The Corner

Law & the Courts

California’s New ‘Gig Economy’ Law Is Dumb. But Is It Unconstitutional?

Uber’s logo on a mobile phone (Hannah Mckay/Reuters)

It’s 2020, and that means California’s new “gig economy” law is in effect.

As I’ve noted before — see here and here — the policy is a complete mess. It first offers an objective test to determine whether a company must treat a worker as a full employee rather than as an independent contractor. (Employees are entitled to far more labor protections, but gig-economy companies such as Uber typically classify their workers as contractors.) Yet dozens of occupations are then exempted from the test, creating an absurd patchwork in which legislators’ case-by-case judgments and prejudices, not a set of neutral principles, determine the fates of countless businesses and workers.

This is a really stupid way to make economic regulations. But is it unconstitutional? A couple new court cases are raising the question. They strike me as long shots legally, but I hope they provoke some discussion on the right about when it’s appropriate to defend economic liberty in the courts rather than the legislatures.

In recent years some conservative legal thinkers have advanced the notion that the Constitution protects individuals against various forms of state economic regulation, for example by guaranteeing a “right to earn a living.” Such ideas once had strong support on the Supreme Court — most famously, the 1905 Lochner decision struck down a law limiting how many hours bakery employees could work — but they largely fell out of favor decades ago as conservatives came to despise judicial activism. The new cases provide grist for that discussion and might one day improve our sense of where the current Court’s conservatives stand.

The common thread running through most of the lawsuits’ various claims is that California legislators arbitrarily, unfairly, and/or maliciously exempted some occupations but not others, and thereby harmed the ability of non-exempted individuals and businesses to thrive economically. Uber and Postmates — whose phone-app-based business models are at the very center of the controversy here — allege the law therefore violates “the Equal Protection and Due Process Clauses of the Fourteenth Amendment to the United States Constitution, the Ninth Amendment to the United States Constitution, and the Contracts Clause of Article I of the United States Constitution, as well as the Equal Protection Clause, Inalienable Rights Clause, Due Process Clause, Baby Ninth Amendment, and Contracts Clause of the California Constitution.” The Pacific Legal Foundation, representing freelance journalists — who received a limited exemption that runs out after they’ve submitted 35 articles in a year to a single publication — makes an equal-protection argument as well, and further claims that giving only a limited exemption to freelance journalists burdens the freedom of the press.

Again, I’m skeptical of these cases’ legal chances, as well as of the notion that the federal Constitution does much to limit states’ ability to pass economic regulations, including dumb and arbitrary ones. But however successful they are in court, hopefully these cases will inspire some helpful intra-Right debates about the original meaning of the Constitution as regards economic liberty, and about the proper role of the judiciary. For starters, Josh Blackman has some comments on the legal technicalities here.