Millions at Stake for Gig Companies as Prop. 22’s Reach Debated

California courts are poised to decide a hotly debated issue that would allow gig companies including Uber Technologies Inc., Doordash Inc., and Grubhub Inc. to avoid millions in potential damages sought by drivers in worker classification lawsuits filed before Proposition 22 took effect.

Bankrolled by app-based businesses, last year’s $225 million Prop. 22 voter initiative carved out ride-hail and delivery drivers from a strict state law that would have required gig platforms to treat their workers as employees rather than contractors. Employment status carries a host of tax, wage, and job benefit costs for companies.

California judges have ...