The Uber/Lyft “Workers’ Association” Debate: A Response to Dubal

N.B.: Benjamin Sachs penned this response to Part I of Veena Dubal’s post on comparing solidarity unionism with company unions earlier this week. In the spirit of debate, we’re cross-posting from On Labor. 

Benjamin Sachs –

Veena Dubal writes an important piece that raises concerns about Uber and Lyft’s suggestion that drivers in California form a “workers’ association.” Dubal worries that such an association would amount to a company union that would “necessarily impede” the development of fully independent, exclusive-representative unions at the gig firms. Given the essential role that independent unions play in our economy and our politics, Dubal is highly critical of the workers’ association idea.

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Gig Worker Organizing for Solidarity Unions

Veena Dubal – 

The “gig economy” is one place where organizing outside of traditional trade unions is undoubtedly happening in surprising and perhaps unexpected ways. For example, on May 8, 2019, a group of independent app-based drivers in Los Angeles called the LA Rideshare Drivers United organized and launched an unprecedented international picket and work stoppage against Uber and Lyft. They were joined by similar driver groups all over the United States (including in New York City) and as far off as Nigeria, Australia, and the United Kingdom.   This was an incredible feat given that, as my co-authors and I have argued, gig workers—particularly those who work for a platform-based company—face unique hurdles to organizing. Among other factors, these workers are unusually dispersed, atomized, and differentially dependent on gig work.

Having studied gig workers for over a decade, I was surprised by the magnitude of the May 8 strike. Two things stood out to me. First, I was struck by the large number of driver-led groups in the U.S. which participated in the coordinated work stoppages. Drivers’ groups from Boston, San Diego, Los Angeles, Chicago, New York City, and Washington, D.C. issued a joint statement calling their action a “strike” (not just a rally or protest) and announcing themselves “united as one joint council of grassroots driver labor organizations with the shared goal of winning job security, livable incomes, and respect for App drivers.” Not all drivers’ groups that participated in their regions signed onto this statement—presumably because of the legal risks of calling this action a “strike.”

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Solidarity Unionism v. Company Unionism in the Gig Economy

Veena Dubal – 

The CEOs of the two top-competing gig firms—Uber and Lyft—penned a June 12, 2019 OpEd in the San Francisco Chronicle in which they claim that after over six years of local, state, federal, and international law-breaking, ignoring the concerns of drivers, and viciously fighting any efforts to achieve living wage and benefits, they are ready to compromise…in California. They claim that in exchange for getting rid of a bill that just passed the state assembly—which would extend California labor protections to many “gig workers” by making it easier for them to claim employee status under state law—they will agree to establish a wage floor, a “workers’ association,” and potentially, a deactivation appeals process.

Why, after six years of legal and political intransigence, are these companies so ready to come up with a salve? And what should we make of their concessions?

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Is Labor’s Future in Labor’s Capital? A Debate, Part III

This is Part III of a conversation between David H. Webber and Michael McCarthy on the prospect of combating neoliberal corporate governance through the shareholder activities of workers’ pension funds. Workers’ retirement savings make up a substantial share of the capital invested in the public stock market and the private equity market. If shareholder primacy is the dominant paradigm of our financialized economy–-usually a problematic proposition in these pages–-then shouldn’t workers have a say in how these companies are run? Webber and McCarthy are both sympathetic to this idea, but disagree about how well such efforts have worked in the past and how likely they are to work in the future.

You can view the other parts of the debate here.

LPE: We now have several potential obstacles on the table. Let’s take a closer look at some of them. First, the legal obstacle—what does fiduciary law really require, and is this a problem for prioritizing something other than short term financial return in fund governance? Second, politics—what will it take for labor to demand a seat at the table, or a majority of the seats?

David H. Webber: Though I do not view current fiduciary law as an insurmountable barrier to the activism I describe, it could be better. ERISA comes from trust law, though the statute explicitly states one should be cautious in using trust law to interpret it. I have argued that, in many respects, the more flexible fiduciary duties found in trust law’s cousin, corporate law, may be a better fit for pension plans as they exist today than trust law itself. Historically, because shareholders were thought to be comparatively more empowered vis-à-vis corporate boards and managers than beneficiaries were vis-à-vis trustees, more flexible fiduciary duties evolved in the corporate sector.

