US judge reverses himself: Proposition 22 retroactivity is undecided

The question of whether Proposition 22 is retroactive is still up for debate, a federal judge has clarified months after stating the gig-driver law does not apply retroactively.

U.S. District Judge Edward M. Chen in San Francisco initially said in January Proposition 22 was not retroactive when he certified a class of Uber drivers who said the company misclassified them as independent contractors. The drivers filed their lawsuit in 2019, more than a year before Proposition 22 -- which effectively classifies app-based drivers as independent contractors instead of employees -- was voted into California law last fall. James et al. v. Uber Technologies, 3:19-cv-06462-EMC (N.D. Cal., filed October 8, 2019).

After Chen made his class certification ruling, Uber's counsel from Gibson, Dunn & Crutcher LLP challenged the retroactivity finding.

"The court should clarify or reconsider its statement that 'Proposition 22 does not apply retroactively' because, while the point is unnecessary to the reasoning or result in the class certification order, it appears to opine on a dispositive merits issue at the class certification stage without the benefit of full argument or analysis from the parties on that issue," Uber's counsel wrote.

"If it were a ruling on the merits, it would violate the rule against one-way intervention," they added.

The Uber drivers' attorneys from Lichten & Liss-Riordan PC disagreed. In a brief opposing Uber's motion for clarification on the retroactivity issue, the drivers' attorneys argued, "No amount of further briefing by the parties is going to change the conclusion that Proposition 22 is not retroactive. Indeed, it is disingenuous (and futile) for Uber to argue otherwise."

But Chen walked back his position last week, agreeing with Uber's counsel "that the retroactive application of Proposition 22 is ultimately a merits question that can dispose entirely of plaintiffs' claims, and thus should not be decided in the context of class certification."

He added the court "is not deciding at this time whether Proposition 22 applies retroactively. Withholding adjudication of the merits of the retroactivity claim does not negate class certification -- the issue of the retroactivity of Proposition 22 is a matter that may properly be decided on a class-wide basis."