People v. Uber Technologies, Inc.

As codified, California Assembly Bill 5 (AB 5) provided that a person providing services for pay was an employee, not an independent contractor, unless the hiring entity established that (A) the hiring entity did not control or direct the person’s work, (B) the person performed work outside the hiring entity’s usual business, and (C) the person was customarily engaged in an independent trade consistent with the work performed for the hiring entity. This test was known as the ABC test. AB 5 authorized certain government officials to seek an injunction to prevent hiring entities from wrongly classifying workers. Uber Technologies, Inc. (Uber) and Lyft, Inc. (defendants), which operated ride-hailing platforms, claimed that they were in the business of providing technology platforms. Public officers (plaintiffs) brought a civil action contending that Uber and Lyft were transportation companies and that they misclassified their drivers as independent contractors. The public officers moved for a preliminary injunction relying, in part, on declarations from Uber’s and Lyft’s drivers explaining the hardships caused by their misclassification, including a lack of benefits. Uber and Lyft presented expert testimony supporting their claim that a preliminary injunction would cause them irreparable harm. The trial court entered a preliminary injunction, finding that Uber and Lyft would likely lose on the merits because they could not satisfy element B of the ABC test and that the balance of harms favored a preliminary injunction. Uber and Lyft appealed to the California Court of Appeal.