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US Circuit Court of Appeals Reinstates Uber and Postmates Lawsuit Against California Contractor Law – JURIST

The U.S. Court of Appeals for the Ninth Circuit on Friday ruled that Proposition 22 (Prop 22), which requires platforms like Uber, Postmates and Lyft to produce evidence to classify their workers as independent contractors rather than employees, is facing lawsuits for unconstitutionality must be confronted.

The court overturned the US District Court’s ruling for the Central District of California, dismissing in part that Prop 22 is constitutional and allows companies to treat their employees as independent contractors. That’s good news for services like Uber and Lyft that rely on contract labor. The state must address claims that the California Assembly Bill 5 (AB5) or the Gig Worker Bill improperly selects independent contractors to “regulate” companies – this was overridden by Prop 22. Companies do not claim to control how long their drivers work and do not provide vehicles/bicycles to their workers, so they are not employees. According to Uber, if AB5 had included app-based drivers, it would have limited driver flexibility.

Proposal 22 was voted on in 2020. It explained the difference between contractors and employees. With app-based drivers for companies like Uber, Postmates, and Lyft, drivers are independent contractors and aren’t eligible for benefits like paid sick leave. This law applied to many industries, but had a significant impact on Uber drivers and app deliverers. This lower court ruling aims to allow big companies like Uber to essentially ignore state laws that require welfare payments and save the company money. Additionally, unions, drivers and state allies have petitioned the Court of Appeals to protect app-based drivers and are still seeking the invalidation of Proposition 22 as violating Article III, Section 3 of the US Constitution.

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