Keeping Tabs on the Ninth Circuit
October 14, 2022 - This Week at the Ninth

This Week at the Ninth: Is This Speech?

contractor employee

This week, the Ninth Circuit grapples with a challenge to California’s law for classifying workers as a content-based regulation of speech.

The Court holds that plaintiffs’ First Amendment challenge to California’s differential treatment of doorknockers and signature gatherers on the one hand and direct sales salespersons on the other hand with respect to characterization of workers as employees or independent contractors is unlikely to succeed on the merits because California’s law regulates economic activity, not speech.

The Panel: Judges Hurwitz, VanDyke, and Ericksen (D. Minn.), with Judge Ericksen writing the opinion, and Judge VanDyke dissenting.

Key Highlight: California Labor Code “section 2783’s exemptions [from California’s ABC test for determining worker status] for direct sales salespersons, newspapers distributors, and newspaper carriers do not depend on the communicative content, if any, conveyed by the workers but rather on the workers’ occupations.”

Background: Plaintiff Mobilize the Message provides political campaigns with doorknockers and signature gatherers, which it purports to hire as independent contractors. Mobilize feared that under California Assembly Bill No. 5, which codified the so-called “ABC test” for determining whether a worker qualifies as an independent contractor or an employee, Mobilize’s doorknockers and signature gatherers would be characterized as employees. So Mobilize stopped offering its services in California because it could not afford the administrative expenses of hiring its independent contractors as employees. Plaintiffs Moving Oxnard Forward and Starr Coalition—a nonprofit and its political action committee—would like to hire Mobilize to gather signatures. Together, the plaintiffs sued the California Attorney General under 42 U.S.C. § 1983 claiming that Assembly Bill No. 5 violates their right of free speech under the First Amendment by classifying their doorknockers and signature gatherers as employees or independent contractors according to the ABC test, while classifying other categories of workers according to a different test. Plaintiffs sought a preliminary injunction, which the district court denied, concluding that the plaintiffs had failed to show a likelihood of success on the merits or irreparable harm.

Result:  The Ninth Circuit affirmed. The Ninth Circuit agreed that the plaintiffs had not shown a likelihood of success on the merits. Although plaintiffs argued that California law discriminates against their speech based on its content by classifying their doorknockers and signature gatherers as employees or independent contractors under the ABC test while classifying other workers under a different test, the Court concluded that Assembly Bill No. 5 and its exemptions do not impose contest-based restrictions on speech. The First Amendment does not prevent restrictions directed at commerce or conduct from imposing incidental burdens on speech. And Assembly Bill No. 5 was directed at commerce and conduct. The Court accepted that application of the ABC test to plaintiffs’ doorknockers and signature gatherers would increase the likelihood that they will be classified as employees, and that such classification might impose greater costs on them 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. Buch such an indirect impact on speech does not violate the First Amendment. The Court rejected plaintiffs’ arguments that California law’s exemptions for certain workers, including direct sales salespersons, newspaper distributors, and newspaper carriers constituted content-based discrimination. Those exemptions do not dependent on the communicative content, if any, conveyed by the workers but rather on the workers’ occupations.

Judge VanDyke dissented. Judge VanDyke reasoned that California’s differential treatment of different occupations violated the First Amendment because the occupation’s labels turned predominantly, if not entirely, on the content of the workers’ speech, making the law a content-based regulation of speech, which could not survive strict scrutiny.