New CA “Gig-Work” Law Experiences Speed Bumps
By: Hassan Said
Photo by Philip Rozenski on Shutterstock.
California’s Assembly Bill 5 (AB 5), a codification of the California Supreme Court’s decision in Dynamex Operations West, Inc. v. The Superior Court, went into effect on January 1, 2020. It was drafted with the intent to protect worker’s rights by forcing companies to recognize their independent contractors as full-fledged employees. In its ideal form, AB 5 means that those contractors are guaranteed health benefits, proper working hours, and minimum wage and unemployment protections.
But, it seems that the wheels of AB5 are threatening to come off as many of the bill’s opponents fight back, demanding a halt to AB5’s enforcement amid the hundreds of lawsuits accusing the new “gig-workers’ bill” of violating the California Constitution and harming the flexibility of the workers the bill was intended to protect.
The judicial response to these cases seems equally varied. On New Year’s Eve, a judge in the Southern District of California granted the California Truckers’ Association’s request for a temporary stay on AB 5 for motor carrier services. But, Uber and Postmates did not fare as well in February when a Los Angeles federal judge denied their request that the law be enjoined.
“We are working to defend independent contractors’ right to earn a living,” said Caleb Trotter, a Pacific Legal Foundation (PLF) attorney suing the California Attorney General on behalf of the American Society of Journalists and Authors as well as the National Press Photographers Association.
For Trotter, the concern is that AB 5 imposes “selective and unequal treatment” for members of “speaking professions” in violation of one’s right to earn an honest living free from irrational government interference and regulation based solely on the type of speech those jobs require.
“You get a limited exemption if you're a freelance writer or journalist, unlike the graphic designers and grant writers who get a full exemption,” Trotter said. “But if you're doing video then you get no exception at all.”
The Rideshare Drivers United (RDU), an independent association of Uber and Lyft drivers based in Los Angeles, on its website, insists that “[AB 5] opens up real possibilities for drivers to achieve our aims in the Driver’s Bill of Rights: fair pay, transparency, a voice on the job and community standards.”
The RDU urges its constituents to continue supporting AB 5 in an effort to curb alleged attempts by Uber and Lyft to create exemptions to the law that would allow the rideshare service giants to treat drivers differently from the rest of its workforce. RDU has declined to respond to The Advocate’s requests for comment.
According to Stanford Law Professor William B. Gould, IV, a former Chairman of the National Labor Relations Board and a powerful voice for labor rights spanning over several decades, AB 5’s current form is not the final product and concerns like those shared by PLF’s clients could well be addressed as the state continues to wrestle with implementing AB 5. “It’s possible that the law should be modified to allow more flexibility for freelancers,” Gould said. “The legislature is going to be considering a number of amendments — that may be one of them.”
Gould notes that at least some of AB 5’s potential flexibility issues, on which companies like Uber and Lyft rest their opposition, have yet to be seen. “This lawsuit is rooted in hot air,” Gould said. “It purports to be on behalf of workers who say that they lose their flexibility as a result of this legislation, [but] Uber hasn’t announced that.” Gould argues that Uber “simply propagandized” that workers will lose flexibility, using that as a vehicle to attack the exemptions, or failures of the legislature to create exemptions, within AB 5.
Other service providers that were required to switch from an independent-contractor structure to a more traditional employee structure seem to be at the onset of balancing flexibility and more substantial workers’ rights. For example, Eaze, a San Francisco-based on-demand cannabis delivery service, was required to make this change in employment structure when marijuana was legalized. As a result, Eaze’s partner depots and dispensaries now allow workers to sign-up for shifts and tasks.
“One of the great benefits of switching to [AB 5], is that drivers that do come in and start in that position have a much easier and more clear matriculation and job growth opportunity within the company,” said David Mack, Senior Vice President of Public Affairs for Eaze. He added that “it is certainly a much better entry point.”
Ultimately, Gould believes that some version of AB 5 is necessary to move the needle on a fair employment system. “It’s a move towards regulation,” he says, “I think we need regulation given the increasing inequality in our society, given the way with which so many employers have been able to exploit workers as independent contractors.”
On February 18, Judge Taylor in the Superior Court of California in San Diego, granted a preliminary injunction against the grocery delivery service, Instacart, for misclassifying its San Diego employees as contract workers. The court’s order stated, “the People have demonstrated a probability of success on the merits of their claims,” making “a very plausible showing of improper classification under the ABC test.” While this is not a final judgement on the merits, it does represent the first instance of AB 5 enforcement in California.
(Editor's Note: This article was originally published in the March 2020 [Volume 50, Issue 3] version of The Advocate.)