If Your Law Needs Scores of Exemptions, Maybe Rethink the Law?

Before addressing which scene from the film comes to mind, an obvious question: How could a dry, legalese-packed decision from the Ninth Circuit come to remind me of a Monty Python scene?

Sadly, it’s not because Judge Johnnie B. Rawlinson has a sharp tongue or gift for satire. In fact, it’s not even what the court wrote that caused my mind to drift to Life of Brian, but what the court observed about the law at the center of the case.

As background, recall that A.B. 5 served to codify the “ABC Test” that was employed by the Supreme Court of California in the case Dynamex Operations West, Inc. v. Superior Court of Los Angeles. The ABC test is used by the court to determine whether workers are categorized as employees or independent contractors for the purposes of California wage orders.

Based on the statements of its sponsors and supporters, it’s clear A.B. 5 was aimed squarely at the “gig economy” and the companies that enable it, including the likes of Postmates and Uber.

“By some estimates, more than 4 million Californians are part- or full-time ‘gig’ workers,” A.B. 5 sponsor California Assemblywoman Lorena Gonzalez wrote in an opinion piece published by the Washington Post in 2019. “Typically, they are not paid a minimum wage or overtime. They don’t have employer-provided health insurance. They do not earn workers’ compensation, unemployment insurance or paid sick days. And without the employer contribution to Social Security and Medicare, these workers represent a ticking time bomb that will make California’s unfunded public pensions look like a small problem. I believe society must defuse this economic time bomb; otherwise, we will live with the consequences.”

Gonzalez noted in her article that exceptions included in the law “will ensure that independent contractors in professions where people have the ability to negotiate for themselves — such as doctors, lawyers, insurance agents, real estate agents, accountants, hairstylists and freelance journalists — are protected.”

As it turns out, however, those exceptions were just the beginning of the carveouts to A.B. 5, which continued to grow in number as more Californian workers and the groups that represent them spoke up about the need for additional exceptions to the law. (The adult industry spoke up too, but as is far too often the case, our cries went largely unheeded and unanswered.)

As Judge Rawlinson noted in the opinion published last week, in its final form “A.B. 5 exempted a broad swath of workers from the Dynamex presumption.”

“These statutory exemptions included: California licensed insurance businesses or individuals, physicians and surgeons, dentists, podiatrists, psychologists, veterinarians, lawyers, architects, engineers, private investigators and accountants; registered securities broker-dealers and investment advisers; direct sales salespersons; commercial fishermen working on American vessels for a limited period; marketers; human resources administrators; travel agents; graphic designers; grant writers; fine artists; payment processing agents; certain still photographers or photo journalists; freelance writers, editors, or cartoonists; certain licensed estheticians, electrogists (sic), manicurists, barbers or cosmetologists; real estate licensees; repossession agents; contracting parties in business-to-business relationships; contractors and subcontractors; and referral agencies and their service providers,” Rawlinson observed, adding that the law “also left open the possibility of court-created exemptions.”

Of course, the California Assembly wasn’t done adding exemptions to the law on its own at that point. As Rawlinson noted in the opinion, within a year of A.B. being enacted, A.B. 5 was amended by A.B. 170 and A.B. 2257, with both bills exempting “even more workers from the Dynamex presumption.”

“A.B. 170 added exemptions for ‘[a] newspaper distributor working under contract with a newspaper publisher… and a newspaper carrier working under contract either with a newspaper publisher or newspaper distributor’,” Rawlinson wrote. “A.B. 2257 added exemptions for recording artists; songwriters, lyricists, composers, and proofers; managers of recording artists; record producers and directors; musical engineers and mixers; vocalists; musicians engaged in the creation of sound recordings; photographers working on recording photo shoots, album covers, and other press and publicity purposes; and independent radio promoters.”

In support of A.B. 5, California Assemblyman Anthony Rendon once referred to the gig economy as “feudalism all over again,” and derided the gig economy as “nothing new,” calling it a “continuation of hundreds of years of corporations trying to screw over workers” adding that with A.B. 5 “we’re in a position to do something about that.”

While I can understand the sentiments behind Rendon’s rhetorical flourish, I’m not sure feudalism made exceptions for commercial fishermen, graphic designers, cosmetologists, repossession agents or “certain still photographers.”

Complicating matters further, the exemptions to A.B. 5 are not automatic. As noted by various legal analyses, workers in exempt categories must also be considered independent contractors under the “Borello Test” established in the 1989 case S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations.

What the court ultimately will do with A.B. 5 and its gargantuan list of exemptions, I have no idea. Regardless, I find myself wondering: if you craft a law to regulate businesses and then find yourself revising the law to exempt hundreds of business types and occupations from the regulation in question, is it possible you’ve written an unnecessary law?

Is it worth considering whether the standard advanced in Dynamex simply doesn’t fit an enormous range of business types and vocations and applying the standard might do more harm to workers in those areas than it offers benefit to them? Is it possible that your law, well-intended though it may be, is making the waters muddier and more difficult to navigate for all involved, rather than providing clarity to employers and workers alike?

Put another way, maybe if the California Assembly were to ask itself, Monty Python-style, “What has the gig economy ever given us?”, the list might be grow longer than the litany of occupations now exempted from A.B. 5.

Lady Justice figurine image by Ekaterina Bolovtsova from Pexels