October 4, 2023

A California law that ensures that many gig employees are considered independent contractors but gives them some limited benefits is unconstitutional and unenforceable, a judge in the California Superior Court ruled Friday night.

The decision is unlikely to have an immediate impact on the new law and is sure to be challenged by Uber and other so-called gig economy companies. It has reopened the debate about whether drivers for transport services and delivery couriers are employees who deserve full service or independent contractors who are responsible for their own business and performance.

Last year’s Proposition 22, an election initiative backed by Uber, Lyft, DoorDash, and other gig economy platforms, created a third classification for workers that grants gig employees limited benefits while preventing them from being considered employees of the tech giants. The initiative was adopted in November with more than 58 percent of the vote.

But Driver and the Service Employees International Union filed a lawsuit to challenge the constitutionality of the law. The group argued that Prop. 22 was unconstitutional as it restricted the ability of state lawmakers to allow workers to organize and to have access to workers’ compensation.

The law also requires a seven-eighths majority so that the legislature can pass any changes to Prop. 22, a super majority that has been seen as near-impossible.

Judge Frank Roesch said in his ruling that Prop. 22 violated the California Constitution because it prevented the legislature from granting gig employees the right to compensation for workers.

“The entirety of Proposition 22 is not enforceable,” he wrote, causing new legal upheavals in the long struggle for the employment rights of gig workers.

“I think the judge made a very reasonable decision when he found that Prop. 22 was unconstitutional because it contained some unusual provisions,” said Veena Dubal, professor at the University of California’s Hastings College of Law, the gig economy has studied and submitted a brief in the case that supports the position of the driver. “It was written so extensively to prevent workers from having access to the rights that the legislature has made.”

Scott Kronland, attorney for the drivers, praised Judge Roesch’s decision. “Our position is that he is exactly right and that his judgment will be upheld on appeal,” said Kronland.

But the gig economy firms argued the judge made a mistake by “ignoring a century of case law that required the courts to protect voters’ right of initiative,” said Geoff Vetter, a spokesman for Protect App-Based Drivers & Services Coalition, a group that represents gig platforms.

An Uber spokesman said the ruling ignored the majority of California voters who supported Prop. 22. “We’ll appeal and expect to win,” said spokesman Noah Edwardsen. “In the meantime, Prop. 22 remains in effect, including all the safeguards and benefits it offers independent workers across the state.”

Uber and other gig economy companies have similar laws in Massachusetts. This month, a coalition of companies tabled an election proposal that could allow voters in the state to decide next year whether gig workers should be considered independent contractors.