Judge Finds California Gig-Worker Law Unconstitutional in Blow to Uber, Lyft

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Uber and Lyft drivers protest during a day-long strike outside Uber’s office in Saugus, Massachusetts, U.S., May 8, 2019. (Brian Snyder/Reuters)

A California judge on Friday struck down a 2020 ballot measure that allowed Uber and Lyft to classify their gig workers as independent contractors, allowing them to deny said workers full-time benefits.

After Uber, Lyft, DoorDash, InstaCart, and Postmates reportedly spent over $200 million lobbying for the measure, known as Proposition 22, Alameda County Superior Court Judge Frank Roesch ruled that the “entirety” of the measure is “unenforceable.”

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Roesch explained in his ruling that this is because a section within Prop 22 “limits the power of a future legislature to define app-based drivers as workers subject to workers’ compensation law” and “is not severable” from the rest of the measure.

The judge said a section of the proposition that requires a seven-eighth’s legislative majority for amendments to pass is in violation of the state’s constitution.

“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 in his ruling.

“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 added.

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A coalition representing the gig economy companies said Friday that it will appeal the ruling.

“We will file an immediate appeal and are confident the Appellate Court will uphold Prop 22,” said Geoff Vetter, spokesperson for the Protect App-Based Drivers & Services Coalition. “Importantly, this Superior Court ruling is not binding and will be immediately stayed upon our appeal. All of the provisions of Prop 22 will remain in effect until the appeal process is complete.”

The decision comes in response to a lawsuit first filed in January in California’s Supreme Court by labor union Service Employees International Union (SEIU), three ride-hail drivers, and one ride-hail customer. The plaintiffs hoped to overturn Prop 22 before being refiled in lower court.

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California voters, in voting for Prop 22 in November, overturned a state labor law that had made it easier to classify drivers as employees rather than as independent contractors. The proposition, which passed by referendum with 58.6 percent of the vote, was the companies’ response to state labor law Assembly Bill 5 which created an “ABC” test to assess if workers are employees who are eligible for labor protections and benefits.

Prop 22 allowed the ride-sharing and delivery companies to treat drivers as independent contractors while conceding certain benefits to some drivers, but not all of the protections that workers would have received without the measure. The law allowed the companies to continue to deny the drivers full-employment status, including benefits such as sick pay, health care and minimum wage.

Bob Schoonover, president of SEIU California State Council, said in a statement that the ruling “couldn’t be clearer” that the “gig-industry-funded ballot initiative was unconstitutional and is therefore unenforceable.”

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“Companies like Uber and Lyft spent $225 million in an effort to take away rights from workers in a way that violates California’s Constitution,” he added.

“They tried to boost their profits by undermining democracy and the state constitution. For two years, drivers have been saying that democracy cannot be bought. And today’s decision shows they were right,” he continued.

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