California judge finds Prop 22 gig worker measure unconstitutional

The measure exempts companies like Uber and Lyft from having to treat drivers as employees.

Andrei Stanescu via Getty Images

A California judge has ruled that Proposition 22, the measure that allows companies like Uber and Lyft to keep classifying app-based drivers in the state as independent contractors, is unenforceable and unconstitutional. According to the San Francisco Chronicle, Alameda County Superior Court judge Frank Roesch found that Prop 22 illegally "limits the power of a future legislature to define app-based drivers as workers subject to workers' compensation law."

Proposition 22 passed by a wide margin in the state when most people voted in favor of it in last year's November elections. Companies were legally obligated to classify gig workers as full-time employees under Assembly Bill 5 A (AB5), which was passed in 2019, but some (like the aforementioned ride-sharing firms) continued to treat them as contractors. Uber, Lyft, Instacart and DoorDash poured over $220 million into campaigning for Prop 22 in order to overturn AB5, and the move clearly worked.

The measure requires gig companies to provide their contractors with healthcare subsidies and a wage floor, but it also exempts them from having to classify their workers as employees with appropriate benefits and protections. While those in favor of the proposition argue that it would allow workers to keep their independence while enjoying benefits they didn't have before, not everyone's happy with the development. A group that includes the Service Employees International Union and the SEIU California State Council sued California earlier this year to overturn the proposition.

In his ruling, Roesch specifically singled out Section 7451 of the measure, which states that any future law related to collective bargaining for app drivers must comply with the rest of the proposition. "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," he wrote in his decision. He also found it unconstitutional that any amendment to the measure requires a seven-eighths vote of approval to pass in the state Legislature.

If the ruling stands, gig companies like Uber and Lyft may have to spend hundreds of millions paying for healthcare and other additional benefits for their drivers. At the moment, though, Prop 22 is still in effect, and gig companies are already planning to appeal. An Uber spokesperson told The Chronicle:

"This ruling ignores the will of the overwhelming majority of California voters and defies both logic and the law. We will appeal and we expect to win. Meanwhile, Prop. 22 remains in effect, including all of the protections and benefits it provides independent workers across the state."