August 20, 2021
On Friday, August 20, 2021, a California Superior Court judge ruled Proposition 22, the ballot initiative turned California law ensuring many gig workers, such as ride-share drivers, are considered independent contractors, is unconstitutional and unenforceable. Though this decision is not likely to have immediate effect as the law’s proponents such as Uber, Lyft, and DoorDash, have already made plans to appeal, this ruling is the first legal attack to gain traction since voters approved the proposition in November 2020. The reasoning for the judge’s ruling, supported by advocates for the drivers, is that Proposition 22 limits the State Legislature’s ability to allow workers to organize and have access to workers’ compensation, which ultimately violates California’s constitution. Those in favor of the gig economy platforms argue the ruling should be overturned as a violation of the court’s obligation to safeguard the voters’ right of initiative.
The employee v. independent contractor fight is far from over in California and this case will most likely be argued before the California Supreme Court. For now, businesses directly impacted by Proposition 22 can continue to rely on its classifications, protections, and benefits provided to independent contractors. Nevertheless, it goes without saying this case will be closely watched by proponents for both labor rights and the gig industry.
If you have questions about how your business might be impacted by these developments, please feel free to reach out to the Pearlman, Brown & Wax employment law department here.