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Industry Insights

Young: Sand in the Gears

  • State: California

The California Superior Court has thrown sand in the gears of the gig-platform companies.

Julius Young

Julius Young

On Aug. 20, Alameda County Superior Court Judge Frank Roesch ruled in Castellanos v. State of California that Proposition 22 is unconstitutional.

Worker advocates fought hard against Prop. 22, but were swamped by the tsunami of money spent by the gig-work companies, who broke California spending records for their ad campaign.

Roesch’s ruling came as he granted a petition for order of mandate filed by several individual ride-share drivers and the SEIU union. An earlier attempt to have the California Supreme Court deal with these issues failed, as the court declined in January 2021 to rule on the merits and wrote no opinion in refusing to hear the matter.

So the forum for determination on the constitutionality of Prop. 22 defaulted to the Superior Court. Now, we’ll see the matter work its way through the California Court of Appeal and likely to the California Supreme Court. That process can take considerable time.

In a nutshell, Roesch finds that Prop. 22 is unconstitutional, as it usurps the California Constitution’s guarantee that the Legislature has plenary power over workers’ compensation — its power to determine what will and will not be covered by workers’ compensation.

He also found that Prop 22. violates the single-subject rule. And Roesch finds that Prop. 22 unconstitutionally purports to limit the Legislature’s ability to pass future legislation.

While an appeal proceeds, the ride-sharing companies are unlikely to change their position on Prop. 22.

What does all this mean for California workers' comp?

It’s possible that we will see ride-share workers file cases with the Workers' Compensation Appeals Board, which would then have to deal with the issue of the constitutionality of Prop. 22. 

Perhaps some ride-share claims have been filed at one of California’s many workers’ comp boards and thereafter settled or stayed pending resolution of Prop. 22 issues. However, to my knowledge, no California workers’ comp ride-share driver claims have been ruled on by the WCAB.

With the constitutionality of Prop. 22 in doubt, some ride-share drivers might well elect to pursue California workers’ comp claims on the theory that they are, in fact, employees under the ABC test outlined in the Dynamex Operations West Inc. v. Superior Court (2018).

My firm, Boxer & Gerson LLP,  is one of the largest workers’ comp applicant firms in California. But it was surprising to many of us that even after Dynamex and before the passage of Prop. 22, few, if any, drivers and relatively few gig workers were coming forward to pursue workers’ comp claims. Why those claims have not materialized in the workers’ comp system is not clear.

The benefits package “guaranteed” by Prop. 22 is inferior to the benefits under the California workers’ comp system. Workers’ comp benefits are available to most taxi drivers, but not to Uber and Lyft drivers under Prop. 22.

Julius Young is an applicants' attorney and a partner for the Boxer & Gerson law firm in Oakland. This column was reprinted with his permission from his Workers Comp Zone blog on the firm's website.

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