California’s gig employee struggle is again within the courts – Orange County Register

The high-profile conflict over whether those who drive for Uber, Lyft and other delivery and ridesharing companies are employees or independent contractors entered a new phase last week in an Alameda County courtroom.

Judge Frank Roesch stated that Proposition 22, one of Uber et al.

The measure exempted companies ‘drivers from being considered workers, but Roesch said it violated the state constitution by restricting lawmakers’ ability to entitle drivers to employee compensation benefits. So he said: “The entirety of Proposition 22 is not enforceable.”

His verdict, of course, is not the last word on the longstanding conflict that Uber and other gig work companies have played against unions in judicial and political arenas. The case will almost certainly climb the legal ladder to the state’s Supreme Court, but the companies will face a tough audience as they would, in effect, ask the court to overthrow itself.

Three years ago, the Supreme Court unanimously passed a three-way test to determine whether an employee is a payroll clerk or qualifies as an independent contractor, making the application of the contractor designation much more difficult.

The Dynamex case, named after a San Diego parcel delivery company that turned its drivers from employees to contractors, was a huge win for unions as it theoretically allowed more salaried workers to become union members.

While California’s union membership is quite high at 16.2% of the state’s 15 million employees, less than half are in the private sector. Only 15% of the state’s workforce are government employees, but they make up more than half of the union’s membership.

As the state’s economy advanced in services, technology, and logistics, union membership in the private sector shrank, and an increase in gig work without employees, such as driving for Uber and Lyft, accelerated the trend.

The unions viewed it as a “misclassification” denying fringe benefits to gig workers and taking the matter to the Supreme Court with the Dynamex case. After winning in court, they shifted their battle to the Capitol by sponsoring Assembly Bill 5, a 2019 measure that legally allowed the three-way test of the Dynamex ruling with a few selective exceptions such as beauticians and real estate agents anchored.

As soon as Governor Gavin Newsom signed the law, the transport companies launched the initiative campaign to work out an exemption for their drivers, which resulted in Proposition 22 showing up on the 2020 vote.

Companies spent more than $ 200 million on a saturation campaign to get the measure passed, more than ten times what the unions and their allies were spending to oppose the measure, and it got nearly a 2-minute lead too 1 exceeded.

Its passage was remarkable not only because a lot of money was spent trying to convince voters, but also because it was so well received in a predominantly democratic state, despite being denounced by virtually all democratic politicians.

Defeated in the election, the unions returned to the justice system and selected Alameda County, one of the most democratic and union-friendly areas in California, as the venue. They also very cleverly avoided direct confrontation on the gig worker issue, arguing that Proposition 22 undermines the workers compensation system, and Judge Roesch agreed.

The end result will have ramifications well beyond the drivers for Uber, Lyft, and other gig work companies. The problem is seeping through to other states and the federal government, and the fate of Proposition 22 will either encourage or discourage other industries from seeking similar exemptions.

CalMatters is a public interest journalism company dedicated to explaining how the California State Capitol works and why it matters. For more stories from Dan Walters, visit Calmatters.org/commentary