One year after California voters approved a ballot measure exempting app-based transportation and delivery companies from a state worker classification law, the future of the carveout seems uncertain, now that a state trial court found the measure is unconstitutional and the state has filed for appeal.
The law codified an ABC test from the state Supreme Court’s 2018 decision in Dynamex Operations West Inc. v. Superior Court, raising the bar for employers to classify workers as independent contractors instead of employees.
Prop. 22 allowed certain app-based companies to continue treating workers as independent contractors, while extending to workers some basic protections, such as pay minimums and heal insurance stipends. Typically, independent contractors lack many protections and benefits mandated for employees, such as overtime pay, minimum wage and the right to unionize.
The ballot has since been the subject of many court battles, many of which pertain to its retroactivity and constitutionality. In August, a California trial court said the measure was unconstitutional, a ruling the state is seeking to appeal.
The past year of Prop. 22 has been “highly uncertain,” said Shannon Liss-Riordan of Lichten & Liss-Riordan PC, who is representing the gig workers. “For years, everyone has thought there was going to be an answer that comes down one day, and that just hasn’t happened because there’s just been such an extraordinary push and pull.”
At the polls last November, 58% of California voters selected yes on Prop.22 after companies including Uber Technologies Inc. and Lyft Inc. pus over $200 million into promoting it. The approval was of great importance for both companies, which under a state appeals court ruling days earlier would have needed to classify drivers as employees.
“It looked like we were finally on the road to gig workers getting their rights under the employment laws,” Liss-Riordan said. “The gig economy saw that coming too, so they poured more than $200 million into the ballot initiative to get Prop. 22 passed.”
Ron Zambrano of West Coast Trial Lawyers, who’s represented gig workers, said Prop. 22 was “a very veiled attempt by the gig companies to basically write the rules that regulate themselves, and it worked.”