A California judge ruled that Proposition 22, the measure that allows companies like Uber and Lyft to continue to classify app-based drivers as independent contractors in the state, is unenforceable and unconstitutional. According to the San Francisco Chronicle, Alameda County Superior Court Judge Frank Roesch found that Prop 22 “illegally restricts a future legislature’s power to define app-based drivers as employees subject to the Employee Compensation Act.”
Proposal 22 was adopted by a wide margin in the state when most people voted for it in last November’s elections. Corporations were required by law to classify gig workers as full-time employees under Assembly Bill 5 A (AB5) passed in 2019, but some (like the ridesharing above) continued to treat them as contractors. Uber, Lyft, Instacart, and DoorDash poured over $ 220 million into the Prop 22 campaign to overthrow AB5, and the move clearly worked.
The measure obliges gig companies to provide health care grants and a lower wage floor to their contractors, but it also exempts them from classifying their workers as workers with adequate benefits and protection. While proponents of the proposal argue that this would allow workers to retain their independence while enjoying benefits that they did not have before, not everyone is happy with the way things have developed. A group that includes the Service Employees International Union and the SEIU California State Council sued California earlier this year for overturning the proposal.
Roesch explicitly highlighted Section 7451 of the measure in his ruling, which states that a future law on collective bargaining for app drivers must be in line with the rest of the proposal. “It only seems to protect the economic interest of network companies in a shared, non-unionized workforce, which is not a declared aim of the law,” he wrote in his decision. He also found it unconstitutional that any change to the measure would require seven eighths of an approval to be passed in the state legislature.
If the verdict is in, gig companies like Uber and Lyft may have to spend hundreds of millions on healthcare and other additional benefits for their drivers. For now, however, Prop 22 is still in place and gig firms are already planning to appeal. An Uber spokesperson told The Chronicle:
“This ruling ignores the will of the overwhelming majority of California voters and goes against both logic and the law. We will appeal and expect to win. Meanwhile, Prop. 22 remains in effect, including all of the safeguards and benefits it provides to independent workers “across the state.”
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