A federal appeals court in California ruled that Uber's challenge to a state law aimed at turning trucking workers into employees rather than independent contractors cannot proceed, dealing the tech company a major defeat in its efforts to keep costs under control.
California AB5 was passed in 2019, intended to make app-based workers — like those of Uber, Lyft and Postmates — full employees with a minimum wage, workplace protections and other benefits. The law was immediately challenged by Uber and rejected by an appeals court after years of deliberation.
Monday's ruling of an eleven-judge panel of the 9th Circuit of Appeals reverses the first appellate decision, ruling that the law does not illegally exclude workers in the trucking industry, but merely changes regulations for all independent contractors.
The California Legislature “saw trucking and delivery companies as the primary perpetrators of the problem they sought to address — worker misclassification,” Judge Jacqueline Nguyen wrote in the court's ruling.
Companies like Uber have fought vigorously against attempts to require their workers to be considered employees because workers incur significantly more costs than contractors. A similar one Ballot measure in Massachusetts is also being challenged in court.
In California: Statewide ballot measure Prop 22 in 2020 established that companies like Uber can consider their employees as contractors. That measure is also being challenged in court, with a union arguing last week that it unfairly hinders future legislation.
The Hill has contacted Uber for comment.
