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Uber, Lyft, and DoorDash Pledge $90 Million To Fund Voter Initiative To Overturn Assembly Bill 5

Assembly Bill 5, a proposed new law currently pending in the California legislature, would limit and codify last year’s California Supreme Court Dynamex opinion.  If passed and signed into law by Gov. Newsom (he’s already said he’ll sign it), AB-5 would make it nearly impossible for most California employers to hire an independent contractor and would convert such workers into “employees” in the eyes of the law.

Among the things the California legislature finds most enticing about the proposed new law is the prospect of collecting more than $7 billion each year in new payroll taxes, which apply to workers who are classified as employees instead of independent contractors. Further, the California legislature, which depends heavily on campaign donations from labor unions, likes the proposed law because it will increase the number of employees (and, therefore, the number of prospective dues-paying union members) in California. (Assemblywoman Lorena Gonzalez, the bill’s author, was the Secretary-Treasurer and CEO of the San Diego-Imperial Counties Labor Council, AFL-CIO, before being elected to office.)

In response to the legislative action, three titans of the “gig economy” (Uber, Lyft, and DoorDash) pledged a combined total of $90 million to fund a voter initiative in 2020 that would limit or overturn AB-5 and Dynamex.  A bruising ballot fight over this issue will be something to behold and will cost both sides a fortune in advertising and voter outreach efforts.

© 2019 Proskauer Rose LLP.

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About this Author

Anthony J Oncidi, Employment Attorney, Proskauer Rose Law Firm
Partner

Anthony J. Oncidi heads the Labor & Employment Law Group in the Los Angeles office. Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection....

310-284-5690
Cole Lewis Employment Attorney
Associate

Cole Lewis is an associate in the Labor & Employment Department.

Cole graduated from UCLA School of Law, where he worked as a law clerk for Public Counsel of Los Angeles and advocated for benefit recipients in the Department of Public Social Services. He has also previously worked as a summer associate in Proskauer’s Labor & Employment Department.

Prior to law school, Cole received his Bachelor’s degree in Journalism at Indiana University, where he graduated cum laude.

310-284-5668