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Monday, December 11, 2023 | Back issues
Courthouse News Service Courthouse News Service

Union Challenges Voter Approval of Independent Status for Gig Economy Drivers

Nearly 60% of California voters backed Proposition 22, which exempts gig economy giants from having to make their workers full-fledged employees, at the ballot box in November. A labor union and four drivers want the initiative struck down.

SAN FRANCISCO (CN) — One of the country’s biggest labor unions joined with four ride-share drivers Tuesday in a constitutional challenge to Proposition 22, the most expensive ballot initiative in U.S. history that exempts firms like Uber, Lyft and Instacart from treating drivers as employees under California law.

A 74-page writ filed directly with the California Supreme Court says the law passed by voters in November should be invalidated. According to the unions and drivers, the measure conflicts with the Legislature’s unfettered constitutional power to extend workers’ compensation benefits that ensure health protections to app-based drivers in the future.

They also argue Proposition 22’s language duped voters into passing law they little understood.

“The measure grossly deceived the voters, who were not told they were voting to prevent the Legislature from granting the drivers collective bargaining rights, or to preclude the Legislature from providing incentives for companies to give app-based drivers more than the minimal wages and benefits provided by Proposition 22,” the writ says. “If allowed to stand, the ploy will be repeated in other initiatives as an effective means to slip potentially unpopular provisions past the voters.”

Service Employees International Union and drivers Hector Castellanos, Saori Okawa and Michael Robinson also take issue with a provision in the initiative requiring seven-eighths vote in the Legislature to amend it. 

By requiring a supermajority, Proposition 22 impermissibly restricts lawmakers’ authority to act by a simple majority vote, the lawsuit says. 

In an emailed statement, lead plaintiff Okawa called Proposition 22 a “corporate power grab,” adding “Every day, rideshare drivers like me struggle to make ends meet because companies like Uber and Lyft prioritize corporate profits over our wellbeing. With Prop 22, they’re not just ignoring our health and safety — they’re discarding our state’s constitution. I’m joining this lawsuit because I know it’s up to the people we elect to make our laws, not wealthy executives who profit from our labor.”

Scott Kronland with San Francisco-based firm Altschuler Berzon, one of the attorneys representing the union and drivers, said in an email that a direct filing with the state’s highest court will allow for a quicker resolution to the constitutional issues raised by the case. However, the California Supreme Court must agree to hear it first, otherwise the action will need to be re-filed in state court.

“The California Supreme Court has original jurisdiction to hear cases if they present pure legal issues of statewide importance,” Kronland said. “The court has exercised original jurisdiction before to hear challenges to state ballot measures. We are asking the California Supreme Court to hear this petition and issue a prompt decision so as to avoid many years of litigation in multiple courts about the constitutionality of Prop 22.”

The dispute over worker classification can be traced to April 2018, when the California Supreme Court adopted a new labor standard in Dynamex v. Superior Court that made it harder for companies to treat workers as independent contractors. To label someone a contractor under the stricter standard, called the “ABC test,” a company must show it does not directly control the worker, that the work falls outside its usual course of business, and that the worker is “customarily engaged in an independently established trade.”

In 2019, Governor Gavin Newsom signed Assembly Bill 5, which codified the Dynamex standard into the state labor code. The law introduced by Assemblywoman Lorena Gonzalez, a San Diego Democrat, took effect Jan. 1, 2020.

Gonzalez praised the lawsuit in a statement, saying the high court ought to be given the chance to decide whether the initiative passes constitutional muster.

“Prop 22 not only created a permanent underclass of workers in California — it stripped the Legislature of its power to step in and improve working conditions for hundreds of thousands of app-based workers,” Gonzalez said. “The state Supreme Court should have an opportunity to weigh in on whether corporations can use the initiative process to write their own laws with artificial barriers designed to block elected representatives from doing their job." 

Uber, Lyft and Doordash poured $205 million into the yearlong campaign to exempt themselves from the law. Their millions resulted in 58.4% of voters backing Proposition 22 in last year’s election.

The ride-hails declined to directly respond to the lawsuit, referring Courthouse News to its campaign coalition Protect App-Based Drivers and Services.

Jim Pyatt, an Uber driver in Modesto, condemned the writ as meritless. “Voters across the political spectrum spoke loud and clear, passing Prop 22 in a landslide,” he said in an emailed statement. “Meritless lawsuits that seek to undermine the clear democratic will of the people do not stand up to scrutiny in the courts.”

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Categories / Business, Employment, Technology

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