AB 5, California’s hastily passed and controversial independent contractor statute, which codifies the use of an “ABC test,” is set to go into effect on January 1, 2020.
Already, the California Trucking Association has filed suit challenging the statute.
As have freelance writers and photographers.
Now, it’s ride-share and delivery companies’ turn to file suit.
Those companies have already commenced the process to create a ballot initiative that would allow voters to decide whether to exempt ride-share and delivery drivers from the “ABC test.”
Now, on December 30, 2019 – just two days before AB 5 goes into effect – two of those companies (and two drivers) have filed suit in Los Angeles in the United States District Court for the Central District of California, seeking to enjoin AB 5 as it pertains to them.
In the complaint, they argue that AB 5 is an “irrational and unconstitutional statute designed to target and stifle workers and companies in the on-demand economy.” They contend that the statute violates various provisions of the California Constitution, including the equal protection clause, the inalienable rights clause, and the due process clause.
The equal protection argument is particularly fascinating as the companies contend that “[t]here is no rhyme or reason to the nonsensical exemptions” that were granted at the eleventh hour to some industries and professions.
We will continue to monitor this action – and the other actions challenging AB 5. Unless and until an injunction is issued, that statute will go into effect as planned, and companies that do business with independent contractors would be wise to review those relationships swiftly.