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California Proposition Relating to App-Primarily based Drivers is Largely Right here to Keep (For Now)


A California Courtroom of Appeals lately addressed challenges to Proposition 22, the Defend App-Primarily based Drivers and Companies Act, and concluded that it’ll largely stay in impact, a minimum of for now.

Background:

Whether or not app-based drivers are impartial contractors or workers has all the time been an space of rivalry.

In 2019, Meeting Invoice 5 was handed, a California statute that expanded the landmark Dynamex choice, and established a brand new check for the way companies in California should classify employees. Beneath the AB 5 check, app-based drivers can be categorised as workers, slightly than impartial contractors, a change not favorable for app-based corporations like Uber, Lyft, and DoorDash. To resolve this downside, Proposition 22 got here to be, a poll initiative led by app-based corporations that allowed for app-based rideshare and supply of products corporations to categorise their drivers as impartial contractors if sure circumstances have been met.

In November 2020, voters authorized Proposition 22. However much like when AB 5 was handed, Proposition 22 was not liked by all. Quickly after it was authorized, numerous people and teams challenged it, arguing it was invalid as a result of it violated the California Structure. The trial courtroom dominated that the proposition (1) was invalid in its entirety as a result of it intruded on the Legislature’s unique authority to create employees’ compensation legal guidelines; (2) was invalid to the extent it restricted the Legislature’s authority to enact laws to amend Proposition 22; and (3) was invalid in its entirety as a result of it violated the single-subject rule for initiative statutes.

Proponents of Proposition 22 and the State appealed, arguing the trial courtroom was mistaken on all three factors.

Castellanos v. State of California Choice

In Castellanos, et al. v. State of California, et al., the Courtroom of Enchantment for the First Appellate District held that Proposition 22 doesn’t intrude on the Legislature’s employees’ compensation authority or violate the single-subject rule. It did discover, nevertheless, that the initiative’s definition of what constitutes an modification violates separation of powers rules. Because the unconstitutional provisions relating to the Legislature’s energy to amend Proposition 22 could be severed, the Courtroom of Enchantment affirmed the decrease courtroom’s judgment solely insofar because it declared these provisions invalid.  However it reversed the rest of the judgment, discovering that the remaining parts of Proposition 22 would stay in impact.

The Castellanos choice will doubtless be appealed to the California Supreme Courtroom. Because of this for now, ride-share and supply corporations can proceed classifying drivers as impartial contractors, as long as they meet the {qualifications} set forth in Proposition 22.

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