But I think that in the case of many pension plans, these distinctions have broken down. First, public pension plans now make regular disclosures through Certified Annual Financial Reports, the pension law equivalent of the 10-K. Second, plan participants and beneficiaries get to vote for worker and retiree representatives on boards, and in their capacity as citizens, they also get to vote for the elected officials who serve as employer representatives on those boards. So there is a measure of accountability not found in traditional trusts. Third, on the corporate side, diversified shareholders have effectively lost their capacity to exit. Divesting is expensive, can often hurt you on the way out, and may undermine diversification. Many shareholders are locked in the same way pension beneficiaries are. It may be time for greater convergence between pension law and corporate law, one that takes account of the new institutional realities.

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Is Labor’s Future in Labor’s Capital? A Debate: Part II

This is Part II of a conversation between David H. Webber and Michael McCarthy on the prospect of combating neoliberal corporate governance through the shareholder activities of workers’ pension funds. Workers’ retirement savings make up a substantial share of the capital invested in the public stock market and the private equity market. If shareholder primacy is the dominant paradigm of our financialized economy–usually a problematic proposition in these pages–then shouldn’t workers have a say in how these companies are run?Webber and McCarthy are both sympathetic to this idea, but disagree about how well such efforts have worked in the past and how likely they are to work in the future.

You can view the other parts of the debate here.

David Webber: Though I think he somewhat overstates the case, I agree with Michael’s observation that these pensions have, at times, been used against labor. And not just historically. I discuss (and decry) contemporary examples of this phenomenon in my book, such as pension fund investment in privatization. And it is also true that both private and public sector pensions have been used in favor of labor, as my book demonstrates. Before digging into those issues, I want to clarify some important distinctions between the public and private fund context, respond to some of Michael’s claims about ERISA and fiduciary duty, and point to examples of why, regardless of what has occurred historically, things are changing and have the potential to change further, if acted upon.

First, Michael shifts the focus to private union pension plans. Fair enough. I discussed them above and I’ll return to them below. But the bulk of my discussion focused on public pension plans, and with good reason. In part that’s because they are far larger. The public pension funds of California alone significantly exceed the assets of all private union pension plans combined. But there’s another reason to focus on public pension plans: they are not governed by Taft-Hartley or by ERISA. They are governed by state pension codes. That matters for two issues: board control, and fiduciary duties.

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Is Labor’s Future in Labor’s Capital? A Debate

This is Part I of a conversation between David H. Webber and Michael McCarthy on the prospect of combating neoliberal corporate governance through the shareholder activities of workers’ pension funds. Workers’ retirement savings make up a substantial share of the capital invested in the public stock market and the private equity market. If shareholder primacy is the dominant paradigm of our financialized economy–usually a problematic proposition in these pages–then shouldn’t workers have a say in how these companies are run? Webber and McCarthy are both sympathetic to this idea, but disagree about how well such efforts have worked in the past and how likely they are to work in the future.

You can view the other parts of the debate here.

LPE: Let’s start with where we are now and how we got here. How did we get to a place where some workers get to decide how their retirement assets should be invested, while others don’t? What were the key fights between labor groups, employers, and financial industry players on this question, and what were the outcomes?

David Webber: Worker shareholder power can be found mostly in public sector pension plans, which are publicly-created retirement plans that invest the retirement savings of public-sector workers. These large state, city, and county employee retirement plans hold at least $4 trillion in assets, roughly 10% of the U.S. stock market, and at least a third of “alternative investment vehicles” like private equity. The most famous examples are the California Public Employees’ Retirement System ($350 billion in assets), the California State Teachers Retirement System ($223.8 billion), the New York City Pension Funds ($195 billion), and the New York Common Retirement Funds ($207.4. billion), among many others. Almost all public pension plans have worker representatives on the boards of trustees, the equivalent of worker representation on corporate boards. These workers are elected by other workers (or retirees) who participate in the funds. Sometimes those worker slots are controlled or heavily influenced by unions. Sometimes workers outright control the board; more often they constitute a minority of trustees.

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Law and Politics in Employee Classification

Benjamin Sachs – 

As has been widely reported, the U.S. Department of Labor issued an “opinion letter” yesterday concluding that an unnamed “virtual marketplace company” does not employ the workers who make the company viable. Instead, the letter finds that these workers are independent contractors. The letter is flawed in multiple ways. As Sharon will explain, deciding a major issue of employment law – maybe the major contemporary issue of employment law – through an informal process that allows one party to present all the facts is decidedly inappropriate. There are also multiple substantive problems: as Charlotte pointed out, the letter considers relevant to the control inquiry the fact that this VMC’s workers can also work for other VMCs. I suppose the fact that Wal-Mart workers can also work for Target suggests that Wal-Mart workers are independent contractors of Wal-Mart. Generalizing, I suppose if low wage workers must rely on multiple jobs to make ends meet this should incline decisionmakers to conclude that those workers are all independent contractors.

