Biden could upend Prop. 22, impacting Uber, Lyft drivers
Californians voted decisively this month, by more than 58%, to classify drivers for companies like Uber and Lyft as contractors rather than employees after the companies spent a record $200 million on Proposition 22. But the federal government may have the last word on the issue.
Labor officials in the incoming Biden administration could propose rules that would overturn key provisions of Prop. 22, entitling the drivers to minimum wages, worker benefits and union representation. And if Democrats, who already control the House, capture the Senate by winning two Georgia runoff elections in January, they may be able to enact legislation that would strike down the entire ballot measure, and any similar laws in other states.
“We’ve got to do everything we can to defend working people’s benefits,” Rep. Mark DeSaulnier, DConcord, a member of the House Education and Labor Committee, said when asked about a
possible congressional response to Prop. 22. “The war against workers, the inequality we have in this country is something we’ve got to fix.”
Presidentelect Joe Biden, who has not spoken publicly about the issue, will have to weigh powerful financial interests — like former Obama administration officials now affiliated with Uber and Lyft — against his own longtime support of labor unions, said Veena Dubal, a labor law professor at UC Hastings in San Francisco.
But if Biden sticks to his principles, she said, “I think there is a good chance that many aspects of Prop. 22 will be preempted.”
That’s highly unlikely, countered Geoff Vetter, spokesman for the Yes on 22 campaign.
“Any effort by Washington politicians to overturn the will of California voters would lead to outrage and create chaos and uncertainty for millions of rideshare and delivery drivers who depend on this work to earn additional income,” Vetter said in a statement.
And if the Biden administration acted to “undermine” the California measure, “a future Republican administration could do the exact opposite — it might make Prop. 22 mandatory nationwide,” said Kurt Oneto, legal counsel for Yes on 22.
The initiative, which takes effect Dec. 16, defines the drivers as independent contractors, overriding state laws and a California Supreme Court ruling that classified such workers as employees if they were in the same field as the company that hired them. As contractors, they are not entitled to the same benefits state law provides to employees, including minimum wages and overtime, sick leave, workers’ compensation, unemployment coverage and reimbursement for workplace expenses.
While Prop. 22 defines the issue under state law — it can be amended only by a seven-eighths vote of the Legislature or a new ballot measure — state labor laws can be superseded by federal laws and regulations for enterprises that affect interstate commerce.
For example, said William Gould, a Stanford labor law professor and former chairman of the National Labor Relations Board, that board could pass regulations that declare Uber and Lyft drivers to be employees, under federal law, with the right to join unions. That would require the companies to negotiate with them over wages, benefits and working conditions.
In addition, he said, President Biden’s labor secretary could announce rules making the drivers eligible for
“The war against workers, the inequality we have in this country is something we’ve got to fix.” Rep. Mark DeSaulnier, DConcord
minimum wages, overtime and workplace expense payments.
Such changes would not come easily, Gould said.
For one thing, the NLRB, which normally has five members, has three Republican members and one Democrat, all appointed by President Trump, and one vacancy. It could potentially have a Democratic majority in August, when one member’s term expires, but any Biden nominee with a prolabor background might not win confirmation if Republicans retain their Senate majority, Gould said. The same would hold true for the new president’s choice to be secretary of labor.
When he was nominated by President Bill Clinton to lead the labor board in 1994, Gould said, his 58 confirmation votes in the Senate included five Republicans. “Today I would get none,” he said.
NLRB decisions can also be challenged in the federal appeals court in Washington, D.C. That court’s rulings can be appealed to the Supreme Court, “not likely to be the most sympathetic forum” to labor concerns, Gould said.
The appeals court in 2017 overturned a ruling by the labor board under President Barack Obama that found drivers for Federal Express to be employees rather than contractors. In April 2019, the general counsel of the Trump-appointed board issued a nonbinding “advice memo” saying Uber drivers were contractors, finding that they were free to act on their own as “entrepreneurs.” A newly appointed NLRB could reach the opposite conclusion, subject to judicial review.
The widestranging change, and probably the most difficult to achieve, would come from Congress in the form of a federal law declaring the drivers and comparable workers elsewhere to be employees.
Even if Democrats win both Georgia runoff elections in January and gain a 5050 Senate split, enabling Vice President Kamala Harris to cast tiebreaking votes, any controversial legislation could face a Republican filibuster, which requires 60 votes to defeat. Senate Democrats could eliminate legislative filibusters by a majority vote, but it’s not clear if every Democrat would support such a change.
DeSaulnier, who has worked on labor issues as a congressman and previously as a state legislator, said a Democratic Congress might be able to negotiate with the companies and Republicans on a system of “portable benefits” that would move them toward employee status and could be transferred between businesses.
“It would be better to have a federal standard” with nationwide coverage, DeSaulnier said. “This is a national issue and a global issue.”