In a major victory for California app-based drivers, rideshare consumers and labor unions, Alameda County Superior Court Judge Frank Roesch ruled on Friday that Proposition 22, which exempted companies like Uber, Lyft and Doordash from treating drivers as employees, was unconstitutional.  The court decision is a game-changing development in the nationwide battle over ensuring that employees of gig companies are entitled to fundamental employment and collective bargaining rights.

According to Judge Roesch’s ruling, Proposition 22 unconstitutionally “limits the power of a future legislature to define app-based drivers as workers subject to workers’ compensation law.” He concludes his order by stating “A prohibition on legislation authorizing collective bargaining by app-based drivers does not promote the right to work as an independent contractor, nor does it protect work flexibility, nor does it provide minimum workplace safety and pay standards for those workers.  It appears only to protect the economic interests of the network companies in having a divided, unionized workforce, which is not a stated goal of the legislation.”

“The judge’s ruling makes clear that Proposition 22 is a fundamentally flawed and self-serving initiative promoted by the gig companies to protect their own economic interests at the expense of gig workers and the public,” said Richard Rios of Olson Remcho, “This is an important win for our clients who have been fighting against an industry that poured more than $200 million into a campaign to convince voters to pass an unconstitutional measure into law.”

Led by senior litigators Robin Johansen and Deborah Caplan, with the assistance of Rios and  associate attorney Benjamin Gevercer, Olson Remcho’s legal team, along with co-counsel from the Altschuler Berzon firm, pinpointed the various ways in which Proposition 22 is patently unconstitutional.

“Proposition 22 fails the constitutional test on multiple grounds,” said Robin Johansen.  “including by limiting the power of the legislature to ensure that workers are protected by a system of workers’ compensation and a draconian requirement that would effectively prohibit app-based drivers from ever engaging in collective bargaining.”

Plaintiffs include rideshare drivers Hector Castellanos, Saori Okawa and Michael Robinson; Joseph Delgado, a user of app-based rideshare services; and the Service Employees International Union (SEIU) and SEIU California State Council. 

Bob Schoonover, president of SEIU California, said in a statement: “Today’s ruling by Judge Roesch striking down Proposition 22 couldn’t be clearer: The gig industry-funded ballot initiative was unconstitutional and is therefore unenforceable. They tried to boost their profits by undermining democracy and the state constitution. For two years, drivers have been saying that democracy cannot be bought. And today’s decision shows they were right.”

The order is available here: Castellanos Order 082021

In May of 2021 Olson Remcho was selected to serve as General Counsel of Caltrain – the public transit agency which provides rail service between San Francisco and Gilroy.  In this capacity the firm is advising the Peninsula Corridor Joint Powers Board (“JPB”), a joint powers authority composed of the City and County of San Francisco, the San Mateo County Transit District, and the Santa Clara Valley Transportation Authority which has owned and operated the railroad since 1991, on all their legal matters.  The firm’s work will include providing the JPB with assistance in considering a new governance structure for the agency as specified by the JPB when Measure RR, which was passed by voters in San Francisco, San Mateo and Santa Clara counties in November 2020 to provide dedicated funding to Caltrain, was placed on the ballot.

“We are honored to be selected as General Counsel of Caltrain,” said James Harrison, who is leading the legal team representing the agency along with Robin Johansen, Tom Willis, Aaron Silva, Omar El-Qoulaq, and Anna Myles-Primakoff of Olson Remcho.  “With a $2 billion electrification plan already underway, Caltrain is an amazing transit agency that provides vital congestion relief to the Bay Area with the goal of serving more consumers and taking more polluting vehicles off the roads for years to come.”

According to a Caltrain press release celebrating the passage of Measure RR, “Caltrain has grown to become the seventh largest commuter railroad in the country, the largest carrier of bikes of any American transit system, and the nation’s most efficient railroad.  In the long-term, the 30-year measure will allow Caltrain to invest in the operation and expansion of faster, more frequent electrified service with added capacity necessary to accommodate expected increases in ridership demand in the decades to come. It will also allow the system to advance equity policies to help ensure Caltrain is accessible and affordable to all members of the communities it serves.”

Olson Remcho filed a writ in Sacramento Superior Court on behalf of the California School Boards Association (CSBA) on July 16, 2021 alleging that California State Controller Betty Yee violated Proposition 98 guarantees and state tax law when she issued her budget guidance earlier this year.  Proposition 98, which was passed by California voters in 1988, requires a minimum percentage of the state budget to be spent on K-12 education.  The Olson Remcho team representing CSBA includes Karen Getman, Kristen Mah Rogers, and Benjamin Gevercer. 

