Even though it only affects California (for now), gig drivers everywhere have been watching Prop 22 to see how it might change the face of the industry. In November of 2020, when voters in California approved Prop 22, most of us thought the fight about companies being forced to treat drivers as full employees was over and done with.
As it turns out, however, we closed the book on this case too soon.
On August 20, 2021, Prop 22 was ruled unconstitutional by Judge Frank Groesch of the California Superior Court. After the long road we traveled with AB 5 and the passage of Prop 22, of course we ask, “Now what?” As we lay out the current state of the controversy and speculate about what could happen next, in this blog post, we’ll cover:
- Prop 22 explained – what is Prop 22?
- Why the court says Prop 22 is unconstitutional
- How fast the gig companies might appeal, and how long this could take
- How a proposition-based law can be overturned
- Do drivers support Prop 22?
Prop 22 explained – what is Prop 22?
Proposition 22 was put forth by a coalition of gig companies to stop Assembly Bill 5, better known as AB 5 or the “gig worker bill.” That bill ordered gig companies to treat drivers the same way any company would treat employees. Prop 22 was put on the ballot during the November 2020 elections and was approved by the people of California with 59 percent of the votes. You can get more details about Prop 22 and what it does (and doesn’t do) for drivers in this Gridwise blog post.
The gig driving companies, including Uber, Lyft, DoorDash, and Instacart, are not too pleased about the Superior Court’s August 20th decision. They backed Prop 22 with more than $200 million in campaigning for its passage. Since then, the “benefits” drivers were supposed to receive are widely reported to be less than ideal. Drivers also report that the changes instituted by the companies make it hard for them to earn as much money as before.
While Prop 22 obviously doesn’t make everyone happy, it does seem to be a somewhat reasonable compromise. As all drivers know, the gig companies continue to struggle to attain profitability, and the added cost of even the few benefits they plan to offer drivers will make the struggle more intense.
Plus, wasn’t Prop 22 approved by the voters of California? And aren’t the people supposed to have the final say about the laws that govern them? The answer to that question could be yes, no, or maybe. Let’s look at what the courts have to say about Prop 22.
Why the court says Prop 22 is unconstitutional
Many legal experts were stunned by the judge’s August 20th ruling. The suit against Prop 22 was filed by the Service Employees International Union (SEIU) of California in Alameda County. It’s not surprising that a large union would have an interest in preventing Prop 22 from being successfully implemented in California, and potentially spreading in similar ways in other places.
What was somewhat unexpected was the court’s ruling and the reasons why the judge declared it unconstitutional. Here they are:
- Prop 22, by allowing gig drivers to remain independent contractors, allows voters to remove the state legislature’s power to include or exclude workers from the workers’ compensation program.
- Prop 22 requires 7/8 of the legislators (called a “super-majority”) to approve any amendments to the law. The court stated that this, in essence, limits the ability of the legislature to pass future legislation.
- Prop 22 violates the “single subject” rule by prohibiting the state legislature from allowing app-based drivers to engage in collective bargaining. The court noted that protecting network companies from a unionized workforce was not one of the goals as stated in the proposition. That means the language about collective bargaining doesn’t fit in with Prop 22’s stated purpose – which makes the law unenforceable.
How fast the gig companies might appeal, and how long this could drag on
It didn’t take long for the gig companies to state that they will appeal the decision (surprise, surprise). But no matter how quickly they get things started, the process they’re likely to undergo will move very slowly. There are many legal points to be argued, and a long (long, long, long) line of lawyers ready to go to battle. Among the possible rebuttals to Judge Groesch’s decision are:
- The term “legislature” includes the power of the people acting through ballot initiatives.
- The judge’s contention that gig workers were once considered “employees” is on shaky ground, since that was only true during the few months AB 5 was in effect, and was never fully adopted by the companies. (Read more about AB 5 in this Gridwise blog post.)
- Even if that argument doesn’t hold water, Prop 22 states that AB 5 does not apply, and Judge Groesch’s decision upheld that.
- It isn’t unconstitutional for Prop 22 to ask for a 7/8 vote for amendments. Why? Because propositions can only be overturned by voters, and Prop 22 can include any restrictions to possible future amendments that those voters agree to.
Obviously, there’s a complicated situation to unravel here, and it will take years. The likely scenario will probably involve the companies getting a stay on the judge’s order while the appeals take place. Business will go on as usual for the gig companies, most likely, while the appeals wind their way through the courts. To get a handle on what this process might eventually turn out to be, let’s take a short trip into the past.
How a proposition-based law can be overturned
Yes, it can happen. Ballot measures like Prop 22 can be picked apart by opponents and taken through long, arduous, and complex legal campaigns. In fact, the Los Angeles Times quotes the Center for Governmental Studies stating that 31 percent of the ballot measures passed since 1964 have been partially or entirely overruled by courts. One of the most controversial of these, Proposition 8, was passed in 2008 and overturned in 2013.
Proposition 8 banned same-sex marriage. The law was ruled unconstitutional in 2010, but over the following years, legal wrangling persisted until it had made its way to the U.S. Supreme Court. In June 2013, in a five to four ruling, the Court declared Proposition 8 to be unconstitutional.
Most experts expect the Prop 22 question to remain in the California courts and avoid the federal circuit since it involves the powers of California’s state legislature rather than the US Constitution. Anything can happen, however. Even though the gig companies are struggling to be profitable, they are likely to view pursuing this case with more millions of dollars to be a wise investment. This means there is no end in sight.
Do drivers support Prop 22?
If Prop 22 fails to remain in effect in California, the gig companies stand to lose future battles looming on the horizon. The business model whereby the companies classify workers as independent contractors is something the gig companies depend on.
The costs of paying employee benefits would put many companies out of business. It would also place restrictions on drivers that remove the flexibility they enjoy in terms of choosing their own hours and electing to take days off at their own chosen times.
Driver opinion is divided on whether they’d like to become gig company employees. This Gridwise blog post offers information about how drivers come down on this issue, and highlights the pros and cons of being an employee vs. independent contractor.
Even though Prop 22 doesn’t affect most of the country directly, the outcome of its eventual lifespan most certainly will. What do you think about Prop 22? Would you like a similar law to come to your state, or would you prefer that the government push the companies into making all drivers employees? Leave a comment and let us know what you’re thinking.
Keep driving with Gridwise
It looks like the gig driving business will continue in California and elsewhere for some time to come. So as long as you’re going to keep on driving, why not drive with Gridwise?
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