On July 25, 2024, the California Supreme Court ruled in the case of Castellanos v. State of California that Proposition 22, also known as App-Based Drivers as Contractors and Labor Policies Initiative, is constitutional. The statewide ballot measure from 2020 exempts certain app-based drivers from California’s independent contractor classification law. This decision will significantly impact ongoing gig economy litigation as well as potential future litigation.

In 2021, drivers for services including Uber Technologies Inc., Lyft Inc. and DoorDash Inc., joined with the Service Employees International Union and its California chapter to challenge Proposition 22. The drivers and union claimed that the voter-approved ballot measure passed in November 2020 must be struck down because it infringed on the California legislature’s power to set workers’ compensation laws. During the May 2024 oral arguments in San Francisco, the justices appeared skeptical of the drivers’ position, expressing concerns about the chilling effect on future ballot initiatives and questioning why the legislature simply could not create new workers’ compensation laws in response. The court concluded that Article XIV, section 4 of the California Constitution does not limit the ability of California voters to enact laws through the initiative process that touch on workers’ compensation, rendering Prop 22 constitutional.Continue Reading California Supreme Court upholds Prop 22: California gig drivers to remain contractors