(Bloomberg) -- A California state judge struck down a voter-approved ballot measure bankrolled by Uber Technologies Inc., Lyft Inc., DoorDash Inc. and Instacart Inc. that declared drivers for the companies independent contractors, saying the measure is unconstitutional. 

Proposition 22, which passed in a statewide vote in November, exempts the so-called gig economy businesses from a state labor law that could require them to hire the workers as employees and pay for certain benefits.

The judge found that Proposition 22’s provisions tying the legislature’s hands regarding which workers are covered by worker’s compensation law, and regarding future gig work law in areas like collective bargaining, violate the state’s constitution.

“If the people wish to use their initiative power to restrict or qualify a ‘plenary’ and ‘unlimited’ power granted to the legislature, they must first do so by initiative constitutional amendment, not by initiative statute,” Alameda County Superior Court Judge Frank Roesch said in the ruling issued Friday.

Uber, Lyft, DoorDash, and Instacart spent around $200 million funding the campaign to pass the measure. Along with shielding the companies from liability in California, where the state attorney general has been suing Uber and Lyft for not providing drivers with employment benefits like the state’s hourly minimum wage, the ballot measure was an important boon for the firms in their efforts to deter state and federal lawmakers and officials elsewhere from targeting their business models. 

A coalition including Uber and Lyft has petitioned to place a similar measure on the ballot in Massachusetts, and the companies have held talks in New York aimed at forging a compromise that supporters said would help head off a ballot box battle like California’s.

Proponents of Proposition 22 said they think the judge’s ruling is wrong and vowed an immediate appeal.

“We believe the judge made a serious error by ignoring a century’s worth of case law requiring the courts to guard the voters’ right of initiative,” Geoff Vetter, spokesperson for the Protect App-Based Drivers & Services Coalition, said in a statement. “This outrageous decision is an affront to the overwhelming majority of California voters who passed Prop 22.”

 

 

 

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