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Prop. 22 Ruled Unconstituional

How companies are pushing legislation to the ballot with their monetary power.

BACKGROUND:

  • California Proposition 22

  • State-level

  • 55/45 in favor of Proposition

  • Ruled Unconstitutional

FUNNY HYPOTHETICAL


Students hate school lunches: lines are long, food is poor, and the experience is overall infuriating. So, like any other high schooler with a phone and a credit card, Ian opens up Doordash to order some sweet McDonalds for his lunch instead. Unfortunately, when the delivery driver, Derek, pulls into the parking lot to drop off his lunch, he gets rear-ended by a random high school driver and breaks his arm in the accident. Before, Doordash would not be required to financially support the driver and Derek would just be unable to work without pay, but with Prop 22, Doordash is required to help Derek until he is able to continue driving again,


WHY THIS POLICY?


Prop 22 was created to override California Assembly Bill 5, which deemed the drivers of these ride-sharing apps as employees with employee benefits like healthcare. Prop 22 allows companies to classify their drivers as independent contractors, but still provide certain benefits such as health compensation if they meet specific work-hour criteria. Being an independent contractor allows drivers to maintain their flexible schedule, and it allows the companies to support numerous independent contractors rather than a few employees. This proposal was heavily backed by the ride-share companies, donating around $200 million for campaign financing, almost double the previous record back in 2008. But was it constitutional?


PERSPECTIVES


The Democratic viewpoint on this policy splits between protecting the rights of workers and the implications of supporting legislation that was bankrolled by large companies. Rebecca Smith, the director of the Work Structures Portfolio at the National Employment Law Project, warns, “Now this is a last-ditch but well-funded effort to permanently take control of all terms and conditions of employment of their workers. If it’s successful, corporations in any industry would know that with enough cash and enough spin, you can buy your way to deregulation."


Republicans supported the proposition for both the companies and the community. They argued that if the drivers were forced to be classified as employees, the companies would not be able to afford as many drivers and both the number of jobs available and the convenience of the service would go down.


Mothers agree too…. Helen Witty, the president of Mothers Against Drunk Driving, claims that rideshare services help reduce drunk driving as people have an alternative way to go home when intoxicated without risking both themselves and others around them.


Without Prop 22, drivers would not be able to experience the freedom of choosing when and where they are able to work, allowing their Uber “gig” to help support them on the side of their official job.


OUTCOME


Proposition 22 was initially approved on the November 2020 ballot by a 59% to 41% vote. CEOs of the rideshare companies like Uber and Doordash were thrilled, claiming that they were going to continue to promote their flexible business structure across the country. The major dissenting opinions were once again split between 2 ideas: By labeling their workforce as independent contractors, companies will be able to bypass labor protections that were fought for centuries ago; The corrupt campaign of bankrolling a proposition onto the ballot will set the tone that companies can continue to exploit legislation through the power of money.


On August 20, 2021, Alameda County Superior Court Judge Frank Roesch ruled that 2 sections of Proposition 22 were unconstitutional and therefore the whole proposition was discarded: Prop. 22 directly contradicts the power of the state Constitution to grant California Legislature the power to regulate compensation for workers’ injuries, and by including language that is focused on preventing drivers from unionizing, it also violates the constitutional provision that initiatives like Prop. 22 be limited to a single subject. Since certain sections of Prop 22 are now unconstitutional, the entire proposition must be thrown out. Proponents of this law announced that they would appeal the ruling, however, this could take up to a year to be decided by the California Supreme court.


SIGNIFICANCE


1. This legislation can drastically change the abilities of rideshare drivers to maintain their freedom but then give up their rights to benefits and social security, or have their numbers be cut down in numbers to support the increased official employee count.

2. The legislation will affect everyday people that use these rideshare apps as the availability of drivers may fluctuate based on how much the companies can support the drivers.

3. As technology progresses and the traditional idea of a business continues to break down and change, the implications of this law for the future of business models similar to rideshare apps will determine whether they can continue to persist or will be shut down by the requirement of providing benefits.

4. Since the main reason the proposition was ruled unconstitutional was not due to the content but rather that it was a proposition, these companies may look to push for a state constitutional amendment rather than a piece of legislation, which could lead to some drastic changes in the future on how our state views and controls this ever- emerging gig business.


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