California's Supreme Court declined to hear a case brought by a union group seeking to have Proposition 22 declared unconstitutional and unenforceable.
Proposition 22 was approved at the election on Nov. 3 with 58.6% of the vote. The ballot initiative defined app-based transportation, rideshare and delivery drivers as independent contractors and not employees or agents.
The ballot measure overrode Assembly Bill 5 (AB 5), signed by Gov. Gavin Newsom in September 2019, which became law Jan. 1, 2020, which reclassified many independent contractors as employees eligible for benefits. The voter-approved measure provides an exception to AB 5 for app-based drivers to remain working as independent contractors and not employees.
The Service Employees International Union (SEIU) and four app-based drivers filed suit in the California Supreme Court on Jan. 12, 2021. Within less than a month, the court rejected their case.
The case can still be filed in a lower court. For now, the ballot measure stands.
Supporters of AB 5 argue that independent contractors should be treated as full-time employees and receive benefits. Plaintiffs suing argued that Proposition 22 violates Section 4 of Article XIV of the California Constitution, which “grants to the Legislature ‘plenary power, unlimited by any provision of this Constitution’ to establish and enforce a complete system of workers’ compensation.”
In response to the court’s ruling, one plaintiff, Hector Castellanos, said, “Make no mistake: we are not deterred in our fight to win a livable wage and basic rights. We will consider every option available to protect California workers from attempts by companies like Uber and Lyft to subvert our democracy and attack our rights in order to improve their bottom lines.”
After AB 5 became law, thousands of independent contractors were put out of work, beginning an exodus from California, which for the first time in the state’s history in 2020 reported a population loss.
"AB 5 is a nightmare law that made it illegal for hundreds of thousands of freelancers to earn a living," said Tom Manzo, president and founder of the California Business and Industrial Alliance. "Luckily, the people of California delivered a verdict against it and in favor of the gig economy---speaking louder than...