A state appeals panel has upheld most of the voter measure known as Proposition 22, blunting the effort by California lawmakers to force app-based services like Uber and Doordash to treat their drivers as direct employees, and not independent contractors. Uber and others had warned the California law known as AB5 would all but force them out of business.
That appellate decision, however, in the case known as Castellanos v. State of California, has raised questions about what comes next for app-based workers and consumers, and what additional changes lawmakers may introduce.
Brendan J. Begley, a certified appellate law specialist with Weintraub Tobin, discussed the Castellanos decision in an email interview with the Northern California Record.
As the lawyer who represented a group of gig workers in what is known as an amicus, or friend of the court brief, Begley said he was pleased with the result.
“I also was gratified to see this panel of the Court of Appeal working so hard, despite their differences, to digest briefs and complex legal arguments from so many parties and amici in order to resolve the dispute in a way that seemed like the court was being mindful of the day-to-day impact on all Californians,” Begley said.
Assuming that the Castellanos decision stands, Begley described the short-term impact as staying largely the same for gig workers, the customers who use their services, and the companies who provide work to them.
And the precedential nature of this decision probably will lead lawyers to cite it or try to distinguish it in other cases, he added.
“I expect that will remain true long-term, unless the Legislature amends any of the laws covered by Prop 22 or the voters pass another initiative related to it,” Begley said. “If either of those things happens, I would predict that another court battle is likely.”
Another long-term consideration: How might this decision make services like Uber and Doordash more viable and sustainable, without state regulators on their back?
“I do not have any insight concerning how this decision specifically impacts those companies, but the fact that they strived to pass and uphold Prop 22 leads me to believe that they see this decision as having a positive impact on their bottom line,” Begley said. “The responsible businesses, organizations, and individuals whom I have represented tend to welcome reasonable regulations and rational regulators to protect the consumers, customers and clients who sustain our capitalist economy, as well as both the companies and workers who drive it, but sometimes that is a tough balancing act.
“In a state like ours, which requires sensible regulations and judicious regulators in order to function properly, voters have the opportunity to make changes through ballot initiatives and elections if they perceive that regulations or the regulators who enforce them have become unreasonable.”
Begley noted the amicus brief on behalf of the Independent Drivers Alliance of California emphasized the positive impacts that Prop 22 has had on their lives, because it allows them to continue working as independent contractors.
“For example, they shared the flexibility it has given them and the balance it has enabled them to achieve between earning a living and meeting other important life goals, as well as the ways Prop 22 has improved their working conditions,” Begley said.
Whether or not Castellanos goes before the California Supreme Court remains to be seen.
“Even though the California Supreme Court turns away the overwhelming majority of challenges to appellate decisions, there are a few reasons to anticipate that the plaintiffs will appeal,” Begley said. “Perhaps the most obvious one is that the plaintiffs seem heavily invested in their quest and highly determined to invalidate Prop 22.”
The impact is far-reaching especially as more people rely on app-based drivers and services. One recent study estimates the number of people using them has more than doubled since 2015.
“For non-attorneys, the most important thing to know about this outcome is that the day-to-day changes that Prop 22 brought to the gig industry in California will remain undisturbed unless and until the Legislature amends the applicable laws or the voters pass another initiative,” Begley said. “For attorneys, the most important thing to know is that this case sets some precedents that may impact other cases they are handling or may handle in the future; perhaps most particularly, ballot-initiative cases.”