We have written here frequently about California’s controversial AB 5 law, which permits companies to treat workers as independent contractors only if they satisfy a stringent “ABC” test.
The broad statute, unambiguously written to try to force companies to treat gig economy workers as employees, has been the subject of a great deal of debate and litigation, including a state court action filed by the State Attorney General trying to force ride share companies to treat their drivers as employees.
In the action filed by the State Attorney General, the Superior Court judge has issued a temporary restraining order requiring the ride share companies to treat their drivers as employees.
The Superior Court judge ruled that the companies could not satisfy the “B” part of AB 5’s “ABC” test, which requires that the worker performs work that is outside the usual course of the hiring entity’s business in order to be treated as an independent contractor.
The decision is appealable within 10 days – and there is every reason to believe that the ride share companies in fact will appeal the decision.
How the issue plays out with the Court of Appeal will be closely monitored. But whatever the Court of Appeal does, there ultimately will be a ballot showdown in November 2020 when California voters will be asked to decide whether ride share and food delivery companies may treat their workers as independent contractors. Of course, only time will tell whether that initiative will be successful.