California's App-Based Drivers Law Struck Down
Author: Michael Cardman, XpertHR Legal Editor
August 23, 2021
A California law allowing companies to classify app-based drivers as independent contractors has been struck down.
Enacted via a ballot initiative passed last year, the Protect App-Based Drivers and Services Act allows gig economy companies like Uber, Lyft and DoorDash to classify their drivers as independent contractors as long as they guarantee a minimum earnings level, provide healthcare subsidies and insurance, and meet other requirements.
On August 20, a California Superior Court held that the law is unconstitutional and unenforceable.
A key section of the law that prohibits 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," the court found. "It appears only to protect the economic interest of the network companies in having a divided, ununionized workforce, which is not a stated goal of the legislation."
Uber and other gig economy companies plan to appeal the ruling, according to several media reports that XpertHR was unable to independently verify. "This ruling ignores the will of the overwhelming majority of California voters and defies both logic and the law," Uber spokesperson Noah Edwardsen told the Associated Press. "You don't have to take our word for it: California's attorney general strongly defended Proposition 22's constitutionality in this very case."
The companies also are expected to ask the court to postpone enforcement of the ruling while their appeal winds its way through the courts.
One of the labor unions that filed the lawsuit expressed confidence that they will ultimately prevail. "This is a solid, well-reasoned ruling," said Scott Kronland, an attorney for the Service Employees International Union. "We expect that the ruling will be upheld on appeal."