The California Supreme Court on Thursday delivered a victory to DoorDash, Uber Eats and Grubhub, ruling that a law classifying gig workers as independent contractors is allowed to stand.
The decision lays to rest the yearslong tug-of-war over Proposition 22, the gig company-backed law that shields the companies from having to treat their drivers as employees with full benefits and protections. It was passed by voters during the 2020 November elections.
Under Prop 22, drivers are considered independent contractors with some additional benefits, such as a guaranteed minimum wage, accident insurance and the ability to get a healthcare stipend. But they are excluded from certain protections afforded to full-time employees, like paid sick leave and workers’ compensation. DoorDash, Uber/Postmates, Lyft and Instacart spent more than $200 million to help get it passed.
In August 2021, in response to a lawsuit from the Service Employees International Union, a county superior court judge ruled that Prop 22 was unconstitutional, in part because it limited the legislature’s ability to make workers’ comp laws.
But in a unanimous decision Thursday, California’s highest court ruled that Prop 22 does not preclude the legislature from making contractors eligible for workers’ comp in the future.
The ruling allows third-party delivery apps and other gig companies to avoid a costly overhaul of their labor model. And it deals a blow to labor advocates, who have pushed for more rights and protections for gig workers.
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