• print
  • decrease text sizeincrease text size
    text

PROP 22 WAS A FAILURE FOR CALIFORNIA’S APP-BASED WORKERS. NOW, IT’S ALSO UNCONSTITUTIONAL.

Share this post

In a landmark decision, the Alameda Superior Court of California recently ruled that Proposition 22, the ballot initiative that excluded many app-based workers from foundational labor laws, violates the California constitution and must be struck down in its entirety.

The decision, which will undoubtedly be appealed by the app-based companies, represents a huge setback in the companies’ power grab to rewrite U.S. labor laws and exempt themselves from labor standards that apply to all other employers. It also represents an important advancement in the gig-worker-led movement for living wages, rights at work, employment benefits, and the right to exercise collective democratic power. 

What Was California’s Prop 22?

California’s Prop 22 was a ballot initiative led by app-based companies such as Uber, Lyft, and DoorDash to exclude ride-hail and food-delivery app-based workers from nearly all employee rights under state law, including the right to a minimum wage, time-and-a-half for overtime, expenses reimbursement, and benefits such as unemployment compensation and state workers’ compensation.

The companies developed the ballot initiative in response to the California legislature’s passage in 2019 of AB5, a simple and straightforward test for determining who is an employee and who is an independent contractor. Although Uber and Lyft ride-hail drivers and DoorDash, Instacart, and Postmates food-delivery workers are clearly employees under the AB5 test, these companies steadfastly refused to comply with the law and continued to deny their workers the rights and benefits to which they are entitled as employees.

As state and local officials sued Lyft, Uber, DoorDash, and Instacart to get them to stop violating the law, the companies spent a whopping $224 million on Prop 22. Among the provisions included in Prop 22 were an inferior set of benefits that the companies agreed to provide their app-based workers. And, worst of all, Prop 22 could only be amended by a seven-eighths vote of the state legislature, making its provisions virtually impossible to repeal or change.

To get Prop 22 passed, Uber and Lyft bombarded television, social media, and their own workers with pressure tactics and deceptive advertising, including the flat-out false claim that Prop 22 would increase, not decrease, workers’ rights. As a result, one survey of California voters founds that 40 percent of “yes” voters thought they were supporting gig workers’ ability to earn a living wage. [1] Other voters said they did not realize they were making a choice between guaranteed rights and protections through employment and “an arbitrary set of supplemental benefits . . . designed by the gig companies.” [2]

Uber also adopted a new cynical marketing slogan—“If you tolerate racism, delete Uber”—to claim solidarity with the Black Lives Matter movement while, at the same time, seeking to enshrine a second-class employment status for California’s ride-hail and food-delivery app-based workers, who are overwhelmingly people of color and immigrants, in what legal scholar Veena Dubal has called a “new racial wage code.”[3] Dubal writes: “By highlighting particular forms of racial subjugation, while ignoring and profiting from others, the corporate sponsors of Prop 22 successfully concealed the very structures of racial oppression that [Prop 22] entrenched and from which companies benefit.”[4]

What Happened After Prop 22 Passed?

After Prop 22 passed, and app-based workers were stripped of their employee rights, the benefits package that the companies offered in exchange proved to be a mirage. In order to qualify for a promised healthcare stipend, for example, app-based workers need to a purchase a covered policy in advance and get enough work hours to qualify for the stipend; if they don’t, they must pay the full cost of the premium.[5] One survey of app-based workers found that only 15 percent have applied for the healthcare stipend.[6]

And, despite the companies’ claims of guaranteed earnings, pay decreased for many ride-hail and food-delivery drivers after Prop 22 passed. According to Peter Young, an app-based ride-hail and food-delivery driver for years, incentives offered to drivers disappeared after Prop 22 passed, and he experienced cuts to his base pay and unpredictable fluctuations in income.[7] Ben Valdez, an Uber driver, similarly said that pay continues to vary widely, and that he averages about $150 per day before expenses for 12 to 15 hours of work—well below California’s $14 minimum wage.[8] In fact, a study by labor economists found that Prop 22 guarantees a minimum wage of only $5.64 per hour after expenses and waiting time are taken into account.[9]