 According to the writ, “That guidance unlawfully permits counties to avoid allocating to school districts, county education offices and community college districts their lawful share of local property tax revenues from the counties’ Education Revenue Funds, thereby unlawfully decreasing the minimum school funding guarantee provided by Article XVI, Section 8(b) of the California Constitution.”  See the Daily Journal story on the case, “School boards sue state controller over tax guidance” provided in full here.

The writ asks the court to issue a permanent injunction barring the use of the Controller’s guidance.  According to the writ, “Unless the controller’s erroneous guidance is declared unlawful, it will create a permanent decrease in the Proposition 98 minimum funding guarantee.”

Olson Remcho is pleased to announce the addition of Anna Myles-Primakoff as a senior associate.  Ms. Myles-Primakoff, who focuses her practice on government and nonprofit law, was previously with NEO Law Group where she provided advice on tax and corporate governance issues to nonprofit and tax-exempt organizations. She also previously served as General Counsel to IDinsight, a global advisory, data analytics, and research organization that aims to transform the way the social sector innovates, learns, and improves. At IDinsight,  advised on governance, intellectual property, employment law, tax and compliance issues. She also led the organization’s internal risk management and transactional work and managed outside counsel in IDinsight countries of operation.

Her prior professional experience includes both international and U.S experience in the non-profit sector. Prior to joining IDinsight, Ms. Myles-Primakoff worked as Legal Director at One Acre Fund, a global non-profit social enterprise providing funding and training to over a million smallholder farmer families in lower income countries to support them increase their food security and assist them achieve a more sustainable livelihood. At One Acre Fund, she led a comprehensive portfolio of legal, compliance, employment law, government relations, and corporate structure matters across more than 10 countries in Sub-Saharan Africa and South Asia during a period in which the organization doubled in size.

Ms. Myles-Primakoff holds a J.D. from Harvard Law School and a Master’s in Public Policy from Harvard’s Kennedy School, and graduated summa cum laude from UCLA with a Bachelor of Arts in political science.

Olson Remcho is co-counsel for the SEIU and other plaintiffs in this case. Set out below is the SEIU press release. 

Service Employees International Union
FOR IMMEDIATE RELEASE: February 11, 2021
Contact: Matt Lopez, matt.lopez@berlinrosen.com, 805-377-2950

SAN FRANCISCO — California app-based drivers, rideshare consumers and labor unions Thursday took the next step in their challenge to Proposition 22, filing suit in Alameda County Superior Court alleging the gig-company-funded ballot measure violates the state’s constitution and should be struck down.

The suit alleges Prop 22 unconstitutionally limits the power of elected officials to govern, including by stripping the legislature’s ability to grant workers the right to organize for improvements to their pay and working conditions and illegally excluding them from the state workers’ compensation program.  The suit also asserts Prop 22 violates a provision in the State Constitution requiring ballot initiatives address only a single subject.

Plaintiffs include rideshare drivers Hector Castellanos, Saori Okawa and Michael Robinson; Joseph Delgado, a user of app-based rideshare services; and the Service Employees International Union (SEIU) and SEIU California State Council.

“I’m joining together with my fellow rideshare drivers to continue our fight against Prop 22 because we know that in a democracy, corporations shouldn’t get the final say in determining our laws,” said plaintiff Saori Okawa.  “With Prop 22, Uber, Lyft, Doordash and the other gig giants overreached by writing a law that violates our state’s constitution and puts corporate profits ahead of workers’ safety and basic rights.  The gig companies are trying to break our democracy just to increase their own bottom lines.  I’m confident that the court will strike down Prop 22 and restore checks and balances to our system of government.”

Earlier this month, the California Supreme Court denied the plaintiffs’ petition for an expedited review of their constitutional challenge against Prop 22, but preserved the plaintiffs’ right to filein a lower court.  The plaintiffs had originally sought an expedited review due to the extraordinary and urgent danger rideshare drivers are facing during the COVID-19 pandemic.

The plaintiffs’ case against Prop 22 follows similar constitutional challenges to two of the state’s most infamous ballot measures, Proposition 8 and Proposition 187.  In the case of Prop 187 —which denied undocumented immigrants access to basic education and healthcare — it took nearly five years, multiple appeals, the end of Gov. Pete Wilson’s administration and thepassage of federal legislation for the initiative to be struck down.  It took almost seven years for Prop 8 — which denied marriage equality to same-sex couples — to make its way to the United States Supreme Court, where it was struck down in 2015.

