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California’s Prop 22, which blocked AB5 for app-based drivers, ruled unconstitutional

County court ruling likely to be appealed and stayed before immediate implementation

Photo: Jim Allen/FreightWaves

Prop 22 has been declared unconstitutional by a California court.

The referendum that exempted app-based gig drivers from companies like Uber and Lyft from the independent contractor definitions of the state’s AB5 law was passed by a solid margin last Election Day.

But in a decision handed down by Alameda County Superior Court Judge Frank Roesch Friday, Prop 22 was declared unconstitutional because of its limitations on workers’ compensation coverage. 

Given that the decision comes out of one county court, it is expected to be appealed, with a stay put in place to block its immediate implementation. 

Day-after media commentary assumed that the case will ultimately need to be decided by California’s Supreme Court. 

But it is the second major court decision in the last few months that has reversed the trend toward limiting AB5 in the state and made it more likely that its reach will grow, not constrict.

An injunction that dates back to the beginning of 2020 that blocked AB5 from being implemented in the trucking sector because of a possible conflict with federal law is hanging on by a thread. An appeal of the injunction resulted in it being overturned, and the California Trucking Industry, which brought the original case against the law, has asked the U.S. Supreme Court to hear its arguments against AB5, a long shot appeal at best. If the Supreme Court denies review, AB5 will be implemented in the state’s trucking sector.

In the case of Prop 22, the vote on Election Day after an expensive and lengthy campaign exempted certain delivery drivers from AB5. That campaign was backed by Uber, Lyft and Doordash, and won with 58% of the vote. But now its future is in doubt as well.

Lorena Gonzalez, the California assemblywoman who authored AB5, which significantly tightens the ability of a company to define a worker as an independent contractor, celebrated the ruling on Twitter.

The decision by Judge Roesch focuses on one of the key sections in the law, section 7451, which defines an independent contractor under California law. The judge interpreted that part of the law as restricting the ability of the state’s legislature to define app-based drivers as “subject to worker’s compensation law.”

Judge Roesch also found that another section, involving the ability of the legislature to amend Prop 22 only through a seven-eights supermajority, is unconstitutional because it “is not germane to Proposition 22’s stated ‘theme, purpose and subject.’”

He further ruled that since section 7451 is not severable from the rest of the statute, “the court finds that the entirety of Proposition is unenforceable.”

The court case was brought by several individual drivers as well as the Service Employees International Union California State Council and the SEIU’s international union. The defendant was the state, which would be required to uphold the law even though the state’s governor, Gavin Newsom, was silent on the referendum as it moved toward a vote last November. 

A prepared statement put out by the Protect App-Based Drivers & Services group that was a respondent in the case, said the ruling by Judge Roesch was “seriously flawed.”

“We believe the judge made a serious error by ignoring a century’s worth of case law requiring the courts to guard the voters’ right of initiative,” the group’s spokesman, Geoff Vetter, said. “This outrageous decision is an affront to the overwhelming majority of California voters who passed Prop 22.”

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  1. FLE+LLC

    This nonsense is just highlighted in California where big government continues to grow under Democrats and this is the result… It is crushing your personal freedom to do anything of your own decision!! In the process it is also crushing the business world and capitalist economy trying to convert it to communism and socialist which are utter historic failures in every country it has been used !! Look at all the riots in the European Union over there overbearing government tyranny and the complete collapse of Venezuela and Cuba because of these nitwit-style tyrannical , anti freedom governments !!

  2. Stephen Webster

    We need better protection for truck drivers and other drivers being paid as contractors also in Ontario Canada in my opinion. You fine many injured truck Uber and other workers in homeless shelters in Ontario.

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.