Even the companies’ central claim—that excluding their workers from employee rights and benefits is necessary to keep their prices affordable—proved to be false. A month after Prop 22 passed, both DoorDash and Uber Eats announced price hikes, a move the workers’ advocacy group Gig Workers Rising decried as a “corporate bait and switch.”[10]

The aftermath of Prop 22 made clear that its sole objective was to insulate app-based companies’ business model from any legal or worker challenge, so the companies could once and for all pass costs onto workers and consumers in a last-ditch attempt at profitability.

Why Did the Court Ruling Find Prop 22 Unconstitutional?

In his ruling that Prop 22 is unconstitutional and unenforceable, California Superior Court Judge Frank Roesch found that the ballot initiative infringes on the power explicitly granted to the California Legislature to regulate workers’ compensation.[11] Prop 22 also included language that prevents the state legislature from passing laws that allow app-based workers to unionize, which the court ruled violated a constitutional provision requiring that ballot initiatives be limited to a single subject.[12] The court also took issue with the substance of this provision, noting that preventing app-based workers from organizing “does not not protect work flexibility, nor does it provide minimum workplace safety and pay standards for those workers. It appears only to protect the economic interests of the network companies in having a divided, ununionized workforce.” [13]

What’s Next Now That Prop 22 Is Unconstitutional?

The app-based companies will appeal the court’s decision, and they will ask for a stay of the ruling while the appeal is pending. If granted, it means that Prop 22 would remain in effect—and app-based drivers and food-delivery workers would continue to be excluded from most state labor rights and benefits—through the appeals process, which could take a year or longer.[14]

What Other States Face Legislation Like California’s Prop 22?

Regardless of the final outcome in the Prop 22 case, app-based companies will continue to spend millions to fund legislation and ballot initiatives that would make it easier for them to avoid accountability as an employer and to depress wages and working conditions for their app-based workers. Their CEOs have made clear that Prop 22 is their model legislation across the country.[15]

In Massachusetts, for example, Uber, Lyft, and DoorDash are funding another ballot initiative to rewrite labor laws to benefit themselves and enshrine independent contractor status for their app-based workers.[16] The push for a ballot initiative comes after Massachusetts Attorney General Maura Healey sued Uber and Lyft for misclassifying their drivers as independent contractors. It appears that the companies, having determined that their likelihood of winning in court is low, have decided it will be easier to simply rewrite the law.

Prop 22–like legislation does not just hurt workers who currently obtain work through apps and other online platforms. At risk is virtually any worker whose job functions can be “gigged out” piecemeal on an app.

Luckily, the aftermath of Prop 22 mobilized app-based workers more than ever, and they are fighting back. In Massachusetts, workers’ rights groups and community organizations launched the Coalition to Protect Workers’ Rights, which aims to “combat Big Tech companies’ campaign to undermine the rights and benefits of their workers.”[17] In New York, a coalition of workers’ rights organizations defeated a state bill pushed by app-based companies that would have created a top-down collective bargaining structure for ride-hail and food-delivery app-based workers while excluding them from nearly all state and local labor rights and protections.[18]

This progressive change is due to the persistence and commitment of workers and their advocates. App-based workers are emboldened in the fight for equal rights, and they are just getting started.

ENDNOTES

[1] Faiz Siddiqui & Nitasha Tiku, Uber and Lyft Uses Sneaky Tactics to Avoid Making Drivers Employees in California, Voters Say. Now They’re Going National, Washington Post, Nov. 17, 2020.

[2] Id.

