Big Labor Overturns Majority of Voters in Court, Stamping Out Worker Freedom & Economic Opportunity

Chris Marchese
Chris Marchese Counsel

Last year, California voters overwhelmingly approved Proposition 22—a measure designed to protect worker autonomy in the ride-sharing industry. Despite passing by a margin of over 3 million votes, Prop. 22 has been viciously attacked by special interests and labor unions ever since. 

On August 20, a California judge bought into their rhetoric and declared Prop. 22 unconstitutional on the flimsiest of grounds. While the judge is likely to be overruled, the decision underscores the lengths Big Labor and its allies will go to stamp out any business model that undermines its power, even if that means throwing out the will of the people. Meanwhile, worker freedom and economic opportunity hang in the balance.

California Voters Approved Prop. 22 to Restore & Protect Worker Autonomy

For over a decade, unions and legacy industries have tried to beat upstarts like Uber, Lyft, Doordash, and Instacart. Rather than compete on the merits, however, Big Labor, Big Restaurant, and legacy taxi services have instead turned to politicians for a handout. Their goal? Regulate app-based platforms to death. Or put another way, to hobble new competitors with regulatory burdens so that they can’t afford to do business in and compete against them.

Take California. At the prodding of unions, the State legislature passed “AB 5,” a highly controversial bill that slashed economic opportunities for independent contractors by pigeonholing them into “employee” status, even when it is neither appropriate nor wanted by the worker. While progressives have worked overtime to make “independent contractor” into a dirty word, it helps millions of Americans earn a living on their own terms while providing consumers and society with convenient products and services. In fact, independent contractor work is so popular that AB 5’s sponsors had to exempt dozens of their favored industries from its application.

California voters, however, saw things differently. Since most of them had favorable opinions of ride-sharing apps, and heard from drivers who welcomed and relied on the freedom working as an independent contractor gave them, voters came out strongly against AB 5. Indeed, 59% of Californians voted to restore independent contract work in the ride-sharing industry. They also sent a strong signal to Sacramento not to mess with employment law for ridesharing by requiring the legislature to amend their decision only with a 7/8ths majority vote.

Independent contractors’ smashing success was a stunning blow to Big Labor. Unions resented the rejection and set to work to undermine this move immediately.

The Unions Sue California & Overrule Vast Majority of Voters

Soon after Prop. 22 took effect, the Service Employees International Union (both the California and national branches) sued. According to the unions, Prop. 22 was unconstitutional because it limited the power of State lawmakers to quickly overrule voters and exempted independent contractors from collective bargaining and unemployment insurance obligations. 

But that’s all pretextual. In reality, unions and their allies hate the freedom independent contractors have. Because they are not employees under their employers’ control, independent contractors have a much larger say in dictating the terms of their own service, like setting their own hours and determining for how long they drive. If they want to take a week off, they don’t need their boss’s permission. A world where workers are afforded such freedom is a world where union membership isn’t particularly valuable.

This freedom is particularly attractive to Americans with limited economic opportunities or with demanding life responsibilities. Driver after driver offered stories about independent contract work allowing them to earn a living while maintaining family life, caring for sick or elderly family members, attending school, or working another job. Despite Big Labor’s lies about how awful independent contract work is, millions of Americans continue to find it appealing.

Which is why the unions sued. Unable to convince Californians to reclassify independent contractors as employees—and thus render them prime targets for unionization—the unions asked a court to intervene and overrule 59% of voters and the hundreds of thousands of contractors.

In an astonishingly poorly reasoned opinion, a State judge agreed. The Judge acknowledged that California citizens, through the state’s initiative system, made a law that would usually be treated as equal in legitimacy as any law passed by the state’s government. However, the Judge oddly argued that the new law passed by ballot initiative was too difficult for lawmakers to overrule. This argument is on shaky ground, given that California’s judiciary has long held that “[a]ny doubts [about initiatives] should be resolved in favor of the initiative and referendum power.”

The court also claimed that the law is unconstitutional because the California Constitution grants the legislature complete or “plenary” legislative power to “enforce a complete system of workers’ compensation” that can’t be limited by other constitutional provisions, including the initiative process. 

But this is circular and unpersuasive. Since California considers voters to be the ultimate “legislature,” and has long said that they have equal power to pass laws, Prop. 22’s passage is itself a “complete system of workers’ compensation” for independent contractors. In fact, Prop. 22 included specific protections for drivers and established a minimum level of compensation and benefits for them.

Ignoring that obvious conclusion, the court claimed that Prop. 22 went too far by placing “unique” burdens on the legislature. Rather than tie lawmakers’ hands completely, Prop. 22 simply said that if they wish to overrule voters, they must do so with a 7/8ths majority. The court, however, found this requirement to be “difficult to the point of near impossibility” and thus unconstitutional. But nothing in California’s Constitution requires a simple majority vote; instead, it allows the legislature to set its own rules. So while those rules may allow for majority votes, ultimate lawmaking power rests with Californians and they changed the rule for a specific issue.

This is common. Besides county- and city-specific supermajority requirements, the State has long singled out specific types of laws—especially tax increases—for additional lawmaker consideration. After all, just because something is “difficult” doesn’t mean it’s inherently bad or undesirable. 

By forcing a supermajority of the legislature to pass a law, Prop. 22 ensured that lawmakers couldn’t repeat the same corrupt process that was used in passing AB 5—the law’s sponsors, you may recall, exempted their favored industries and burdened their competitors. Californians sternly disagreed with that and sent Sacramento a signal not to mess with a good thing unless it’s absolutely necessary.

Constitutional analysis aside, the court revealed its true feelings throughout the decision. Citing no evidence, the judge claimed Prop. 22 “appears only to protect the economic interests of the network companies in having a divided, ununionized workforce.” Even if we were to assume that unionization is a net benefit, this statement is astonishingly inappropriate. First, the judge seems to think that 59% of California voters were duped when in fact they had actually approved additional, more stringent protections for independent contractors, including compensation and worker-protection requirements!

But because independent contractors threaten unions—again, unlike traditional employees, independent contractors have freedoms employees do not—Prop. 22 was seen as a grave threat to Big Labor. The judge apparently agreed because, according to his rationale, the law unfairly and unconstitutionally infringed on the legislature’s power to compel payment into worker’s compensation and to require collective bargaining. 

Again, this gets it all wrong: California’s Constitution does not require worker’s comp or collective bargaining. To be sure, those employment requirements are common throughout the United States. But both were created after California adopted its Constitution, which makes it laughable to say that they are required. No, they are simply big wins from earlier generations that Big Labor wants to use as a cudgel to fight off alternative forms of compensation and worker rights that are more adaptable to today’s economy and attractive to today’s workers.

That Big Labor might have its own self-interested reasons for fighting Prop. 22 is never acknowledged. Instead, the court glibly and without explanation merely repeats Big Labor’s lie that the initiative benefits tech businesses and no one else.

The Decision Undermines Economic Opportunity and Harms Californians

While the opinion is likely to be appealed and hopefully overruled, it underscores that any attempts to increase worker flexibility and freedom outside the established norms of a different century will be met with harsh resistance—even when the public overwhelmingly seeks to protect economic opportunity and to adapt to current realities.

In short, ride-sharing and delivery apps like Uber, Lyft, and Doordash offer consumers untold convenience, especially over the last year of lockdowns, while offering workers the opportunity to earn a living on their terms. We should all hope the decision is overturned, but we must also be hyper vigilant about attempts at the federal level to mandate what voters reject when given the chance. 

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