Proposition 22, California’s voter-approved ballot measure that allowed rideshare and delivery network companies like Uber, Lyft, and DoorDash to classify drivers as independent contractors rather than employees, should remain state law, a divided three-judge appellate panel ruled last month.
The law had been struck down in 2021 by a lower court, but the state appealed. Prop 22, also known as the Protect App-Based Drivers and Services Act, is a 2020 ballot measure that received heavy financial backing from app-based companies. The law passed with 59 percent of the vote.
Prop 22 was an industry response to 2019 state legislation, Assembly Bill 5, which set standards for classifying such workers as employees. In AB 5, the state legislature codified a California Supreme Court decision which put the burden on employers through the so-called “ABC test” to show that someone was an independent contractor and not an employee.
The question of whether a worker is an employee or an independent contractor is important because while employees are entitled to minimum wages, overtime, and work expenses, independent contractors are not.
Prop 22 exempts app-based companies’ drivers from the standards of AB 5 that classified them as employees, offering them alternative benefits instead. According to the Los Angeles Times, labor advocacy group Rideshare Drivers United has said drivers earnings and protections have eroded since voters approved Prop 22. Gig companies say the opposite, that Proposition 22 has boosted drivers earnings.
The Protect App-Based Drivers And Services Coalition celebrated the ruling as a “historic victory for the nearly 1.4 million drivers who rely on the independence and flexibility of app-based work to earn income, and for the integrity of California’s initiative system.”
Meanwhile, SEIU California and SEIU United Service Workers West president David Huerta said: “Every California voter should be concerned about corporations’ growing influence in our democracy and their ability to spend millions of dollars to deceive voters and buy themselves laws.”
The Times reported that app-based ride-sharing and delivery companies spent more than $200 million marketing Prop 22 to Californians.
There is one silver lining for gig workers: the appeals court ruled that one part of Prop 22 should remain invalid, and it’s a section that defined legislation on certain subjects, including unionization, as amendments to the proposition. Prop 22 says amendments need to pass by a seven-eighths majority in the California legislature, so having that section struck down seemingly opens the door for lawmakers to pass a law giving gig workers the right to unionize.
“If the Legislature wanted to enact collective bargaining legislation today, it would be free to do so by a simple majority,” said Stacey Leyton, an attorney with Altshuler Berzon, a law firm representing the drivers and SEIU in challenging the ballot measure, told Cal Matters.
But a lawyer representing the Protect App-Based Drivers And Services Coalition told Cal Matters that a collective-bargaining law passed with less than a supermajority would be challenged in court.
“It would be up to a court to decide at that point if it is an amendment or not,” said Kurt Oneto, an attorney with Nielsen Merksamer, who is representing the coalition.
If you work for an app-based company you believe you’ve been misclassified as an independent contractor, you may be able to challenge your employment status in court.
Keller Grover is here to help workers with their employment-related disputes. If your employer isn’t treating you fairly, we can help you better understand your rights, protections and options. In more than 25 years litigating fraud and employment cases, we have recovered hundreds of millions of dollars for clients and class members.
Contact us today for a free, confidential consultation.