Proposition 22 Challenged in Oakland State Court

CDF Labor Law LLP

Last November, California voters convincingly (almost 60% supporting) enacted Proposition 22.  This Proposition was a well-funded effort that allows gig drivers working for companies like Uber, Lyft and Doordash to avoid the statutory requirements of AB5 and allows them to continue to have legitimate arguments that they are working as independent contractors. 

In mid-January, the SEIU petitioned the California Supreme Court to rule that Proposition 22 is unenforceable on the grounds that it violates section XIV of the California Constitution because it removes drivers from the workers’ compensation system.  The SEIU also made other ancillary arguments in opposition to the constitutionality and enforceability of Proposition 22.  On February 3, the California Supreme Court declined to take up the petition, without explanation.  This denial of the petition was mostly a jurisdictional one and was done without prejudice.  This means that the SEIU, or any other plaintiff with standing, can bring the same challenge at the trial court level.

Earlier yesterday, that is exactly what happened.  The SEIU and three rideshare drivers filed a complaint in the Alameda County Superior Court challenging the constitutionality and the enforceability of Proposition 22, arguing that rideshare drivers should be subjected to the ABC test and therefore should be properly classified as employees, notwithstanding the enactment of Proposition 22.  We expect that the plaintiffs will move quickly to seek a statewide injunction from the Alameda County Superior Court that Proposition 22 is unconstitutional and unenforceable.  

We will continue to keep you updated on developments on the lawsuit and overall battle between the unions (who want drivers to be employees so they can have more rights and be subject to union organizing) and the rideshare companies (who desire to continue to employ their drivers as independent contractors) on this hotly contested issue.  

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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