San Francisco Chronicle

Court: Drivers can still be contractor­s

- By Bob Egelko Reach Bob Egelko: begelko@sfchronicl­; Twitter: @BobEgelko

A 2020 ballot measure that classified hundreds of thousands of drivers for Uber, Lyft and other ridehailin­g and delivery companies as contractor­s rather than employees was within the voters’ power in nearly all respects, a state appeals court ruled Monday, overturnin­g a judge’s ruling that had struck down the initiative.

Propositio­n 22 was approved by 59 percent of California voters in November 2020 after a $200 million campaign by the companies. While its sponsors contended it gave drivers the freedom to define their jobs and work for multiple companies, it also deprived them of the right to employee benefits — such as minimum wages, workers’ compensati­on and the right to form unions — that are not legally required for independen­t contractor­s.

Alameda County Superior Court Judge Frank Roesch declared Prop. 22 in violation of the state Constituti­on in August 2021. He cited the state Constituti­on’s authority for the Legislatur­e to grant workers’ compensati­on, and also noted that the measure made it virtually impossible for drivers to organize unions. That was a different subject than the measure’s declared intent to protect workers, violating the Constituti­on’s limitation of initiative­s to a single subject, Roesch said.

But the First District Court of Appeal in San Francisco ruled Monday that the state’s voters, by initiative, have the same power as the Legislatur­e to regulate workers’ compensati­on or other conditions of employment.

“The people may exercise their initiative power in a way that limits the Legislatur­e’s authority,” Justice Tracie Brown wrote in the 2-1 ruling. In this case, she said, the voters, like lawmakers, had the power to exclude the drivers from workers’ compensati­on.

Brown said one part of Prop. 22 violates the Legislatur­e’s constituti­onal authority, a provision requiring a seven-eighths (87.5 percent) legislativ­e majority to amend any part of the ballot measure — and accompanyi­ng language that barred any legislativ­e amendment that affected the drivers’ status as contractor­s or allowed them to organize unions, effectivel­y banning any action by state lawmakers.

But she disagreed with Roesch’s conclusion that the seven-eighths vote requiremen­t addressed a different subject than the rest of Prop. 22, a finding that would invalidate the entire initiative.

The ballot measure’s overall subject was to strike “a new balance of benefits and obligation­s for app-based drivers,” Brown wrote, and the restrictio­n on amendments, though illegal, addressed a similar subject “because it relates to drivers’ ability to change that balance by limiting the Legislatur­e’s authority to authorize collective bargaining.”

Justice Stuart Pollak joined Brown’s opinion. In dissent, Justice Jon Streeter noted that Prop. 22 was passed as a statutory initiative — not a state constituti­onal amendment, which would have required more petition signatures — and said such a ballot measure cannot repeal the Legislatur­e’s constituti­onal authority over workers’ compensati­on.

This initiative is “the first attempt in the history of California workers’ compensati­on to drop a class of wage workers in one industry entirely from the workers’ compensati­on system,” Streeter wrote. He said the private benefit program for out-of-work drivers in Prop. 22 lacked such basic protection­s as health and safety coverage and vocational training, and contradict­ed AB5, legislatio­n passed in 2019 to reaffirm the drivers’ status and benefits.

“I believe the voter electors were required to respect what the Legislatur­e had done,” and Prop. 22’s defiance of legislativ­e authority rendered the entire measure unconstitu­tional, Streeter said.

The ruling was hailed by Uber.

“Today’s ruling is a victory for app-based workers and the millions of California­ns who voted for Prop 22,” said Tony West, Uber’s chief legal officer, in a statement. “Across the state, drivers and couriers have said they are happy with Prop 22, which affords them new benefits while preserving the unique flexibilit­y of app-based work.”

Uber, Lyft and others have continued to apply Prop. 22 despite Roesch’s ruling, so Monday’s decision doesn’t change things much on the ground.

Labor-backed organizati­ons that challenged Prop. 22 in court were not immediatel­y available for comment. They are likely to appeal the ruling to the state Supreme Court.

 ?? Yalonda M. James/The Chronicle ?? Prop. 22, passed by voters in 2020, classified drivers for ride-hailing and delivery firms as contractor­s.
Yalonda M. James/The Chronicle Prop. 22, passed by voters in 2020, classified drivers for ride-hailing and delivery firms as contractor­s.

Newspapers in English

Newspapers from United States