The Gig Is Up — Prop 22 Overruled

On Aug. 20, the controversial Proposition 22 — which deprived app-based workers of fundamental labor rights with false promises of freedom, flexibility and employer-defined benefits — was ruled unconstitutional by Alameda County Superior Court Judge Frank Roesch.

“I see this decision as a sign in the right direction of gig workers rights,” Cherri Murphy, an organizer with Gig Workers Rising, told Random Lengths. Brian Chen, a staff attorney at the National Employment Law Project, agreed. “This was an incredible win for California’s app-based workers who for years have been organizing and fighting for decent pay, and basic rights and protections,” he said. “When you think about the just staggering amount of corporate money that went into Proposition 22, this really was a kind of David beats Goliath moment.”

An appeal is expected, so the ruling won’t go into effect immediately, though a reversal seems highly unlikely.

The proposition was promoted in a $220 million campaign by companies like Uber, Lyft, Doordash and Instacart. But the benefits they promised have failed to materialize.

“When Proposition 22 first came about they made some big promises right, they indicated that health insurance would be provided, that folks would be protected,” Murphy said, but “Proposition 22 was not an advocate for fair labor standards and working conditions,” as had been claimed. “Unfortunately, we’re still getting unfair deactivation, not enough pay for safety, lack of transparency around 120% of the minimum wage, that was required by Proposition 22, and tips.”

For her, it’s personal. “I know through the experience what it feels like to be driving around with no coverage. I certainly know what it’s like to be in the middle of a pandemic and not have unemployment insurance, because my greedy employer refuses to put in their part. I certainly know what it’s like to be a woman looking for a restroom with no facilities available,” Murphy said. “These are just examples of what we’re talking about.”

But those broken promises weren’t the basis of Judge Roesch’s rulings — though they have been challenged in more piecemeal fashion. Instead, workers’ compensation and the right to organize were central to his decision.

The companies implicitly — and falsely — argued that employee status was incompatible with the flexibility that’s a key feature of app-based employment. In fact, employee status has been established in several jurisdictions, and Judge Roesch found that Prop. 22’s prohibition of the right to organize was “utterly unrelated to its stated common purpose,” and thus violated the California Constitution’s requirement that an initiate have a single common purpose.

Specifically, he wrote, “A prohibition on legislation authorizing collective bargaining by app-based drivers does not promote the right to work as an independent contractor, nor does it protect work flexibility, nor does it provide minimum workplace safety and pay standards for those workers.” Indeed, he concluded, “It appears only to protect the economic interests of the network companies in having a divided, un-unionized workforce, which is not a stated goal of the legislation.”

However, that was not the basis for striking down Prop. 22 in its entirety, because it was a severable part of the initiative — meaning that the rest of the proposition would remain in effect if it were to be struck down. The core provisions were contained in a different section that explicitly was not severable, and one of them — prohibiting the legislature from enacting workers compensation protections — was also found to be unconstitutional.

The constitution “provides that the Legislature shall have the power to create worker’s compensation laws ‘unlimited by any provision of this Constitution,’” Judge Roesch wrote. “[I]f the People wish to use their initiative power to restrict or qualify a ‘plenary’ and ‘unlimited’ power granted to the Legislature, they must first do so by initiative constitutional amendment, not by initiative statute.”

The plaintiffs raised a number of other objections as well — such as the unprecedented requirement of a seven-eighths majority to modify or amend the proposition. However, the judge noted that the legislature could still enact changes with a simple majority, subject to the approval of a majority of voters — what’s known as a legislative initiative. The care shown in Roesch’s analysis and the fact that he rejected some arguments while accepting the two already mentioned create a strong impression that his ruling will be upheld on appeal.

Indeed, Prop. 22’s proponents resorted to arguing irrelevancies.

“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,” Prop. 22 spokesperson Geoff Vetter said. But the ruling itself did no such thing, and faulted the drafting of the initiative, not the voters.

“This ruling ignores the will of the overwhelming majority of California voters and defies both logic and the law,” Uber spokesperson Noah Edwardsen said in a statement. “You don’t have to take our word for it: California’s Attorney General strongly defended Proposition 22’s constitutionality in this very case.”

But, it’s the Attorney General’s job to defend an initiative, once passed, though exceptions are sometimes made. And a majority vote for an unconstitutional initiative doesn’t magically make it constitutional, as California history makes clear.

In 1964, Proposition 14, overturning the Rumsfeld Fair Housing Act — a desegregation measure — was passed with 65.39% of the vote, and was subsequently struck down by the California Supreme Court as an unconstitutional violation of the 14th Amendment’s equal protection clause.

In 1994, Prop. 187, establishing a state-run citizenship screening system and prohibiting undocumented immigrants from receiving a broad range of services, passed with 58.93% of the vote, and was subsequently struck down by a federal court, as an unconstitutional usurpation of federal authority over immigration law.

But there’s another problem with the claims of popularity: the foundation on deceitful corporate propaganda, as Chen explained.

“There is obviously something definitely wrong with the situation when you have five companies commit north of $200 million to pass a ballot initiative, the initiative passes, and when they do the exit polling we come to find that really people had no idea what the hell they were voting for, and that soon afterwards they came to regret the vote that they have made.”

Chen pointed to an exit poll finding that 40% of Prop. 22 supporters characterized their vote as “Ensuring Uber / Lyft and DoorDash employees can earn livable wages,” the exact opposite of its actual effect. “So there is something deeply wrong with the way that the California ballot initiative process works,” he concluded.

As to the broader picture of the struggle for gig worker rights, this marks a moment of reckoning. “Over the last few years gig companies have aggressively lobbied and carved up state laws across the country to make sure that their workers cannot be considered employees,” Chen said. “They have been very successful at that. So when a few years ago California, after a lot of worker organizing, passed AB5 it was I think finally a sign that the power balance is starting to shift, that the home state of these big companies, the home state of Silicon Valley, is putting a check on this blatant misclassification.”

Prop. 22 — with a $220 million price tag — was the corporate response.

“So, I think Proposition 22 was for a lot of people a cautionary tale. For advocates for workers it was, ‘If we push too hard, the companies are going to come back even harder against us,’” Chen explained. But now, “This court decision says that these companies aren’t invincible, that they can overstep their bounds, that they can pay [and] have to play by the rules as well. And so it really is a momentous and hugely important decision.”