Uber, Lyft, Instacart, Postmates, and DoorDash have put about $180 million – & a slew of in-app messages – behind their push for California Prop. 22, one of the most nationally consequential things on any ballot this year. Here’s some context on how we got here & what& #39;s at stake
In April 2018, CA& #39;s supreme court issued a sweeping ruling, Dynamex, establishing that if workers aren& #39;t doing “work that is outside the usual course” of a firm’s business, then under CA wage law they& #39;re employees entitled to protections, not contractors https://www.bloomberg.com/news/articles/2018-05-09/democrats-take-aim-at-the-gig-economy">https://www.bloomberg.com/news/arti...
This “ABC test” ruling spurred alarm among all sorts of companies, including tech platforms whose core business model is providing services via an army of workers who they claim are contractors, but whose work is arguably very much within "the usual course" of the firm& #39;s business
Federal or state laws guarantee a slew of protections to employees but not to independent contractors, including minimum wage, overtime, breaks, sexual harassment protection, unemployment, worker& #39;s compensation, non-discrimination & union organizing rights https://www.bloomberg.com/news/articles/2014-10-16/fedex-ground-says-its-drivers-arent-employees-dot-the-courts-will-decide">https://www.bloomberg.com/news/arti...
Having employees brings costs & liabilities for companies that don& #39;t apply w/ contractors. Uber has said making drivers employees “would require us to fundamentally change our business model" & have "adverse effect on our business and financial condition.” https://www.bloomberg.com/news/articles/2019-04-12/uber-ipo-filing-warns-that-drivers-will-be-even-less-happy">https://www.bloomberg.com/news/arti...
Under state and federal laws, whether workers are contractors or employees depends on a range of often-contested factors including how much control a boss exerts over the work. Someone may be an employee under one law, but not under another https://www.bloomberg.com/news/articles/2017-01-10/it-s-a-new-game-for-uber-drivers-if-new-york-passes-this-law">https://www.bloomberg.com/news/arti...
In 2019, dozens of workers classified by Instacart as contractors told me the work is less flexible than advertised, with tactics like four minutes of pinging noise (with an ACCEPT button but no reject button) used to prod them to take on unappealing tasks https://www.bloomberg.com/news/articles/2019-07-15/instacart-hounds-workers-to-take-jobs-that-aren-t-worth-it">https://www.bloomberg.com/news/arti...
Unable to secure relief from elected Democrats on their own, gig companies tried in 2019 to secure a deal with unions that would let them keep classifying workers as contractors while providing them new perks like benefit funds or guilds https://www.bloomberg.com/news/articles/2019-01-16/uber-has-bigger-problems-to-worry-about-than-the-d-c-shutdown">https://www.bloomberg.com/news/arti...
In late 2018, SEIU Cali privately circulated a memo saying that the ABC test could create a path for “potentially the entire gig sector” to organize, but that there were major drawbacks, including that the governor, state referendum process or Congress could subvert such efforts
Uber had previously forged a deal to create a Uber-funded, union-affiliated guild for New York drivers that& #39;s prohibited from striking or challenging designation of drivers as contractors, but can contest deactivations and lobby for changes like wage floor https://www.bloomberg.com/news/articles/2016-10-27/uber-found-an-unlikely-friend-in-organized-labor">https://www.bloomberg.com/news/arti...
1 proposal circulated privately in 2019 by SEIU CA council would’ve created systems for bargaining, “portable benefits” accounts & pay guarantees but allowed companies to seek “flexible alternative standards” in areas like overtime, breaks & worker’s comp https://www.bloomberg.com/news/articles/2019-07-25/union-splits-from-uber-and-lyft-on-california-worker-rights-law">https://www.bloomberg.com/news/arti...
In August 2019, AB 5 was endorsed by Bernie Sanders, Kamala Harris & Elizabeth Warren. The Massachusetts senator wrote an op-ed opposing "exclusions," saying "All Democrats need to stand up & say, without hedging, that we support AB 5 & back full employee status for gig workers”
In August, when a judge granted an injunction to force the companies to reclassify workers as employees, Uber and Lyft threatened to shut down California operations. An appeals court put the injunction on hold while considering the case.
(Back in Sacramento, following complaints about Dynamex and AB 5’s impact in areas like freelance journalism and language interpreting, the legislature passed, and in September 2020 the governor signed, a new compromise bill that loosens the rules in such sectors.)
Meanwhile the gig companies, unable to secure a deal of their own, forged ahead with their ballot measure, now called Prop 22, which qualified in the spring for the Nov. 3 ballot. https://voterguide.sos.ca.gov/propositions/22/">https://voterguide.sos.ca.gov/propositi... If it passes, lawmakers are blocked from amending it absent a 7/8 majority.
Prop 22 would shield the companies from AB 5 by designating app-based drivers as contractors exempt from California employment laws such as hourly minimum wage, while providing some alternative perks such as health contributions. https://vig.cdn.sos.ca.gov/2020/general/pdf/topl-prop22.pdf">https://vig.cdn.sos.ca.gov/2020/gene...
How about unionization rights? Under U.S. law, private sector unionization rights are generally handled by the federal government; states are pre-empted from encroaching on that. So nothing in Dynamex or AB 5 or Prop 22 directly resolves whether Uber drivers can unionize. But…
The claim that drivers are currently excluded, as supposed contractors, from the scope of federal labor protection could theoretically serve as license for a state to legislate its own bargaining system for them, as has been done for example in agriculture https://www.bloomberg.com/graphics/2020-the-fleecing-of-the-american-worker/">https://www.bloomberg.com/graphics/...
On other hand, if AB 5 stays in force for drivers & firms can be forced to classify them as employees under state law, the resulting business model changes could make it much easier to persuade federal officials that drivers are employees under federal law too, with union rights.
Under Trump, the National Labor Relations Board’s general counsel has held that app-based drivers aren’t employees and so aren’t protected. Depending on who wins the election, that could change.
So California’s gig work fight will be hugely impacted by the national one – and vice versa…
Adding an “ABC test” like California’s to federal labor law was proposed by Bernie Sanders and other senators days after the 2018 Dynamex ruling, and is part of the labor law reform that passed the Democratic U.S. House this year. https://www.bloomberg.com/news/articles/2018-05-09/democrats-take-aim-at-the-gig-economy">https://www.bloomberg.com/news/arti... https://www.bloomberg.com/graphics/2020-the-fleecing-of-the-american-worker">https://www.bloomberg.com/graphics/...
Joe Biden and Kamala Harris have weighed in against Prop 22, and Donald Trump& #39;s campaign has attacked them for supporting AB 5. Whatever happens with Prop 22 will have national shockwaves.
You can follow @josheidelson.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled: