Uber, Lyft and DoorDash have won a big victory for their business models. On July 25 the California Supreme Court issued its ruling in Hector Castellanos v. State of California (see pdf of the opinion below), rejecting arguments that Prop 22 is unconstitutional.
The outcome was not unexpected, as observers of the oral argument before the court noted that the court seemed unsympathetic to the arguments challenging the constitutionality of the 2020 initiative called the “protect App-Based Drivers and Services Act”, which became Business and Professions Code Sections 7448 through 7467.
The court rejected the argument that the initiative was prohibited by Article XIV Section 4 of the California Constitution, which provides for legislative plenary power over California’s workers’ compensation system. In so doing they hold that section does not prevent “the people’s initiative power”.
Under the terms of Prop 22, amendments would take a seven-eighths majority of both houses of the California legislature. That would be practically impossible, of course.
The California Supreme Court declined to rule on hypotheticals such as how it would deal with an act of the legislature providing workers’ compensation to app-based drivers.
Challenging Prop 22 has been a major priority of the California labor movement. But for the foreseeable future it appears that app-based drivers will be covered only by the scheme set up under Prop 22. It’s an inferior benefit system.
An interesting side-note is that one of the architects of Prop 22, Uber’s Senior VP and Chief Legal Officer Tony West, is married to Maya Harris, sister of Kamala Harris.
A pdf of Hector Castellanos v. State of California can be seen here:
HectorCastellanosV.StateOfCalifornia(7.25.24)
Stay tuned.
Julius Young
510.835.8870