On Friday, a California Superior Court judge – the state’s trial court system – held that Prop. 22, which, among other provisions, permitted gig companies like Uber, Lyft, DoorDash, Instacart, and others to classify their workers as independent contractors rather than employees, enabling them to evade a host of labor and employment laws, is unconstitutional and unenforceable. As Zach Sorenson wrote for OnLabor earlier this year, the lawsuit, brought by SEIU and several drivers, was rejected by the California Supreme Court in February, which declined to hear the state constitutional challenge and instead ordered the plaintiffs to refile the suit in a lower venue. Alameda County Superior Judge Frank Roesch presided over the case.
According to Roesch, Prop. 22 is unconstitutional for two reasons. First, because it exempts “app-based drivers” from the “ABC” test, which would otherwise be utilized to determine their status as employees or independent contractors, it removes them from participation in the state’s workers’ compensation system and thereby infringes on the power of the California legislature to “create and enforce a complete system of workers’ compensation,” which, per the California Constitution, is a “plenary power” vested in the legislature. “The grant of power is not ‘plenary,’” wrote Roesch, “if the Legislature’s power to include app-based drivers in the workers’ compensation program is limited by initiative statute. . . . In short, if the People wish to use their initiative power to restrict or quality a ‘plenary’ and ‘unlimited’ power granted to the Legislature, they must first do so by initiative constitutional amendment, not by initiative statute.” Second, because it includes a provision that deals with collective bargaining rights – prohibiting legislation authorizing drivers to collectively bargain – Prop. 22 violates the state constitution’s “single-subject” rule, which requires that initiative statutes be “limited to a single subject.” According to Roesch, the “stated common purpose” of Prop. 22 is “protecting the opportunity for Californians to drive their cars on an independent contract basis, to provide those drivers with certain minimum welfare standards, and to set minimum consumer protection and safety standards to protect the public.” The subsection that references the collective bargaining rights of drivers, Roesch said, “is utterly unrelated to [Prop. 22]’s stated common purpose,” and it “appears only to protect the economic interests of the network companies in having a divided, ununionized workforce, which is not a stated goal of the legislation.” The subsection is therefore not “germane” to Prop. 22’s “stated ‘theme, purpose, or subject” and, since it is not severable from the remainder of the statute, violates the state constitution.
Because Prop. 22 was a ballot initiative, and since a ballot initiative cannot be amended after being passed by voters, any unconstitutional provision renders the entire law unenforceable. Uber – which, along with other gig companies, spent more than $220 million last year on the ballot initiative campaign, the most expensive in the nation’s history – predictably vowed to appeal the decision, which, it said, “defies both logic and the law.” The case will next be heard by the state court of appeals, after which it could eventually end up in front of the California Supreme Court again – although the process could take a year or more. Although the fight is far from over, the decision is nonetheless a major blow for gig companies and a significant victory for gig workers, and it would not have been possible without the critical organizing and advocacy work of SEIU, Rideshare Drivers United, and all those who stood in solidarity. Contrary to what most lawyers, judges, and analysts would suggest, Roesch’s decision is not merely the result of sage legal analysis alone; it is the consequence of concerted pressure from drivers, unions, and other activists and organizations, who have fiercely resisted gig companies’ efforts to subjugate and subordinate them. Their work should be lauded and celebrated, but the fight against gig companies and the venture capital firms that support them will – and must – continue.
In other news, the AFL-CIO elected Liz Shuler to succeed the late Richard Trumka as interim president. Shuler, former Secretary-Treasurer of the federation, will become the first female to occupy the post. She began her career as an organizer at IBEW Local 125 in Portland, Oregon, before being elected Secretary-Treasurer in 2009 – the first woman elected to the position and youngest ever on the federation’s Executive Council. Shuler will serve as AFL-CIO’s top official until the summer of 2022, when the federation’s 56 affiliates will gather for their annual convention and vote on a permanent successor. Although Shuler has confirmed that she will run for reelection in 2022, Trumka’s unexpected death came at a pivotal moment for the labor movement, and it has not only compelled top union officials to contemplate difficult questions about the direction and future of organized labor but also presented them with the first significant opportunity in decades to reorient the direction of the nation’s largest and most powerful labor organization at the 2022 convention. Shuler, according to members of the Executive Council, apparently has broad support to continue beyond the rest of Trumka’s 10-month term, but her reelection as Trumka’s permanent replacement will necessarily entail fundamental questions about the future of the organization, and it is far from guaranteed. Shuler, while generally seen as Trumka’s ideological successor, has advocated for both a focus on legislation like the PRO Act – Trumka’s near-exclusive focus – and for organizing to expand membership. “We have to be in the halls of power,” she said, “and we have to be out in the streets.” Fred Redmond, USW Vice President, who has served on the federation’s Executive Council since 2008, was elected to succeed Shuler as Secretary-Treasurer, and he will become the first African-American to hold the office.
Finally, in political news, President Biden, despite the continued nationwide surge in cases spurred by the Delta variant, announced on Friday that his administration would not reinstate the enhanced federal unemployment benefits after their expiration on September 6, despite earlier statements suggesting that he might extend it. Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh confirmed in a letter to Congress that the $300 boost in benefits would “expire on 6 September, as planned,” which, they said, was “always intended to be temporary.” The letter calls for states with high levels of unemployment, such as California and New York, to use funds from other provision of the American Rescue Plan to provide longer-term assistance to unemployed workers. Although Yellen and Walsh acknowledge that the enhanced benefits have been a “critical lifeline” to millions of struggling Americans, the Biden administration appears to be succumbing to months of sustained pressure and criticism from business owners and conservative politicians, who have been speciously arguing that the enhanced unemployment aid has disincentivized work and hindered economic recovery. There is, however, no evidence that ending the federal benefits has decreased unemployment rates, according to a report by the Bureau of Labor Statistics released on Friday, which stipulated that only eight of the 26 states that eliminated federal benefits early saw a statistically significant drop in unemployment rates in July.