Calif. Court Says Uber, Lyft, Can Still Treat Drivers as Contractors
SAN FRANCISCO — Uber, Lyft and other companies with ride-sharing apps can continue to treat their drivers as independent contractors, a California appeals court ruled Monday, overturning a lower court decision.
At issue was California’s Proposition 22, which state voters approved in November 2020, and which allowed ride-sharing apps to classify their drivers as independent contractors and avoid the expense, among other things, of having to pay for the drivers’ health insurance or other business expenses.
More than $200 million had been poured into the campaign to pass the proposition, and its supporters hailed its passage as the vanguard of a new future of work, one that gave employees the greater flexibility and autonomy of independent gig workers, while sparing their employers the costs associated with full-time employees.
But in August 2021, Alameda County Superior Court Judge Frank Roesch struck down the proposition, declaring it unconstitutional on the grounds that it infringed on the Legislature’s power to define app-based drivers as workers subject to workers’ compensation law.
Roesch also found the proposition invalid because it limited state lawmakers’ ability to enact amendments to it, and because it violated the single-subject rule for initiative statutes.
Supporters of Proposition 22 and the state appealed.
On Monday, a three-judge panel presiding in California’s First Appellate District, sided with the appellee’s.
“We agree that Proposition 22 does not intrude on the Legislature’s workers’ compensation authority or violate the single-subject rule, but we conclude that the initiative’s definition of what constitutes an amendment violates separation of powers principles,” the panel said in its ruling.
In short, the panel found that the provision of the California Constitution that allocates power to the Legislature to create and enforce the state’s workers’ compensation system must be construed to grant lawmaking authority to both lawmakers and the electorate.
“Because the unconstitutional provisions can be severed from the rest of the initiative, we affirm the judgment insofar as it declares those provisions invalid and to the extent the trial court retained jurisdiction to consider an award of attorney’s fees, and otherwise reverse.”
Though Associate Justice Jon Streeter, a member of the panel, concurred with its overall ruling, he dissented on several key points and admitted his preference, ultimately, would have been to “invalidate Proposition 22 in its entirety.”
The appeals court, however, might not have the last word. The Service Employees International Union, along with several drivers, is expected to appeal the decision to the California Supreme Court, which will then have to decide whether to hear the case.
Dan can be reached at [email protected] and @DanMcCue
In The News
In The States
WASHINGTON — Americans starting to think about spring and summer vacations as the weather warms may find their favorite water... Read More
WASHINGTON — Americans starting to think about spring and summer vacations as the weather warms may find their favorite water destinations unsafe for swimming. Thick layers of cyanobacteria — commonly known as blue-green algae — have closed popular local lakes in recent years, and Florida has... Read More
WASHINGTON (AP) — President Joe Biden on Friday will visit a Mississippi town ravaged by a deadly tornado even as... Read More
WASHINGTON (AP) — President Joe Biden on Friday will visit a Mississippi town ravaged by a deadly tornado even as a new series of severe storms threatens to rip across the Midwest and the South. Last week's twister destroyed roughly 300 homes and businesses in Rolling... Read More
FORT CAMPBELL, Ky. (AP) — Two Army helicopters crashed in southwestern Kentucky during a routine training mission, causing several casualties,... Read More
FORT CAMPBELL, Ky. (AP) — Two Army helicopters crashed in southwestern Kentucky during a routine training mission, causing several casualties, military officials said. The two HH-60 Black Hawk helicopters, part of the 101st Airborne Division, crashed around 10 p.m. Wednesday in Trigg County, Kentucky, according to... Read More
RALEIGH, N.C. (AP) — North Carolina residents can now buy a handgun without getting a permit from a local sheriff,... Read More
RALEIGH, N.C. (AP) — North Carolina residents can now buy a handgun without getting a permit from a local sheriff, after the Republican-controlled state legislature on Wednesday overrode the Democratic governor’s veto — a first since 2018. The House voted 71-46 to enact the bill, which eliminates the... Read More
WASHINGTON — With exploitation on the rise and Republican lawmakers in some states rolling back protections, the Biden administration is... Read More
WASHINGTON — With exploitation on the rise and Republican lawmakers in some states rolling back protections, the Biden administration is stepping up its efforts to combat child labor violations. Labor Department officials say there has been a dramatic increase in the number of children employed in... Read More
EAST PALESTINE, Ohio — The state of Ohio received more than $209,000 in wellness and community resilience funding this week,... Read More
EAST PALESTINE, Ohio — The state of Ohio received more than $209,000 in wellness and community resilience funding this week, the first in a series of grants awarded by the Substance Abuse and Mental Health Services Administration in the wake of last month’s East Palestine train... Read More