US Supreme Court won't hear Uber's challenge to California gig work law
By Daniel Wiessner
Oct 15 (Reuters) -The U.S. Supreme Court on Tuesday turned away a bid by Uber Technologies and subsidiary Postmates to revive a challenge to a California law that could have forced the companies to treat drivers as employees rather than independent contractors who are typically less expensive.
The justices denied Uber's petition for review of a 9th U.S. Circuit Court of Appeals ruling that said the companies failed to show that the 2020 California law known as AB5 illegally singled out app-based transportation services while exempting other industries.
Drivers for app-based services are now exempt from AB5 under an industry-backed 2020 ballot initiative known as Proposition 22. The California Supreme Court upheld Prop 22 in July, rejecting a union's claims that it violated the state's constitution.
Theane Evangelis, a lawyer for Uber, in a statement provided by the company maintained that AB5 improperly targeted app-based services "out of animus rather than reason."
"Prop 22 remains the law of the land in California and ensures that drivers and couriers retain the independence and flexibility they want and also receive the benefits they deserve — more than $1 billion so far," Evangelis said.
The office of California Attorney General Rob Bonta, a Democrat, did not immediately respond to a request for comment.
Employees are entitled to the minimum wage, overtime pay, reimbursements for expenses and other protections that are not extended to independent contractors. Uber, Postmates and similar services typically treat workers as contractors in order to control costs.
California's AB5 raised the bar for proving that workers are truly independent contractors, requiring a company to show that workers are not under its direct control or engaged in its usual course of business and operate their own independent businesses.
The U.S. Department of Labor in January issued a rule that makes it more difficult to treat workers as independent contractors under federal wage law, though it uses a different test than the one adopted by California. A coalition of major business groups is challenging that rule in Texas federal court.
Uber, Postmates and two Uber drivers sued over the California law in 2019, saying it was unconstitutional because it targeted their industry. Many other industries that routinely utilize contractors and freelance workers are explicitly exempt from AB5.
A federal judge in Los Angeles dismissed the lawsuit at an early stage, and a three-judge 9th Circuit panel last year revived the case. The court said then that the "piecemeal fashion" of the exemptions to the law was enough to sustain Uber's lawsuit.
The full 9th Circuit granted en banc review of that decision, and in June ruled against Uber and Postmates. The court said that California lawmakers had found that transportation and delivery companies were more likely to misclassify workers, and that AB5 was a reasonable response to that problem.
The case is Olson v. California, U.S. Supreme Court, No. 24-269.
For Uber: Theane Evangelis of Gibson Dunn & Crutcher
For California: Samuel Thomas Harbourt of the California Department of Justice
Read more:
Uber loses challenge to California gig work law in US appeals court
Uber challenge to California contractor law revived by U.S. appeals court
California top court upholds ballot measure treating Uber, Lyft drivers as independent contractors
Business groups move to strike down Biden rule on contracting, gig work
Biden administration issues rule that could curb 'gig' work, contracting
U.S. Supreme Court won't hear freelancers' challenge to California employment law
Reporting by Daniel Wiessner in Albany, New York
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