Uber and Lyft don’t have to worry about reclassifying their workers in California for now. An appeals court has just ruled that temporary workers, such as rideshare drivers, can continue to be classified as independent contractors under Proposition 22.
If you remember, California passed Assembly Bill 5 (AB5) in September 2019 that legally requires businesses to treat their temporary workers as full-time employees. That means providing them with all the appropriate benefits and protections, like paying their unemployment and health insurance. In response, Uber, Lyft, Instacart, and DoorDash invested more than $220 million in the campaign for the Proposition 22 ballot measure, which would allow them to treat app-based workers as independent contractors. He ended up passing by a wide margin in state.
In 2021, a group of critics including the Service Employees International Union and the California State Board of SEIU filed suit in 2021 to strike down the proposal. The judge in charge of the case sided with them, calling Proposition 22 unconstitutional. He said at the time that the proposition illegally “limits the power of a future legislature to define app-based drivers as workers subject to workers’ compensation law.”
All three appellate court judges have now reversed that ruling, though according to The New York Times, one of them wanted to throw out Proposition 22 entirely for the same reason the trial judge gave when he handed down his decision. While the appeals court ultimately upheld the policy, it ordered that a clause making it difficult for state workers to unionize be removed from the rest of the proposal. That particular clause required a seven-eighths majority vote of the California legislature in order to amend workers’ rights to collective bargaining.
David Huerta, president of the Service Employees International Union in California, said The times in a statement: “All California voters should be concerned about the growing influence of corporations in our democracy and their ability to spend millions of dollars to mislead voters and buy laws.” The group is now expected to appeal this ruling and take their fight to the Supreme Court, which could take months to decide whether to hear the case.
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