A federal judge in California on Monday denied a request for preliminary injunction in a lawsuit brought by Uber Technologies Inc., Postmates Inc. and two drivers seeking to prohibit enforcement of California’s AB 5 independent contractor law against drivers while the lawsuit is heard.
AB 5 codified the more-strict ABC test for independent contractor misclassification, and several are concerned Uber drivers could be ruled employees under the law.
In Monday’s ruling, Judge Dolly Gee wrote Uber and Postmates had not shown serious questions about the merits of the laws, “… and, though company plaintiffs have shown some measure of likelihood of irreparable harm, the balance of equities and the public interest weigh in favor of permitting the State to enforce this legislation.”
Gee wrote the law did not target on-demand companies in violation of equal protections under the law and does not deprive independent contractor drivers of their right to pursue their occupation. She also wrote that enforcement of AB 5 does not unconstitutionally impair plaintiffs’ contracts.
“It’s clear Judge Gee found no merit in Uber and Postmates’ argument that they suffer irreparable harm under AB 5 and denied their injunction,” Lorena Gonzalez, the California Democratic lawmaker who authored AB 5, said in a statement. “She chose to let the law stand and, as such, it is now the responsibility of California to enforce the law on behalf of these workers.”
Cnet reported both Uber and Postmates said they are weighing their options to appeal Gee’s decision.
“This is a procedural decision on the preliminary injunction only,” a Postmates spokeswoman said in an emailed statement to Cnet. “While we look forward to continuing to present our full case on the merits, the decision comes as a disappointment to the on-demand workers (Lydia Olson and Miguel Perez) who filed suit to protect their flexibility and income.”
Lydia Olson and Miguel Perez are the two named driver plaintiffs in Uber and Postmates’ lawsuit.
Gee’s decision doesn’t impact human cloud operations in other states, but similar laws could pop up outside of California said Elaine Turner, a shareholder/partner at law firm Hall Estill.
“In my opinion, there will be other states that will eventually follow California,” Turner said. “Only time will tell if all states go that direction.”
Still, there may be states reluctant to pass similar restrictions, so the true test will be what happens at the federal level, she said.