A California appeals court overturned most of a ruling invalidating Proposition 22, the 2020 voter-approved sharing economy state law that allows giant trucking and delivery companies to classify their workers as independent contractors instead of of employees.
The Court of Appeals for the 1st District determined Proposition 22 should stand, at odds with a 2021 ruling that found central provisions of the law to be in conflict with the state Constitution, rendering the law unenforceable and striking it out entirely.
However, the appeals court struck down some provisions of the statutes that it had found unduly restricted the authority of the California Legislature.
The court found that the ballot measure had incorrectly defined what actions constitute an amendment to Proposition 22, in violation of the separation of powers principles of the state Constitution. The court struck down Proposition 22 provisions that restricted the California Legislature’s ability to authorize collective bargaining over driver compensation, benefits, or working conditions and create rules that single out or impose “unequal regulatory burdens” on app-based drivers.
The group of companies that backed Proposition 22, called the Protect App-based Drivers & Services coalition, hailed the ruling as a “historic victory for the nearly 1.4 million drivers who depend on the independence and flexibility of app-based work to earn income. and for the integrity of California’s initiative system.”
“The Court of Appeal upheld the fundamental policy behind the measure,” Molly Weedn, a spokeswoman for the coalition, said in an email.
he judgment of first instance, made by Alameda County Superior Court Judge Frank Roesch in August 2021, found that the law conflicts with the state Constitution by restricting the Legislature’s ability to regulate its workers’ compensation system. The ruling also argued that Proposition 22 violates a constitutional provision that requires initiatives to be limited to a “single subject.”
The sweeping ruling came as a surprise to those who study California’s ballot initiative process; Experts have said that courts are reluctant to challenge voter-approved laws.
Proposition 22 has remained in effect throughout the appeals process. Monday’s ruling is expected to be appealed to the California Supreme Court.
A three-judge panel in San Francisco heard the appeal case in December.
Judge Tracie L. Brown, who penned Monday’s ruling, challenged during the hearing the provision of the law that limits legislation related to app-based drivers’ collective bargaining rights. Brown had said that she believed she was outside the scope of Proposition 22’s stated purpose and she raised the hypothetical idea of striking down that provision instead of the entire law.
Brown, in his latest opinion, largely disagreed with Roesch and found that Proposition 22 does not impede the Legislature’s workers’ compensation authority or violate the single-subject rule. He also determined that provisions he considered unconstitutional could be struck down without dismantling the entire law. His opinion was supported by Judge Stuart R. Pollak.
The third appeals court judge, Jon B. Streeter, dissented, writing in his opinion that Proposition 22 usurps the power of the Legislature to create and enforce the state’s workers’ compensation system.
“My disagreement on this point leads me to a different overall result,” Streeter wrote. “I think we should strike down Proposition 22 in its entirety.”
The language in Proposition 22 was intended to block further legislative action directed at gig companies. The law requires a supermajority of seven-eighths of the legislature to pass any amendment to the law. Monday’s ruling does not invalidate that requirement to amend the law in the Legislature.
A small group of app-based drivers and the Service Employees International Union had filed the legal challenge to Proposition 22. The plaintiffs and the union said in an emailed statement that the appeals court decision showed that powerful corporations had “hijacked” the electoral referendum process, but he praised the court for striking down provisions restricting workers’ collective bargaining rights.
“All California voters should be concerned about the growing influence of corporations in our democracy and their ability to spend millions of dollars to mislead voters and buy themselves laws,” said David Huerta, president of SEIU California and SEIU United Service Workers. West, in an email. statements.
“We are grateful that the California Court of Appeals has affirmed that companies like Uber, Lyft, Doordash and Instacart cannot prevent drivers from joining a union through their deceptive ballot measure,” said the plaintiff and Uber driver. and Lyft, Mike Robinson. “But make no mistake, we still believe that Proposition 22, in its entirety, is an unconstitutional attack on our basic rights.”
Proposition 22 went into effect in early 2021. App-based transportation and delivery companies, including Uber, Lyft, and DoorDash, together spent more than $200 million promoting the ballot initiative to Californians as a boon to Californians. workers and customers, promising flexible hours, some worker benefits, and low prices.
For hundreds of thousands of drivers, Proposition 22 Granted independent contractor status, but removed protections imposed by a 2019 law, AB 5, which requires temporary workers in many industries to be classified as employees with stronger benefits, such as a minimum wage, overtime, and workers’ compensation in injury case.
Labor advocacy group Rideshare Drivers United has said drivers’ earnings and protections have eroded since voters approved Proposition 22. Gig companies say the opposite, that Proposition 22 has increased driver earnings .
Lyft spokeswoman Shadowwn Reddick-Smith applauded the appeals court ruling, saying Proposition 22 “protects the value of independent drivers and provides them with new and historic benefits.”
“We are pleased that the Court has upheld the will of the people and that Prop. 22 remains in effect,” Tony West, Uber’s chief legal officer, said in an emailed statement.