The headlines on stories about this week’s California Court of Appeals decision upholding most of Proposition 22, which classified app-based drivers as “independent contractors” under California law, declared the decision a huge victory for Uber, Lyft, and the other online platform companies. But there is one part of the decision that could turn into a potentially important opportunity for the Service Employees International Union and other unions seeking to organize these workers into unions.
The decision is a deep dive into California constitutional law. It examines how the California constitution balances power between voters legislating through the initiative and referendum process, the legislature making laws as representatives of the people of California, and the California judiciary’s role as constitution and law interpreter. The Court of Appeals read the precedents as requiring a significant lean toward the initiative and referendum process at the expense of the legislature. This lean, rather than Proposition 22’s labor and employment policy for app-based drivers, caused the Court of Appeals to uphold most of the highly controversial proposition. So, app-based drivers will remain “independent contractors” under California law, at least for the time being.
Yet, one part of the decision creates a meaningful opportunity for the unions that have been helping app-based drivers to organize over the past several years. The Court of Appeals struck down a provision of the law that would have required a seven-eighths vote of the legislature to “amend” Proposition 22 to allow the drivers to organize and bargain collectively with the companies. While the decision focused on Proposition 22 impinging on the judiciary’s role in deciding what constitutes an “amendment,” the bottom line is that the Court of Appeals decision would permit the California legislature to create a system of collective bargaining for these drivers.
If this decision holds (see below), drivers’ unions may not be able to bargain over certain topics firmly decided by Proposition 22, like a minimum hours requirement. Nonetheless, there are a lot of topics that could be subject to bargaining, including other working conditions defined by Proposition 22. As the Court of Appeals stated, “the benefits and obligations that Proposition 22 provides and imposes are established as minimums, not maximums, so nothing prevents drivers from negotiating for more, collectively or individually.” There is a lot of room for unions to improve the wages and working conditions of these drivers, if they can organize them.
App-based drivers have a long, long road to travel before secure organizing and collective bargaining rights. This Court of Appeals decision is only the first stop. The next stop is almost certainly the California Supreme Court. As I was quoted as saying in a New York Times article when the decision was released, "[i]t’s very hard to imagine [the Supreme Court] passing on a case of this importance,” But while the case is under consideration, pro-labor members of the California legislature can begin to solve knotty legal problems that could be barriers to a new collective bargaining law for app-based drivers.
Three problems risk making the California legislature the end of the line. The first problem is described above: any collective bargaining law for app-based drivers must respect the voters’ decisions in Proposition 22 regarding what working conditions are fixed in law and what topics can be subjects of bargaining. In a sense, that’s the easiest problem to solve, although it almost certainly will result in litigation, probably initiated by the companies.
The second problem is antitrust law. Independent contractors cannot work together on things like setting prices (i.e., wages) without running afoul of antitrust laws. So, the California legislature will have to enact legislation that lays the requisite groundwork for these workers to have the right to act collectively. The U.S. Court of Appeals for the Ninth Circuit provided a road map for this kind of legislation in its decision striking down a 2015 Seattle ordinance that created a system of union organizing and collective bargaining for app-based drivers. So, this problem also can be solved, understanding that legislating is never an easy thing to do.
The third problem may be the knottiest: labor law preemption. The National Labor Relations Act, our nation’s private-sector labor law, broadly preempts related state laws. It also jealously guards the National Labor Relations Board’s jurisdiction over decisions related to union organizing, collective bargaining, and related issues, including decisions about whether workers are “employees” covered by the Act. The Board has never decided whether app-based drivers are “employees” or “independent contractors,” so the California legislature risks treading on the Board’s jurisdiction if it establishes a collective bargaining law for workers who could be classified as “employees” by the Board. If it does, the California law would be struck down by a court because it is preempted.
Adding a bit of irony that highlights how complicated the California legislature’s task will be, the Board is about to issue a decision that will broaden the definition of “employee” under the Act, albeit not in a case involving app-based drivers. One possible solution would be for the California legislature to authorize organizing and collective bargaining for app-based drivers, but only to the extent they are independent contractors under the Act. Thus, if the drivers are deemed “employees” by the Board, they would be excluded from coverage under the California law. Otherwise, the California legislature would not purport to make any decision for the Board about the drivers’ status under federal law.
The last stop in this journey, assuming everything else goes right, is organizing the app-based drivers. That will be no mean feat. These workers do not gather in a single workplace. They are spread across the state. They have little or no contact with one another and, apart from their jobs, have little else in common. Most are part-time, while some are full-time. Simply contacting workers who work in their cars most of each day will be a challenge. There is likely to be competition among unions to represent the workers. The legislation will have to establish a process of defining which drivers belong together in a “bargaining unit.” In brief, there will be a lot of questions that must be answered, and not all can be addressed in a law.
Of course, the California legislature could make this task easier by requiring the employers to recognize any union that collects authorization cards from some pre-defined, achievable percentage of drivers. The law could require the employers to provide lists with cell phone information to the unions early in their organizing. A process for deconflicting different unions’ claims to groups of workers could be established. It is achievable, but it will not be easy.
Sometimes it is possible to snatch victory from the jaws of defeat. This Court of Appeals decision could be one of those times. But we need to know a lot more before either side should claim that they have won anything yet.
