Oct 15 (Reuters) - The U.S. Supreme Court on Tuesday

turned away a bid by Uber Technologies ( UBER ) and subsidiary Postmates

to revive a challenge to a California law that could have forced

the companies to treat drivers as employees rather than

independent contractors who are typically less expensive.

The justices denied Uber's ( UBER ) petition for review of a 9th U.S.

Circuit Court of Appeals ruling that said the companies failed

to show that the 2020 California law known as AB5 illegally

singled out app-based transportation services while exempting

other industries.

Drivers for app-based services are now exempt from AB5 under

an industry-backed 2020 ballot initiative known as Proposition

22. The California Supreme Court upheld Prop 22 in July,

rejecting a union's claims that it violated the state's

constitution.

Theane Evangelis, a lawyer for Uber ( UBER ), in a statement provided

by the company maintained that AB5 improperly targeted app-based

services "out of animus rather than reason."

"Prop 22 remains the law of the land in California and

ensures that drivers and couriers retain the independence and

flexibility they want and also receive the benefits they deserve

- more than $1 billion so far," Evangelis said.

The office of California Attorney General Rob Bonta, a

Democrat, did not immediately respond to a request for comment.

Employees are entitled to the minimum wage, overtime pay,

reimbursements for expenses and other protections that are not

extended to independent contractors. Uber ( UBER ), Postmates and similar

services typically treat workers as contractors in order to

control costs.

California's AB5 raised the bar for proving that workers are

truly independent contractors, requiring a company to show that

workers are not under its direct control or engaged in its usual

course of business and operate their own independent businesses.

The U.S. Department of Labor in January issued a rule that

makes it more difficult to treat workers as independent

contractors under federal wage law, though it uses a different

test than the one adopted by California. A coalition of major

business groups is challenging that rule in Texas federal court.

Uber ( UBER ), Postmates and two Uber ( UBER ) drivers sued over the

California law in 2019, saying it was unconstitutional because

it targeted their industry. Many other industries that routinely

utilize contractors and freelance workers are explicitly exempt

from AB5.

A federal judge in Los Angeles dismissed the lawsuit at an

early stage, and a three-judge 9th Circuit panel last year

revived the case. The court said then that the "piecemeal

fashion" of the exemptions to the law was enough to sustain

Uber's ( UBER ) lawsuit.

The full 9th Circuit granted en banc review of that

decision, and in June ruled against Uber ( UBER ) and Postmates. The

court said that California lawmakers had found that

transportation and delivery companies were more likely to

misclassify workers, and that AB5 was a reasonable response to

that problem.

The case is Olson v. California, U.S. Supreme Court, No.

24-269.

For Uber ( UBER ): Theane Evangelis of Gibson Dunn & Crutcher

For California: Samuel Thomas Harbourt of the California

Department of Justice

Read more:

Uber ( UBER ) loses challenge to California gig work law in US

appeals court

Uber ( UBER ) challenge to California contractor law revived by U.S.

appeals court

California top court upholds ballot measure treating Uber ( UBER ),

Lyft drivers as independent contractors

Business groups move to strike down Biden rule on

contracting, gig work

Biden administration issues rule that could curb 'gig' work,

contracting

U.S. Supreme Court won't hear freelancers' challenge to

California employment law

(Reporting by Daniel Wiessner in Albany, New York)