The high-stakes battle over the status of hundreds of thousands of California drivers for gig companies such as Uber and Lyft has entered a new phase.
California Attorney General Rob Bonta is asking the National Labor Relations Board to authorize the drivers to form unions to negotiate wages and working conditions with companies that insist they are not the drivers’ employers. President Biden has nominated an outspoken critic of the companies’ practices to a key Labor Department position, with a contested Senate confirmation vote upcoming. Biden’s Justice Department has also asked the NLRB to support union rights for the drivers.
And Proposition 22, the $200 million California ballot measure sponsored by Uber, Lyft, DoorDash and other companies in November 2020 to classify their drivers as independent contractors rather than employees, is headed for higher courts, after an Alameda County judge ruled the measure unconstitutional.
In short, the legal and political war over the ride-hailing companies and their workplace rules has just begun.
“We’re not protecting American workers the way they should be. I think people are starting to realize that,” said Rep. Mark DeSaulnier, D-Concord, a member of the House Education and Labor Committee, a former owner of restaurants in Concord and Berkeley, and a supporter of employee status and union rights for the drivers. Changes on such far-reaching issues, he said in an interview, “don’t happen overnight.”
And they’re not without consequences, as a lawyer for the Yes-on-22 campaign, Kurt Oneto, observed after nearly 59% of the state’s voters approved the 2020 ballot measure. If the Biden administration took federal action to undo Prop. 22, Oneto warned, “a future Republican administration could do the exact opposite — it might make Prop. 22 mandatory nationwide.”
On Feb. 10, Bonta joined attorneys general from 14 other states and the District of Columbia in asking the NLRB to overturn decisions in 2019 by the labor board, controlled by appointees of President Donald Trump, and its general counsel that classified the drivers as contractors with no right to join unions. The board said then that the drivers had “entrepreneurial opportunities” to market their services and therefore should not be considered employees.
“Without the right to organize, these workers are more vulnerable to exploitation in the workplace,” the state officials told the NLRB, describing workers’ “entrepreneurial opportunities” as irrelevant.
In a statement accompanying the filing, Bonta said, “It’s because of unions that Americans today can enjoy eight-hour workdays, overtime, paid sick leave, workers’ compensation, and more.” Federal and state laws provide those rights to employees but not to independent contractors.
Biden’s Justice Department has taken a similar stance, asking the NLRB to adopt a nationwide standard that “adequately protects workers’ rights to organize.”
The current board is likely to agree and set a nationwide standard that allows the drivers and others in similar situations to organize and join unions, said William Gould, a Stanford labor law professor and former chairman of the NLRB under President Bill Clinton from 1994 to 1998. That would not overturn Prop. 22, but it would give the workers some bargaining power with their companies.
On the other hand, said Veena Dubal, a law professor at UC Hastings in San Francisco and an opponent of Prop. 22, any such decision would be challenged in the U.S. appeals court in Washington, D.C., which became more conservative during Trump’s administration and has found “entrepreneurial opportunities” to be a key factor in worker classifications.
Its ruling could be appealed to the Supreme Court, not a friendly forum for organized labor — one notable decision in 2018 found that public employee unions violated non-members’ free speech rights by requiring them to pay for their state-mandated representation at the bargaining table.
Bonta and his colleagues sent an “important political signal” of their position, but the courts are unlikely to go along, Dubal said.
A different scenario awaits in the Senate, which will soon consider Biden’s nomination of David Weil to lead the Labor Department’s Wage and Hour Division, which enforces federal minimum wage and overtime laws.
Weil held the same position under President Barack Obama from 2014 to 2017. He has criticized Uber and Lyft for their labor policies, and said in a Los Angeles Times column in 2019 that the companies’ “status as employers is really quite clear.”
His nomination stalled in a Senate committee last year, with all Republican members opposed, but advanced on an 11-10 vote last month when Sen. Rand Paul, R-Ky., was absent. If Weil is confirmed, he will have the power to declare a nationwide standard that effectively overrides the California ballot measure and defines ride-hailing drivers as employees, said Stanford’s Gould, the former NLRB chairman..
“The feds can go beyond a less generous employee eligibility standard,” Gould said. Although Weil’s office could not directly enforce California’s minimum wage, which for large employers is now twice the federal minimum of $7.50 an hour, Gould said the office could authorize state officials to apply state wage and labor laws to the drivers.
The Labor Department’s position could change, of course, under a new Republican administration. But meanwhile, Prop. 22 faces an uncertain legal future in California. In a ruling last August, Alameda County Superior Court Judge Frank Roesch found the ballot measure unconstitutional on multiple grounds:
• The state Constitution authorizes the Legislature to regulate workers’ compensation, and Prop. 22 was not drafted as a constitutional amendment, just an initiative to change state law.
• Prop. 22’s requirement of a 7/8 vote by the Legislature to amend any of its terms interferes with legislative authority over labor issues and collective bargaining.
• The state Constitution limits ballot measures to a single subject, but Prop. 22 covers at least two subjects: the self-declared rights of Californians to drive their cars as independent contractors, with specified benefits from the companies, and their lack of access to collective bargaining.
The companies are challenging the ruling in a state appeals court in San Francisco and are continuing to enforce Prop. 22, although neither Roesch nor the appellate court has issued a stay that would let them disregard his decision. The court’s ruling, probably sometime this summer, is likely to be appealed to the state Supreme Court, which has usually deferred to the voters on ballot measures but also has been more sympathetic to unions than its federal counterpart.
Dubal, of UC Hastings, pointed to the court’s unanimous ruling in the 2018 Dynamex case that set standards, later approved by the Legislature, saying companies must classify their workers as employees unless they can prove the workers are running their own independent businesses. Prop. 22 exempted the drivers from that ruling and the ensuing state law, AB5.
“There is a really good chance the California Supreme Court will find Prop. 22 unconstitutional,” she said.