[3] Veena Dubal, The New Racial Wage Code, Hastings Law & Policy Review, at 3-4, Aug. 17, 2021, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3855094. According to one study of the San Francisco Bay Area in 2019immigrants and people of color comprised 78 percent of Uber and Lyft drivers, most of whom relied on these jobs as their primary source of income. Chris Benner, Erin Johansson, Kung Feng & Hays Witt, On-Demand and On-the-Edge: Ride-hailing and Delivery Workers in San Francisco, University of Santa Cruz Institute for Social Transformation, May 5, 2020, at 2 https://transform.ucsc.edu/wp-content/uploads/2020/05/OnDemandOntheEdge_ExecSum.pdf.

[4] Id. at 20.

[5] Megan Rose Dickey, California Gig Workers Say Prop. 22 Isn’t Delivering Promised Benefits, Protocol, May 25, 2021, https://www.protocol.com/policy/gig-workers-prop-22-benefits.

[6] Tulchin Research, April 20, 2020

[7] Michael Sainato, ‘I Can’t Keep Doing This’: Gig Workers Say Pay Has Fallen After California’s Prop 22, Guardian, Feb. 18, 2021,

[8] Id.

[9] Ken Jacobs & Michael Reich, The Uber/Lyft Ballot Initiative Guarantees Only $5.64 an Hour, UC Berkeley Labor Center, Oct. 31, 2019, https://laborcenter.berkeley.edu/the-uber-lyft-ballot-initiative-guarantees-only-5-64-an-hour-2/.

[10] Eve Batey, That Price Hike That Delivery Apps Threatened If Prop 22 Failed? It’s Happening Anyway, Dec. 15, 2020, https://sf.eater.com/2020/12/15/22176413/uber-eats-doordash-price-hike-fee-december-prop-22

[11] Castellanos v. California, Case No. RG21088725, at 2-4 (Alameda Co. Sup. Ct. Aug. 20, 2021).

[12] Id. at 10-11.

[13] Id. at

[14] Suhauna Hussain, Prop 22. Was Struck Down; Will the Ruling Stick? Uber and Other Gig Companies Plan to Appeal; It Could Drag on for More Than a Year, L.A. Times, Aug. 26, 2021.

[15] Faiz Siddiqui, Uber Says It Wants to Bring Laws Like Prop 22 to Other States, Washington Post, Nov. 5, 2020, https://www.washingtonpost.com/technology/2020/11/05/uber-prop22/.

[16] Nate Raymond & Tina Bellon, Groups Backed by Uber, Lyft Pushes Massachusetts Gig Worker Ballot Initiative, Reuters, Aug. 4, 2021.

[17] Grace Pham, The Launch of a New Coalition: Protecting the Rights of Gig Workers in Massachusetts, Massachusetts Jobs with Justice, June 29, 2021, https://www.massjwj.net/blog/2021/6/29/the-launch-of-a-new-coalition-protecting-the-rights-of-gig-workers-in-massachusetts

[18] Edward Ongweso Jr., A Plan to Tame Labor Unions for Uber and Lyft Has Been Scrapped in New York, Vice, June 9, 2021.

About the Author: Brian Chen is a staff attorney at the National Employment Law Project. Brian focuses on combating exploitative work structures that subordinate workers in low-wage industries. Brian is admitted to practice law in New York and is a proud member of the NELP Staff Association, NOLSW, UAW, Local 2320.

About the Author: Laura Padin joined NELP in 2018 as a senior staff attorney for the Work Structures Portfolio. Laura’s work focuses on policies that improve workplace standards and economic security for the contingent workforce, including temporary workers and workers in the “gig economy.” Laura is a proud member of the NELP Staff Association, National Organization of Legal Services Workers, UAW Local 2320.

This blog originally appeared at NELP on September 16, 2021. Reprinted with permission.


Share this post

Prop 22 is Bad for Black Workers

Share this post

When the pandemic forced Cherri Murphy to stop driving for Lyft, she applied for unemployment benefits like millions of other workers. But because Lyft has refused to pay into California’s unemployment insurance fund, insisting that its workers are independent contractors rather than employees, Cherri received zero dollars in unemployment benefits.

