State high court should uphold Proposition 22
On Tuesday, the California Supreme Court will hear oral arguments over the constitutionality of Proposition 22. Approved by over 58% of voters in 2020, the measure allowed app-based transportation and delivery companies like Uber and Lyft to continue to work with drivers hired as independent contractors.
The measure came after the passage of Assembly Bill 5, which broadly made independent contracting illegal in California under many circumstances, including in the way typified by Uber, Lyft and Doordash.
The rideshare companies were the true targets of AB 5, which was a straightforward effort by Big Labor to crush the gig economy. Unions saw the gig economy as a threat to their ability to generate money and wield political power by unionizing employees.
Under AB 5 as written, rideshare companies would have needed to hire drivers as full-fledged employees. This would have drastically reduced the number of people who could make money through the apps by driving and significantly driven up the costs for people who still wanted the convenience of app-based transportation services.
As a result, Lyft, Uber, DoorDash, Instacart and Postmates put together and funded Proposition 22, which created a carve-out for their services from California law that essentially allowed them to continue to do business as they had been. The measure included some new benefits for drivers, including pay for mileage and a health insurance stipend for drivers who worked above a certain threshold.
The overwhelming passage of Prop. 22 was a clear rebuke to Sacramento and Big Labor and a big win for consumer choice and worker freedom.
The measure has been in the courts ever since. The Service Employees International Union filed a lawsuit challenging the measure’s constitutionality, scoring an early win in the courts.
“In 2021, a Superior Court judge invalidated Prop. 22, saying it limits the Legislature’s constitutional power to create and enforce a complete workers’ compensation system because it declares gig workers independent contractors ineligible for the benefit,” explained Levi Sumagaysay for CalMatters.
But that was ultimately reversed by an appeals court, which largely upheld the constitutionality of the measure. That in turn was appealed, hence the coming California Supreme Court hearing.
The unions argue that the state constitution grants the Legislature “unlimited power to enforce a complete workers’ compensation system” and that Prop. 22’s carve-outs interfere with that ability.
But the proponents of Prop. 22 correctly argue that the initiative process gives the people powers on par with the Legislature. That was the reasoning backed by the appeals court.
Ultimately, anyone who favors worker freedom and defends the initiative process as a means of checking Sacramento’s overreach should be rooting for the union arguments to be rejected and for Prop. 22 to be upheld.
AB 5 and Lorena Gonzalez’s assault on independent contractors are a stain on California labor law. Prop. 22 is a needed and justified rebuke to unjustified government meddling.