The U.S. Supreme Court will not hear a case that claims California’s Assembly Bill 5 violates the Constitution’s Equal Protection Clause.
In an order filed on Tuesday, Oct. 15, the Supreme Court officially denied a petition to continue Lydia Olson’s case against the state’s worker classification law.
Olson, who represents gig workers such as drivers for Uber and Postmates, claimed that California unfairly provided AB5 exemptions to some companies but not others.
“In an effort to punish network companies like Uber and Postmates, the California Legislature created a two-tier legal standard that imposed a stringent test for independent-contractor status on disfavored network companies and others, while rolling back legal protections for millions of workers from hundreds of other different professions and industries – with no rational basis for the differing treatment,” Olson’s petition to the Supreme Court stated. “Many of the industries exempted from the new legal standard were the very occupations that legislative committees identified as having a history of worker misclassification.”
AB5 is based on the ABC Test, which says that a worker is considered an employee unless three factors are established. The state law – signed in 2019 – makes it extremely difficult for a worker to be considered an independent contractor. The B prong of the test says that a worker cannot be an independent contractor if he or she is providing a service that is in line with the company’s usual course of business.
However, California granted numerous exemptions. For instance, an app-based dog-walking service received an exemption, but Uber and Postmates did not.
In June, an 11-judge en banc panel of the U.S. Court of Appeals for the Ninth Circuit sided with the state. Now, Olson’s appeal has been denied.
Meanwhile, California voters approved Proposition 22, which blocks California from enforcing AB5 against gig drivers.
“As we explained in detail in our complaint, and a three-judge panel of the Ninth Circuit unanimously agreed, with AB5 the legislature unfairly targeted my clients out of animus rather than reason,” Theane Evangelis, an attorney for the plaintiffs, said in a statement. “Fortunately, in Proposition 22, California voters rejected AB5 because it threatened to take away the flexible work opportunities of hundreds of thousands of Californians.”
The Supreme Court receives about 7,000 petitions each year and typically grants 150 or fewer.
OOIDA’s case against AB5
The Supreme Court’s decision not to hear the Olson case comes days after the Owner-Operator Independent Drivers Association filed an amicus brief in support of the plaintiffs.
OOIDA, which represents small-business truckers, has a separate case against California’s AB5 in the Ninth Circuit.
In that case, OOIDA argues that interstate truck drivers are being singled out as California provides a business-to-business exemption for California intrastate truckers.
“Despite the disappointing decision from the Supreme Court denying the petition for review in the Olson case, OOIDA remains confident in the legal foundation for its own California AB5 case,” the Association said in a statement. “We will continue to zealously pursue our own case, which is currently before the Court of Appeals for the Ninth Circuit on behalf of owner-operators across the United States.” LL
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