Courts

Ride-Share and Delivery Drivers Are Independent Contractors, Says Court

Plus: College says abortion art runs afoul of state law, the politics of Silicon Valley Bank's collapse, and more...

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rideshare driver | Photo by <a href=%40plhnkfd19-3.html Hanaoka</a> on <a href=d-qq7w751vs6341-3.html
(Photo by Paul Hanaoka on Unsplash )

California court upholds Proposition 22. A Monday ruling from a state appeals court in California is good news for delivery and ride-share drivers, as well as a win for free markets and direct democracy. The court upheld a ballot initiative passed by California voters in 2020, securing the status of delivery and ride-share drivers as contractors, not employees.

Back in 2019, California passed Assembly Bill (AB) 5, which defined many independent contractors—from gig workers like Uber and Lyft drivers to freelance writers to business consultants and more—as employees. As such, workers would be entitled to employee benefits and protections but risk losing a lot of flexibility and independence. And because many businesses can't afford to treat all contractors as employees, laws like California's AB5 can (and have) put some independent contractors entirely out of work.

Some gig workers and companies pushed back, arguing that ride-share and delivery drivers should be exempt from AB5's requirements. And California voters agreed, passing a resolution to this effect—Proposition 22—in 2020.

But a small group of drivers and the Service Employees International Union challenged the ballot initiative, arguing that it was unconstitutional. And a lower court agreed, ruling in 2021 that Proposition 22 violated California's constitution by interfering with state lawmakers' ability to make rules related to worker compensation, among other flaws.

Now, California's court has largely reversed the lower court's decision.

"Proposition 22 does not intrude on the Legislature's workers' compensation authority," the appeals court held in a Monday ruling.

"Today's ruling is a victory for app-based workers and the millions of Californians who voted for Prop. 22," Tony West, chief legal officer for Uber, said in a statement. "Across the state, drivers and couriers have said they are happy with Prop. 22, which affords them new benefits while preserving the unique flexibility of app-based work. We're pleased that the Court respected the will of the people, and that Prop. 22 will remain in force."

The appeals court did find some parts of Proposition 22 (related to future legislative amendments) to be unconstitutional. But "because the unconstitutional provisions can be severed from the rest of the initiative," it affirmed only the part of the lower court's ruling related to this and reversed the rest of its decision.

You can find the full appeals court ruling here. Bottom line: Companies like Uber, Lyft, and DoorDash can continue to define drivers and delivery people in California as independent contractors.

FREE MINDS

College removes abortion art, citing state law. Idaho's Lewis-Clark State College has removed six works of art related to abortion or birth control from a health-themed college art show. One of the works removed was an embroidery piece by Katrina Majkut, depicting bottles of pills that are used to induce abortion. Majkut, who was also the show's guest curator, said the school told her that inclusion of her work would run afoul of Idaho law.

From The New York Times:

Idaho's No Public Funds for Abortion Act, which was enacted in 2021, a year before the U.S. Supreme Court overruled Roe v. Wade, prohibits state funds from being used to perform, 'promote" or "counsel in favor of" abortions. Penalties include fines and jail time.

A Lewis-Clark spokesman said in a statement that the school "became aware of concerns" about the exhibition on Feb. 26 and was then informed by its legal counsel that "some of the proposed exhibits could not be included." The spokesman did not answer questions about who raised the concerns over a show that was not yet open to the public. Emily Johnsen, director of the Center for Arts & History, did not respond to a request for comment.

The artists Michelle Hartney and Lydia Nobles also had works removed from the show at Lewis-Clark.

Hartney's work is a print of a handwritten transcription of one of the thousands of letters written a century ago to the Planned Parenthood founder Margaret Sanger by women pleading for information about birth control at a time when federal Comstock laws prohibited using mail to circulate material defined as "obscene and illicit." Contraception was singled out as an example.

"The letter writer simply mentions having had an abortion in the 1920s," Hartney said, "but the larger project that it's part of, called 'Unplanned Parenthood,' is not about abortion, and that is by design. It's about the history of birth control access in the U.S."

More here.

FREE MARKETS

Self-serving political narratives emerge around the collapse of Silicon Valley Bank and subsequent actions by federal authorities. As is wont to happen in any crisis, politicians have been quick to slot the situation into their preferred narratives. For folks like Sen. Elizabeth Warren (D–Mass.), this means blaming a lack of regulation. For populists both left and right, it's further fuel for condemning tech companies (since many of the bank's customers were tech startups) or "elites" more broadly.

Meanwhile, the White House and many on the left are adamant about insisting that what's happening isn't a bailout. Yesterday, we briefly mentioned why this framing is silly. And it seems even NPR disagrees with the "not a bailout" contention.

"According to experts who specialize in government bank bailouts, the actions of the federal government this weekend to shore up Silicon Valley Bank's depositors are nothing if not a bailout," writes NPR business reporter Bobby Allyn:

"If your definition is government intervention to prevent private losses, then this is certainly a bailout," said Neil Barofsky, who oversaw the Troubled Asset Relief Program, the far-reaching bailout that saved the banking industry during the 2008 financial crisis.

Under the plan announced by federal regulators, $175 billion in deposits will be backstopped by the federal government.

[…] "What they mean when they say this isn't a bailout, is it's not a bailout for management," said Richard Squire, a professor at Fordham University's School of Law and an expert on bank bailouts. "The venture capital firms and the startups are being bailed out. There is no doubt about that."

See also:

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