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Supporters of Proposition 22, now codified at California Business and Professions Code sections 7448-7467, were handed a significant victory recently when the Court of Appeal reversed a trial court judgment that ruled the second most expensive ballot measure in California’s history was unconstitutional.
In Castellanos v. State of California, the trial court granted a petition brought by opponents of Proposition 22 which sought a determination that the law governing app-based work in California was unconstitutional on the grounds that it (1) intrudes on the Legislature’s exclusive authority to create workers’ compensation laws; (2) limits the Legislature’s authority to enact legislation that would not constitute an amendment to Proposition 22, and (3) violates the single-subject rule for initiative statutes.
On appeal, the Court of Appeal agreed with the trial court’s determination that Proposition 22 was invalid to the extent it limited the Legislature’s authority to enact legislation that would not constitute an amendment, but otherwise reversed the trial court as to its other holdings. The portion of the law that was deemed unconstitutional, Section 7465 (c)(3) and (c)(4), required amendments that increased prohibitions on what activities app-based drivers could perform or authorized collective bargaining on behalf of app-based drivers to pass each house on a seven-eighths vote. As a result, Proposition 22 survives, albeit with less protection from future legislative attempts to weaken it.
While the Court of Appeal’s decision in Castellanos v. State of California swings momentum back towards ride-share and app-based delivery companies, the fight for the future of app-based work is not over. Opponents of Proposition 22 are expected to continue their efforts to strike down the law by seeking relief from the California Supreme Court.
For more information, please contact Nathaniel L. Dunn at [email protected] or your local FMG attorney.