To play devil's advocate, even if they wanted to follow the law in good faith, they'd need to completely restructure their business. Until they can do so, they'd need to be shut down.
Can someone with legal expertise chime in but in cases like this, can a company like Uber lay out a plan for restructuring and be like "ok we'll comply but over the course of a year and here's the plan"? Or does it have to be done ASAP? The latter seems sort of infeasible. Curious about how these judgments are resolved. My feeling is that judges and the government aren't out there to hurt anyone since compliance is the goal rather than punishment but I have no real legal expertise. Thanks in advance.
Not a lawyer, but as a citizen why would we expect a company to be allowed to violate a law for an extended period of time after a court has ruled that the conduct is illegal?
That seems like the definition of capriciously applying laws, and would seem like it would create more problems arising from unequal application of laws.
> That seems like the definition of capriciously applying laws, and would seem like it would create more problems arising from unequal application of laws.
AB5 is a case of capriciously writing laws. The state wrote a new law that was specifically intended to put Uber and similar companies in a state of noncompliance with it.
Isn't every law specifically intended to put a group of people in noncompliance with it? What's the point of making a law if everyone was going to comply regardless?
The power to create laws is not supposed to be used as weapon. It clearly was in this case.
AB5 was written in bad faith with the goal of hurting specific companies, not with the goal of writing a sensible law that sets a framework for how businesses ought to operate. They wrote it in such a hurry that it unintentionally hurt a bunch of other people and small businesses. That's not how laws are supposed to work.
So if a government sees a company's actions as too unethical what are they to do about it other than target them with a law? I don't know about the specifics of this law, Ill assume you're correct it's poor, but I have trouble understanding your point of the law not being used as a weapon against these companies. That seems to be all its for to me, something to be used to stop a bad actors behavior. I can't imagine the majority of laws are created preemptively.
Laws aren't allowed to be created as weapons, under US constitutional law this is often referred to as illegal taking, if AB5 was illegal taking these companies would've been able to get the law halted which it seems to have not happened.
Would you consider all labor and environmental laws to have been crafted as a weapon?
One could argue that much of our labor and environmental protective apparatus was written to curb behaviors of specific companies (or "business models," if you prefer).
It’s usually written to make existing manufacturing activity clean up after itself, or existing employment relationships better for the employees. There may be some collateral damage, but the intent is not to destroy.
“People’s jobs should be better” is a different goal from “bad jobs should not exist.” It may be used as a tool to achieve the former, but we care whether it’s actually effective at doing so.
Is the intent here really to destroy? Is it really the case compliance with the law is only possible for employers like Walmart, The Gap, and thousands of other small firms in California? I'm very in favor of gig work, but the notion that the only option left is to stop work rather than hire folks as employees seems obviously facile. Notably, there's no exemption for the many other companies that operate passenger transport in the state.
Your last sentence is interesting because the entire point of a labor law like this one is to bring jobs under the remit of labor protections so that "people's jobs should be better" is something that can even be addressed.
b) Its existence will trigger a “race to the bottom” that threatens all workers.
c) Gig work is not very important to casual gig workers, so taking it away would not harm them.
d) Taking away gig work will prompt gig workers to find real jobs which are better for them, anyway.
Low margin employers like Walmart and Amazon ruthlessly squeeze efficiency from
their employees to ensure productivity > cost for every shift. The could not do otherwise - such are the economics of a low margin business. The gig economy offers the option of working “inefficiently,” and some people value that enough to trade off compensation for it. Maybe the gig economy companies could operate like Walmart, but the point is people are choosing gig work over Walmart for a reason.
> specifically intended to put Uber and similar companies in a state of noncompliance with it.
It would be capricious if it were more targeted, written without ample public discussion, or if the affected firms had no ability to continue operations. As I understand it, none of that is true of AB5. For example, the affected companies are free to use contingent workforces in a manner similar to the other many thousands of companies that were not affected.
I'm far from an expert on the law, but wouldn't a fair read also be that those companies were operating in noncompliance with community norms (as expressed by voter preferences), and so lawmakers plugged a regulatory hole?
In that way, could it be seen as similar to a body writing a new law (say) prohibiting people from carrying long rifles into grocery stores? Would that also be a law written capriciously?
