Labor, Gig Companies Near Bargaining Deal in N.Y.

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New legislation creating collective bargaining rights for gig-economy workers is poised to be introduced in New York State in the coming weeks, according to the president of the Transport Workers Union. If passed, the proposal would represent the fulfillment of a long-sought goal for companies like Uber Technologies Inc. and Lyft Inc.: a compromise that stops short of making workers into full employees.

TWU President John Samuelsen said the union is backing the proposal after criticizing past deal-making efforts elsewhere. “I had every intention of staying away from it, and now after seeing how much it’ll advance gig workers, I’m fully supporting it,” Samuelsen said Monday. “I actually think it becomes a national model.”

Gig companies like Uber and Lyft have won skirmishes against labor advocates in recent months, including Proposition 22, a major ballot proposal in California. But the industry has still faced calls to offer more employment benefits and the danger that the Biden administration will try to blow up their business model by backing rules that would make workers into employees instead of contractors. A compromise with labor groups could alleviate some of that pressure.

Samuelsen said he expects the new proposal to pass before the end of the New York legislative session on June 10. Gig economy companies and labor groups are close to reaching an agreement on the specific legislative text of a compromise, which could speed its passage through the legislature, according to people familiar with the talks who asked not to be identified discussing private information.

The new proposal will allow app-based workers to vote to form unions, Samuelsen said. The unions would then engage in “sectoral bargaining” with companies to hammer out standards governing the industry. Because antitrust law restricts direct collective bargaining by contractors, the new rules would take the form of recommendations to the state, which could then approve and impose them.

Samuelsen said the draft legislation, which has not yet been finalized, would also guarantee some specific benefits such as worker’s compensation and unemployment insurance, and would pre-empt local governments from passing some forms of workplace regulation of their own.

The union president has talked with representatives of gig delivery and transportation companies and said he is confident they will not oppose the legislation. Samuelsen also said the proposal was brought to his attention by the New York State AFL-CIO, whose executive council he’s a member of. That chapter and leaders from its affiliated unions have discussed the proposal multiple times, he said, and have not objected to it.

“It’s going to add tens of thousands of members into the organized labor movement,” Samuelsen said. Under the proposal gig workers would become “legitimate trade union members,” he said. “This is not some sort of fictitious cut-out.”

New York State AFL-CIO President Mario Cilento, when asked through a spokeswoman about the state of negotiations, said he was confident a deal could be reached. “This is obviously a very complex issue, and everyone is trying to work through the details,” Cilento said in an emailed statement. “Our goal remains the same, to ensure gig workers receive the same rights and protections as all other workers.”

For years, some gig economy executives and labor leaders have been trying to hammer out a compromise that would meet both groups’ goals: growing unions’ ranks, and not destroying companies’ business models, which rest on the claim that workers are independent contractors rather than employees entitled to full labor protections. In New York, Uber reached an agreement in 2016 with the International Association of Machinists to launch an advocacy group called the Independent Drivers Guild, affiliated with the union and funded by the company. In California, the app-based transportation and delivery companies met repeatedly with unions in hopes of securing a deal exempting them from the state’s new broader definition of employment, established by a 2018 state supreme court ruling and a lightning-rod 2019 law. When those talks failed, they instead bankrolled a successful $200 million ballot measure campaign to win an exemption via referendum.

The companies’ ballot measure victory in California last November reinforced some labor leaders’ belief in the virtues of finding a compromise. At the same time, Democrats’ victories in the presidential election and the subsequent Georgia runoffs that put them in control of the U.S. Senate intensified the companies’ eagerness to deter threats to their business model from the federal government. Lyft President John Zimmer said in February that he was hopeful President Biden, who campaigned on cracking down on classification of gig workers as contractors, will come around to support compromise. Securing such a deal at the state level could help change the national debate, Zimmer said: “Ideally, there’s a model that can be replicated.”

The potential to offer political cover for the companies’ business models has given some labor advocates concern about potential deal-making. “There are reasons to be deeply skeptical about a ‘sectoral bargaining bill,’ brokered by the same app companies behind Prop 22, that locks workers out of universal employment protections,” said Brian Chen, an attorney at the pro-labor nonprofit National Employment Law Project. “It suggests that this isn’t really about allowing workers to build power together. It’s about employers bargaining down labor standards and undermining workers’ rights.”

In March, a similar sectoral bargaining proposal was considered in Connecticut with the support of the state’s AFL-CIO, but then shelved after the national AFL-CIO privately expressed concerns about how it would affect the federation’s nationwide advocacy efforts, according to a lawmaker who sponsored it. The AFL-CIO is currently fighting an uphill battle to pass the PRO Act, a sweeping revamp of federal labor laws -- passed by the U.S. House and endorsed by President Biden, but endangered by the U.S. Senate filibuster and a few hesitant Democrats -- which would make it much harder to claim workers are contractors.

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