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<![CDATA[AB5]]>

California’s Ninth Circuit Issues Another Body Blow to AB5

March 19, 2023 by Jennifer Oliver OConnell Leave a Comment

The Ninth U.S. Circuit Court of Appeals is on a tear this week, dismantling the court rulings that have supported AB5, the so-called California gig workers law. Crafted to target rideshare companies and the trucking industry, since AB5 was signed into law in 2019, it has upended the careers of approximately 4.5 million freelancers, independent contractors, and the self-employed, and destroyed the independent contractor model in the state.

On Monday, the Ninth Circuit overturned a Superior Court of Alameda decision that deemed California’s Proposition 22, which allowed rideshare drivers to maintain their status as independent contractors, unconstitutional. Proposition 22 was placed on the November 2022 ballot and approved by a wide margin. It also helped to gut AB5 and set precedent to discourage similar laws being drafted in other states, which is why Big Labor and their allies in the California Attorney General’s office continue to try and overturn the will of the voters as well as mount challenges to any lawsuit brought.

The Ninth Circuit bookended the week of bad news for proponents of AB5 by serving them yet another defeat.

The 9th Circuit has issued a scathing rebuke of Newsom and the Legislature. The court advanced a case alleging AB 5 is unconstitutional and rooted in “corruption, pure spite, or naked favoritism.”

— Kevin Kiley (@KevinKileyCA) March 18, 2023

A U.S. appeals court on Friday revived a lawsuit by Uber Technologies Inc (UBER.N) and subsidiary Postmates Inc challenging a California law that would require them to provide more proof that workers are independent contractors, a classification that helps the companies save millions.

In a major win for app-based services that heavily rely on contractors, the San Francisco-based 9th U.S. Circuit Court of Appeals said the state must face claims that the law known as AB5 is unconstitutional because it improperly singles out app-based transportation businesses while exempting many other industries.

The decision gave further weight to what opponents of AB5 have been saying all along: If you can carve out exemptions for one group, but exclude others with no solid or consistent basis, then your law is not worth the paper it is written upon. Karen Anderson, journalist and founder of the Facebook group Freelancers Against AB5 wrote in 2021:

To date, approximately 100 professions and industries in California have been exempted from Assembly Bill 5, either in the original law that went into effect on January 1, 2020, or in the “fix-it” bill (Assembly Bill 2257) that followed nine months later. The arbitrary exemption process picks winners and losers, and has resulted in nothing less than total chaos, anguish, upheaval, outrage, lost livelihoods, shuttered businesses, and a slew of lawsuits.

Thanks to the arbitrary nature of the exemptions, the Ninth Circuit has deemed that the lawsuits, even the ones that had been previously rejected or dismissed, must now be reconsidered.

A three-judge 9th Circuit panel on Friday said the “piecemeal fashion” of the exemptions to the law was enough to keep Uber’s lawsuit alive.

“The exclusion of thousands of workers from the mandates of AB5 is starkly inconsistent with the bill’s stated purpose of affording workers the ‘basic rights and protections they deserve,’” Circuit Judge Johnnie Rawlinson wrote for then court.

The court said the federal judge in Los Angeles who dismissed the case must also reconsider her earlier ruling declining to block AB5 pending the outcome of the lawsuit.

This is how Governor Gavin Newsom lost the pandemic lawsuits brought by houses of worship: because there was a clear pattern of preferential treatment given to secular gatherings like entertainment shows, while discriminating against religious gatherings. The constitutional right to freedom of religion and assembly was upheld by the courts. Thanks to the Ninth Circuit’s ruling, rideshare and app-based independent contractors, as well as the trucking industry and journalists, can potentially revive their challenges, and new challenges based on constitutional grounds can be brought.

Attorney General Rob Bonta issued this statement to Reuters regarding the Ninth Circuit decisions:

The office of California Attorney General Rob Bonta, a Democrat, said in a statement that it was reviewing the decision and assessing its next steps.

“We will continue to defend laws that are designed to protect workers and ensure fair labor and business practices,” Bonta’s office said.

The opinions expressed by contributors are their own and do not necessarily represent the views of RedState.com.

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Filed Under: <![CDATA[9th circuit court of appeals]]>, <![CDATA[AB5]]>, <![CDATA[lyft]]>, <![CDATA[prop 22]]>, <![CDATA[Uber]]>, News, Red State

AB5’s Chickens Coming Home to Roost? OOIDA Truckers Fight Secy of Labor Nominee Julie Su

March 15, 2023 by Jennifer Oliver OConnell Leave a Comment

As RedState reported on Wednesday, California Congressman Kevin Kiley did a joint press conference with Assembly Republicans, business organizations, and independent professionals affected by AB5 to oppose President Joe Biden’s nomination of Julie Su for U.S. Secretary of Labor. While not a part of Congressman Kiley’s press conference, on March 3, the Owner-Operator Independent Drivers Association (OOIDA) submitted a letter to the Senate Committee on Health, Education, Labor & Pensions (HELP) asking them to reject Su’s nomination. Su’s implementation of AB5 did, and continues to do, tremendous harm to the trucking industry in the state of California. No one wants to see this same damage spread nationwide, and OOIDA is trying to cut it off at the pass.