Prop 22, which took effect last year, defines “App-Based Drivers” as independent contractors rather than as employees, and thereby withdraws basic employment protections from them, including workers’ compensation coverage.  Further, it precludes the legislature from passing various types of legislation not directly related to the measure’s classification of App-Based Drivers as independent contractors.  The measure has left rideshare drivers in a precarious position as California continues to reel from months of surging COVID-19 infections. Prop 22 stripped California gig workers of basic rights like paid family leave, sick days, unemployment insurance and a voice on the job through a union. Instead, Prop 22 seeks to violate the state’s constitution in order to erode the traditional guardrails of democratic accountability, placing the power to determine laws governing gig workers in the hands of the gig companies themselves.

“Although titled the “Protect App-Based Drivers and Services Act,” Proposition 22 actually withdraws minimum employment protections from hundreds of thousands of California workers,” the suit alleges.  “That result would be profoundly harmful to many workers, but not necessarily unconstitutional, if the measure had not overreached in several significant ways.”

THREE STRIKES AGAINST CALIFORNIA’S CONSTITUTION

The lawsuit alleges Proposition 22, as written by Uber and Lyft, denies drivers rights under the law in California and makes it nearly impossible for lawmakers to fix these problems.  The suit charges the measure violates the California Constitution in at least three specific ways:

• Prop 22 unconstitutionally limits the ability of the California legislature to establish and enforce a system of workers’ compensation for gig workers. The California Constitution gives the Legislature “unlimited” authority to provide for a worker’s compensation system, so that authority cannot be limited by a statutory initiative.
• Prop 22 unconstitutionally defines an amendment as any legislation that authorizes any entity to collectively bargain on drivers’ behalf or that treats rideshare drivers differently from other workers. In California, it is the constitutional authority of the legislature to enact legislation so long as it does not impermissibly amend a ballot measure, and of the judiciary to decide what constitutes an amendment to a ballot measure.
• Prop 22 unconstitutionally violates the “single subject rule” governing ballot measures in California, which requires initiative statutes to only address a single subject addressed in the measure’s substance.

“We continue to stand with the rideshare drivers in their fight against Prop 22, which seeks to unconstitutionally deny them their fundamental right to bargain for better pay and working conditions,” said Bob Schoonover, President of SEIU Local 721 and SEIU California State Council.  “Here in California, companies like Uber and Lyft are trying to boost their profits by undermining democracy and the state constitution — and if left unchecked, they’ll continue these kinds of corporate power grabs all across the country.  SEIU is proud to support drivers in their fight for their basic rights and for the integrity of our democracy.”

###

Olson Remcho is co-counsel for the SEIU and other plaintiffs in this case.  Set out below are links to the court documents filed on January 12, 2021 and the SEIU press release.

Castellanos v. State Of California – Request for Judicial Notice and Memorandum of Points and Authorities

Castellanos v. State Of California – Emergency Petition for Writ of Mandate & Request for Expedited Review

Service Employees International Union
FOR IMMEDIATE RELEASE: January 12, 2021
Contact: Matt Lopez, matt.lopez@berlinrosen.com, 805-377-2950

California Rideshare Drivers File Suit Charging Proposition 22 Violates State Constitution
Ballot measure pushed by gig-economy giants unconstitutionally limits state’s power to protect basic rights of rideshare drivers
Plaintiff: ‘Prop 22 will live in infamy alongside unconstitutional ballot measures like Prop 8 and Prop 187’

SAN FRANCISCO — California app-based drivers, rideshare consumers and labor unions filed a lawsuit Tuesday alleging Proposition 22 violates the state’s constitution and should be struck down.  The suit, filed in California Supreme Court, alleges Prop 22 unconstitutionally limits the power of elected officials to govern, including by stripping the legislature’s ability to grant workers the right to organize for improvements to their pay and working conditions as well as by illegally excluding them from the state workers’ compensation program. The suit also asserts Prop 22 violates a provision in the State Constitution requiring ballot initiatives address only a single subject.

Plaintiffs include rideshare drivers Hector Castellanos, Saori Okawa, Michael Robinson; Joseph Delgado, a user of app-based rideshare services; and the Service Employees International Union (SEIU) and SEIU California State Council.

