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East Coast’s Prop 22? Massachusetts facing potential vote on gig driver status

(Editor’s note: the article has been adjusted from its initial publication on the receipt of additional information).

Massachusetts voters likely will confront a ballot question in November that would try to do what Proposition 22 sought in California: define gig drivers, such as those who work for Uber, Lyft or DoorDash, as independent contractors.

It is not certain that the proposition will make it on to the ballot on Election Day, though, as there are still a few hurdles. 

But it is being seen as the next big battlefield where forces backed by companies such as Uber (NYSE: UBER) are bankrolling a direct referendum to overcome legislation that threatens the independent contractor model for gig drivers. 

The first attempt worked in California with Proposition 22. But a judge’s ruling that Prop 22, as it is more commonly known, was unconstitutional due to conflicts with the state’s workers’ compensation law is keeping the outcome of that vote uncertain. 

There are two main provisions in the Massachusetts ballot proposition, which will not have a designated number attached to it until it is formally certified for the election.

The first provision, and the one most closely aligned with Prop 22, classifies rideshare and delivery company drivers as independent contractors. They are not employees or agents. 

The second key provision is a series of pay and benefit standards. One requirement would be that companies such as Uber guarantee a minimal amount of compensation equal to 120% of the Massachusetts minimum wage of $14.25 per hour, plus a per-mile rate for miles driven. (The minimum would be superseded if the driver’s pay exceeds the minimum.) But the minimum would only apply to drivers actually driving; time spent waiting for a request to pop up on the company app wouldn’t count.  

The full text of the ballot proposition can be found here. 

Looming in the background to the referendum is the fact that the state’s attorney general already has sued Uber and Lyft on how they classify drivers. That case, filed in July 2020 by Attorney General Maura Healey (who is running for governor this year), is asking the courts to rule that Uber and Lyft (NASDAQ: LYFT) drivers are employees, not independent contractors, and is citing existing Massachusetts law.  

The Massachusetts law on independent contractors has at its heart the ABC test, which is the basis for California’s AB5 law. 

That law has been kept out of California trucking by a more than 2-year-old injunction and the wait to see if the Supreme Court will review appellate court decisions that overturned that injunction, though it remains in place in the interim. 

The ABC test is a three-part guideline found in both law and civil litigation that attempts to spell out when a worker is an employee or can be considered independent. Guidelines for making that determination involve such questions as the degree of control the hiring company has over the worker and whether the worker is generally engaged in the activity being performed. 

The B prong of the ABC test has proved particuarly troublesome for gig companies. It defines an employee as a worker who performs activity that is at the core of the company’s business. A trucking company hiring an outside accounting company for an audit would not be in conflict with the B prong. A trucking company hiring an independent owner-operator is likely to be considered in violation. 

Similarly, a company like Uber or DoorDash with a primary business to move people or food in a private car, using an app, could be seen as violating the B prong by not having that driver be an employee.

The primary force backing the Massachusetts proposition is The Coalition for Independent Work. It is financially supported by companies that employ gig workers. 

According to the Ballotpedia website, the ballot committee that works as an arm of the coalition had taken in $17.8 million in total contributions as of Dec. 31. The forces opposing the proposition had received contributions of about $1 million. 

Conor Yunits, senior vice president at the public relations firm of Solomon McCown & Cence and a spokesman for the coalition, said another impact on the November vote could come from legislative action that would define gig workers as ICs and eliminate any question of whether they are employees.

That legislative action is HB 1234, which mimics much of the language in the proposition. That bill is in front of the Massachusetts House’s Financial Services committee. There also is a provision in there for portable retirement benefits. 

Yunits said the ballot proposition can’t be fully approved to be placed before voters until July, “so the legislature could still do something in advance by that deadline.” 

That legislative effort could modify the law that now puts the ABC test as the defining provision of independent contractor definition. The test, among all the legal precedents regarding defining an IC sprinkled throughout state and federal laws and court decisions, is considered the one most likely to require a worker to be an employee. 

If there are no legislative solutions, Yunits said the backers of the proposition will need to get an additional 13,000 signatures on top of what they’ve already secured. That would put the proposition before the voters on Election Day.   

“Our side has picked up strong support from social justice groups, business groups and chambers of commerce,” Yunits said. “But most importantly we are experiencing tremendous support from drivers.”

Yunits provided results of a recent survey that it said came from interviews with 406 gig worker drivers, taken over a roughly one-week period ending in early February. According to the survey, 81% of the drivers would vote yes on the proposition. 

Asked what sort of system drivers who are opposed the proposition desire, Yunits replied, “What we’ve heard drivers say is they prefer the status quo.”

And while the proposition seeks to preserve the status quo, the lawsuit being pursued by the state, even if the Election Day vote is successful, would complicate the issue and probably lead to more litigation.

A further complication in the vote is that opponents of the proposition have sued the attorney general’s office for certifying the petitions of the groups backing the effort, an action that Yunits called “pretty standard procedure.” The irony then is that the attorney general’s office certified the petitions for a proposition that is a direct challenge to what the AG is alleging in its separate lawsuit. 

Henry De Groot is the executive director of Massachussets Drivers United. It is an organization that had a separation last year from the Boston Independent Drivers Guild. The chairperson and executive director of the guild, Beth Griffith, said the two organizations split over “political ideology.” But both groups are fighting the ballot proposition. 

De Groot said the benefits built into the proposition are “phony.” The pay guarantees are “incredibly misleading,” he added, criticizing the fact that the pay guarantees do not cover downtime. Given that, the amount of money a driver can make during active time will generally exceed the minimum so the guarantee would not kick in frequently.

De Groot also pushed back on the proposition backers’ claim that the referendum needs to pass to ensure employee “flexibility.” 

“The flexibility comes from the technology,” he said. “There is no law that says an employee can’t have flexibility. It’s all about money.”  

If the ballot proposition were to fail, the drivers organizations are pursuing another front: the Driver’s Bill of Rights, now sitting before the Massachusetts Legislature. It refers to “transportation network” and food delivery drivers as the employees who are targeted by the proposed legislation.  

The provisions of the Driver’s Bill of Rights would require that those drivers come under state law regarding such things as sick leave, overtime and arbitration or other resolutions of complaints. 

De Groot, when asked what his ideal definition of driver status would be — employee or independent contractor — demurred on the question. “I don’t care whether you call me an employee or an independent contractor,” he said. “What I want is raises, rights and respect on the job.

“That is why we want to have a driver’s bill of rights,” De Groot said. “Even if we win on the proposition, a union is not going to fall into our lap.”

DeGroot’s avoidance of describing what the drivers want as being an employee but still favoring union recognition, echoes a battle being played out in California, where a group of independent drivers who service XPO Logistics (NYSE: XPO) are seeking union recognition, even though they are not employees. 

Griffith, when asked if her group’s preference was to have drivers classified as employees, did not answer directly.

She noted that the fact that compensation for drivers is set by the algorithm of the gig companies undercuts any arguments about independence. She also said the state’s current independent contractor statute means the gig companies are currently in violation of the law.

Griffith said it was not a “personal opinion,” but that it was a fact that “under Massachusetts law, we are employees because of their illegal business model. Uber and Lyft need to be regulated because their business model is illegal.”

Her group supports the Driver’s Bill of Rights that is being pushed by DeGroot’s organization. 

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