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Uber and Postmates Sue to Kill California Gig-Economy Law

January 7, 2020

By Steve Wishnia and Neal Tepel

Assemblywoman Lorena Gonzalez

SAN FRANCISCO, Calif.—Uber and Postmates filed a suit in federal court Dec. 30 arguing that California’s new law limiting when employers can classify workers as “independent contractors.” The suit against the state of California and Attorney General Xavier Becerra calls the Assembly Bill 5 law, which went into effect Jan. 1, an “irrational and unconstitutional statute designed to target and stifle workers and companies in the on-demand economy.” It argues that the law violates the 14th Amendment’s equal-protection clause because it exempts occupations such as direct salespeople, grant writers, and commercial fishermen while defining gig-economy workers whose pay rates and work rules are set by the companies as “employees.” Assemblymember Lorena Gonzalez (D-San Diego), the bill’s author, called the suit part of Uber’s pattern of evading state labor regulations. “First, Uber sought not only an exemption from AB 5 but from all California labor laws,” she said in a statement. “Then, they said AB 5 didn’t apply to them because they weren’t a transportation company. Then, they said they would create a ballot initiative to exempt themselves from AB 5. And now Uber is in court bizarrely trying to say AB 5 is unconstitutional.” Read more

January 7, 2020

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