For more than a year, the California voter-approved gig-economy law known as Proposition 22 has hung in the balance after a judge invalidated the ballot initiative allowing giant ride-hailing and delivery companies to classify their workers as independent contractors rather than employees.
On Tuesday, a California appeals court will hear oral arguments in San Francisco on whether it should uphold the lower court that deemed Proposition 22 unconstitutional and unenforceable.
At stake is the business model of Uber, Lyft, DoorDash, Instacart and other app-based companies, which spent more than $200 million pushing Proposition 22 as a way to protect people who choose to work as independent contractors. The measure was approved by nearly 60% of voters in November 2020.
For hundreds of thousands of drivers, Proposition 22 allows the flexibility of remaining an independent contractor but took away protections granted by a 2019 law, AB 5, requiring gig workers across many industries to be classified as employees with stronger benefits such as a minimum wage, overtime and workers’ compensation in case of injury.
The ultimate decision on Proposition 22 will have a broad effect not only in California but across the U.S., as the gig company coalition behind the successful initiative looks to legalize its business model in other states, said Stacey Leyton, an attorney with Altshuler Berzon, the firm representing plaintiffs Service Employees International Union and several drivers who...
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