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Uber and Postmates Sue CA to Challenge New AB5 Legislation that Effects CA’s Growing Gig Economy

Photo by VisionPic.net from Pexels

On Monday, December 30, 2019, Uber, Postmates, and two drivers filed a lawsuit against the State of California, seeking preliminary and permanent injunctions, in an effort to fight AB 5, which went into effect on January 1, 2020. The two companies, along with Lyft, Instacart and DoorDash, have also put more than $100 million into a campaign to try to bring the issue before California voters in November 2020. The suit claims new law violates constitutional guarantees of equal protection and due process. Read about the lawsuit here, and download our FREE AB5 Compliance Handout.

In its complaint, the Plaintiffs argue that AB5 is “unreasonable and unlawful,” and seek to defend the “fundamental liberty to pursue their chosen work as independent service providers and technology companies in the on-demand economy.


The suit claims that AB5 targets “modern app-based” ride and delivery companies, even while exempting dozens of other professions, thus violating equal protections.

Uber addresses the major issue of AB 5 causing significant “economic and non-economic harm to the Independent Service Providers, Companies, and many others.” Uber argues that it supports the goal of protecting workers and clarifying California’s rules surrounding worker classification, but that, “singling out network companies and subjecting them to different rules is an improper, ineffectual, and unconstitutional means of furthering that objective. It irreparably harms network companies and app-based independent service providers by denying their constitutional rights to be treated the same as others to whom they are similarly situated“.

Uber argues that these and other adverse consequences also would “undermine the public’s interest in having access to the app- based platforms that network companies have created, with the attendant benefits of being able to hire independent service providers on demand with the click of a button“.

Uber is not the only one’s making waves to overthrow this new law.

Do you agree? What are your thoughts? How has AB5 affected your business so far?

Photo by Dan Gold on Unsplash

For an analysis of whether your worker should be classified as an independent contractor or employee, contact us, or read our article about the changes to the law in California under AB 5 (as of January 1, 2020), or how to convert independent contractors to employees.

The Grady Firm attorneys provide the following employment law services:

  1. Act as I-9 agent;

  2. I-9 audit preparation or defense;

  3. Employee v. independent contractor classification analysis;

  4. Assistance with converting independent contractors to employees;

  5. On-site, classroom-style Sexual Harassment training for employees and supervisors;

  6. “Experiential” supervisor training in which managerial employees practice processing a harassment complaint and commencing an investigation in pairs with other trainees.

  7. Draft and review Employee Handbooks, arbitration agreements, and Anti-Harassment policies;

  8. Employee personnel file audits;

  9. E-Verify account creation and monitoring;

  10. Assistance with the employee on-boarding, discipline, and termination process;

  11. Medical leave policies and implementation advising; and

  12. Litigation defense.

To learn more about ensuring your business is compliant with state and local laws, schedule a complimentary 15-minute consultation with The Grady Firm’s attorneys; call +1 (949) 798-6298; or fill out a Contact Request Form. The Grady Firm has offices in Beverly Hills, Irvine, and San Diego, California.

*Jennifer A. Grady, Esq. is licensed to practice employment law in California.

This article is for informational purposes only, and does not constitute legal advice or create an attorney-client relationship. This article does not make any guarantees as to the outcome of a particular matter, as each matter has its own set of circumstances and must be evaluated individually by a licensed attorney.


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