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Prop. 22 Backers Appeal Ruling Striking California Gig Work Law (1)

Sept. 22, 2021, 11:57 PMUpdated: Sept. 23, 2021, 2:16 PM

Supporters of Proposition 22 are challenging a judge’s ruling that struck down the voter-approved rule that exempted app-based drivers from the state’s strict worker classification laws, according to a notice filed Wednesday.

The Protect App-based Drivers & Services Coalition, a group supporting Prop. 22, said it will appeal the ruling to a state appellate court. Its filing follows a Sept. 17 notice from the California Department of Justice about the state’s plan to appeal.

Prop. 22, which was bankrolled by Uber Technologies Inc., Lyft Inc., DoorDash Inc. and Instacart Inc. and approved by voters in November 2020, allows the companies to classify their ride-hail and delivery drivers as independent contractors rather than employees. The measure was a carveout from Assembly Bill 5, a law that codified a three-part legal test that makes it hard for companies to classify drivers as contractors.

A group of drivers and the Service Employees International Union challenged the rule in Alameda County Superior Court, after the California Supreme Court declined to directly take up the case in February.

Alameda Judge Frank Roesch issued an emergency order declaring Prop. 22 invalid in August.

Provisions tying lawmakers’ hands regarding which workers are covered by worker’s compensation law, and regrading future gig work law in areas like collective bargaining, violate California’s constitution, Rosech said.

“If the people wish to use their initiative power to restrict or qualify a ‘plenary’ and ‘unlimited’ power granted to the legislature, they must first do so by initiative constitutional amendment, not by initiative statute,” the ruling said.

Nielsen Merksamer Parrinello Gross & Leoni LLP represents the Drivers & Services Coalition.

The case is Castellanos v. California, Cal. Super. Ct., No. RG21088725, 9/22/21.

VIDEO: App-based companies and governments are at odds over how to properly classify gig economy workers.

(Updated with California's notice of appeal. The story originally published Sept. 22.)

To contact the reporter on this story: Maeve Allsup in San Francisco at mallsup@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com

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