California Supreme Court Says Proposition 22 is a Done Deal

San Francisco, CAA lawsuit filed by rideshare drivers and the Service Employees International Union seeking to overturn Prop 22, which exempts gig workers from key California labor law AB5, will not be heard by the Supreme Court. But it’s not over yet: the court suggested that plaintiffs could still file their case in a lower court.

The lawsuit, filed January 12, 2021, alleges that the ballot measure Proposition 22 violates the state’s constitution because it limits the power of the Legislature and excludes drivers from being eligible for workers’ compensation, reported the Associated Press.

Proposition 22

Proposition 22 was approved by California voters November 2020 and went into effect the following month. Prop 22 has allowed gig companies to basically bypass California’s AB5 law, which classifies gig workers—such as Uber and Lyft drivers—as employees with minimum wage protections and employment benefits.

Proposition 22 now classifies drivers for Uber, Lyft and other app-based transportation and delivery companies such as DoorDash as independent contractors, unless the company sets drivers’ hours, requires acceptance of specific ride or delivery requests, or restricts working for other companies. Prop 22 also requires the companies to provide some traditional entitlements or “alternative benefits”, including minimum wage and subsidies for health insurance if they average 25 hours of work a week, and vehicle insurance.

Support for Prop 22

“We’re thankful, but not surprised, that the California Supreme Court has rejected this meritless lawsuit,” Uber driver Jim Pyatt told the Associated Press. “We’re hopeful this will send a strong signal to special interests to stop trying to undermine the will of voters.” The ballot measure had 58 percent support from Californians and cost Uber, Lyft and other gig companies $200 million.

Prop 22 Opposition

Those opposed to Prop 22 say it exploits workers. “Drivers will continue to be paid less than the minimum wage if all their work time is counted; and they will be reimbursed for less than half of their business expenses. That’s a big price to pay,” UC Berkeley labor economist Michael Reich told the Los Angeles Times.

“The law as written by Uber and Lyft denies drivers rights under the law in California and makes it nearly impossible for lawmakers to fix these problems,” said a spokesperson for the Service Employees International Union.

Unions who joined drivers in the lawsuit spent about $20 million challenging Prop 22. These plaintiffs said they were disappointed and would continue to challenge the measure but didn’t go so far as to say how or if they would refile the case.

Perhaps taking the case to lower courts is timely, as the Supreme Court could delay the case for years. “The high court would have to find the arguments are legal, not factual, and there is urgency to decide the issue,” said Mary-Beth Moylan, associate dean of McGeorge Law School in Sacramento. She added that courts in California generally don’t like to overturn the will of the people (who voted 58 percent in favor of Prop 22), but plaintiffs argue that the people did not really have the power to do what they did. “There are instances where the California courts have come in and said … it’s nice that this is what the people wanted to do, but our constitution doesn’t permit the people to do this.”