California’s Gig Worker Law Struck Down as Unconstitutional

September 8, 2021 by Stephanie Platenkamp

California workers have scored a major victory in the fight against the erosion of labor protections in the gig economy. Last November, California voters approved Proposition 22 with 59% of the vote after a $225 million initiative campaign that barraged voters with misleading ads indicating the Proposition’s carve out of “app-based drivers” from basic employment protections would benefit drivers. With Proposition 22, Uber, Lyft and other app-based driving companies sought to legalize the previously unlawful misclassification of workers by making them independent contractors instead of employees. In so doing, covered employees were deprived of critical worker protections such as the obligation to be paid at least minimum wage for all hours worked, to bargain collectively with their employer over the terms and conditions of employment, to be reimbursed for work-related expenses, and protection from discrimination.

Unions fought back. In Castellanos v. California, SEIU, SEIU California, and individual drivers and consumers challenged the constitutionality of Proposition 22. On August 20, 2021, the Alameda County Superior Court struck down the law as unconstitutional.

The court concluded that Proposition 22’s carve-out of gig workers from the pool of employees eligible for workers’ compensation conflicts with the California Constitution’s grant to the State Legislature of the absolute right to set and control workers’ compensation regulation. The court also ruled that Proposition 22’s provision preventing the unionization of workers was included in the proposition in violation of the Constitutional requirement that ballot initiatives address just a single subject.

This decision is a victory for unions and California drivers who have struggled to assert their labor rights. This decision will undoubtedly be appealed, and the decision will likely be stayed until the case is heard on appeal. If the court issues a stay, Proposition 22 will remain in place until the case is heard on appeal. However, if the decision is upheld, app-based workers may later be able to recover for violations of the Labor Code and other employment laws.

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