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Uber, Postmates sue to block California law

Credit: Reuters Studio
Published on December 31, 2019 - Duration: 01:11s

Uber, Postmates sue to block California law

Uber Technologies and Postmates Inc.

Asked a U.S. court to block a California labor law set to go into effect on Wednesday, arguing the bill violates the U.S. Constitution.

Jillian Kitchener has more.

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Uber, Postmates sue to block California law

Uber and food-delivery service Postmates have filed a lawsuit in California looking to block a state labor law that would require them to treat many of their independent contractors – otherwise known as gig workers – as employees.

The law is set to go into effect January 1st.

The companies said the new California law, called Assembly Bill 5, was irrational and vague.

In their lawsuit, Uber and Postmates argued that singling out app-based workers violates equal protection guaranteed under the Constitution.

But backers of the bill, including labor groups, have argued the law protects workers' rights.

By classifying the contractors as employees, the companies would answer to labor laws that require higher pay and other benefits such as medical insurance.

Uber, Postmates and other app-based companies said the legislation compromises the flexibility valued by their workforce.

They said fewer workers would be hired if considered employees, vs.

Contract workers.

The office of the California Attorney General said in a statement that it was reviewing the complaint.

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