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California's ABC test does not
violate the First Amendment

Mobilize the Message v. Bonta (9th Cir 10/11/2022)
http://case.lawmemo.com/9/mobilize.pdf
Sent to Custom Alerts™ subscribers on 10/12/2022

The 9th Circuit (on a 2-1 vote) affirmed the denial of plaintiffs' motion for a preliminary injunction which sought to restrain the California Attorney General from applying California’s “ABC test,” codified in California Labor Code 2775(b)(1) to classify plaintiffs’ doorknockers and signature gatherers as either employees or independent contractors.

For certain purposes, California classifies “a person providing labor or services for remuneration” as an employee unless the hiring entity satisfies the “ABC test” adopted in Dynamex Operations West, Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018). Cal. Lab. Code 2775(b)(1).

Section 2775 and Dynamex do not apply to several occupations. For workers in the exempt occupations, the multifactor test of S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 769 P.2d 399 (Cal. 1989), governs in determining whether the worker is an employee or an independent contractor. Although Dynamex was initially limited to wage orders, with Borello applying outside that context, the California legislature codified the ABC test and expanded its applicability through the enactment of Assembly Bill No. 5 (AB 5) in 2019.

Plaintiffs hire doorknockers and signature gatherers, which they purport to hire as independent contractors. Plaintiffs claimed that the California law violates the First Amendment because it discriminates against speech based on its content by classifying their doorknockers and signature gatherers as employees or independent contractors under the ABC test while classifying direct sales salespersons, newspaper distributors, and newspaper carriers under Borello.

The court accepted, for present purposes, plaintiffs’ assertion that application of the ABC test to their doorknockers and signature gatherers increased the likelihood that they will be classified as employees. The court also accepted that classification of their doorknockers and signature gatherers as employees might impose greater costs on plaintiffs than if these individuals had been classified as independent contractors, and that as a result they might not retain as many doorknockers and signature gatherers.

Such an indirect impact on speech, however, does not violate the First Amendment. Section 2783 does not target certain types of speech. Unless an occupational exemption exists, the ABC test applies across California’s economy. Thus, plaintiffs were not unfairly burdened by application of the ABC test to their doorknockers and signature gatherers.

The court also rejected plaintiffs’ assertion that statutory exemptions for direct sales salespersons, newspaper distributors, and newspaper carriers constituted content-based discrimination. The exemptions do not depend on the communicative content, if any, conveyed by the workers but rather on the workers’ occupations. Although determination of whether an individual is, for example, a direct sales salesperson might require some attention to the individual’s speech, the US Supreme Court has rejected the view that any examination of speech or expression inherently triggers heightened First Amendment concern.

Because plaintiffs had not established a colorable claim that their First Amendment rights had been infringed, or were threatened with infringement, they had not demonstrated a likelihood of success on the merits. The district court did not abuse its discretion in denying a preliminary injunction.

Dissenting, Judge VanDyke stated he would reverse the denial of a preliminary injunction. The governmental burdens challenged here turned primarily on what is said, not labor distinctions unrelated to speech. Regardless of whether such content-based distinctions hide under the veneer of a labor classification, the First Amendment’s protections remain the same. Plaintiffs face cost-prohibitive expenses because of the content of the speech in which they engage.

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