California Supreme Court rejects Prop 22 lawsuit over gig worker rights

California’s Supreme Court has declined to hear a lawsuit seeking to overturn the results of November’s Prop 22 ballot – which exempted gig workers from a key California labour law.

The lawsuit, filed by a number of rideshare drivers and the Service Employees International Union, alleged that Prop 22 violates the state’s constitution and makes it harder for the legislature to create and enforce a compensation system for gig workers.

It also alleged Prop 22 interferes with the judiciary’s ability to determine what constitutes an amendment to a ballot measure, as well as the legislature’s ability to legislate in areas not addressed by the measure.

“We are disappointed in the Supreme Court’s decision not to hear our case, but make no mistake: we are not deterred in our fight to win a liveable wage and basic rights,” Hector Castellanos, a plaintiff in the case, said in a statement. “We will consider every option available to protect California workers from attempts by companies like Uber and Lyft to subvert our democracy and attack our rights in order to improve their bottom lines.”

In declining to hear the case, the court suggested that the plaintiffs refile the case in a lower court.

Prop 22

Prop 22 passed last November with 58 percent of the vote and was seen as a huge victory for startups that rely on so-called ‘gig workers’.

The firms claimed that AB5, a law passed in 2019 that changes the way companies classify employees, would dramatically alter their business model, and even threatened to pull out of California after a court ordered them to comply in August.

Compliance with AB5 would have forced all gig economy companies to employ their drivers and, in turn, pay for healthcare, unemployment insurance and other benefits – something  that could have added up to 30 percent in labour costs for firms.

The ballot received heavy backing from businesses including Uber, Lyft and DoorDash, who spent over US$200 million lobbying the electorate – making it the most expensive ballot in California State’s history.

In contrast, the No on Prop 22 campaign – which claimed the legislation was “written by app companies, for app companies”– received around US$19 million in support, mostly from labour groups.

“We’re thankful, but not surprised, that the California Supreme Court has rejected this meritless lawsuit,” Jim Pyatt, a rideshare driver and Yes on 22 campaigner said in a statement. “We’re hopeful this will send a strong signal to special interests to stop trying to undermine the will of voters who overwhelmingly stood with drivers to pass Prop 22.”

As it stands, Prop 22 would require a seven-eighths legislative supermajority in order to amend the measure.

Image: Uber