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Lawsuit seeks to throw out California measure that protected 'gig economy' business model

By Levi Sumagaysay

Union and ride-hailing drivers seek to invalidate Proposition 22 after expensive campaign by Uber, Lyft and DoorDash resulted in passage on November ballot

Ride-hailing drivers and the Service Employees International Union filed a lawsuit against California on Tuesday that asks the state Supreme Court to invalidate Proposition 22 on grounds that it is unconstitutional.

Proposition 22 sought to avoid classifying gig workers as employees, as required by California law. The measure was passed by 58% of the state's voters in the November election after companies like Uber Technologies Inc. (UBER), Lyft Inc. (LYFT) and DoorDash Inc. spent more than $200 million to support it.

See: Uber and Lyft win fight to keep drivers as contractors in California (link)

Scott Kronland, attorney for the plaintiffs, said Prop. 22 "overreached." He said the California constitution "gives to the Legislature the power to decide which workers are given access to workers' comp and OSHA," something the measure takes away.

The measure, which took effect in mid-December, "illegally limits the power of lawmakers and courts to protect gig workers," Bob Schoonover, president of the SEIU state council and SEIU Local 721, said during a news conference Tuesday.

The plaintiffs are seeking expedited consideration from the court and expect to hear back from the court within a couple of weeks, Kronland said.

Uber, Lyft and DoorDash did not immediately return requests for comment Tuesday.

Check back for updates on this breaking story.

-Levi Sumagaysay; 415-439-6400; AskNewswires@dowjones.com

 

(END) Dow Jones Newswires

01-12-21 1407ET

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