US appeals court revives lawsuit by Uber and Postmates challenging California contractor law News
US appeals court revives lawsuit by Uber and Postmates challenging California contractor law

The US Court of Appeals for the Ninth Circuit Friday ruled that Proposition 22 (Prop 22), which requires platforms like Uber, Postmates and Lyft to provide evidence to classify their workers as independent contractors rather than employees, must face claims of unconstitutionality.

The court reversed and remanded in part the US District Court for the Central District of California’s ruling that Prop 22 is constitutional and allows companies to treat their workers as independent contractors. This is good news for services like Uber and Lyft, which rely on contractual work. The state must face claims that the California Assembly Bill 5 (AB5) or the gig worker bill improperly singles out independent contractors in an attempt to “regulate” companies—this was overridden by Prop 22. Companies do not claim to control how long their drivers work and do not provide vehicles/bikes to their workers, so they are not employees. AB5, had it included app-based drivers, would have reduced the drivers’ flexibility, according to Uber.

Proposition 22 was voted on in 2020. It outlined the difference between contractors and employees. For app-based drivers for companies like Uber, Postmates and Lyft, drivers are independent contractors and are not entitled to benefits such as paid sick leave. This law applied to a lot of industries, but it had a significant impact on Uber drivers and app-delivery workers. This lower court ruling has been said to allow big companies like Uber to essentially ignore state laws requiring worker benefits and save the company money. Furthermore, labor unions, drivers and state allies petitioned the appeals court to protect app-based drivers are still calling for Proposition 22 to be invalidated, arguing it violates article III section 3 of the US Constitution.