California Supreme Court hears oral arguments on Uber, Lyft-backed Prop. 22

The California Supreme Court will hear arguments Tuesday on the constitutionality of Proposition 22, the voter-approved law that classifies drivers who work in the gig economy as independent contractors rather than full employees.

The court must decide whether the law, which Uber, Lyft, Doordash and other app-based delivery companies pushed in 2020 with a $200 million campaign, unlawfully conflicts with the state legislature's authority to provide workers' compensation protections to those who were injured. the job.

How the justices ultimately rule will have enormous ramifications for the delivery and taxi companies that have argued that their ability to operate in California depends on the law's survival, as well as the more than one million people in California who drive for them. A victory for the group of drivers and unions that filed the lawsuit against Proposition 22 would let Uber, Lyft and companies like them decide whether to continue operating in California, one of their largest markets.

Under the law, drivers are considered their own employers, a designation that frees the companies they drive for from the obligation to provide benefits that traditional state workers are entitled to, such as overtime, sick leave and a minimum wage.

The Service Employees International Union and a group of drivers first filed the lawsuit challenging Proposition 22 in January 2021, just after the law came into effect. They tried unsuccessfully to take the case directly to the California Supreme Court, but had to pursue the case in a lower court.

In a sweeping decision, Alameda County Superior Court Judge Frank Roesch reigned in August 2021 that Proposition 22 was unconstitutional and unenforceable.

The law failed to pass constitutional muster, Roesch wrote, because it infringed on the Legislature's power expressly granted by the state constitution to regulate compensation for workers' injuries.

“If the people want to use their power of initiative to limit or qualify a 'plenary' and 'unrestricted' power granted to the legislature, they must do so first through a constitutional amendment, and not through an initiative statute,” wrote the judge.

In March 2023, a split three-judge panel of a state appeals court largely reversed that ruling, finding that the law did not interfere with the Legislature's authority and upholding the legality of the law's provision classifying drivers as contractors enforced.

Supporters of the law celebrated the ruling as a “historic victory for the nearly 1.4 million drivers who depend on the independence and flexibility of app-based work to earn income, and on the integrity of California's initiative system.”

Proposition 22 remained in effect throughout the appeal process.

When they make their case Tuesday, attorneys for the drivers and the union are expected to continue their claim that the law unfairly leaves gig economy drivers injured while on the job, without access to compensation enjoyed by traditional workers in the state.

The state constitution “grants the Legislature unlimited power to protect workers with a complete workers' compensation system,” said Scott A. Kronland, an attorney representing SEIU and the drivers.

A coalition backed by Uber, Lyft and DoorDash, called the Protect App-Based Drivers & Services coalition, meanwhile counters that courts should respect the will of voters, who voted by a 58% margin to approve the law.

“The court has not established a limit on voters' initiative power in 100 years,” said Kurt Oneto, a lawyer representing the coalition.

Around 9 a.m. Monday, dozens of drivers gathered outside SEIU Local 721's Westlake office, preparing to travel as a car caravan to San Francisco to gather outside the courthouse during oral arguments. They piled into dozens of honking cars lined up along a nearby intersection, plastered with signs denouncing Proposition 22 as “bad for workers, bad for the economy, bad for California.”

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