The Mercury News

Upholding of Prop. 22 is big victory for Uber, Lyft, others

- By Grace Gedye

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.

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