UPDATED
California 'gig worker' ballot ruled unconstitutional
Issued on:
San Francisco (AFP)
A California judge has ruled unconstitutional a 2020 referendum passed by the state's voters that lets "gig workers" be treated as contractors, in a decision revealed Friday.
Labor legislation known as Proposition 22 -- heavily backed by Uber, Lyft and other app-based, on-demand services -- effectively overturned a California law requiring them to reclassify their drivers and provide employee benefits.
Uber attacked the decision and pledged to challenge it.
"This ruling ignores the will of the overwhelming majority of California voters and defies both logic and the law," the ride-hailing service said in a statement.
"Meanwhile, Prop. 22 remains in effect, including all of the protections and benefits it provides independent workers across the state," it added.
The November vote came after a contentious campaign with labor groups claiming the initiative would erode worker rights and benefits, and with backers arguing for a new, flexible economic model.
The victory for the "gig economy" in California was expected to echo across the US, in a boon for app-based services while igniting fears that big business is rewriting labor laws.
Under the proposition, drivers remained independent contractors but Uber and Lyft were to pay them a number of benefits including a minimum wage, a contribution to health care and other forms of insurance.
Critics of the measure said it failed to take into account the full costs borne by drivers.
Uber and Lyft claimed most drivers support the contractor model.
But the firms had been sued by the state, which argued keeping that model violated California labor law. A Proposition 22 victory rendered the court case effectively moot.
© 2021 AFP
California judge finds Prop 22 gig worker measure unconstitutional
The measure exempts companies like Uber and Lyft from having to treat drivers as employees.
M. Moon
@mariella_moon
August 21st, 2021
A California judge has ruled that Proposition 22, the measure that allows companies like Uber and Lyft to keep classifying app-based drivers in the state as independent contractors, is unenforceable and unconstitutional. According to the San Francisco Chronicle, Alameda County Superior Court judge Frank Roesch found that Prop 22 illegally "limits the power of a future legislature to define app-based drivers as workers subject to workers' compensation law."
Proposition 22 passed by a wide margin in the state when most people voted in favor of it in last year's November elections. Companies were legally obligated to classify gig workers as full-time employees under Assembly Bill 5 A (AB5), which was passed in 2019, but some (like the aforementioned ride-sharing firms) continued to treat them as contractors. Uber, Lyft, Instacart and DoorDash poured over $220 million into campaigning for Prop 22 in order to overturn AB5, and the move clearly worked.
The measure requires gig companies to provide their contractors with healthcare subsidies and a wage floor, but it also exempts them from having to classify their workers as employees with appropriate benefits and protections. While those in favor of the proposition argue that it would allow workers to keep their independence while enjoying benefits they didn't have before, not everyone's happy with the development. A group that includes the Service Employees International Union and the SEIU California State Council sued California earlier this year to overturn the proposition.
In his ruling, Roesch specifically singled out Section 7451 of the measure, which states that any future law related to collective bargaining for app drivers must comply with the rest of the proposition. "It appears only to protect the economic interest of the network companies in having a divided, ununionized workforce, which is not a stated goal of the legislation," he wrote in his decision. He also found it unconstitutional that any amendment to the measure requires a seven-eighths vote of approval to pass in the state Legislature.
If the ruling stands, gig companies like Uber and Lyft may have to spend hundreds of millions paying for healthcare and other additional benefits for their drivers. At the moment, though, Prop 22 is still in effect, and gig companies are already planning to appeal. An Uber spokesperson told The Chronicle:
"This ruling ignores the will of the overwhelming majority of California voters and defies both logic and the law. We will appeal and we expect to win. Meanwhile, Prop. 22 remains in effect, including all of the protections and benefits it provides independent workers across the state."
M. Moon
@mariella_moon
August 21st, 2021
A California judge has ruled that Proposition 22, the measure that allows companies like Uber and Lyft to keep classifying app-based drivers in the state as independent contractors, is unenforceable and unconstitutional. According to the San Francisco Chronicle, Alameda County Superior Court judge Frank Roesch found that Prop 22 illegally "limits the power of a future legislature to define app-based drivers as workers subject to workers' compensation law."
