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Uber: Defeat in court does not change California's law for gig workers

Above said Monday (June 10) that a U.S. appeals court's decision dismissing a challenge to a California law that could force the company to treat its drivers as employees rather than independent contractors will have no impact.

“Although the 9th District decided today to leave AB5 intact, Uber drivers and couriers remain independent as a result Proposition 22, which preserves their flexibility while providing them with important new benefits,” Uber said in an emailed statement to PYMNTS. “This decision does not change the status of the law in California in any way.”

Uber argued in court that AB5, which was passed into state law in 2020, unfairly singles out app-based transportation companies, Reuters reported Monday.

Proposition 22, a ballot initiative that would establish Uber drivers as independent contractors, is being heard in a separate case by the California Supreme Court, according to the report.

In its ruling in AB5, the 9th Circuit said transportation and delivery brokerage companies could be treated differently than other brokerage companies because the California legislature views them as the “biggest offenders” in misclassifying workers, according to the report.

AB5 makes it more difficult for companies to prove that employees independent contractorssays the report.

Uber launched its legal challenge on AB5 in December 2019. While a federal judge initially dismissed the lawsuit, a panel of the 9th Circuit Court of Appeals reinstated the case, saying the law's exceptions were “piecemeal.” But that ruling was overturned by the decision announced Monday, the report said.

The case of the challenge of the Voting measure Proposition 22 was introduced by the Service Employees International Union (SEIU) and four drivers and is being heard by the California Supreme Court.

The key question is whether gig workers should be treated as employees or contract workers. Employees are entitled to benefits such as minimum wage, overtime pay, expense reimbursement and other protections that independent contract workers do not receive.

Massachusetts is also addressing the issue of employee classification and how to ensure fair treatment and adequate protection for Gig workerswhile maintaining the flexibility and accessibility that characterise this part of the workforce.


Anna Harden

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