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

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

U.S. District Judge Dolly Gee of the Central District of California, who issued a tentative prior to the hearing, appeared unconvinced.

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

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

In a statement following Friday's hearing, Uber said, "State legislators had the opportunity to expand benefits for hundreds of thousands of independent workers in California, a step Uber has been advocating for and one that other states already have taken. Instead, they passed AB5 using a biased and overtly political process that ignored the voices of the workers most affected by the law and granted preferential treatment to an arbitrary group of industries. We are joining a growing group of companies and individuals suing to ensure that all workers are equally protected under the law and can freely choose the way they want to work."

Uber and Postmates have alleged in a lawsuit filed against the state of California on Dec. 30 that AB 5, passed Sept. 11 of last year, violated the U.S. Constitution's equal protection and due process clauses of the Fourteenth Amendment, the Ninth Amendment, the Contracts Clause and other constitutional provisions. They argued that California legislators specifically targeted "network companies," and that city and state officials have vowed to enforce the law against gig companies.

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

At Friday's hearing, Evangelis tried to argue why AB5 would hurt not just her corporate clients but also individual drivers, who would lose the flexibility of their jobs if the state enforced the law. She also insisted that Uber and Postmates, which both dispute that the law applied to them, faced the threat of enforcement.

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

In challenging the statute, the judge told Evangelis her clients had "a very steep hill to climb." Moreover, the judge was not convinced that the state would enforce AB5 against Uber and Postmates.

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

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

But Evangelis talked extensively about a "patchwork of exemptions" the legislature carved out from AB5, creating an "irrational scheme" that targeted her clients, but not other professions, like home cleaners or dog walkers. As a result, she said, her clients had demonstrated "serious questions" about the law.

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

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

The case is one of at least three lawsuits filed to halt enforcement of AB5. On Jan. 16, U.S. District Judge Roger Benitez of the Southern District of California granted a preliminary injunction motion in a separate case brought by the California Trucking Association. In that case, he found that the plaintiff had raised a plausible argument that the Federal Aviation Administration Authorization Act of 1994 preempted AB5 as it pertained to motor carriers.

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Judge not convinced as Uber, Postmates argue against gig law

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