Proposition 22 passed by a wide margin in the state when most people voted in favor of it in last year's November elections. Companies were legally obligated to classify gig workers as full-time employees under Assembly Bill 5 A (AB5), which was passed in 2019, but some (like the aforementioned ride-sharing firms) continued to treat them as contractors. Uber, Lyft, Instacart and DoorDash poured over $220 million into campaigning for Prop 22 in order to overturn AB5, and the move clearly worked.
The measure requires gig companies to provide their contractors with healthcare subsidies and a wage floor, but it also exempts them from having to classify their workers as employees with appropriate benefits and protections. While those in favor of the proposition argue that it would allow workers to keep their independence while enjoying benefits they didn't have before, not everyone's happy with the development. A group that includes the Service Employees International Union and the SEIU California State Council sued California earlier this year to overturn the proposition.
In his ruling, Roesch specifically singled out Section 7451 of the measure, which states that any future law related to collective bargaining for app drivers must comply with the rest of the proposition. "It appears only to protect the economic interest of the network companies in having a divided, ununionized workforce, which is not a stated goal of the legislation," he wrote in his decision. He also found it unconstitutional that any amendment to the measure requires a seven-eighths vote of approval to pass in the state Legislature.
If the ruling stands, gig companies like Uber and Lyft may have to spend hundreds of millions paying for healthcare and other additional benefits for their drivers. At the moment, though, Prop 22 is still in effect, and gig companies are already planning to appeal. An Uber spokesperson told The Chronicle:
"This ruling ignores the will of the overwhelming majority of California voters and defies both logic and the law. We will appeal and we expect to win. Meanwhile, Prop. 22 remains in effect, including all of the protections and benefits it provides independent workers across the state."
Judge shoots down law that kept Uber and Lyft drivers from being employees
Last Updated: Aug. 20, 2021
By Jeremy C. Owens
Appeals court rules that law backed by record-breaking millions from Uber, Lyft, DoorDash and other gig companies is unconstitutional for barring future legislative moves on workers’ compensation, collective bargaining
Uber Technologies Inc. and Lyft Inc. could have to treat drivers as employees after a judge tossed out a proposition passed by California voters. AFP/GETTY IMAGES
A judge late Friday shot down a law that would have allowed app-based companies to continue treating drivers as contractors instead of employees in California, ruling unconstitutional a proposition passed by voters in 2020 after a record-breaking campaign.
Uber Technologies Inc. UBER, +0.23%, Lyft Inc. LYFT, -1.92%, DoorDash Inc. DASH, +1.11%, Instacart and other app-based companies funneled more than $200 million into support for Proposition 22, which recused their businesses from treating drivers as employees under state law. While more than 58% of the state’s voters approved the proposition, California Superior Court Judge Frank Roesch ruled that it broke the state constitution by unfairly hampering the power of the Legislature in regards to workers’ compensation and collective bargaining.
“The court finds that the entirety of Proposition 22 is unenforceable,” the judge concluded.
For more: Uber and Lyft win fight to keep drivers as contractors instead of employees in California
A spokesman for a group that represents gig company interests, the Protect App-Based Drivers & Services Coalition, said that they will appeal and the the ruling will be stayed when they file, which would maintain Prop. 22 rules that are in effect while the appeal moves through the system.
“We believe the judge made a serious error by ignoring a century’s worth of case law requiring the courts to guard the voters’ right of initiative,” spokesman Geoff Vetter said in an email. “This outrageous decision is an affront to the overwhelming majority of California voters who passed Prop. 22.”
Uber, Lyft and other gig companies have attempted to use Prop. 22 as a model for new regulation across the U.S., including a recent effort to establish similar rules in Massachusetts. The companies are trying to establish a “third way” for employment, in which drivers are treated as contractors but are offered the potential for some benefits under certain conditions.
Those rules in the California law continued to keep app-based workers out of systems such as workers’ compensation and unemployment insurance. Gig companies do not pay into such systems for drivers, some of whom received unemployment assistance instead from the federal government relief packages during the COVID-19 pandemic.
For more: What Prop. 22 would actually do in California
Roesch concluded that California’s Legislature holds the ultimate right to determine the course of workers’ compensation in the state, despite extensive power for propositions passed by voters. He also said that an amendment would prohibit the Legislature from approving collective bargaining for app-based workers in the future.
