The California court mostly upholds prop. 22 in victory for Uber and other gig companies

The Service Employees International Union condemned the decision.

“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, in a press release.

Jon Streeter, one of three judges on the appeals court, disagreed with much of the 63-page ruling by his colleagues, Tracie Brown and Stuart Pollak. In a 64-page dissent, Justice Streeter wrote that all of Proposition 22 should be rejected, largely because of its clause limiting the legislature’s authority over workers’ compensation for gig drivers.

“I would confirm the judgment, but I prefer to go further. I believe we must invalidate Proposition 22 in its entirety,” Justice Streeter wrote. He added that the definition of independent contractors used in the measure was “constitutionally invalid”.

Uber and other companies have long argued that drivers enjoy the flexibility of being an independent contractor with no set hours from an employer, and say they would have to give up that freedom if they became employees. Union activists respond that drivers are exploited, deserve better health care and employment benefits, and could retain their flexibility under a traditional employment model.

Gig companies have spent more than $200 million lobbying for Proposition 22, which gave gig workers limited benefits but exempted them from Assembly Bill 5, a law passed by the California Legislature. in 2019 that set a new standard for determining whether workers should be considered employees under the law.

If AB 5, which faces its own legal challenge, is ever applied to gig drivers, Uber and other companies may find themselves inappropriately treating such drivers as independent contractors rather than employees.

As a result, gig companies would have to adjust their business models at the cost of hundreds of millions of dollars a year, either giving conductors greater independence or – more likely – converting a number of them. into employees, possibly of a third-party vehicle. fleet operator that would use Uber and Lyft platforms.