LEGAL CHALLENGES ARISE TO "ABC TEST"

The Lyft/Uber/DoorDash team has prepared a proposed ballot measure for the November 2020 election to combat the impact of AB5 which codified the "ABC Test" in determining independent contractor status. The "Protect App-Based Drivers & Services" ballot measure would provide specific conditions for a driver to be considered an independent contractor such as able to work flexible hours, able to decline jobs, and able to work for competing companies. The promoters' are expected to determine whether the in-coming legislature is willing to modify AB5 to exempt "app-based drivers", otherwise the proposal will be placed on the November 2020 ballot.

Meanwhile, the California Trucking Association (CTA) has filed a lawsuit in U.S. District Court asserting AB5 places an impermissible burden on interstate commerce in violation of the Supremacy and Commerce clauses of the U.S. Constitution. They assert AB5 creates obvious problems such as how to handle long-distance drivers whose legal employment status may now change based solely upon what state the driver is driving through at the moment.

[COMMENT: The attacks against AB5 were expected given the statute will dramatically impact many long-standing business models. Question now is to what extent the legislature will work with business to allow more exemptions, or will they punt to the Courts and/or the California voters to decide.]