“A prohibition on legislation authorizing collective bargaining by app-based drivers does not promote the right to work as an independent contractor, nor does it protect work flexibility, nor does it provide minimum workplace safety and pay standards for those workers,” Roesch wrote. “It appears only to protect the economic interests of the network companies in having a divided, ununionized workforce, which is not a stated goal of the legislation.”
Catherine Fisk, a professor at UC Berkeley who teaches labor law, told MarketWatch when the lawsuit was originally filed that the prohibition of future unionization could prove a successful appeal.
“None of the materials describing what the proposition would do informed voters that by voting yes on 22 they were voting to prevent drivers from unionizing and to prevent the legislature from allowing them to unionize,” she said in January. “It is a huge change in the law and is buried at the end of the fine print.”
Gig workers and labor unions filed the lawsuit in January, but the state Supreme Court rejected a request for an expedited review of the case. The plaintiffs include the SEIU California and the national SEIU, individual drivers and a ride-hailing customer.
By Jeremy C. Owens
Appeals court rules that law backed by record-breaking millions from Uber, Lyft, DoorDash and other gig companies is unconstitutional for barring future legislative moves on workers’ compensation, collective bargaining
Uber Technologies Inc. and Lyft Inc. could have to treat drivers as employees after a judge tossed out a proposition passed by California voters. AFP/GETTY IMAGES
A judge late Friday shot down a law that would have allowed app-based companies to continue treating drivers as contractors instead of employees in California, ruling unconstitutional a proposition passed by voters in 2020 after a record-breaking campaign.
Uber Technologies Inc. UBER, +0.23%, Lyft Inc. LYFT, -1.92%, DoorDash Inc. DASH, +1.11%, Instacart and other app-based companies funneled more than $200 million into support for Proposition 22, which recused their businesses from treating drivers as employees under state law. While more than 58% of the state’s voters approved the proposition, California Superior Court Judge Frank Roesch ruled that it broke the state constitution by unfairly hampering the power of the Legislature in regards to workers’ compensation and collective bargaining.
“The court finds that the entirety of Proposition 22 is unenforceable,” the judge concluded.
For more: Uber and Lyft win fight to keep drivers as contractors instead of employees in California
A spokesman for a group that represents gig company interests, the Protect App-Based Drivers & Services Coalition, said that they will appeal and the the ruling will be stayed when they file, which would maintain Prop. 22 rules that are in effect while the appeal moves through the system.
“We believe the judge made a serious error by ignoring a century’s worth of case law requiring the courts to guard the voters’ right of initiative,” spokesman Geoff Vetter said in an email. “This outrageous decision is an affront to the overwhelming majority of California voters who passed Prop. 22.”
Uber, Lyft and other gig companies have attempted to use Prop. 22 as a model for new regulation across the U.S., including a recent effort to establish similar rules in Massachusetts. The companies are trying to establish a “third way” for employment, in which drivers are treated as contractors but are offered the potential for some benefits under certain conditions.
Those rules in the California law continued to keep app-based workers out of systems such as workers’ compensation and unemployment insurance. Gig companies do not pay into such systems for drivers, some of whom received unemployment assistance instead from the federal government relief packages during the COVID-19 pandemic.
For more: What Prop. 22 would actually do in California
Roesch concluded that California’s Legislature holds the ultimate right to determine the course of workers’ compensation in the state, despite extensive power for propositions passed by voters. He also said that an amendment would prohibit the Legislature from approving collective bargaining for app-based workers in the future.
“A prohibition on legislation authorizing collective bargaining by app-based drivers does not promote the right to work as an independent contractor, nor does it protect work flexibility, nor does it provide minimum workplace safety and pay standards for those workers,” Roesch wrote. “It appears only to protect the economic interests of the network companies in having a divided, ununionized workforce, which is not a stated goal of the legislation.”
Catherine Fisk, a professor at UC Berkeley who teaches labor law, told MarketWatch when the lawsuit was originally filed that the prohibition of future unionization could prove a successful appeal.
“None of the materials describing what the proposition would do informed voters that by voting yes on 22 they were voting to prevent drivers from unionizing and to prevent the legislature from allowing them to unionize,” she said in January. “It is a huge change in the law and is buried at the end of the fine print.”
Gig workers and labor unions filed the lawsuit in January, but the state Supreme Court rejected a request for an expedited review of the case. The plaintiffs include the SEIU California and the national SEIU, individual drivers and a ride-hailing customer.
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