A federal appeals court appears that it may yet let California Democratic state officials slam the door on a lawsuit challenging a controversial union-backed state law that Uber and other gig economy companies say was designed intentionally to devastate their businesses and force many gig workers out of work.
On Dec. 18, the U.S. Ninth Circuit Court of Appeals announced a full panel of judges, known as an en banc panel, would revisit the ruling issued earlier this spring by a panel of three appellate judges in favor of rideshare giant Uber and its subsidiary, food delivery app operator Postmates.
Uber and other gig economy companies had argued the law would devastate their businesses by forcing them to provide health insurance, paid time off and other benefits to their contractors, who currently are able to work independently.
U.S. Ninth Circuit Court of Appeals Judge Johnnie Rawlinson
| OpenJurist
They were joined in the action by an Uber driver and a Postmates driver, who said the law will force them to give up their gigs, because the flexibility they now enjoy as independent contractors will be replaced with the rigid schedules of regular employees.
In the earlier decision, the three-judge panel said Uber and its co-plaintiffs could move forward with the lawsuit on the grounds that the state of California in passing the law known as AB5 had violated their rights to equal protection under the 14th Amendment by intentionally targeting their businesses, while leaving many other businesses and workers untouched.
Gonzalez departed the California state legislature in 2022 for a leadership post in the AFL-CIO labor union.
"Plaintiffs plausibly allege that the primary impetus for the enactment of AB 5 was the disfavor with which the architect of the legislation viewed Uber, Postmates, and similar gig-based business models. As Plaintiffs plausibly alleged, the exclusion of thousands of workers from the mandates of AB 5 is starkly inconsistent with the bill’s stated purpose of affording workers the 'basic rights and protections they deserve,'" Rawlinson said in the earlier order.
Legal observers had taken note of the panel decision, saying it sent a strong signal to lower courts - such as the California federal judge who had attempted to end Uber's lawsuit - that they can and should consider the intentions and animus of lawmakers when evaluating companies' challenges to those laws.
The order issued by Ninth Circuit Chief Judge Mary H. Murguia vacated the earlier appellate decision, meaning it is no longer considered precedent and is not binding.
The full court's order doesn't state why the full Ninth Circuit intends to revisit the case. It also does not include any dissents.
Uber and Postmates have been represented by attorneys Theane Evangelis, Blaine Evanson, Alexander Harris, Heather Richardson and Dhananjay Manthripragada, of the Los Angeles firm of Gibson, Dunn & Crutcher.
California has been represented by Attorney General Rob Bonta and his office.