Gig Industry Firms Argue Against Employee Classification Law Before 9th COA

Thursday, July 14, 2022 | 0

Attorneys for gig industry firms including Uber and Postmates on Wednesday argued that a three-judge panel from the U.S. 9th Circuit Court of Appeals should overturn a trial court judge who refused to stop California from implementing the employment classification standards from Assembly Bill 5.

The bill codified a 2018 state Supreme Court decision that adopted the so-called “ABC test,” which presumes a worker is an employee unless the employer rebuts the presumption by proving that the worker is free from control, is performing work outside the usual course of business for the hiring entity and is customarily engaged in an independently established trade.

The bill that took effect at the start of 2020 included exemptions for some specified industries and professions for which employee status would continue to be determined using the criteria from a 1989 state Supreme Court decision in S.G. Borello & Sons Inc. v. Department of Industrial Relations.

According to a Bloomberg Law report, attorneys for gig companies found some success arguing that lawmakers had no rational basis for classifying some gig workers as independent contractors while others are classified as employees.

Theane Evangelis, a partner with Gibson Dunn & Crutcher, said AB 5 included exemptions for some gig companies such as TaskRabbit, Handy, and Wag! — an on-demand dog walking service — while requiring transportation and courier services to classify their drivers as employees.

Assistant Attorney General Jose Zelidon-Zepeda argued that the Legislature has leeway to choose what to consider in deciding whether one industry should be treated differently than another.

Bloomberg reports the judges appeared skeptical of the state’s arguments.