A court has overturned a 2021 ruling that struck down the law, declaring it unconstitutional. It allows companies like Uber to classify workers as contractors, not employees.
An appeals court in California has ruled that the state’s Proposition 22 should mostly be allowed to stand, after a judge ruled to strike it down in 2021, declaring it unconstitutional, according to The Wall Street Journal and The New York Times. The law, which passed in 2020 following a massive and expensive campaign, made it so companies like Uber, Lyft, Instacart, and DoorDash can classify their workers as independent contractors instead of employees.
The three appeals judges did recommend removing sections 7465(c)(3) and (c)(4) from the law, which were seen as preventing workers from collectively bargaining. Two of the judges said it should otherwise said it should remain as-is, while one wrote a dissenting opinion saying that the law should be thrown out entirely, according to the Times. (The dissent was apparently longer than the actual ruling.)
Prop 22, which has been in effect even as it’s gone through the appeals process, provides some protections for gig workers by requiring that companies provide healthcare stipends and minimum hourly pay. However, it also means they don’t get certain protections like unemployment insurance and family leave, and that the companies they drive for don’t have to provide benefits like health insurance. Rideshare and delivery companies pushed hard for the bill, spending $200 million in the process while promising no price hikes (they lied through their teeth), and it ended up passing with around 59 percent of the vote.
Since then, gig economy companies have faced scrutiny beyond the fight for Prop 22. The FTC has said it’s looking into whether there’s been wage-fixing in the industry, and says it’ll pursue companies that misrepresent how much someone can make working for them. The Department of Labor also proposed a rule change that would push companies towards classifying workers as employees rather than contractors. It garnered over 54,000 comments in two months, and the department says it’s “currently reviewing” them.
In response to the appeals court’s decision, which was filed on Monday, Uber’s chief legal officer Tony West sent the following statement to The Verge:
Today’s ruling is a victory for app-based workers and the millions of Californians who voted for Prop 22. Across the state, drivers and couriers have said they are happy with Prop 22, which affords them new benefits while preserving the unique flexibility of app-based work. We’re pleased that the Court respected the will of the people, and that Prop 22 will remain in place, preserving independence for drivers.
In a statement posted on Service Employees International Union California’s website, David Green, an executive board member for the union, said:
Gig companies should know by now that drivers aren’t going to give up until they have the rights afforded to all other workers in the state, from basic protections on the job like workers compensation and unemployment insurance, paid sick leave to having a seat at the table to bargain for better wages and benefits. Corporations prioritizing their bottom lines over our democracy should not dictate the laws in our state. SEIU will continue to stand alongside drivers in the fight to prevent democracy from being sold to the highest spender.
The fight likely isn’t over yet. The NYT says the Service Employees International Union and drivers are likely to appeal Monday’s decision, potentially taking the case all the way to the California Supreme Court.