Upholding of Prop. 22 is big victory for Uber, Lyft, others
In the winding story of California's gig worker laws, another chapter has come to a close.
Justices in a California court of appeals have ruled that Proposition 22 — a 2020 ballot measure that allowed Uber, Lyft and other platforms to classify their workers as independent contractors rather than employees — is largely constitutional, but that part of the measure is invalid.
The distinction between employees and contractors is important: Employees have the right to a host of benefits and protections like minimum wage, sick leave and family leave, unemployment and disability benefits, and more. But independent contractors don't have the same rights.
The appeals court disagreed with a lower court that had ruled Proposition 22 was unconstitutional on the whole.
But the Monday ruling struck down part of Proposition 22 that they felt intruded on the Legislature and judiciary's power. The court ruled that a section of the measure that defined legislation on certain topics — like unions for gig workers — as amendments to the Proposition was invalid.
“Today the Appeals Court chose to stand with powerful corporations over working people, allowing companies to buy their way out of our state's labor laws and undermine our state constitution,” wrote Lorena Gonzalez Fletcher, executive secretary-treasurer of the California Labor Federation, an umbrella organization for labor unions, which opposed Proposition 22, in a statement. “Our system is broken. It would be an understatement to say we are disappointed by this decision.” “Voters knew what they were voting on,” said Jennifer Barrera, president of the California Chamber of Commerce, a powerful business group that supported Proposition 22. “They wanted to maintain the flexibility for these gig workers and provide them the opportunity to do this work. And I think that ultimately, what the judge did is to uphold that flexibility.”
In a statement from Protect App-Based Drivers and Services Coalition, which includes Uber, Lyft, DoorDash and Instacart, the companies celebrated the ruling as “a victory for the nearly 1.4 million drivers” in California.
Most of Proposition 22 remains in effect.
But while this chapter has drawn to a close, the story probably isn't over. A union challenging the constitutionality of Prop. 22, Service Employees International, may appeal the ruling. When asked about a possible appeal, Tia Orr, the executive director of SEIU California, said in a statement “Drivers have always led this movement, and we will follow their lead as we consider all options — including seeking review from the (California) Supreme Court — to ensure that gig drivers and delivery workers have access to the same rights and protections afforded to other workers in California.
In an interview this month, UC Berkeley Law professor Catherine Fisk said she'd be “stunned” if whichever side lost didn't appeal the decision.
“There's just too much money at stake — for both sides,” she said.
The judicial system moves slowly, so it could be months before we learn whether the California Supreme Court decides to hear an appeal.
The case has ramifications beyond this initiative, said Kurt Oneto, an attorney with Nielsen Merksamer, the firm representing the Protect AppBased Drivers and Services Coalition, which includes Uber, Lyft, DoorDash and Instacart and is defending the ballot measure in court.
The arguments that a union and several drivers are making to challenge the initiative “would drastically undercut and restrain the initiative power of California voters,” he told CalMatters in late January.
On the other side, ultimately at stake for drivers are the kinds of pay, benefits, and legal protections they're entitled to, said Stacey Leyton, an attorney with Altshuler Berzon, the law firm representing SEIU and the drivers in challenging the ballot measure.
But the effects will extend beyond drivers, she said. If Uber and Lyft have to pay drivers higher wages, other industries — like fast food and janitorial services — that are potentially trying to hire the same workers will have to compete with those wages, she said in a January interview.
“When companies exploit their workers and misclassify their workers, it has the effect of harming all workers,” Leyton said.
Shortly after Proposition 22 passed, several drivers and SEIU mounted a legal challenge, arguing that it violated California's constitution. Their case was eventually heard by a judge in Alameda County Superior Court, who ruled that Proposition 22 was unconstitutional. Attorneys representing the state and the Protect App-Based Drivers Coalition appealed that decision, which is how it wound up in the appeals court that issued Monday's decision.