SAN FRANCISCO (CBS SF) -- A judge on Friday found that Proposition 22 -- a measure backed by ride-hailing companies that classified drivers as independent contractors which voters passed last November -- is unconstitutional and unenforceable.
The ruling Friday by Alameda County Superior Court Judge Frank Roesch stated that, due to a clause requiring 7/8ths of the state legislature to support any amendments to the law, the proposition could not be enforced.
The controversial Nov. 2020 ballot measure was heavily bankrolled by the ride-hailing and food-delivery companies including Uber, Lyft and DoorDash. The proposition classified drivers as independent contractors instead of full-time employees.
"It's going to be a setback for them, it's going to add to their costs," labor law attorney and senior attorney for the Advocacy Center for Employment Law Steve Cohn said. "It means they're going to have an increased burden of social security, disability insurance, matching payroll taxes. Individuals who work deserve to be compensated. They deserve to be protected."
Proposition 22 was pushback against California's Assembly Bill 5 which passed in 2019 after the companies failed to obtain exemptions. That law requires companies in many industries to reclassify contract workers as employees entitled to more wage protections and benefits. It also provided some health and wage benefits to the independent contractors.
The news was tweeted out by Hastings law professor Veena Dubal, who included an image of the court documents signed by Judge Frank Roesch on Friday.
Among the tweets by lawyers, labor advocates and elected officials was a tweet by Assemblymember Ash Kalra (D-San Jose) who said Friday's ruling was unexpected.
"The judge is right and I think we were right, those of us that were fighting against Prop 22, against the over $200 million that the rideshare companies spent to really deceive the voters and so it's really quite exciting," Kalra said. "They have not been given healthcare. They're given a little stipend but it doesn't even cover a small portion of the cost so most of the ride-share workers are on Medi-Cal or Medicare. We're basically subsidizing the profits of these companies."
The findings noted that the court found Section 7451 of the proposition "unconstitutional because it limits the power of a future legislature to define app-based drivers as workers subject to workers' compensation law."
It also said that part of Section 7465 "unconstitutional because it defines unrelated legislation as an 'amendment' and is not germane to Proposition 22's stated 'theme, purpose or subject.'"
The findings went on to state that, because Section 7451 of the proposition was not severable from the statute, "the court finds that the entirety of Proposition 22 is unenforceable."
- Read the full ruling here
The superior court finding was in response to a petition brought by unions and delivery drivers calling on the state not to enforce Proposition 22 due to its unconstitutionality.
Bob Schoonover, president of SEIU California State Council, issued a statement in response to the ruling.
"Today's ruling by Judge Roesch striking down Proposition 22 couldn't be clearer: The gig industry-funded ballot initiative was unconstitutional and is therefore unenforceable. Companies like Uber and Lyft spent $225 million in an effort to take away rights from workers in a way that violates California's Constitution," the statement read. "They tried to boost their profits by undermining democracy and the state constitution. For two years, drivers have been saying that democracy cannot be bought. And today's decision shows they were right."
Activist group Gig Workers Rising also issued a statement on the ruling.
"Prop 22 has always been an illegal corporate power grab that not only stole the wages, benefits and rights owed to gig workers but also ended the regulating power of our elected officials, allowing a handful of rogue corporations to continue to act above the law," read the statement attributed to the group's lead organizer Shona Clarkson. "Prop 22 is not just harmful for gig workers—it is also dangerous for our democracy. This fight is not over until all gig workers receive the living wages, benefits and voice on the job they have earned."
Last February, the California Supreme Court declined to move forward with the lawsuit, with the justices stating that the case should be filed in a lower court. The plaintiffs filed the lawsuit with the state supreme court because they saw it as a constitutional issue.
Both Lyft and Uber released statements that said they would appeal the judge's ruling.
An Uber spokesperson said in the statement that the ruling "ignores the will of the overwhelming majority of California voters and defies both logic and the law. You don't have to take our word for it: California's Attorney General strongly defended Prop 22's constitutionality in this very case."
Geoff Vetter, a spokesperson for the Protest App-Based Drivers & Services Coalition, said in a statement on behalf of Lyft that "the judge made a serious error by ignoring a century's worth of case law requiring the courts to guard the voters' right of initiative" and that "provisions of Prop 22 will remain in effect until the appeal process is complete."
© Copyright 2021 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. KPIX 5's Maria Cid Medina contributed to this report
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