The 9th Circuit Court of Appeals upheld the California labor known as AB 5. Uber challenged it arguing the employment unfairly targeted the company. Photo by Mike Blake, ReutersA 2020 California law compels businesses to offer employment benefits to more workers rather than treating them like independent contractors. Uber lost an effort to overturn the law.
The companies sued and sought an injunction against the law that took effect at the beginning of 2020. Last year, a three-judge panel at the 9th Circuit sided with Uber and revived the case, which had been previously dismissed by a federal judge.
The ruling means “the Legislature can continue to make laws that impact companies differently if the decision to do so is rational, without being concerned that such laws would violate the constitutional rights of the corporation,” said Veena Dubal, a UC Irvine law professor whose research centers on labor and inequality. “This is particularly important because so many sectors are now concentrated by two or three large companies.
If Prop. 22 is upheld, it would be a huge victory for Uber and the other big gig companies, but today’s ruling means they would still be on the hook in any cases where they are found to have violated laws related to worker classification before Prop. 22 took effect. In the appeals court decision, Nguyen referred to “ongoing state enforcement actions seeking retrospective relief, including civil penalties,” against Uber and Postmates.
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