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Chronicles

The story behind the story

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How the success of California's Prop 22, driven by gig economy companies, is affecting negotiations between unions and businesses across the US

Josh Eidelson / Bloomberg :

Bloomberg Josh Eidelson

Context & Ripple Effects

California voters sided with Uber, Lyft, and DoorDash on Prop 22 after gig companies spent roughly $200M on the campaign, exempting the platforms from reclassifying contractors as employees. Within weeks, unions and gig workers sued in the state Supreme Court to overturn the measure as a violation of the constitution.

The Bloomberg piece reports the initiative's success is now echoing beyond the ballot: the template of sidestepping employee classification by direct vote is shaping how unions and businesses negotiate at the bargaining table nationwide.

First-order effects

  • Unions bargaining with platform and other companies now face employer demands modeled on Prop 22's carve-out, changing what is on the table in classification fights.
  • Uber, Lyft, DoorDash, and their peers hold a voter-validated exemption that weakens union leverage over worker-status demands in new agreements.

Second-order effects

  • Businesses outside the gig economy can cite California's outcome when resisting employee-reclassification concessions, exporting the strategy to other states' labor talks.
  • Union counter-strategy shifts from legislative lobbying toward courts and future ballots, as shown by the pending state Supreme Court challenge.

Third-order effects

  • If Prop 22 survives judicial review, ballot-box exemptions could become a standard corporate tool for pre-empting labor law, shifting power over worker classification from legislatures to expensive statewide campaigns — an outcome the later CalMatters reporting on lax enforcement (four years on) suggests compounds.

The trend: Worker classification battles are moving from legislatures and agencies to ballot initiatives and courtrooms, with Prop 22 serving as the test case both sides are now importing into bargaining nationwide.

Discussion

  • @josheidelson Josh Eidelson on x
    New: After years of mostly unsuccessful efforts, Uber, Lyft and peers are poised to secure deals with major unions, just in time to help defuse threats from the new Biden Administration https://www.bloomberg.com/... My feature in the next @BW, based on 50 interviews since the ele…
  • @tom_swing Alex Wood on x
    Very informative article on the consequences of gig economy, prop 22. and Biden for US labour. Highlights the dangers of trying to improve jobs via narrow legalistic means that focus on one section of workers rather radical changes that shift the balance of power for all workers …
  • @rwartzman Rick Wartzman on x
    Eye-opening piece by @josheidelson: “For as long as there's been labor law in America, companies have been working to poke and stretch loopholes so fewer laborers would actually be covered by it.” https://www.bloomberg.com/...
  • @josheidelson Josh Eidelson on x
    “Our work is like everybody else's work... If we compromise employment rights, we're going to have a whole lot of people, including ourselves, who are second-class.” https://www.bloomberg.com/... @nicoemoe https://twitter.com/...
  • @jrivanob Joe Rivano Barros on x
    ecstatic to learn that, immediately after AB5 passed & made Uber/Lyft/etc. drivers employees in California, Gavin Newsom's staff assured executives in private that he would “ultimately shield them from it” he then stayed neutral on Prop. 22, which we lost https://www.bloomberg.co…
  • @jessicaramos Jessica Ramos on x
    As NY heads towards recovery while the gig economy continues to transform the labor landscape, we must find a way forward that protects workers. It's imperative to find a compromise that brings all sides to the table & allows all to leave equally unhappy. https://www.bloomberg.co…
  • @econ_marshall Marshall Steinbaum on x
    This is the nightmare scenario. https://twitter.com/...
  • @gigworkersrise Gig Workers Rising on x
    Misclassification is a deadly reality for drivers. It hurts our core right to unionize & means lower wages & fewer benefits. All working ppl deserve the freedoms provided by a living wage, healthcare, paid time off & more. We will continue to organize & win power for workers. htt…
  • @nelsonlichtens1 Nelson Lichtenstein on x
    This is a depressing story at the dawn of the Biden era. Looks like labor is once again being overpowered and left behind. https://twitter.com/...
  • @josheidelson Josh Eidelson on x
    In NY, gig firms are in talks with RWDSU, the IDG, & the NY AFL-CIO. In Canada, they're talking to Unifor. In CA, the building trades coalition that helped block past deals now says it's deferring to the Teamsters, whose leaders are talking up compromise https://www.bloomberg.com…
  • @josheidelson Josh Eidelson on x
    “President Biden looks forward to working with Congress to establish a federal standard modeled on the ABC test for all labor, employment and tax laws,” White House spokesperson says https://www.bloomberg.com/... https://twitter.com/...
  • @greenhousenyt Steven Greenhouse on x
    The Gig Economy Is Coming for Millions of American Jobs California's vote to classify Uber & Lyft drivers as independent contractors has emboldened many employers to eliminate employee positions—all part of larger anti-worker plans to “Uberize” the U.S. https://www.bloomberg.com/…