California Court of Appeals Overturns Most Rulings Finding Proposition 22 Invalid

A California appeals court has overturned most of a decision invalidating Proposition 22, the state’s voter-approved gig economy law of 2020, allowing giant ride-sharing and delivery companies to classify their workers as independent contractors rather than employees.

The 1st District Court of Appeals determined that Proposition 22 should stand, disagreeing with a 2021 decision finding that central provisions of the law conflicted with the state Constitution, rendering the law unenforceable and the rejecting in its entirety.

However, the appeals court struck down certain provisions of the statutes that it found had unduly limited the authority of the California legislature.

The court found that the ballot measure incorrectly defined which actions constituted an amendment to Proposition 22, in violation of the separation of powers principles of the state Constitution. The court struck down Proposition 22 provisions restricting the California legislature’s ability to allow collective bargaining over drivers’ compensation, benefits or working conditions and creating rules that single out or impose ‘unequal regulatory burdens’ to app-based drivers.

The group of companies that backed Proposition 22, called the Protect App-based Drivers & Services Coalition, celebrated the decision as a “historic victory for the nearly 1.4 million drivers who rely on the independence and application-based work flexibility to earn income, and for the integrity of California’s initiative system.

“The Court of Appeal upheld the fundamental policy behind the measure,” Molly Weedn, spokeswoman for the coalition, said in an email.

The lower court ruling, issued by Alameda County Superior Court Judge Frank Roesch, in August 2021, found the law violated the state Constitution by restricting the ability of the Legislative Assembly to regulate its workers’ compensation system. The ruling also argued that Proposition 22 violates a constitutional provision requiring initiatives to be limited to a “single subject.”

The sweeping decision came as a surprise to those studying California’s ballot initiative process; experts said the courts are reluctant to challenge voter-approved laws.

Proposition 22 remained in effect throughout the appeal process. Monday’s decision is expected to be appealed to the California Supreme Court.

A three-judge panel in San Francisco heard the case on appeal in December.

Judge Tracie L. Brown, who wrote Monday’s ruling, had during the hearing questioned the law’s provision limiting the law on app-based drivers’ collective bargaining rights. Brown had said she thought it fell outside the stated purpose of Proposition 22 and floated the hypothetical idea of ​​striking down that provision rather than the entire law.

Brown, in his ultimate opinion, largely disagreed with Roesch, believing that Proposition 22 does not fetter the legislature’s workers’ compensation authority or violate the single subject rule. She also determined that provisions she deemed unconstitutional could be removed and struck down without dismantling the entire law. His opinion was supported by Judge Stuart R. Pollak.

Third Court of Appeals Judge Jon B. Streeter dissented, writing in his view that Proposition 22 usurps the legislature’s power to create and enforce the workers’ compensation system. State.

“My disagreement on this point leads me to a different overall result,” Streeter wrote. “I believe we must invalidate Proposition 22 in its entirety.”

The wording of Proposition 22 was intended to block further legislative action targeting gig businesses. The law requires a seven-eighths supermajority of the legislature to pass any amendment to the law. Monday’s decision does not invalidate that requirement to change the law in the Legislative Assembly.

A small group of app-based drivers and the Service Employees International Union had mounted the legal challenge to Proposition 22. The plaintiffs and the union said in an emailed statement that the appeals court ruling shows that powerful corporations had “hijacked” the referendum process, but praised the court for overturning provisions restricting workers’ collective bargaining rights.

“Every voter in California should be concerned about the growing influence of corporations in our democracy and their ability to spend millions of dollars misleading voters and buying laws for themselves,” said David Huerta, president of SEIU California and SEIU United Service Workers West, in an email. statement.

“We are grateful that the California Court of Appeals affirmed that companies like Uber, Lyft, Doordash and Instacart cannot prevent drivers from banding together in a union through their misleading vote,” the plaintiff said. and Uber and Lyft driver Mike Robinson. “But make no mistake, we still believe Proposition 22 – in its entirety – is an unconstitutional attack on our fundamental rights.”

Proposition 22 went into effect in early 2021. Ride-sharing and app-based delivery companies including Uber, Lyft and DoorDash have together spent more than $200 million to market the voting initiative to Californians. as a boon for workers and customers, promising flexible hours, certain benefits and low prices.

For hundreds of thousands of drivers, Proposition 22 gained independent contractor status, but removed protections imposed by a 2019 law, AB 5, requiring construction workers in many industries to be classified as employees with greater benefits such as a minimum wage , overtime, and workers’ compensation for injury.

Labor advocacy group Rideshare Drivers United said driver incomes and protections have been eroded since voters approved Proposition 22. Gig companies say the opposite, that Proposition 22 has boosted drivers’ incomes. .

Lyft spokeswoman Shadawn Reddick-Smith applauded the appeals court’s decision and said Proposition 22 “protects the value of Independence Engines and gives them new historical advantages.”

“We are pleased that the Court has respected the will of the people and that Prop. 22 remains in effect,” Tony West, Uber’s chief legal officer, said in an emailed statement.

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