Despite a series of legal challenges from Big Labor groups, a recent California appeals court issued a ruling upholding Proposition 22’s constitutionality. This is a win for the gig economy and for freelancers nationwide who comprise a growing share of the U.S. workforce.
Prop. 22 is a 2020 ballot measure designed as a direct rebuke of California Assembly Bill 5 (AB 5) which forcibly reclassifies the majority of the Golden State’s independent contractors, including rideshare drivers, as W-2 employees under an onerous ABC test that makes it harder for workers to prove they aren’t default traditional employees. The measure proposes to protect the independent contract status of rideshare app drivers, and was approved by 58% of California voters.
Nevertheless, in November of the same year, a trial court ruled Prop. 22 unconstitutional. Had the trial court successfully rejected the measure, rideshare app drivers would have been subject to the full AB 5 regulations as well as worker exemptions established by the subsequent AB 2257.
But on March 13, a three-judge panel in San Francisco invalidated the trial court decision, contending that AB 5 is unconstitutional because it singles out certain industries but exempts others. Prop. 22 will live to protect contractors’ status for another day.