AB 5 and its new test for determining the legality of an independent contractor relationship has seriously disrupted business in California. Prior to the law’s implementation on January 1st Uber and Postmates filed a lawsuit in federal court challenging the law on constitutional grounds. On Monday Judge Dolly Gee rejected Uber and Postmates attempt to block the new law with an injunction. The judge ruled that the companies had proved they could suffer some irreparable harm (a requirement to get an injunction) but that the government’s interest in regulating employment is more important to the public interest.
The ruling does not end the case or determine its outcome. The case will continue, but the probability that Uber and Postmates will ultimately succeed in defeating AB 5 is a bit lower. The ruling also has no impact on other cases proceeding against the State of California in an attempt to defeat AB 5. For instance, a federal judge imposed an injunction against the implementation of the law in the trucking industry because the Federal Aviation Administration Authorization Act likely preempts state law.