The state of California is appealing a judge’s 2021 ruling striking down a voter-approved ballot measure exempting certain app-based workers from legislation requiring them to be classified as employees. 

The case, Castellanos et al. v. California, has to do with Proposition 22, also known as the Protect App-Based Drivers and Services Act, a 2020 ballot measure which received heavy financial backing from Uber, Lyft and other app-based companies. The law passed with 59 percent of the vote. 

Prop 22 was an industry response to 2019 state legislation, Assembly Bill 5, which set standards for classifying such workers as employees. In AB 5, the state legislature codified a California Supreme Court decision which put the burden on employers through the so-called “ABC test” to show that someone was an independent contractor and not an employee.

The question of whether a worker is an employee or an independent contractor is important because while employees are entitled to minimum wages, overtime, and work expenses, independent contractors are not. The issue of whether a worker is an employee or independent contractor is one that both California and other states have gone back and forth on. 

Prop 22 exempts app-based companies’ drivers from the standards of AB5 that classified them as employees, offering them alternative benefits instead. After the law went into effect, plaintiff Hector Castellanos and other workers challenged the measure, arguing it violates the California Constitution. Last year, a California Superior Court judge agreed, finding the initiative unconstitutional and unenforceable. 

Specifically, Alameda County Superior Court Judge Frank Roesch ruled that Prop 22 conflicts with the legislature’s power to create and enforce a worker’s compensation system and violates the Constitution’s separation-of-powers and single-subject provisions. 

The state has appealed the ruling to the First District Court of Appeal. In the state’s opening brief, California Attorney General Rob Bonta argued Judge Roesch’s decision was erroneous. He asserted that  the measure does not conflict with the legislature’s power to create a system for workers’ compensation because Prop 22 does not seek to modify the worker’s compensation system. 

“The initiative merely impacts the threshold classification test to determine whether individuals engaged in a particular type of work are employees or independent contractors,” he said. “This is well within the authority of the electorate under initiative power.”

Additionally, the state argued the law does not violate other aspects of the Constitution. 

The case has prompted outside groups and individuals to file friend-of-the-court briefs in support of both workers and the state, including actor and former Gov. Arnold Schwarzenegger, who has said he supports keeping Prop 22 in place because it received the support of the voters. 

As of mid-June, the appeals court had not yet set a date for arguments in the case. Keller Grover continuously monitors for updates in the law that could affect app-based workers and we will provide future updates on the law, should it change. 

If you work for an app-based company you believe you’ve been misclassified as an independent contractor, you may be able to challenge your employment status in court. 

Keller Grover is here to help workers with their employment-related disputes. If your employer isn’t treating you fairly, we can help you better understand your rights, protections and options. In more than 25 years litigating fraud and employment cases, we have recovered hundreds of millions of dollars for clients and class members. 

Contact us today for a free, confidential consultation.