Truckers and their mode of operations represent a last bastion of independent entrepreneurship in our country. Our food supply and other commerce chains depend upon the work that they do. But Big Labor only sees dollar signs and flagging membership. While certain segments of trucking are unionized, the owner-operator model of motor carriers has resisted this, because you make a whole lot more money, have a greater degree of flexibility, and can negotiate higher pay rates if you are your own boss. In my own interviews with California truckers for a piece I did for another outlet, many of these owner-operators are multigenerational, passed on from parents to children, and their families have been in California for decades. The life is akin to ranchers, farmers, and other agricultural businesses in the state. The ownership investment and independence are the main draws. It’s just that simple. It is government that has made it complicated.

What AB5 did in California is destroy this model. Despite numerous court challenges to exempt themselves from this ridiculous and work-killing law, in June 2022, the U.S. Supreme Court declined to review the California truckers’ last challenge, so they became subject to the restrictions imposed by the law. The result? Some truckers have left the industry, and others are moving their operations out of the state.

Just as Congressman Kiley has been doing in his speeches, letters, and advocacy, OOIDA CEO Todd Spencer’s letter to the HELP Committee points out the failure, malfeasance, and outright destructiveness that ensued when Julie Su, as California’s Labor and Workforce Development Secretary, implemented and enforced AB5. OOIDA is vowing, never again.

The Owner-Operator Independent Drivers Association represents 150,000 owner-operators leased to motor carriers, small-business motor carriers with their own operating authority, and employee truck drivers. We oppose Ms. Julie Su’s nomination to lead the Department of Labor and the Senate Committee on Health, Education, Labor, & Pensions must reject her nomination in order to protect the livelihoods and careers of the hard-working truckers we represent. Her record as California Labor Commissioner and Secretary for the California Labor and Workforce Development Agency, including her support for AB5 and overseeing its disastrous implementation, demonstrates she would pursue policies that threaten our members’ ability to use a business model they have properly and beneficially used for decades.

Spencer further said of AB5,

This is the most disruptive worker classification policy to be enacted anywhere at the state or federal level.

And all California independent professionals, freelancers, and self-employed say, “Can I get an Amen?!” Spencer pulls no punches on his disdain for Su’s lack of knowledge and lack of competence.

When asked about AB5 in an interview, Ms. Su responded that it was meant to address misclassification that has “resulted in the day labor-ization of our economy.” She continued, “Instead of the steady, consistent, reliable work, people end up basically in odd jobs and you’re hustling all the time, right? So AB 5 is meant to address that kind of misclassification so that we can bring more people who should be under the protection of our labor laws back on that floor.”

These comments demonstrate either an ignorance of the owner-operator model in trucking or an overly broad generalization of how different workers operate as independent contractors. For the tens of thousands of truckers who have enjoyed a successful career as an owner-operator, it would come as a surprise to learn that their business represents an “odd job” in need of fixing.

This has been the argument among independent professionals since before this law passed or had even been implemented. In its so-called push to help misclassified “workers,” AB5 employs a broad brush approach that swept in those of us who are independent by choice, are hustling because we like the hustle, and who did not need government intervention to negotiate what we wish to be paid and how we are paid. California lawmakers did not care that in its greedy efforts to control truckers and rideshare drivers, it was destroying an entire independent contractor model that not only facilitates the engines of the economy but, in many ways, drives it.

Make no mistake: Independent contractors have comprised a good portion of the 500,000 people who have done the California Adios over the past two years. This not only represents a loss of population, but a loss of business revenue, corporate taxes, and all the ancillary businesses that revolve around it. California Secretary of Workforce Su instituted this madness for the state. A Secretary of Labor Su would further spread this chaos nationwide, and OOIDA’s Spencer wants to let Senate Chairman Bernie Sanders and Ranking Member Bill Cassidy know that Su’s nomination should not be allowed to stand.

It has been frustrating enough for small-business truckers that the California legislature ignored their concerns when enacting AB5. But the implementation of the law has been just as, if not more, disappointing. For months after the law was enacted, OOIDA sought guidance about how the law would apply in the trucking industry and how small businesses and independent contractors could potentially comply. Despite our efforts, we were left with essentially no guidance before the law took effect. The law and its haphazard rollout has forced independent contractor truckers to leave the state of California, become an employee, attempt to reconfigure their business, operate under a cloud of uncertainty, or abandon the trucking profession altogether.

For these reasons, we are concerned that Ms. Su would continue to pursue an ideologically-motivated agenda towards worker classification that ignores the thousands of small-business truckers that depend on the ability to work as an independent contractor. Make no mistake, if Ms. Su were to advance the same policies that she championed in California, it would force hundreds of thousands of truckers to change their business model and put their livelihood in jeopardy.

Spencer points out that despite offering to help California and national lawmakers understand how the independent contractor model works for the trucking industry, there continues to be a push to enact one-size-fits-all solutions that only erode and undermine a model that works not just for one industry, but for independent contractors and professionals across the United States. However, he concludes by extending the olive branch of goodwill once again, while warning that a confirmation of Julie Su would only hamper—not help—any forward progress.

We stand ready to work with Senators to address misclassification and improve working conditions in the trucking industry. But we believe that Ms. Su’s confirmation would make it extremely difficult to fix these issues in a way that benefits America’s truckers.

Or America’s independent professionals, freelancers, and self-employed. Julie Su’s nomination should and must be opposed.

The opinions expressed by contributors are their own and do not necessarily represent the views of RedState.com.

Filed Under: <![CDATA[AB5]]>, <![CDATA[Julie Su]]>, <![CDATA[OOIDA]]>, <![CDATA[Owner-Operator Independent Drivers Association]]>, <![CDATA[U.S. Department of Labor]]>, News, Red State

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