By day, Ms. Murphy is a member of Gig Workers Rising and a volunteer social justice minister who helps people connect their faith to the fight for racial justice. By night, she is a Black working woman in America, completing more than 12,000 Lyft rides, forced to play by rules designed for her — and millions of Black workers — to lose.

“Uber and Lyft drivers are mostly folks who look like me,” said Ms. Murphy. “We’re African American and people of color. We’re on the frontlines and among the hardest hit financially. But our bosses have offered us no meaningful protections, treating us as expendable as ever.”

Now, in the midst of a pandemic that is disproportionately hurting Black Americans, Uber, Lyft and other gig companies like DoorDash and Instacart are trying to roll back labor rights for app-based workers through a ballot measure called Proposition 22. That’s bad news for Black workers.

Supporters of Proposition 22 talk about innovation and jobs of the future, but there is nothing new about bosses attacking labor rights. Don’t be fooled by the misinformation campaign these companies are running — saying drivers must choose between flexibility and employee rights. Flexibility has always been at the discretion of the employer.

As a report co-authored by the Partnership for Working Families and NELP shows, Proposition 22 would lock app-based workers out of minimum wage and overtime protections, unemployment insurance, the right to form a union, and critical health and safety protections.

Proposition 22 would effectively cancel local COVID-19 emergency sick leave laws, passed in cities like San Francisco, Oakland, San Jose, and Los Angeles, that apply to app-based workers.

Bosses have always taken too much from Black workers. And U.S. labor laws have continuously failed Black workers, leaving them out of lifesaving labor protections. Economic inequality continues to this day, with Black women earning 62 cents on the dollar, and Black families having on average one-tenth of the wealth of white families. Union membership dramatically reduces that wealth gap.

The failed response to COVID-19 has only made life worse for Black people in the U.S. Racism in the labor market has forced Black workers onto the most dangerous frontlines of essential work. Yes, Trump is a threat to our safety. But Silicon Valley has done extensive damage as well, using sly legal moves and buying off politicians to steal the benefits workers have earned.

Proposition 22 is only the latest attempt by Silicon Valley bosses to rewrite state laws. It would roll back years of court rulings, agency policy, and statutory law in California, including Assembly Bill 5, which clarified that app-based workers are employees covered by the state’s wage-and-hour laws and eligible for unemployment insurance and workers’ compensation.

Proposition 22 is a step in the wrong direction that harkens back to a long and shameful history of denying Black workers their fundamental rights. The measure sets a dangerous precedent; one that the Trump administration and gig companies could use as fodder for their continued nationwide attack on workers’ rights.

Ms. Murphy was among hundreds of Black Uber and Lyft drivers who penned an open letter calling out gig employers for empty lip-service to the Black Lives Matter movement. The same companies running ad campaigns in support of Black Lives are bankrolling the most expensive ($184 million+) ballot measure in history to take protections away from Black workers.

California voters must vote no on Proposition 22, and say yes to a future with universal rights and good jobs for Black workers and for every worker in the state.

This blog originally appeared at National Employment Law Project on October 23, 2020. Reprinted with permission.

About the Author: Rashad Robinson is an American civil rights leader. He is the president of Color of Change, having joined the organization in May 2011. He has served as a board member of RaceForwardDemosState Voices, and currently sits on the board of the Hazen Foundation.

Rebecca Dixon is executive director of the National Employment Law Project (NELP).


Share this post

Subscribe For Updates

Sign Up:

* indicates required

Recent Posts

Forbes Best of the Web, Summer 2004
A Forbes "Best of the Web" Blog

Archives

  • Tracking image for JustAnswer widget
  • Find an Employment Lawyer

  • Support Workplace Fairness

 
 

Find an Employment Attorney

The Workplace Fairness Attorney Directory features lawyers from across the United States who primarily represent workers in employment cases. Please note that Workplace Fairness does not operate a lawyer referral service and does not provide legal advice, and that Workplace Fairness is not responsible for any advice that you receive from anyone, attorney or non-attorney, you may contact from this site.