Current:Home > InvestCalifornia court says Uber, Lyft can treat state drivers as independent contractors-Angel Dreamer Wealth Society D1 Reviews & Insights
California court says Uber, Lyft can treat state drivers as independent contractors
View Date:2024-12-24 14:03:20
SACRAMENTO, Calif. — App-based ride hailing and delivery companies like Uber and Lyft can continue to treat their California drivers as independent contractors, a state appeals court ruled Monday, allowing the tech giants to bypass other state laws requiring worker protections and benefits.
The ruling mostly upholds a voter-approved law, called Proposition 22, that said drivers for companies like Uber and Lyft are independent contractors and are not entitled to benefits like paid sick leave and unemployment insurance. A lower court ruling in 2021 had said Proposition 22 was illegal, but Monday's ruling reversed that decision.
"Today's ruling is a victory for app-based workers and the millions of Californians who voted for Prop 22," said Tony West, Uber's chief legal officer. "We're pleased that the court respected the will of the people."
The ruling is a defeat for labor unions and their allies in the state Legislature who passed a law in 2019 requiring companies like Uber and Lyft to treat their drivers as employees.
"Today the Appeals Court chose to stand with powerful corporations over working people, allowing companies to buy their way out of our state's labor laws and undermine our state constitution," said Lorena Gonzalez Fletcher, leader of the California Labor Federation and a former state assemblywoman who authored the 2019 law. "Our system is broken. It would be an understatement to say we are disappointed by this decision."
The ruling wasn't a complete defeat for labor unions, as the court ruled the companies could not stop their drivers from joining a labor union and collectively bargain for better working conditions, said Mike Robinson, one of the drivers who filed the lawsuit challenging Proposition 22.
"Our right to join together and bargain collectively creates a clear path for drivers and delivery workers to hold giant gig corporations accountable," he said. "But make no mistake, we still believe Prop 22 — in its entirety — is an unconstitutional attack on our basic rights."
The California Legislature passed a law in 2019 that changed the rules of who is an employee and who is an independent contractor. It's an important distinction for companies because employees are covered by a broad range of labor laws that guarantee them certain benefits while independent contractors are not.
While the law applied to lots of industries, it had the biggest impact on app-based ride hailing and delivery companies. Their business relies on contracting with people to use their own cars to give people rides and make deliveries. Under the 2019 law, companies would have to treat those drivers as employees and provide certain benefits that would greatly increase the businesses' expenses.
In November 2020, voters agreed to exempt app-based ride hailing and delivery companies from the 2019 law by approving a ballot proposition. The proposition included "alternative benefits" for drivers, including a guaranteed minimum wage and subsidies for health insurance if they average 25 hours of work a week. Companies like Uber, Lyft and DoorDash spent $200 million on a campaign to make sure it would pass.
Three drivers and the Service Employees International Union sued, arguing the ballot proposition was illegal in part because it limited the state Legislature's authority to change the law or pass laws about workers' compensation programs. In 2021, a state judge agreed with them and ruled companies like Uber and Lyft were not exempt.
Monday, a state appeals court reversed that decision, allowing the companies to continue to treat their drivers as independent contractors.
The ruling might not be the final decision. The Service Employees International Union could still appeal the decision to the California Supreme Court, which could decide to hear the case.
"We will consider all those options as we decide how to ensure we continue fighting for these workers," said Tia Orr, executive director of SEIU California.
veryGood! (82)
Related
- Real Housewives of New York City Star’s Pregnancy Reveal Is Not Who We Expected
- Teen killed by lightning on Germany's highest peak; family of 8 injured in separate strike
- Bangladesh protests death toll nears 180, with more than 2,500 people arrested after days of unrest
- Agreement halts Cowboys owner Jerry Jones’ countersuit trial against woman who says he’s her father
- Georgia remains part of College Football Playoff bracket projection despite loss
- Crowdstrike blames bug for letting bad data slip through, leading to global tech outage
- What's a capo? Taylor Swift asks for one during her acoustic set in Hamburg
- Georgia denies state funding to teach AP Black studies classes
- Congress is revisiting UFOs: Here's what's happened since last hearing on extraterrestrials
- Haason Reddick continues to no-show Jets with training camp holdout, per reports
Ranking
- Trump ally Steve Bannon blasts ‘lawfare’ as he faces New York trial after federal prison stint
- Keanu Reeves Shares Why He Thinks About Death All the Time
- Wisconsin, in a first, to unveil a Black woman’s statue in its Capitol
- A plane slips off the runway and crashes in Nepal, killing 18 passengers and injuring the pilot
- 2025 NFL Draft order: Updated first round picks after Week 10 games
- Brandon Aiyuk reports to 49ers training camp despite contract extension impasse
- Psst! Madewell’s Sale Has Cute Summer Staples up to 70% Off, Plus an Extra 40% off With This Secret Code
- What is the first step after a data breach? How to protect your accounts
Recommendation
-
What is ‘Doge’? Explaining the meme and cryptocurrency after Elon Musk's appointment to D.O.G.E.
-
Alabama universities shutter DEI offices, open new programs, to comply with new state law
-
Why the 2024 Paris Summer Olympics are already an expensive nightmare for many locals and tourists
-
Fans drop everything, meet Taylor Swift in pouring rain at Hamburg Eras Tour show
-
Vogue Model Dynus Saxon Charged With Murder After Stabbing Attack
-
Dream Ignited: SCS Token Sparks Digital Education and Financial Technology Innovation
-
Maine will decide on public benefit of Juniper Ridge landfill by August
-
John Mayall, tireless and influential British blues pioneer, dies at 90