Proposition Battles

By: Mark Webb

Late last month, Alameda County Superior Court Judge Frank Roesch ruled that Proposition 22, the “protect app-based drivers” measure passed by the voters last year, was unconstitutional. The reason given was because it impermissibly restricted the plenary authority of the Legislature to create, maintain, and change a complete workers’ compensation system.

Needless to say, the proponents of Prop 22 are going to appeal the decision. While this may at first glance appear to be yet another chapter in the ongoing saga of Assembly Bill 5 (Gonzalez) and ride-share companies, a closer read would show this issue has profound implications for workers’ compensation and workplace safety.

Between 1911, when the constitutional authority for the Roseberry Act was ratified by the voters (Proposition 10), and 1918, when the voters decided to give the Legislature plenary authority unlimited by any provision of the constitution (Proposition 23), the Legislature created workplace safety requirements and a state insurance fund.  The legal status of those laws was specifically cited as part of the reason for the need for Prop 23 by Senators Edgar Luce and Herbert Jones who wrote the ballot arguments encouraging passage.

The issue about to be addressed by the appellate courts in the challenge to Prop 22 is about the scope of the Legislature’s plenary authority. More specifically, it is about whether the People, through the initiative process, can have a say in the matter as well. It would be profoundly ironic if the Supreme Court agreed with the petitioners that following the 1918 amendments the right of initiative does not extend to workers’ compensation.  It’s ironic because in 1911 the voters concurrently approved both the first iteration of constitutional provisions regarding workers’ compensation and the ability of citizens to place initiatives and referenda on the ballot directly.

It is also ironic to suggest somehow the right of initiative was impliedly curtailed in 1918 during the height of the Progressive era in California and during a period of time that largely encompassed Hiram Johnson’s tenure as Governor. But the legal significance of these ironies will be left to those writing the briefs and, ultimately, the opinions.

For those in the workers’ compensation community, there may be a sigh of relief knowing that the Court could end the thought of even trying an initiative to change the Grand Bargain. Sort of like in 2003-04 when various employers and employer organizations filed multiple proposed initiatives to bring pressure to bear on the Legislature. Those initiatives never saw the light of day, but the Legislature did pass Senate Bill 899 (Poochigian) in 2004.

It should also be remembered that a complete system of workers’ compensation includes, “full provision for securing safety in places of employment”. In 1988, voters approved Proposition 97. This initiative, brought to the voters by a coalition of labor organizations, restored funding to Cal/OSHA to administer the state plan for compliance with federal occupational safety laws.  Prop 97 would seem to fall foursquare into the oversight of workplace safety so important to the proponents of Prop 23 in 1918 and as such subject to the plenary power of the Legislature.

The initiative process as it has become in California has many problems. But, per Article IV, Sec. 1 of the Constitution, while the legislative power is vested in the legislature, the people reserve to themselves the powers of initiative and referendum. We should think twice before we take that power away.

Note: The opinions expressed herein may or may not be those of Workers’ Comp Executive. Mark Webb is a former Arizona insurance regulator, insurance company chief compliance officer, and is an expert in corporate governance, risk and compliance. He is the owner of Prop 23 Advisors.