Uber/Postmates. Photo: Twitter

Uber and Postmates appeared unlikely to convince a federal judgeto halt enforcement of a California employment law that they claimwould upend their ride-hailing businesses.

At a hearing Friday, Theane Evangelis, a partner at Gibson, Dunn& Crutcher's Los Angeles office, said that Californialegislators targeted her clients and other ride-hailing firms whenthey passed Assembly Bill 5, which reclassified certain independentcontractors as employees. Backed by the U.S. Chamber of Commerceand others, Evangelis, who also represents two drivers, sought amotion for preliminary injunction to halt thelaw, which became effective Jan. 1, as it pertained to herclients.

Related: California's AB5 & gig work: Whatnow?

U.S. District Judge Dolly Gee of the Central District ofCalifornia, who issued a tentative prior to the hearing, appearedunconvinced.

"I can't second guess the legislature," the judge said at thehearing, in Los Angeles. She said that while Uber and Postmates hadpresented evidence of "irreparable harm," they failed to show alikelihood of success on the merits.

Although limited to the motion for preliminary injunction,Friday's hearing drew spectators from Mobile Workers Alliance andRideshare Drivers United, both of which support AB 5.

In a statement following Friday's hearing, Uber said, "Statelegislators had the opportunity to expand benefits for hundreds ofthousands of independent workers in California, a step Uber hasbeen advocating for and one that other states already have taken.Instead, they passed AB5 using a biased and overtly politicalprocess that ignored the voices of the workers most affected by thelaw and granted preferential treatment to an arbitrary group ofindustries. We are joining a growing group of companies andindividuals suing to ensure that all workers are equally protectedunder the law and can freely choose the way they want to work."

Uber and Postmates have alleged in a lawsuit filed against thestate of California on Dec. 30 that AB 5, passed Sept. 11 of lastyear, violated the U.S. Constitution's equal protection and dueprocess clauses of the Fourteenth Amendment, the Ninth Amendment,the Contracts Clause and other constitutional provisions. Theyargued that California legislators specifically targeted "networkcompanies," and that city and state officials have vowed to enforcethe law against gig companies.

They got support for their preliminary injunction from the U.S.Chamber of Commerce, two tech groups, and four independentcontractors, including an aspiring actor and freelancescreenwriter, who filed amicus briefs in the case.

At Friday's hearing, Evangelis tried to argue why AB5 would hurtnot just her corporate clients but also individual drivers, whowould lose the flexibility of their jobs if the state enforced thelaw. She also insisted that Uber and Postmates, which both disputethat the law applied to them, faced the threat of enforcement.

"While we don't admit or at all agree they're right, we aresubject to the threat of enforcement," she said.

In challenging the statute, the judge told Evangelis her clientshad "a very steep hill to climb." Moreover, the judge was notconvinced that the state would enforce AB5 against Uber andPostmates.

"Right now, the law hasn't had an opportunity to be enforced,"she said.

Further, she said, AB5 codified into law a California SupremeCourt decision in 2018 called Dynamex Operations W.Inc. v. Superior Court, which set up a test to determinewhether employees should be independent contractors oremployees.

But Evangelis talked extensively about a "patchwork ofexemptions" the legislature carved out from AB5, creating an"irrational scheme" that targeted her clients, but not otherprofessions, like home cleaners or dog walkers. As a result, shesaid, her clients had demonstrated "serious questions" about thelaw.

"You have to show me that these are irrational," Geereplied.

California Deputy Attorney General Jose Zelidon-Zepeda, speakingfor Attorney General Xavier Becerra in support of AB5, saidlegislators had to weigh which industries needed exemptions andwhich were taking advantage of their workers. He said that Uber andPostmates raised "very flimsy arguments."

The case is one of at least three lawsuits filed to haltenforcement of AB5. On Jan. 16, U.S. District Judge Roger Benitezof the Southern District of California granted a preliminaryinjunction motion in a separate case brought by the CaliforniaTrucking Association. In that case, he found that the plaintiff hadraised a plausible argument that the Federal AviationAdministration Authorization Act of 1994 preempted AB5 as itpertained to motor carriers.

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