Young: Another Gig Company Victory

Monday, April 3, 2023 | 0

On March 17, the United States Court of Appeals for the 9th Circuit published its opinion in a challenge to Assembly Bill 5 filed by Postmates, Uber and two driver plaintiffs. This is a critical juncture in the gig worker legal wars.

Julius Young

The court reversed dismissal of the plaintiffs’ complaint and found that:

Plaintiffs plausibly alleged that AB 5, as amended, violated the equal protection clause for those engaged in app-based ride hailing and delivery services. Thus, plaintiffs plausibly alleged that the primary impetus for the enactment of AB 5 was the disfavor with which the architect of the legislation viewed Uber, Postmates and similar gig-based business models. Additionally, plaintiffs plausibly alleged that their exclusion from the wide ranging exemptions, including for comparable app-based gig companies, could be attributed to animus rather than reason. The district court therefore erred by dismissing plaintiff’s equal protection claim.

The 9th Circuit panel noted the many exceptions to AB 5 under AB 170 and AB 2257, including exemptions for TaskRabbit, Wag and a laundry list of other occupations and businesses. Also prominent in the opinion are many media quotes and tweets from the bill’s sponsor, Sen. Lorena Gonzalez (now head of the California Labor Federation) and other prominent legislators.

The court noted that “the plausibility of plaintiffs’ allegations is strengthened by the piecemeal fashion in which the exemptions were granted” and that allegations of legislative animus were plausible.

Thus, the 9th Circuit remanded the matter to the federal district court, saying, “We remand the district court’s order denying plaintiffs’ motion for a preliminary injunction for reconsideration."

However, the 9th Circuit panel opined that U.S. District Court Judge Dolly Gee correctly dismissed the plaintiffs’ other theories that alleged federal and state constitutional violations of the due process clause, contract clause and bill of attainder clause.

What happens next?

The matter likely returns to Judge Gee. The California attorney general, defending AB 5, can petition for a rehearing or an en banc hearing by the entire 9th Circuit or can seek review by the U.S. Supreme Court. But succeeding on those is likely a long shot.

Perhaps Judge Gee will issue a preliminary injunction against AB 5 and eventually hold a trial on the equal protection arguments. The 9th Circuit panel decision might not bind her if there is a lack of evidence in support of the equal protection arguments. But this will take time, and a victory by AB 5 supporters is not assured. Whatever her personal views, Judge Gee is perhaps somewhat hemmed in by the 9th Circuit opinion.

My take is that this leaves the future of AB 5 in question. The California Legislature may need to revisit and revise AB 5.

And in any event, the gig companies are a roll, having mostly prevailed at the California Court of Appeal in the Castellanos case, which I analyzed in a recent blog post.

But as they say, it’s not over til it’s over. The gig worker legal wars grind on in the meantime.

Julius Young is an applicants' attorney and a partner for the Boxer & Gerson law firm in Oakland. This column was reprinted with his permission from his Workers Comp Zone blog on the firm's website.