New lawsuit targets California ride-hail labor law
The suit contends the measure that passed in November violates California's Constitution
Ride-hail drivers and a union filed a lawsuit Thursday against Proposition 22 — a ballot measure that exempted Uber and other companies from California's gig economy law — after the state Supreme Court threw out their case.
The suit filed in Alameda County Superior Court contends the measure that passed in November violates California's Constitution. The proposition shields app-based ride-hailing and delivery companies from a new labor law that required such services to treat drivers as employees and not independent contractors, who don't have to receive benefits such as paid sick leave or unemployment insurance.
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Last week, the state's highest court declined to hear the case but left open the possibility of a lower court challenge.
The new suit is essentially the same as the Supreme Court suit. The Service Employees International Union, three drivers and a passenger contend that Proposition 22 is unconstitutional because it removes the state Legislature’s ability to grant workers the right to organize and give access to the state workers’ compensation program.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UBER | UBER TECHNOLOGIES INC. | 71.16 | -0.21 | -0.29% |
| LYFT | LYFT INC. | 17.78 | -0.56 | -3.05% |
“We know that in a democracy, corporations shouldn’t get the final say in determining our laws,” said Saori Okawa, a plaintiff in the suit who has worked for companies including Uber, Lyft, DoorDash and Instacart.
“The gig companies are trying to break our democracy just to increase their own bottom lines," she said in a statement included in a union news release.
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However, a group of drivers who backed Proposition 22 called the suit meritless.
“Special interests have consistently refused to accept the overwhelming desire of drivers to remain independent since it doesn’t fit their political agenda," Lyft driver Jimmy Strano said in a statement, adding that he was confident the court would reject the suit.
Proposition 22 passed in November with 58% support. It was the most expensive ballot measure in state history with Uber, Lyft and other services putting $200 million behind the effort to undo a law that had been aimed squarely at them by labor-friendly Democrats. Uber and Lyft threatened to leave the state if voters rejected the measure.
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Unions, who joined drivers in the lawsuit, spent about $20 million to challenge the proposition.
Before the ballot measure passed, a lower court already had issued a preliminary injunction requiring Uber and Lyft to treat drivers as employees instead of freelancers, and an appeals court upheld that decision in October.
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On Wednesday, The California Supreme Court declined to review the case but the issue is moot because of Proposition 22.