Emboldened by California’s election victory to preserve the independence of their drivers last year, contract economy companies like Uber and Lyft have in recent months accelerated their push for a new one. what they call the “third way,” a classification of independent gig workers who receive limited benefits without attaining employee status.
But that plan was quashed Friday night by a California judge who ruled that the ballot initiative was backed by Uber, Lyft, DoorDash and companies known as the gig economy. otherwise violated the State Constitution. It’s a potential setback for companies and a win for labor organizers and drivers who claim they are being treated unfairly.
Here’s an explanation of this long smoldering war and what happens next:
Has this problem not been resolved in California?
Uber and Lyft have long said their drivers are independent contractors, which allows the company to avoid the cost of health insurance, unemployment insurance, sick leave and other employment benefits.
However, some state legislatures, federal officials and legal experts maintain that drivers are employees by law, and that Uber and other gig companies owe them protection. Full protection comes with employment.
In 2019, California lawmakers passed legislation requiring companies like Uber to hire their drivers. The state’s attorney general sued Uber and Lyft to enforce the law, and the companies responded by threatening to leave the state.
Uber, Lyft and DoorDash have poured more than $200 million into a ballot measure, known as Proposition 22, that allows drivers to remain independent contractors, while the companies provide them with benefits limit. Proposition 22 passed in November with about 59% of the vote.
A coalition of motorbike taxi drivers and labor groups sued in January, arguing that Proposition 22 is unconstitutional. A month later, the California Supreme Court declined to hear the case, seemingly ending the challenge. However, the group dismissed its claim in a lower court, leading to a ruling last week.
Why did the judge find Proposition 22 unconstitutional?
Judge Frank Roesch’s decision of the California Superior Court in Alameda County had three main outcomes.
The first is Proposition 22, which removes contract workers from the category of employees eligible for workers’ compensation in the event of an injury or other incident in the workplace. But the State Legislature has the power under the California Constitution to set and control workers’ compensation.
Judge Roesch wrote in his decision that Proposition 22 “limits the power of the future legislature to identify app-based drivers as workers subject to workers compensation laws.” action” and is therefore unconstitutional.
Second, Prop 22 includes a number of unusual provisions designed to prevent the Legislature from making significant changes to the law.
The bill requires the Legislature to obtain a majority of seven-eighths to make any changes to the law, a large percentage deemed unattainable. It also requires any changes to be “consistent” with Prop 22, which prevents the Legislature from significantly changing or reversing the law.
If the driver independence status is changed, the rest of Proposition 22 will also be invalid. So if drivers are declared employees, Uber and Lyft could withdraw the higher wages, private accident insurance and other benefits offered under Proposition 22.
Since the issue of workers’ compensation is inseparable from the rest of Proposition 22, Judge Roesch wrote “that Proposition 22 as a whole” cannot be enforced.
Finally, the judge also took issue with a provision in Proposition 22 that prevented workers from cooperating with one another. Proposition 22 says any future law that gives an organization the power to collective bargaining over driver benefits, compensation or working conditions would be considered an amendment and would be subject to regulation. seven-eighth majority rule. Judge Roesch found that provision unconstitutional because the law of collective bargaining must be treated as “irrelevant law”.
Who intervened to stop Proposition 22?
Three equestrian drivers and a motorist are involved in the lawsuit, along with Service Staff International.
Michael Robinson, a Lyft driver from Loma Linda, Calif., said in a press conference Monday: “We will continue to pay attention to how gig companies are putting their profits before employees. their.
Who’s on the other side of the courtroom?
Although the lawsuit focuses on how the app-based companies treat their workers, the union of drivers and labor groups is suing the State of California and the Department of Industrial Relations, the compensation regulator. for workers.
The California attorney general’s office is now defending Proposition 22 – an awkward development, since the attorney general sued Uber and Lyft before Proposition 22 was passed in an attempt to force the companies to hire drivers. their.
Contract economy companies can still consider. Their union, Driver Protection and Application-Based Services, is the defendant in the lawsuit and said it plans to file an appeal.
“This outrageous decision prompted a majority of California voters to pass Proposition 22,” said Geoff Vetter, a coalition spokesman. “We will file an appeal immediately and are confident that the Court of Appeals will uphold Proposition 22.”
The Attorney General of California or Driver Protection and the app-based service can file an appeal to overturn Judge Roesch’s decision. Even an expedited appeal can take several months.
For now, contract economy companies can be asked to start paying into workers’ compensation funds – but the companies argue that nothing will change until the appeal is resolved. They also said they have no immediate plans to change the way drivers are classified. All provisions of Proposition 22 will remain in place until the appeals process is complete, Mr. Vetter said.
Stacey Leyton, the drivers’ attorney, disagrees. “The Supreme Court has declared Proposition 22 invalid,” she said, and drivers must be considered employees immediately.
The war in California is beginning to repeat itself in other states. In August, companies filed a similar vote in Massachusetts, where the treatment of contract workers is facing intense scrutiny.
SEIU and other labor activists have vowed to continue fighting and planning to help drivers’ organization and activism efforts.
“We will continue to support their actions because of their claim to the fundamental rights they are afforded them under applicable law, reaffirmed with them on Friday,” said Alma Hernández, executive director of SEIU California.