If it wasn't targeted, then why are there so many exceptions written into the law? Lawmakers added exemptions for dozens of different types of businesses. If this was intended to be a generic law about worker classification they wouldn't have needed to do that. They really had Uber and similar companies in their crosshairs, and they intended to apply this law narrowly to them.
Thanks for the clarification! (I am definitely not an expert on this law.)
Just reading up on it, I see exemptions for (simplifying a bit) a) highly-paid professions and b) commercial fishers, repo agencies, and people who drive for driving clubs(?). The first category absolutely makes sense if the aim is something like "companies shouldn't abuse the 'contractor' classification to take advantage of low-paid workers". The second category smells like lobbying.
Unless I'm missing some of the dozens of types of businesses, I don't see how the exemptions are broadly anything more than a red herring here. I guess they could have left the exemptions and then put a $ figure and an inflation tie, but that has proven problematic as well.
How would you have written a law to express the goal of "companies shouldn't abuse the 'contractor' classification to take advantage of low-paid workers" ?
> A repossession agency licensed pursuant to Section 7500.2 of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by Section 7500.2 of the Business and Professions Code, if the repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. (nonitalic emphasis mine)
IANAL but that's not an exception - that's the bill saying that if the primary part of the ABC test does not apply, then the existing regulations for that licensed business take over from AB5.
From my quick glance, all of the exceptions I could find boiled down to this FAQ from the CA state website or older legislation explicitly mentioned right next to the exceptions in AB5 [2]:
> 4) Do AB 5 and Labor Code section 2750.3 require use of the ABC test in all situations?
> ...
> Additionally, where a court determines the ABC test cannot apply for a reason other than an express exception, the Borello test, described in Question 5 below, will apply. For example, if a court were to determine in a particular case that the ABC test is preempted by an applicable federal law, the Borello test would be used.
Note that the "express exception" in the case of the repo agencies is due to existing CA state law governing that profession which supersedes AB5 as long as the "repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact."
In the case of other licensed professions like doctors, veterinarians, and yes, commercial fishermen (who must have a commercial fishing license) they are all covered by existing, more specific, legislation and federal laws that by definition require exceptions in the State law - otherwise it'd be even more bogged down in the courts. That's why there's the Borello test and explicit exception: in order to fit in with other existing laws.
This is all just seems like self serving FUD from our industry but again, IANAL.
Since this is the result of a court case, where they should have been complying with the law already, no, there is no transition period.
The transition period was the ~2 months between AB5 being signed and it coming into effect (+ the year leading up to it, which they could've also used to prepare).
> can a company like Uber lay out a plan for restructuring and be like "ok we'll comply but over the course of a year and here's the plan"?
IANAL, but well, this is kinda basic. All laws come with instructions about that. Some do give them that time, other laws do not and say they must be followed immediately.
> Can someone with legal expertise chime in but in cases like this, can a company like Uber lay out a plan for restructuring and be like "ok we'll comply but over the course of a year and here's the plan"?
No, except perhaps as a settlement offer, but because the law gives specific rights to workers which State executive officials don't have the authority to bargain away, I don't know that would be effective except against any fines, etc, that might be due to the State; individual workers would still have claims until they complied.
> Or does it have to be done ASAP?
It has to be done from the effective date of the legal requirement to avoid legal penalties; for the preliminary injunction, it has to be done on whatever timeline (which may be immediately) is specified in the injunction once any stay on the injunction ends (this one was stayed for 10 days during which Uber is attempting to appeal to have it lifted) to avoid contempt penalties for defying the injunction.
> The latter seems sort of infeasible.
Yes, it's risky to have a business plan that depends on breaking the law.
> Yes, it's risky to have a business plan that depends on breaking the law.
The business plan didn’t break the law; a new law was introduced to disrupt the existing business plan. This is pretty obvious no matter your opinion about Uber’s business model or the novel law in question.
The new law merely codified a legal standard that the California Supreme Court had previously come up with (in Dynamex in 2018) as an interpretation of existing law.
I read the parent's emphasis in "even if they wanted to follow the law in good faith" on even. It's quite possible they agree and meant:
I don't think they want to follow the law in good faith, but even if they did, they'd have to shut down while they restructure to accommodate the law, so this outcome doesn't tell us much about their thinking yet.