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Rethinking Public and Private Power: Anderson’s Private Government and Labor Law Reform

This post is part of a symposium on Elizabeth Anderson’s Private Government: How Employers Rule Our Lives (and Why We Don’t Talk about It). Read the complete symposium here.

Catherine L. Fisk –

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Elizabeth Anderson has gained rock star status as the leading philosopher-critic of rising economic inequality and its threat to democratic society. In her second Tanner Lecture, Anderson provides one of the most exciting theoretical justifications for labor law reform since the demise of popular interest in Marxist theory. Anderson’s work inspires me to think about the importance of worker control of access to jobs, co-determination of workplace and corporate governance, and the importance of inclusive unionism along the entirety of a supply chain.

The Industrial Revolution, Anderson says, shattered eighteenth century egalitarian theorists’ hope that “a free society of equals might be built through a market society.” Employment in large enterprises for the vast majority of workers after the Industrial Revolution, whether in a Ford factory in 1930 or in McDonald’s today, was to subject oneself to a dictatorship for most of one’s waking hours. The only real freedom the worker enjoys is to quit. The freedom to quit is not much freedom. (After all, Anderson points out, Mussolini was no less a dictator because Italians could emigrate.)

Labor unions are the only mechanism in history that institutionalized what Anderson identifies as the four essential ways to protect “the liberties and interests of the governed under any type of government.” These are (1) an effective use of the threat of exit (as by striking or enabling workers to leave a job without being blacklisted or unemployed), (2) the rule of law (effective enforcement of contractual and statutory rights to minimum standards and fair treatment), (3) substantive constitutional rights (rights at work), and (4) voice (a say over working conditions). Unions are the only institution that achieved nationwide scale and a sustainable funding mechanism to enable consistent performance of these four functions by and on behalf of workers. Other worker formations (worker organizations like ROC United in the restaurant industry or the National Domestic Worker Alliance in domestic work) could play many of these functions, and already do on a limited scale, but they have yet to achieve meaningful voice in the workplace.

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Workplace Autocracy in an Era of Fissuring

This post is part of a symposium on Elizabeth Anderson’s Private Government: How Employers Rule Our Lives (and Why We Don’t Talk about It). Read the complete symposium here.

Cynthia Estlund

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Elizabeth Anderson’s deeply thoughtful book, Private Government, aims to bring the problem of workplace hierarchy and “the pervasiveness of authoritarian governance in our work and off-hours lives” back onto the front burner of political and philosophical discourse, where it resided a century ago. She reframes the problem as one of “private government” – that is, a government “under which its subjects are unfree,” and which “has arbitrary, unaccountable power over those it governs.” “It is high time,” says Anderson, “that political theorists turned their attention to the private governments of the workplace.”

The problem of employer domination has long occupied legions of labor and employment law scholars. Unfortunately, Anderson’s welcome effort to reignite stalled debates (which I review at greater length here) might come too late, given decades-long trends in the organization of work that are transforming the landscape of work and destabilizing the very concept of workplace governance.

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Worker Voice, Worker Power

This post is part of a symposium on Elizabeth Anderson’s Private Government: How Employers Rule Our Lives (and Why We Don’t Talk about It). Read the complete symposium here.

Charles Du

anderson book coverEvery day, as in-house counsel for an activist, organizing union, I listen to workers’ stories of the indignities that come with being subject to the arbitrary power of their employers: being forced to work through breaks and lunch; facing sexual harassment from customers, coworkers, and supervisors; being fired for an offense they did not commit. It is gratifying to see these lived experiences of working people, so often ignored, being highlighted by a political philosopher of Elizabeth Anderson’s stature. By denaturalizing and challenging arbitrary and unaccountable authority in the workplace, Private Government is a powerful argument for an expansive commitment to democracy in private spaces like the workplace, where blinkered definitions of what counts as “government” have come to serve as ideological justifications for abuse and domination. Her book also comes at just the right time, providing conceptual clarity in a moment of rising social democratic sentiment and actual potential for change. I’d like to provide some reflections on practical lessons that labor law practitioners and academics might draw from Anderson’s work.

After laying out the problem of private government at work, Anderson examines four different strategies for tackling the problem: (1) exit, (2) the rule of law, (3) substantive constitutional rights, and (4) voice. She dispenses with the first three before concluding that “there is no adequate substitute for recognizing workers’ voice in their government.” I agree, but I believe that the critical question is how to achieve greater worker voice in the face of recalcitrant employer opposition, a problem that requires further attention to legal norms, constitutional rights, and worker exit.

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