A judge has declared California’s concert workers law unconstitutional. Now what?
Emboldened by a California election victory that kept their drivers independent last year, gig economy companies like Uber and Lyft have accelerated a push for what they call a ‘third way’ in recent months. to work, a classification of self-employed workers who receive limited benefits without obtaining employee status.
But that plan was overturned Friday night by a California judge who ruled that the ballot initiative backed by Uber, Lyft, DoorDash and other so-called odd-job companies violated the state’s constitution. It was a potential setback for companies and a victory for union organizers and drivers who claim they are being treated unfairly.
Here’s an explanation of this long-simmering fight and what happens next:
Has this issue not been resolved in California?
Uber and Lyft have long said their drivers are independent contractors, which allows companies to avoid spending on health insurance, unemployment insurance, sick leave, and other benefits.
However, some state legislatures, federal officials, and legal experts have argued that drivers are employees under the law and that Uber and other concert companies owe them all the protections that come with employment.
In 2019, California lawmakers passed a law requiring companies like Uber to employ their drivers. The state attorney general sued Uber and Lyft to enforce the law, and the companies responded by threatening to leave the state.
Uber, Lyft and DoorDash poured more than $ 200 million into a voting measure, known as Proposition 22, that would allow drivers to remain independent contractors, while companies gave them limited benefits. Proposal 22 was approved in November with around 59% of the vote.
A coalition of VTC drivers and labor groups filed a lawsuit in January, arguing that Proposition 22 is unconstitutional. A month later, the California Supreme Court declined to hear the case, seemingly ending the challenge. But the group filed their petition in a lower court, which led to the ruling last week.
Why did the judge find prop. 22 unconstitutional?
The decision of Judge Frank Roesch of the California Superior Court in Alameda County had three main conclusions.
The first was that Proposition 22 excluded workers in the group from the group of employees eligible for workers’ compensation in the event of an injury or other incident in the workplace. But the state legislature has the right under the California Constitution to set and control workers’ compensation.
Judge Roesch wrote in his ruling that Proposition 22 âlimits the power of a future legislature to define app-based drivers as workers subject to workers’ compensation lawâ and is therefore unconstitutional.
Second, Proposition 22 included several unusual provisions designed to prevent the legislator from making significant changes to the law.
The measure requires the legislature to achieve a seven-eighths majority to make changes to the law, a qualified majority that is considered unattainable. It also requires that any change be “consistent” with Proposition 22, preventing the legislator from drastically changing or overturning the law.
If the independent status of drivers was changed, the rest of Prop. 22 would also be invalid. So, if the drivers were declared employed, Uber and Lyft could forgo the higher wages, private accident insurance and other benefits offered under Proposition 22.
Because the issue of workers’ compensation could not be separated from the rest of Proposition 22, Judge Roesch wrote âthat the entirety of Proposition 22â could not be implemented.
Finally, the judge also challenged a clause in Proposition 22 that prevents concert workers from unionizing. Proposition 22 stated that any future law giving an organization the right to collectively bargain for the benefits, remuneration or working conditions of drivers would be considered an amendment and would be subject to the seven-eighths majority rule. Justice Roesch concluded that this provision was unconstitutional because a collective bargaining law should be considered âunrelated legislationâ.
Who intervened to block the prop. 22?
Three VTC drivers and a passenger are involved in the lawsuit, as well as the Service Employees International Union.
“We will continue to shine a light on how concert companies put their profits before their workers,” Michael Robinson, a Lyft driver from Loma Linda, Calif., Said Monday at a press conference.
Who’s across the courtroom?
Although the lawsuit focuses on how app-based companies treat their workers, the coalition of drivers and worker groups are suing the state of California and the Department of Industrial Relations, which administers workers’ compensation.
The California Attorney General’s Office is now defending prop. 22 – an awkward turn of events, as the Attorney General sued Uber and Lyft before prop. 22 be approved in order to force companies to employ their drivers.
Companies in the odd-job economy can still weigh in. Their coalition, Protect App-Based Drivers and Services, is a respondent in the lawsuit and said it plans to appeal.
“This outrageous decision is an affront to the overwhelming majority of Californian voters who adopted Proposition 22,” said Geoff Vetter, spokesperson for the coalition. “We will file an immediate appeal and are confident that the Court of Appeal will uphold Prop. 22.”
The California Attorney General or Protect App-Based Drivers and Services can appeal to overturn Judge Roesch’s decision. Even an expedited appeal could take several months.
For now, companies in the odd-job economy may be required to start paying workers’ compensation funds – but companies say nothing will change until the appeal is resolved . They also said they have no plans to change the way drivers are classified immediately. All of the provisions of Proposition 22 will remain in place until the appeal process is complete, Vetter said.
Stacey Leyton, the drivers’ lawyer, disagreed. “The Superior Court declared prop. 22 invalid,” and the drivers should immediately be considered employees, she said.
The Californian fight begins to repeat itself in other states. In August, companies filed a similar request for a vote in Massachusetts, where the treatment of concert workers is already under scrutiny.
The SEIU and other union activists have pledged to continue their struggle and to plan to help the organizing and activist efforts of the drivers.
“We will continue to support their actions for their claim for the fundamental rights granted to them under the current law, was reaffirmed to them on Friday,” said Alma HernÃ¡ndez, executive director of SEIU California.