Court Rules Proposition 22 Unconstitutional

The Alameda County Superior Court issued a decision on August 20 holding that California’s Proposition 22 conflicts with the California Constitution and is invalid in its entirety.  The case, Castellanos v.  California, No. RG21088725, was filed by SEIU, SEIU California, and four individual drivers and consumers after gig economy companies funded a $225 million initiative campaign that convinced the voters to exempt drivers who work for transportation and delivery network companies like Uber, Lyft, and DoorDash (who the proposition calls “app-based drivers”) from California’s employment law protections.

The court held Proposition 22 unconstitutional for three reasons.  First, by excluding “app-based drivers” from the state’s workers’ compensation system and forbidding the state legislature from including them in the future, Proposition 22 impermissibly interferes with the legislature’s “plenary power” over the workers’ compensation system under Article XIV, Section 4 of the California Constitution.  Second, although Proposition 22 lacks any substantive provisions addressing collective bargaining by “app-based drivers,” it impermissibly deems any legislation authorizing representation of app-based drivers an “amendment” to Proposition 22 that may be enacted only by a seven-eighths vote of each house of the state legislature.  A statutory initiative cannot limit future legislation that does not actually amend the substantive terms of an initiative.  And third, Proposition 22 violates the requirement, under Article II, Section 8(d) of the California Constitution, that initiative statutes be “limited to a single subject.”  The Court concluded that Proposition 22’s limitation of drivers’ collective bargaining rights “appears only to protect the economic interests of the network companies in having a divided, ununionized workforce” and was “utterly unrelated to” the Proposition’s “stated common purpose” of “protecting the opportunity for Californians to drive their cars on an independent contract basis, to provide those drivers with certain minimum welfare standards, and to set minimum consumer protection and safety standards to protect the public.”

The petitioners in the case are represented by Altshuler Berzon LLP, Olson Remcho, LLP, and the SEIU legal department.   A copy of the Superior Court’s decision is available here.  News coverage of the decision can be found here and here.