“Every day, rideshare drivers like me struggle to make ends meet because companies like Uber and Lyft prioritize corporate profits over our wellbeing,” said plaintiff Saori Okawa. “ With Prop 22, they’re not just ignoring our health and safety — they’re discarding our state’s constitution. I’m joining this lawsuit because I know it’s up to the people we elect to make our laws, not wealthy executives who profit from our labor. I’m confident the court will see Prop 22 for the corporate power grab that it is, and that Prop 22 will live in infamy along with unconstitutional ballot measures like Prop 8 and Prop 187.”

There is a long history in California of attempts to circumvent the California Constitution and deny people their rights, including Prop 187, which attacked immigrant communities, and Prop 8, which attacked the LGBTQ+ community. Both were ultimately ruled unconstitutional. Prop 22, which took effect last month, defines “App-Based Drivers” as independent contractors rather than as employees, and thereby withdraws basic employment protections from them, including workers’ compensation coverage. It also goes further than that, precluding the legislature from passing various types of legislation not directly related to the measure’s classification of App-Based Drivers as independent contractors.

The measure has left rideshare drivers in a precarious position as California experiences a dangerous spike in COVID-19 infections. Prop 22 stripped California gig workers of basic rights like overtime pay, paid family leave, sick days, unemployment insurance and a voice on the job through a union. Instead, Prop 22 places the power to protect drivers in the hands of rideshare companies like Uber and Lyft — the very same companies who wrote the unconstitutional law, spent over $200 million to pass it last November and who have proven time and again to prioritize profits over the safety and well-being of their drivers.

“Although titled the “Protect App-Based Drivers and Services Act,” Proposition 22 actually withdraws minimum employment protections from hundreds of thousands of California workers,” the suit alleges. “That result would be profoundly harmful to many workers, but not necessarily unconstitutional, if the measure had not overreached in several significant ways.”

THREE STRIKES AGAINST CALIFORNIA’S CONSTITUTION

The lawsuit alleges Proposition 22, as written by Uber and Lyft, denies drivers rights under the law in California and makes it nearly impossible for lawmakers to fix these problems. The suitcharges the measure violates the California Constitution in at least three specific ways:

● Prop 22 unconstitutionally limits the ability of the California legislature to establish and enforce a system of workers’ compensation for gig workers. The California Constitution gives the Legislature “unlimited” authority to provide for a worker’s compensation
system, so that authority cannot be limited by a statutory initiative.
● Prop 22 unconstitutionally defines an amendment as any legislation that authorizes any entity to collectively bargain on drivers’ behalf or that treats rideshare drivers differently from other workers. In California, it is the constitutional authority of the legislature to enact legislation so long as it does not impermissibly amend a ballot measure, and of the judiciary to decide what constitutes an amendment to a ballot measure.
● Prop 22 unconstitutionally violates the “single subject rule” governing ballot measures in California, which requires initiative statutes to only address a single subject addressed in the measure’s substance.

“We look forward to the court affirming that gig companies cannot strip workers of their fundamental right to bargain for better pay and working conditions — and that corporations alone should not dictate the laws in our state,” said Bob Schoonover, President of SEIU Local 721 and SEIU California State Council. “Like Prop 187 and Prop 8, Prop 22 is an unconstitutional attack on Californians’ rights that if left unchecked will grant permission to companies like Uber and Lyft to dismantle workers’ rights across the country. SEIU is proud to support drivers’ fight to stop this unconstitutional law.”

“Just like every other worker, rideshare drivers should have a right to join together in a union and bargain for better pay and working conditions,” said SEIU President Mary Kay Henry. “SEIU has always stood with working Californians when their basic rights have been threatened, and we’ll continue to support their fight against the unconstitutional Prop 22 and companies like Uber and Lyft that prioritize corporate profit over worker safety. We won’t rest until rideshare drivers have the same opportunities other workers have to have a seat at the table with their employer.”

“We stand with the hard-working drivers whose exploitation by Uber and Lyft will only deepen as a direct result of Prop 22,” said California Labor Federation Executive Secretary-Treasurer Art Pulaski. “This unconstitutional law, which gig companies bought with hundreds of millions of dollars in political spending, is an affront to the fundamental protections and rights all workers deserve and should be expeditiously struck down by the courts.”

Today at noon, rideshare drivers in Los Angeles will take to the streets to support the plaintiffs in their fight against the unconstitutional Prop 22. Drivers will organize car caravans, honking their horns and holding signs as they wind through the streets to raise awareness of the drivers’ fight.