Assembly Bill 5 (“AB 5”), now Cal. Lab. Code § 2778, codified the ABC test previously set out in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, 416 P.3d 1 (Cal. 2018) for ascertaining whether workers are employees or independent contractors. In Am. Soc'y of Journalists & Authors v. Bonta, 20-55734 (9th Cir. Oct. 6, 2021), writer and photographer professional groups argued that, because they received a narrower exemption from the applicability of the ABC test than was offered to certain other professionals, section 2778 effectuates content-based preferences for certain kinds of speech, burdens journalism, and burdens the right to film matters of public interest in violation of the First Amendment and Equal Protection Clause.
The professional groups argued that the restrictions burdened journalism by forcing freelancers to become employees, thereby reducing their work opportunities and inhibiting their freedom to freelance. However, the Ninth Circuit Court of Appeals rejected this argument, finding that Cal. Lab. Code § 2778 regulates economic activity, not speech.
The Court reasoned that Cal. Lab. Code § 2778 does not regulate speech because it does not limit what someone can or cannot communicate or restrict when, where, or how someone can speak. The statute is aimed at the employment relationship, which is a traditional sphere of state regulation. The First Amendment does not prevent restrictions directed at commerce or conduct from imposing incidental burdens on speech. Section 2778’s effect on speech is incidental.
The Court further held that Cal. Lab. Code § 2778 does not impose content-based burdens on speech. Although journalists "speak" as part of their professions, nothing about section 2778's text, structure, or purpose reflects a legislative content preference. In the Court’s view, the inclusion of provisions specific to "speaking" professionals does not transform a broad-ranging, comprehensive employment law like section 2778 into a content-based speech regulation.
Because Cal. Lab. Code § 2778 does not implicate the First Amendment, the rational basis standard of review applied. In order to succeed on the rational basis standard of review, the party attacking the law must negate every conceivable basis which might have supported the distinctions drawn, which the professional groups had failed to do. The Court found that it was conceivable that differences between occupations warrant differently contoured rules for determining which employment test better accounts for a worker's status, and that misclassification was more rampant in certain industries and therefore deserving of special attention.