On July 25, the California Supreme Court upheld Proposition 22, allowing companies like Uber, Lyft and DoorDash to classify their drivers as independent contractors rather than employees.

This ruling in Hector Castellanos v. State of California was not unexpected, as observers of the oral argument noted that the court seemed unsympathetic to the arguments that Prop. 22 violated the California Constitution by limiting legislative power over workers' compensation.

Passed by voters in 2020, the Protect App-Based Drivers and Services Act became Business and Professions Code Sections 7448-746 and requires a seven-eighths majority in the Legislature to amend, making significant changes nearly impossible.

The court did appear to raise that a conflict may exist between the extra-super majority seven-eighths approval requirement to overturn provisions of Prop. 22 and the Legislature's plenary power. But the court found that until the Legislature attempts to pass a provision in conflict with Prop. 22, that issue is not before it, so there may be future legal battles on this issue if the Legislature chooses to act.

This decision is seen as a major win for rideshare companies, allowing them to avoid providing traditional employee benefits such as overtime pay, sick leave and workers’ comp while some drivers, like plaintiff Hector Castellanos, criticize the measure for enriching corporations at workers' expense.

The ruling was a setback for labor groups, unions and advocates who argued that Prop. 22 deprived app-based workers of essential benefits and violated their rights. Despite this loss, union leaders and labor-friendly lawmakers, such as Senate Labor Committee Chair Lola Smallwood-Cuevas, remain committed to securing better protections, conditions and the right to unionize for gig workers.

“While this decision is frustrating, it must also be motivating,” said Sen. Smallwood-Cuevas in a statement. “I’m more determined than ever to ensure that all workers — including our diverse and Black, Indigenous and people of color leading the gig workforce — have the basic protections of workers' compensation, paid sick leave, family leave and disability insurance and the right to form a union.” 

This opinion by the California Applicants' Attorneys Association communications team is republished with permission from the CAAA website.