A California judge set aside a statewide proposition exempting drivers working for companies such as Uber, Lyft and DoorDash from the state’s “gig workers” law, which requires employers to provide all employees with benefits, including health care and vacations.
The ruling, in a case filed earlier this year by the Service Employees International Union, is a setback for Uber and Lyft, which have built their business model around part-time drivers and spent millions on the campaign that led to the passage of Proposition 22 in last November’s election.
Uber said it plans to appeal the judge’s decision and is confident it will ultimately prevail. However, judges in California have succeeded in killing off other proposals approved by voters in the past. For example, a judge overturned a ban on gay marriage approved the California voters.
Ruling hurts bid in other states
The ruling also could slow Uber and Lyft’s efforts to have similar laws, allowing them freedom in determining how to compensate drivers, in other states. A law similar to California’s is now pending in Massachusetts.
“A prohibition on legislation authorizing collective bargaining by app-based drivers does not promote the right to work as an independent contractor, nor does it protect work flexibility, nor does it provide minimum workplace safety and pay standards for those workers,” Alameda Superior Court Judge Frank Roesch wrote in his ruling.
“It appears only to protect the economic interest of the network companies in having a divided, ununionized workforce, which is not a stated goal of the legislation.”
The coalition representing Uber and other companies using gig labor said in a statement Friday that it planned to appeal.
“We will file an immediate appeal and are confident the Appellate Court will uphold Prop 22,” said Geoff Vetter, spokesperson for the Protect App-Based Drivers & Services Coalition, in a statement. “Importantly, this Superior Court ruling is not binding and will be immediately stayed upon our appeal. All of the provisions of Prop 22 will remain in effect until the appeal process is complete.”
Unions hail ruling
From the other side of the fight, Bob Schoonover, president of SEIU California State Council, said in a statement, “Today’s ruling by Judge Roesch striking down Proposition 22 couldn’t be clearer: The gig industry-funded ballot initiative was unconstitutional and is therefore unenforceable. Companies like Uber and Lyft spent $225 million in an effort to take away rights from workers in a way that violates California’s Constitution.
“They tried to boost their profits by undermining democracy and the state constitution. For two years, drivers have been saying that democracy cannot be bought. And today’s decision shows they were right,” he added.
California’s courts have sided with the drivers in the rulings leading up to the passage of Prop 22 last fall by the state’s voters. The parties on both sides have been at odds since California passed a law known as Assembly Bill 5 in September 2019. In fact, the companies wanting to keep workers as contractors, thus ineligible for benefits, lost a court case less than two weeks before the current law was passed by voters.