In November 2020, the voters approved Proposition 22, the Protect App-Based Drivers and Services Act (Bus. & Prof. Code, §§ 7448–7467). This meant app-based drivers such as Uber, Uber Eats, Lyft, and GrubHub, could be classified as independent contractors by the various app-companies. Plaintiffs filed a petition for writ of mandate seeking a declaration that Prop. 22 is invalid because it violates the California Constitution. The trial court granted the petition, ruling that Proposition 22 (1) is invalid in its entirety because it intrudes on the Legislature’s exclusive authority to create workers’ compensation laws, (2) is invalid to the extent that it limits the Legislature’s authority to enact legislation that would not constitute an amendment to Prop. 22, and (3) is invalid in its entirety because it violates the single-subject rule for initiative statutes. (See Superior Court of Alameda County, No. RG21088725.)
On March 14, 2023, the Court of Appeal of California, First Appellate District, concluded that Proposition 22, the Protect App-Based Drivers and Services Act, Bus. & Prof. Code, §§ 7448-7467, which sets forth conditions for an app-based driver to qualify as an independent contractor, does not violate the California Constitution, as it does not intrude on the Legislature’s workers’ compensation authority; Proposition 22 does not violate the single-subject rule of Cal. Const., art. II, § 8, subd. The single section of the proposition that remains unconstitutional is Section 7465, subsections (c)(3) and (4), because these provisions unduly limited the powers afforded to the Legislature to enact amendments to the legislation; specifically, the authority to authorize collective bargaining over driver’s compensation, benefits, or working conditions. This issue was not expressly contemplated by the proposition when passed. (See Castellanos v. State of Cal., No. A163655, 2023 Cal. App. LEXIS 183 (Ct. App. Mar. 13, 2023).)
What does this mean for California rideshare drivers? The Court of Appeal determined that Proposition 22 was mostly constitutional, and essentially remains in effect, for the time being. Thus, the app-based drivers may continue to be classified as independent contractors. We will not be surprised if the Court of Appeal Decision is appealed to the California Supreme Court, as at least one workers’ union has indicated it will.