A judge on Friday night shot down a law that would have allowed app-based companies to continue to treat drivers as contractors rather than employees in California, ruling unconstitutional a proposal passed by voters in 2020 after a record-breaking campaign.
Uber Technologies Inc.
By Dash Inc.
Instacart and other app-based companies funneled more than $200 million in support of Proposition 22, which prevented their companies from treating drivers as employees under state law. While more than 58% of state voters approved the proposal, California Supreme Court Judge Frank Roesch ruled it broke the state constitution by unfairly impeding the legislature’s power over workers’ compensation and collective bargaining. .
“The court finds that the entirety of Proposition 22 is unenforceable,” the judge concluded.
A spokesperson for a group representing the interests of gig companies, the Protect App-Based Drivers & Services Coalition, said they will appeal and the ruling will be suspended when they file, overturning Prop’s rules. 22 in effect will be maintained while the appeal goes through the system.
“We believe the judge has made a grave mistake by ignoring a century of jurisprudence that obliges courts to safeguard voters’ right of initiative,” spokesman Geoff Vetter said in an email. “This outrageous decision is an insult to the overwhelming majority of California voters who passed Prop. 22.”
Uber, Lyft and other gig companies have tried Prop. 22 as a model for new regulations in the US, including a recent effort to enact similar regulations in Massachusetts. The companies are trying to create a “third way” for employment, in which drivers are treated as contractors but given the potential for certain benefits under certain conditions.
Those rules in California law kept app-based workers out of systems like workers’ compensation and unemployment insurance. Gig companies do not pay in such systems for drivers, some of whom received unemployment benefits from the federal government’s aid packages during the COVID-19 pandemic.
Roesch concluded that the California legislature has the ultimate right to determine the course of workers’ compensation in the state, despite extensive power for proposals passed by voters. He also said an amendment would prohibit lawmakers from approving collective bargaining for app-based workers in the future.
“A ban on legislation allowing collective bargaining by app-based drivers does not promote the right to work as an independent contractor, nor does it protect job flexibility, nor does it provide minimum occupational safety and wage standards for those workers,” Roesch wrote. “It only seems to protect the economic interests of the network companies in having a divided, unionized workforce, which is not a clear goal of the legislation.”
Catherine Fisk, a professor at UC Berkeley who teaches labor law, told MarketWatch when the lawsuit was originally filed that banning future unionization could be a successful appeal.
“None of the materials describing what the proposition would do informed voters that by voting yes they voted 22 to prevent drivers from joining a union and to prevent the legislature from allowing them to join a union.” Union.” she said in January. “It’s a huge change in law and is buried at the end of the fine print.”
Gig workers and unions filed the lawsuit in January, but the Supreme Court of the State rejected a request for an expedited review of the case. The plaintiffs include the California SEIU and the national SEIU, individual drivers and a customer who takes taxi rides.
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