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A California court has rejected Uber’s challenge to a state law that would classify gig workers as employees rather than independent contractors.
The federal appeals court in California ruled that Uber cannot move forward with its challenge to California’s Assembly Bill 5 (AB5). Enacted in 2019, AB5 mandates that app-based workers, including those for Uber, Lyft, and Postmates, be classified as full employees, granting them minimum wage, workplace protections, and other benefits. Uber’s immediate challenge led to years of legal deliberation, resulting in an initial appellate decision that struck down the law.

On Monday, an 11-judge panel of the 9th Circuit Court of Appeals overturned this decision, arguing that the law does not unfairly target transportation gig workers but rather adjusts regulations for all independent contractors. Circuit Judge Jacqueline Nguyen emphasized in the court’s decision, “The California Legislature perceived transportation and delivery companies as the most significant perpetrators of the problem it sought to address — worker misclassification.”
Uber and similar companies have vigorously opposed efforts to classify their workers as employees due to the increased costs associated with employee status. Uber went so far as to warn drivers with notifications in their Uber app that read “Recent changes to California law could threaten your access to flexible work with uber. Unless lawmakers take action now to modernize the law, you could lose your ability to work with multiple apps and control when and where you drive.”
Despite the ruling, another California law, Prop 22, allows Uber and similar businesses to classify drivers as contractors, not employees. This prop, which was passed in 2020, is currently tied up in a similar legal battle.