Supreme Court Won’t Hear Uber Challenge to California Gig Worker Law

An Uber logo is shown on a rideshare vehicle in Los Angeles on Aug. 20, 2020. Mike Blake/Reuters

The U.S. Supreme Court on Oct. 15 denied Uber Technologies and its subsidiary Postmates in their bid to press forward with their constitutional challenge to California’s gig worker law. The decision was made just over one week after the Supreme Court ruled against Uber in another labor case out of California.

In their denial on Tuesday, Supreme Court justices opted to uphold a ruling by the U.S. Court of Appeals for the Ninth Circuit dismissing the ride-sharing services’ lawsuit on the constitutionality of Assembly Bill 5 (AB 5), which went into effect in 2020.

The law classifies most workers as employees, while Uber’s business model treats drivers as independent contractors.

As employees, drivers are required to receive the minimum wage, overtime pay, reimbursements for expenses, and more not available to independent contractors under California state law. AB 5 also requires companies to demonstrate that independent contractors are not under its control or involved in business operations, and instead are actually running their own businesses.

Uber and Postmates argued AB 5 stripped them of their equal protection under the law, saying the law contains arbitrary exemptions to other particular industries that use independent contractors.

Theane Evangelis, a lawyer for Uber, in a statement provided by the company said that AB 5 improperly targeted app-based services “out of animus rather than reason.”

The Ninth Circuit disagreed, suggesting lawmakers could have found the law necessary due to certain industries being prone to misclassifying workers in order to save on payroll costs.

Regardless of the Supreme Court decision, Uber drivers are now exempt from AB 5 due to Proposition 22, a ballot initiative approved by voters in 2020 that established labor policies specifically for app-based drivers.

To counter the law, Uber and other companies poured more than $200 million into backing Prop. 22.

The California Supreme Court upheld Prop. 22 in July, ruling that it was not in violation of the state’s constitution.

“Prop 22 remains the law of the land in California,” Evangelis said.

The Supreme Court last week declined to hear an appeal by ride-sharing companies Uber and Lyft to block the state of California from pursuing labor lawsuits over drivers’ status as contractors.

That decision allows the California attorney general and labor commissioner to pursue lawsuits that claim the companies owe money to drivers who were misclassified as independent contractors rather than employees. As a result, Uber and Lyft could owe back pay to tens of thousands of California drivers unless the companies and the state reach a settlement.

At the federal level, the U.S Department of Labor also submitted a rule in January that makes it harder to classify workers as independent contractors under federal wage law.

The office of California Attorney General Rob Bonta did not respond to a request for comment by the Epoch Times before publication.

Reuters contributed to this report.