April is National Stress Awareness Month, a time for individuals and organizations to take a closer look at the impact of stress on our health and well-being. We in the community are no strangers to stress, and this month presents an opportunity to examine the unique stressors and challenges of those working in the workers’ compensation industry.
Research suggests that one of the most effective ways to reduce stress and promote well-being is by spending time in nature. As the spring season blooms, we encourage you all to take a walk in a park or a hike in the mountains to fully enjoy all that this season has in store!
EQUAL PROTECTION CHALLENGE TO AB 5 POTENTIALLY VIABLE
Last month, Plaintiffs, who filed an Equal Protection challenge to enforcement AB5, including Uber, Lyft, and Postmates, received a favorable ruling from the US 9th Circuit Court of Appeals, which held that a lower district court erred in dismissing the equal protection claim. The practical result for now is that app-based ride hailing companies such as Uber and Lyft can continue to classify its drivers as independent contractors, which protects such companies from liability arising out of laws designed to protect employees, including workers’ compensation laws.
AB 5 codified the “ABC test” to categorize workers as employees or independent contractors for purposes of California wage orders. Under the ABC test, workers are presumed to be employees and may be classified as independent contractors only if certain criteria are met. Specifically, the employer must demonstrate that the worker is free from its control or direction in connection with work performance, that the worker is customarily engaged in an independently established trade of the same nature as the work performed.
As noted by a recent WorkCompCentral article, the expressed intent of the Legislature in enacting AB 5 was “to ensure that workers who are currently exploited by being misclassified as independent contractors instead of recognized as employees have the basic rights and protections they deserve under the law.” However, AB 5 exempted various categories of workers from the presumption of employee status.
Two app-based ride hailing services, Uber Inc. and Postmates Inc., among others, filed a complaint based on the unconstitutionality of AB 5 and requested a preliminary injunction, which a district court judge declined to issue.
The plaintiffs filed an appeal with the U.S. 9th Circuit Court of Appeals. However, before the court could issue a ruling, Proposition 22 was adopted, which expressly classified app-based drivers as independent contractors.
The plaintiffs filed an amended complaint with the district court, which the state moved to dismiss for its failure to state a claim for which relief could be granted. The district court granted the state’s motion with prejudice.
The plaintiffs filed an appeal with the U.S. 9th Circuit Court of Appeals and the court said that even under the “fairly forgiving” standard of rational basis review, plaintiffs plausibly alleged an equal protection violation. The court said that the plaintiffs plausibly alleged that the primary reason for the enactment of AB 5 was due to legislative disdain for Uber, Postmates and other gig-based business models. Further, the exclusion of thousands of workers from the mandates of AB 5 is inconsistent with the bill’s purpose. “The plausibility of Plaintiffs’ allegations is strengthened by the piecemeal fashion in which the exemptions were granted, and lends credence to [p]laintiffs’ allegations that the exemptions were the result of ‘lobbying’ and ‘backroom dealing’ as opposed to adherence to the stated purpose of the legislation”, the court said. As such, the court held that the district court erred in dismissing plaintiff’s equal protection claim and the matter was remanded for reconsideration.
Opinion in re: Lydia Olson, et al v. State of California, et al
Gig Workers, Employers Assert Potentially Viable Equal Protection Challenge to AB 5
DIR HONORS WORKERS’ MEMORIAL DAY
On April 28, 1970, Congress passed the Occupational Safety and Health Act, ensuring that workers have the right to a safe and healthy workplace. To commemorate the passing of the legislation, April 28 is observed to remember workers who have lost their lives due to work-related injuries and illnesses.
As noted by a recent news release from the Department of Industrial Relations (DIR), 462 Californians died from work-related injuries in 2021.
The DIR’s Division of Safety and Health (Cal/OSHA) Chief Jeff Killip said “Workers Memorial Day Honors all of the workers who have lost their lives on the job … Important workplace safety regulations are critical in preventing tragedies from occurring. Our team is here to support employers and workers with workplace safety and health guidance, training, and on-site consultation to prevent workplace injury, illness and death.”
According to the DIR, Cal/OSHA was the first in the nation to adopt an Injury and Illness Prevention Program (IIPP) regulation to set standards for employers across the state to identify and prevent workplace hazards.
Cal/OSHA has a website to guide employers and workers for various hazards, including enforcement of COVID-19 prevention non-emergency regulations, which can be found by clicking the link below.
DIR and Cal/OSHA Honor Workers’ Memorial Day
COVID-19 Prevention Non-Emergency Regulations
This Bulletin was written by Steve Rosendin, Associate Partner in our San Francisco office. A copy of this Bulletin and the most current twelve months are available on our website at: www.mulfil.com/bulletins.
