who have long been considered independent contractors under California law. 

Earlier this month, the California Legislature revised AB 5 to exempt several more businesses from the classification test and to increase the state’s ability to enforce the law. Meanwhile, Uber, Lyft and other app-based companies have poured millions of dollars into Prop 22, a measure on the November ballot that would exempt their drivers from AB5 and classify them as independent contractors. 

If you believe you have been misclassified as an independent contractor instead of an employee, contact Teukolsky Law today for a free consultation.