62 F.4th 1206
9th Cir.2023Background
- California enacted A.B. 5 (amended by A.B. 170 and A.B. 2257) to codify the California Supreme Court’s Dynamex "ABC test," presuming workers are employees unless the hiring entity meets A, B, and C.
- A.B. 5 contains numerous, industry-specific exemptions (including some app-based services) and was motivated in public statements by concern over misclassification in the gig economy.
- Plaintiffs (Uber, Postmates, and drivers Lydia Olson and Miguel Perez) sued to enjoin enforcement of A.B. 5 as applied to them, asserting federal and California Equal Protection, Due Process, Contract Clause, and Bill of Attainder claims.
- The district court denied a preliminary injunction and dismissed the Second Amended Complaint with prejudice. The Ninth Circuit reversed dismissal of the Equal Protection claim, affirmed dismissal of the other claims, and remanded the preliminary-injunction ruling for reconsideration.
- Key factual allegations supporting the Equal Protection claim: selective exemptions (including for some comparable app-based services), legislative statements targeting rideshare/delivery platforms, and the subsequent passage of Prop. 22 affecting app-based drivers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Equal Protection | A.B. 5 irrationally singles out Uber/Postmates and similarly situated gig workers via selective exemptions and sponsor animus. | A.B. 5 rationally targets misclassification broadly; exemptions reflect legitimate, industry-specific policy choices. | Reversed dismissal: plaintiffs plausibly alleged irrational classifications and animus sufficient to survive rational-basis review. |
| Due Process (vocational liberty) | Reclassification as employees deprives drivers of their right to pursue their calling as independent contractors. | A.B. 5 does not bar the occupation; it regulates the manner (classification) and permits continued work as employees or under exemptions. | Dismissed: plaintiffs failed to allege a complete prohibition of a calling or a protected liberty interest. |
| Contracts Clause | A.B. 5 substantially impairs existing contracts between platforms and drivers and frustrates their contractual expectations. | The law does not substantially impair contracts; states may regulate employment and parties can amend contracts to comply. | Dismissed: plaintiffs plausibly alleged a contract and impairment but not a substantial impairment of reasonable expectations. |
| Bill of Attainder | A.B. 5 singles out and punishes Uber/Postmates/drivers without trial. | A.B. 5 is a generally applicable remedial statute aimed at preventing misclassification, not punitive. | Dismissed: plaintiffs failed to plausibly allege historical-type punishment or unmistakable punitive legislative intent. |
Key Cases Cited
- Dynamex Operations W. v. Superior Ct., 4 Cal.5th 903 (Cal. 2018) (adopted the ABC test for employee classification).
- United States Dep’t of Agric. v. Moreno, 413 U.S. 528 (U.S. 1973) (animus against a politically unpopular group is not a legitimate governmental interest).
- SeaRiver Maritime Fin. Holdings, Inc. v. Mineta, 309 F.3d 662 (9th Cir. 2002) (Bill of attainder test; historical and intent-focused inquiry into legislative punishment).
- American Soc’y of Journalists & Authors, Inc. v. Bonta, 15 F.4th 954 (9th Cir. 2021) (applied rational-basis review to A.B. 5 classifications).
- Merrifield v. Lockyer, 547 F.3d 978 (9th Cir. 2008) (rational-basis standard for economic/classification challenges).
- Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (U.S. 2008) (standard for preliminary injunctions).
- CDK Global LLC v. Brnovich, 16 F.4th 1266 (9th Cir. 2021) (Contracts Clause framework).