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SACRAMENTO, Calif. (AP) — App-based ride hailing and delivery companies like Uber and Lyft can continue to treat their California drivers as independent contractors, a state appeals court ruled Monday, allowing the tech giants to bypass other state laws requiring worker protections and benefits.
“Today’s ruling is a victory for app-based workers and the millions of Californians who voted for Prop 22," said Tony West, Uber’s chief legal officer. ”We’re pleased that the court respected the will of the people.”
“Today the Appeals Court chose to stand with powerful corporations over working people, allowing companies to buy their way out of our state’s labor laws and undermine our state constitution,” said Lorena Gonzalez Fletcher, leader of the California Labor Federation and a former state assemblywoman who authored the 2019 law. “Our system is broken. It would be an understatement to say we are disappointed by this decision.”
The ruling wasn't a complete defeat for labor unions, as the court ruled the companies could not stop their drivers from joining a labor union and collectively bargain for better working conditions, said Mike Robinson, one of the drivers who filed the lawsuit challenging Proposition 22.
“Our right to join together and bargain collectively creates a clear path for drivers and delivery workers to hold giant gig corporations accountable,” he said. “But make no mistake, we still believe Prop 22 — in its entirety — is an unconstitutional attack on our basic rights.”
In November 2020, voters agreed to exempt app-based ride hailing and delivery companies from the 2019 law by approving a ballot proposition. The proposition included “alternative benefits” for drivers, including a guaranteed minimum wage and subsidies for health insurance if they average 25 hours of work a week. Companies like Uber, Lyft and DoorDash spent $200 million on a campaign to make sure it would pass.
Monday, a state appeals court reversed that decision, allowing the companies to continue to treat their drivers as independent contractors.
The ruling might not be the final decision. The Service Employees International Union could still appeal the decision to the California Supreme Court, which could decide to hear the case.
“We will consider all those options as we decide how to ensure we continue fighting for these workers,” said Tia Orr, executive director of SEIU California.