"A California judge said a ballot measure that allowed Uber Technologies Inc., Lyft Inc. and DoorDash Inc. to bypass a state law that sought to reclassify their drivers as employees was unenforceable and unconstitutional.
The companies, which spent more than $200 million to pass Proposition 22 in November, said they would appeal the ruling.
The companies don't need to immediately change their underlying models, but Friday's ruling adds a wrinkle in their efforts to preserve their independent-worker models and serves as another hiccup in their yearslong fight against the state law at the center of the ruling.
California sued the companies last year, saying they were in violation of the state's so-called gig law because none of them reclassified their drivers as employees after the law went into effect in 2020. A high-stakes legal battle ensued, culminating in Proposition 22, which asked state voters to exempt them from the statute.
California voters passed the measure with an overwhelming majority. Superior Court Judge Frank Roesch said in Friday's ruling that Proposition 22 limits the state legislature's authority and its ability to pass future legislation, which is unconstitutional.
"We believe the judge made a serious error by ignoring a century's worth of case law requiring the courts to guard the voters' right of initiative," said Geoff Vetter, a spokesman for the companies' Proposition 22 campaign. "This outrageous decision is an affront to the overwhelming majority of California voters."
Friday's ruling came after a group of ride-share drivers and labor unions challenged the constitutionality of the ballot measure in February.
"Today's ruling by Judge Roesch striking down Proposition 22 couldn't be clearer: The gig industry-funded ballot initiative was unconstitutional and is therefore unenforceable," said Bob Schoonover, the president of SEIU California State Council, one of the labor unions involved. The companies "tried to boost their profits by undermining democracy and the state constitution," he added.
Proposition 22 was the most expensive ballot measure in the history of California. It allowed the ride-hailing and delivery companies to avoid complying with a law that could have reshaped their business models and battered their business in the most populous U.S. state.
But the effort to win popular support did lead the companies to guarantee new protections." [1]
1. U.S. News: Prop 22 Unconstitutional, Judge Says
Rana, Preetika. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 21 Aug 2021: A.3.
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