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AB 5: Uber and Postmates sue California; judge temporarily excludes truckers

January 02, 2020

Human cloud firms Uber Technologies Inc. and Postmates on Monday filed a complaint in California federal district court, alleging California’s Assembly Bill 5 is unconstitutional.

The new rule formally puts in place the “ABC” test for determining whether a worker is properly classified as an independent contractor. The employment test codified in the bill was signed into law in September and took effect Jan. 1.

The complaint argues that AB 5 violates several clauses in the US and California constitutions, including equal protection because of how it classifies gig workers for ridesharing and on-demand delivery companies compared to the exemptions it grants to workers who do “substantively identical work” in more than 20 other industries, TechCrunch reported.

The politicians responsible for AB 5 have targeted gig companies and their workers, Miguel Perez a named plaintiff in the lawsuit wrote in a Postmates blog post.

“Politics are always messy, but I don’t understand why it should be so hard to work out a compromise that gives gig workers like me better pay and benefits, and more of a voice, without stripping us of our flexibility and control,” Perez wrote. “It would be a wonderful new year present to all of us independent workers if everyone — companies, unions, elected officials — would get back in a room together and hash this out.”

Separately, a federal judge on Tuesday temporarily blocked the labor law from impacting more than 70,000 independent truckers by granting a temporary restraining order. US District Judge Roger Benitez granted California Trucking Association’s request for a temporary restraining order enjoining enforcement of AB 5 against motor carriers pending the court’s resolution of the California Trucking Association and two owner-operator co-plaintiffs’ while he considers imposing a permanent injunction, the hearing for which is set for Jan. 13.

The new test denies a significant segment of the trucking industry the ability to continue operating as independent owner-operators in California, forcing them to abandon $150,000 investments in clean trucks and the right to set their own schedule and become their own boss, according to the California Trucking Association.

“Having considered the parties’ arguments set forth in plaintiffs’ supporting papers, as well as defendants’ and intervenor-defendant’s opposition papers, the court finds that plaintiffs’ requested temporary restraining order is warranted,” the judge said in the five-page order.

Uber, Lyft and DoorDash aim to place a ballot measure before California voters in November 2020 to counteract AB 5.