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Uber and Lyft's Proposition 22 is unconstitutional, judge rules

The measure classifies gig workers as contractors rather than employees.

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A California judge said the law crimps the state's ability to impose workplace standards on companies that rely on gig workers.

James Martin/CNET

A California judge ruled on Friday that Proposition 22, a measure passed by voters last year allowing Uber, Lyft and other gig companies to classify workers as independent contractors rather than employees, violated the state's constitution. 

Alameda County Superior Court Judge Frank Roesch ruled the law improperly crimps the state's ability to set workplace standards. Declaring the law unconstitutional, Roesch wrote that Proposition 22 "limits the power of a future legislature to define app-based drivers as workers subject to workers' compensation law."

The decision throws into question the fate of Proposition 22, a law that was passed last November after Uber, Lyft and other gig economy companies poured more $200 million into a campaign urging voters to support the measure. The state law will likely remain in effect while expected appeals make their way through the court system.

Gig companies initiated Proposition 22 because treating drivers, delivery people and other gig workers as employees would add enormous costs to their business operations. The proposition created an alternative, leaving gig workers as independent contractors but giving them some benefits, such as expense reimbursement and a health care subsidy. 

"This ruling ignores the will of ... California voters and defies both logic and the law," an Uber spokesperson said in a statement. The company will appeal the ruling, the spokesperson said.

DoorDash, which also supported the Prop 22 campaign, said its workers had earned more and gotten new benefits since the law passed. Lyft and Instacart, another supporter, referred inquiries to the Protect App-Based Drivers & Services Coalition, a group representing gig companies. The group said it would file an immediate appeal. Postmates, another proponent, didn't immediately respond to a request for comment.

The California measure has implications nationwide: Uber and other gig-economy firms are currently pushing a similar ballot effort in Massachusetts. The companies argue drivers prefer the flexibility of being their own bosses. Opponents, however, say drivers need the kind of pay and protections that come with full employee status, and that such a classification doesn't rule out flexibility.

In the lawsuit that led to Roesch's ruling, a group of ride-hail drivers, along with the Service Employees International Union, argued Proposition 22 hamstrings California's ability to protect gig workers through safeguards such as workers' compensation and the right to organize.