In a stunning ruling late on Friday evening, California Superior Court Judge Frank Groesch ruled that Prop 22 – the most expensive ballot proposition in California history, which last year passed with 59% of the vote and allowed Uber and Lyft to classify their drivers as “independent contractors” rather than employees – was unconstitutional.
According to the Court, Proposition 22 violated three different provisions of the California Constitution:
First, by approving a proposition that made app-based drivers independent contractors rather than employees, the people of the State caused app-based drivers to lose workers’ compensation insurance. But only “the Legislature has the power to include or exclude workers from the workers’ compensation system,” the Court ruled. Under Article XIV, Section 4 of the California Constitution, the plenary power of the State’s Legislature can only be changed by an initiative constitutional amendment. Yet the Court noted that Proposition 22 was merely an initiative statute. As a result, the Court concluded, Proposition 22 is an “unconstitutional continuing limitation on the Legislature’s power to exercise its plenary power to determine what workers must be covered by the workers’ compensation system.”
Second, Prop 22 included language requiring a super-majority of 7/8 of Legislators to approve any future amendments to the law. This extraordinary requirement, the Court concluded, “unconstitutionally purports to limit the Legislature’s ability to pass future legislation” pursuant to Article II, Section 10 of the California Constitution.
Finally, the Court found that Prop 22 violated the “single subject” rule required by Article II, Section 8 of the California Constitution. By inserting language that prohibited the state Legislature from authorizing collective bargaining by app-based drivers, Prop 22 aimed to “protect the economic interest of the network companies in having a divided, unionized workforce,” the Court found. The Court then recited the explicit language in Prop 22 that stated the goals of the initiative. Protecting network companies from a unionized workforce “was not a stated goal” of Prop 22, according to the Court. Therefore, the Court ruled that, as a result of including anti-union language that was “utterly unrelated to its stated common purpose,” Prop 22 was legally unenforceable.
So what’s next? The coalition of companies supporting Prop 22 vowed to immediately appeal the Court’s ruling. Prop 22 will remain in force in California until the appeals process is complete, which likely will not occur until the case has been heard by the California Supreme Court.
You can read the Court’s full opinion here.
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