Attorneys across California are debating the constitutionality of “AB 5”, a statute designed to radically change what happens to California companies who employ independent contractors. The implications of the law, now found at California Labor Code Section 2750.3 et seq.) are massive: companies who employ independent contractors in many sectors may be required to give those contractors in essence the benefits of regular employees. These changes are designed to force employers to hire persons as regular employees. Numerous exemptions are contained in the law, mostly adopted as truly last-minute midnight legislative changes.
Several majority industry groups who requested exemptions had those requested denied — this famously included “gig economy” ride-sharing companies such as Uber and Lyft. Calling themselves “app-based platforms”, Uber and Lyft have thrown the constitutional book at AB 5 in Olson et al. v. State of California, Central District of California Case No. 2:19-cv-10956 (December 31, 2019). Uber and Postmates challenge this law under the Equal Protection Clause (page 35), Due Process (right to pursue a chosen occupation), the 9th Amendment (the enumeration clause, a largely forgotten part of the Constitution alleging protection of undefined “certain rights” and the “Contracts Clause” (state laws cannot infringe on private contracts).
The history of AB 5 is documented blow-by-blow in the Complaint – read the entire complaint here:
One group that was denied an exemption at the last moment was surprisingly journalist and free-lance reporters. Widely believing that they would get an exemption, this discussion was largely ignored in the print media before AB 5 was adopted. Through the American Society of Journalists and Authors, Inc. et al. v. Becerra, Central District of California Case No. 2:19-cv-10645 (Dec. 17, 2019), journalists also alleged numerous constitutional violations:
So what is next for businesses? The journalists’ lawyers have already moved for a preliminary injunction — something with a very high burden to meet when the stakes are “mere money”. A hearing on this is not set until March 9, 2020 before the Hon. Philip S. Gutierrez. Expect a major battle and stay tuned to this website for real factual uploads of the pleadings and the facts.