San Francisco Chronicle Late Edition
Gigwork law faces challenge in lawsuit
Controversy over Proposition 22, the gigwork measure that keeps Uber and Lyft drivers as independent contractors rather than employees, didn’t end when voters passed it in November by a margin of 59% to 41%. Labor unions, along with ridehailing drivers and a passenger, sued Tuesday seeking to overturn the new law on the basis that it undermines the California Constitution.
The new challenge, in which the union group argues that Prop. 22 “limits the power of elected officials to govern” and takes away workers’ rights, shows the ongoing tensions over gig work. Ondemand apps allowing consumers to summon a ride or order in meals and groceries have propelled the San Francisco companies behind them to skyhigh valuations on the stock market. And some drivers and couriers say they have created new work opportunities. But critics say the way Prop. 22 keeps gig workers as independent contractors unfairly make them secondclass citizens in the workforce.
The plaintiffs are the Service Employees International Union and SEIU California State Council, as well as three ridehailing drivers
and one passenger. Labor unions fought hard against passage of Prop. 22, saying it would deny gig workers the benefits and protections of employment, but were outspent by a margain of 10 to 1. Uber, Lyft, DoorDash and Instacart poured more than $ 200 million into passing Prop. 22, seeing it as crucial to their future. Those companies hope to take a similar model to other states.
“If giant corporations are allowed to bankroll ballot initiatives that circumvent the California constitution, it sets a precedent that any right can be rolled back just by spending enough money,” said Bob Schoonover, president of SEIU California, in a press call Tuesday.
Gig companies referred question to the Yes on 22 campaign committee, which put out a statement it attributed to Jim Pyatt of Modesto, a retiree who drives with Uber.
“Nearly 10 million California voters — including the vast majority of appbased drivers — passed Prop. 22 to protect driver independence, while providing historic new protections,” he said in the campaign-provided statement. “Voters across the political spectrum spoke loud and clear, passing Prop. 22 in a landslide.”
Lawsuits against initiatives are common, especially for those placed on the ballot via signaturegathering backed by an interest group, as opposed to by the legislature, said David McCuan, a professor of political science at Sonoma State University.
“The legal challenge on Prop. 22 is an inevitable part of the process,” he said. “The majority of those that go on the ballot through popular
petition are challenged in court. But courts are reluctant to overturn the will of the voters.”
Scott Kronland, an attorney for the plaintiffs, said they hope for expedited review by the California Supreme Court, which could choose to hear the case, or could say that it must first go to the court of appeals or start in the trial court.
“Prop. 22 overreached,” he said. Its provisions about
workers’ comp should only have been possible with a constitutional amendment, he said.
Technically, the defendants in the case are the California attorney general and California labor commissioner. In a supreme irony, both of those entities are suing Uber and Lyft over their drivers’ employment status — essentially coming down on the side against Prop. 22. Those lawsuits say
Uber and Lyft violated AB5, California’s gig work law. Prop. 22 exempts gig companies from AB5.
“A statute passes and the attorney general normally has an obligation to defend the statute, whether the AG agrees with it or not,” Kronland said. “The initiative contemplates that if the AG chooses not to defend it, independent counsel would be hired to defend it. It’s also quite possible that some of the gig companies might choose to intervene to defend the initiative.”
In a statement, the attorney general’s office said it would review the complaint and respond in court as appropriate.
“Separately, our case against Uber and Lyft is ongoing and we’re currently awaiting a decision on procedural matters regarding the appellate court’s decision in our favor from October,” it said.
The First District Court of Appeal in San Francisco had unanimously agreed to a preliminary injunction that would reclassify Uber and Lyft drivers as employees in late January. Prop. 22 would make that impossible, a point the companies are expected to argue in court.