A Massachusetts court ruled on Tuesday that a proposed ballot measure concerning the job status of gig drivers violated state law and was not eligible to be put to voters this fall.
The measure, which was backed by companies like Uber and Lyft, would have classified gig drivers as independent contractors rather than employees, a longtime goal of the companies. The ruling effectively ended a $17.8 million campaign by the gig companies to support the initiative.
The ballot measure contained two “substantively distinct policy decisions, one of which is buried in obscure language” violating the state constitution, which requires all parts of a ballot measure to be related, the Massachusetts Supreme Judicial Court wrote in its ruling.
The court took issue with a provision of the measure that said drivers were “not an employee or agent” of a gig company, because it appeared to be an attempt to shield Uber and Lyft from liability in the case of an accident or a crime. That provision was unrelated to the rest of the proposal, which was about the benefits drivers would or would not receive as independent contractors, according to the seven-judge panel. The measure would have given drivers some limited benefits but absolved the companies of the need to pay them for full health care benefits, time off or other employee benefits.
“Petitions that bury separate policy decisions in obscure language heighten concerns that voters will be confused, misled and deprived of a meaningful choice,” the court wrote.
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For years, gig companies and labor rights groups have argued over how to classify drivers: Should they be employees, with full labor protections and benefits? Or should they be independent contractors, responsible for their own expenses and, as companies have contended, afforded greater freedom and flexibility to work the hours they want?
Since it has appeared unlikely that the federal government will settle the question, Uber and Lyft have embarked on a state-by-state march to lock in their drivers’ labor statuses.
The campaign on the part of gig companies to lock in their drivers’ labor status in Massachusetts was similar to an effort in California two years ago. In 2020, the companies successfully persuaded California voters to pass Proposition 22, a ballot measure that enshrined drivers’ independent contractor status; it was later overturned by a judge. The following year they tried to strike a labor bargain in New York, and this year they forged a similar agreement with legislators in Washington state, preventing drivers from being classified as employees.
But the companies’ defeat in Massachusetts, a staunchly pro-labor and pro-union state, shows the limits of the strategy, said Terri Gerstein, a workers rights lawyer at Harvard Law School’s Labor and Worklife Program.
“Policymakers should pay attention to the reality that gig companies’ march toward a future with degraded worker protections is not inevitable,” Ms. Gerstein said.
Opponents of the Massachusetts ballot measure welcomed the court’s ruling.
“Millions of Massachusetts drivers, passengers and taxpayers can rest easier knowing that this unconstitutional bid by Big Tech C.E.O.s to manipulate Massachusetts law has been struck down by the Supreme Judicial Court,” Wes McEnany, who leads Massachusetts Is Not for Sale, wrote in an email. “The ballot question was written not only as an attempt to reduce the rights of drivers, but also would have put the rights of passengers and the public at risk.”
Uber and Lyft declined to comment, but the organization driving the measure expressed disappointment and argued that it would have had wide support in the fall.
“A clear majority of Massachusetts voters and rideshare and delivery drivers both supported and would have passed this ballot question into law,” Conor Yunits, who is leading the Massachusetts Coalition for Independent Work, said in a statement.
The group hoped the state’s legislature would still take action on drivers’ job statuses before the end of the summer. “We hope the legislature will stand with the 80 percent of drivers who want flexibility and to remain independent contractors while having access to new benefits,” Mr. Yunits wrote.
A survey of about 400 Massachusetts drivers this year, paid for by the gig companies, found that 81 percent backed the ballot measure. But critics have argued that drivers were being presented with a false choice between flexibility and benefits, when being classified as employees could give them both.
“The companies have already spent millions trying to fool drivers and voters into accepting this deceitful proposal,” Steve Tolman, the president of the Massachusetts A.F.L.-C.I.O., said in a statement.
The labor fight in Massachusetts began in 2020, when the state’s attorney general, Maura Healey, sued Uber and Lyft, arguing that they were misclassifying their workers by treating them as independent contractors rather than employees. That lawsuit is pending in court.
Uber, Lyft, DoorDash and Instacart responded with the ballot measure, which stood a fair chance of passing had it made it to voters, if the California initiative was any indication.
But their plans began to unravel when a group of labor activists filed a complaint in January, arguing that the ballot measure should not be allowed to proceed because of the clause related to gig companies’ liability.
On Tuesday, the Massachusetts justices’ ruling made it clear that Uber and Lyft, by trying to pass an ambitious and sweeping law, had overreached.
“Gig companies wrote an overly long ballot initiative designed to confuse people, in an effort to avoid responsibility for everything — from employer obligations to taking care of passengers when accidents happen,” Ms. Gerstein said.