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Proposition 22 Challenge Rejected by California Supreme Court

  • 05 March, 2021

Since the passing of Proposition 22, which allowed gig companies like Uber and Lyft to classify their drivers as independent contractor, the courts in California have seen new challenges rise against the proposition. The most recent challenge was in February as the Service Employee International Union (SEIU) and a few app based drivers filed a lawsuit against Prop 22 to the California supreme court.

The lawsuit claims that Prop 22 violates California’s constitution. Specifically, the lawsuit argues it violates the constitution by limiting the power of elected officials as Prop 22 removes elected officials’ power to authorize workers the right to organize and the right to have access to the state’s workers’ compensation program.

Ultimately, the California supreme court has declined to hear the case against Prop 22. However, since the state supreme court has also denied to hear the case “without prejudice” this would still allow the SEIU to file their lawsuit against Prop 22 in a lower court. For now the SEIU, which is one of the largest labor unions in the country, has not made any further comment on whether they will seek to pursue their legal challenge against Prop 22.

Hector Castellanos, who has worked for Uber and Lyft for five years and who is one of the drivers that filed the lawsuit against Prop 22 did release a statement saying, “We will consider every option available to protect California workers from attempts by companies like Uber and Lyft to subvert our democracy and attack our rights in order to improve their bottom lines.”

What is most impactful about the state supreme court’s decision is that by deciding to throw out the challenge made to Prop 22, the California supreme court further reinforced the argument gig companies have been making for a long time. The argument that app based drivers are independent  contractors. Back in November of 2020 gig companies campaigned heavily in support for Prop 22 as this measure would allow them to keep their drivers as independent contractors. As a quick reminder Prop 22 came about as a challenge against the passing of the bill AB5. AB5 saw to it that workers must be classified as employees if the work they do is within the company’s normal course of business.

Gig companies like Uber and Lyft refused to abide to the AB5 bill. Thus, gig companies turned to Prop 22 as their ticket to be once and for all exempt from the state law. A historical amount of money was spent by companies like Uber and Lyft in support of Prop 22 which came to be passed with 58% of the vote.

Yet, another challenge the courts are still facing in regards to Prop 22 is how the new voter approved measure will come to affect pending cases regarding the misclassification of workers, specifically misclassification claims that were filed before the passing of Prop 22.

Warren Postman, an attorney with Keller Lenkner LLC, comments “Let’s put it this way, I don’t think anyone dropped any of the cases when Prop. 22 passed. In our view, they were violating the labor code up until when Prop. 22 took effect and they will have to answer for that.”

The assessment from legal experts see Prop 22 as placing a cap on further claims of misclassification. Therefore, despite Prop 22 passing, lawsuits filed before Prop 22 will continue to move forward. Michelle Miller, the West Coast chair of labor and employment at Cozen O’Connor remarks on the future complexities these pending cases present to the courts saying “it’s a never-ending issue, and each time courts and the state legislature weigh in, a new set of issues is created.”

Source: LATimes, BloombergLaw

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