A California law defining app-based drivers as independent contractors is unconstitutional, a judge ruled Friday.
It’s a blow to delivery and ridesharing companies like DoorDash and Uber, which contributed more than $ 200 million in support of Proposition 22, making it the most expensive electoral effort in the state’s history. California voters approved the measure in November.
The law shielded gig firms from an existing law, AB 5, which would have forced them to reclassify their workers as employees with full protection and full scope. Under Prop 22 they can still treat drivers as independent contractors with some additional benefits.
However, Alameda County Superior Court Judge Frank Roesch ruled Friday that the law was unconstitutional as it restricts the legislature’s power to extend workers’ compensation claims to app-based drivers. The judge highlighted an “unusual provision” in Prop 22 that requires seven eighths of the Legislature to approve any changes.
A group supported by DoorDash and Uber said the ruling was scheduled to be appealed immediately.
“This outrageous decision is an affront to the overwhelming majority of California voters who passed Prop 22,” said Geoff Vetter, spokesman for the Protect App-Based Drivers & Services Coalition, in a statement.
The appeal will overturn the judgment and leave Prop 22 in place until the process is completed, he said.
The lawsuit was filed in the California Supreme Court in January by the Service Employees International Union, three app-based drivers, and a consumer.
“Judge Roesch’s decision today to put down Proposition 22 couldn’t be clearer: The gig industry-funded voting initiative was unconstitutional and therefore unenforceable,” said Bob Schoonover, president of the SEIU’s California State Council, in a statement. “For two years now, motorists have been saying that democracy cannot be bought. And today’s decision proves them right.”
The fate of Proposition 22 is likely to affect restaurants that rely on third-party delivery drivers. Proponents of the election warned that switching from drivers to full-time workers would make delivery more expensive, which would ultimately harm restaurants. Opponents said it would help restaurants by creating a more reliable workforce and encouraging customers to patronize restaurants in ways other than pickup.