In Castellanos v. State of California, the Supreme Court today rejects one legal attack on Proposition 22, the 2020 initiative — heavily financed by Uber and Lyft — that classifies app-based drivers as independent contractors instead of employees, but it doesn’t address another, putting the ball back in the Legislature’s court (no pun intended).
The court’s unanimous opinion by Justice Goodwin Liu holds Business and Profession’s Code section 7451, the part of Prop. 22 classifying drivers as independent contractors and thus precluding them from workers’ compensation coverage, doesn’t conflict with California Constitution article XIV, section 4, which gives the Legislature “plenary power . . . to create, and enforce a complete system of workers’ compensation.” There’s no conflict, the court concludes, because the constitutional provision “does not preclude the electorate from exercising its initiative power to legislate on matters affecting workers’ compensation.” The Legislature’s power might be “plenary,” the opinion says, but that “power is not exclusive.”
What the court doesn’t touch is the argument that another Prop. 22-enacted statute, section 7465, when read with article II, section 10(c), of the Constitution, requires voter approval of any legislative changes to section 7451 and thus “constrains the Legislature’s article XIV, section 4 authority to enact future legislation.” Two weeks after granting review in the case, the court limited the issue to be decided to the possible section 7451–article XIV, section 4, conflict. Today, the court says it won’t delve into the section 7465/article II, section 10(c)–article XIV, section 4, issue “until we are presented with an actual challenge to an act of the Legislature providing workers’ compensation to app-based drivers.”
The court affirms the divided First District, Division Four, Court of Appeal published opinion “insofar as it held that Business and Professions Code section 7451 does not conflict with article XIV, section 4 of the California Constitution.” More about the case here, here, here, and here.
