Two Paths to Reining In Gig Companies Are Going Head-to-Head in Connecticut

As companies like Uber seek to undermine labor rights nationwide, Connecticut is becoming a battleground for potential solutions.
March 18, 2021, 3:34pm
Two Paths to Reigning In Gig Companies Are Going Head-to-Head In Connecticut
Robert Alexander / Contributor

In Connecticut, two bills are making their way through the legislature that could decide whether gig workers will be protected from the exploitative practices central to the business models of firms such as Uber and DoorDash.

Over the past few years, Uber has spearheaded an international campaign aimed at changing labor laws and regulations to suit its exploitative business practices. In California, it rallied a coalition of app-based gig companies to spend over $200 million on Proposition 22, a ballot measure they wrote to preserve their misclassification of gig workers in the state. In Massachusetts, Illinois and New York, and Canada, Uber is either preparing to or has already introduced bills that would blunt reclassification battles by offering paltry benefits funds or collective bargaining rights without a floor. At the same time, the company is using these schemes to convince labor unions to hand over long-sought after concessions.

Advertisement

One bill in Connecticut seeks to provide app-based workers with the right to set industry-wide standards but abandons the fight for employment classification. The other does just the opposite, and would turn legions of so-called “independent contractors” into real employees. These two bills, both of which have yet to receive a vote. represent two diverging visions of how to ameliorate the gig economy’s disastrous impact on workers and labor rights. 

Bill SB 1000: Bargaining rights without employee classification

The first bill, SB 1000, was introduced by the Labor and Public Employees committee and co-sponsored by David Michel, a progressive Democrat from the 146th district. It has gotten support from groups including the AFL-CIO and Independent Drivers Guild in New York (a workers guild formed in an agreement with Uber), and is opposed by trade group The Internet Association—full of companies that rely on gig and contractor labor like Amazon, DoorDash, Facebook, Lyft, and Uber—but has also drawn some criticism from labor officials and advocacy groups.

At its core, SB 1000 seeks to prevent app-based companies from frustrating efforts by gig workers to unionize by establishing clear guidelines and processes to allow for unionization and collective bargaining. The bill, however, is full of murky and unclear language that at times gives unnecessary concessions to the gig companies. Take one section, for example, that suddenly declares nothing in the law can constrain "proprietary software algorithms,” raising the possibility that ride-hail companies could simply reject bargaining proposals that improve driver livelihood by insisting they interfere with the algorithms or threaten the privacy of drivers it surveils—an argument it has made before.

Advertisement

Notably, the bill forsakes fighting for employee status; keeping legions of workers classified as independent contractors instead of employees is critical to the business model of the gig economy as a whole. Instead, the bill opts for sectoral bargaining, which allows workers in an entire sector to set industry-wide standards for work regardless of the specific employer or workplace they belong to and without necessarily being employees.

“We cannot allow technology to be used as an excuse to exploit workers. There is nothing new or innovative about businesses coming up with excuses to cheat working people out of the wages, tips and benefits we need and deserve,” testified Sal Luciano, President of the state's AFL-CIO, at a public hearing on March 11. “That is why it’s important that these workers have the opportunity to join together and bargain for fair wages and working conditions.”

Over the past few years, sectoral bargaining has grown in popularity as a solution to fight the decades-long sustained assault on unions and worker rights in the United States that has transformed previously steady gigs in many industries into contractor-based gig work. 

According to a group of academics that recently published a report on sectoral bargaining, however, sectoral bargaining can be a tool that reinforces exploitative practices rather than ending them. Critically, this is because sectoral bargaining doesn’t address the failures in our antitrust and labor laws that allowed the gig economy to flourish in the first place. 

Advertisement

“The crucial point is that the gig economy is not a sector so much as a segment of the labor market carved out of pro-worker regulation,” the group wrote in early March. “What is at issue is how large law and regulation permits that segment to be.”

“Moreover,” the group wrote, “the model the gig platforms have succeeded in carving out for themselves threatens to extend into other sectors and states, undermining employment status, statutory entitlements, NLRA unions, and wages and worker standards well beyond what we now understand as the gig economy.”

Instead of simply adopting sectoral bargaining as a salve, they propose a series of principles be followed to help strike at the underlying issues of antitrust and labor law. First and foremost, they propose building on employment status instead of forsaking it. They also call on advocates to dismiss portable benefits proposals that provide benefits that fall short of what we expect from employers. Workers must also be allowed to organize into proper unions, the group argues, and antitrust regulators should target firms that unilaterally control labor conditions.

In a March 11 hearing on the bill, Kurt Westby, Commissioner of the state's Department of Labor (DOL) raised several concerns with the proposed legislation, including whether it’s even legal as it seems to undermine the authority of the NLRB, and the increased burden it would place on state agencies as a result.

Advertisement

The gig companies have lined up in opposition to the law, seeing workers organizing as a threat. The Internet Association opposed the bill on antitrust grounds, arguing that the law "forbids individual businesses from banding together and collectively fixing prices and other conditions." Uber subsidiary Raiser, LLC also argues on similar grounds and suggested workers could abuse collective bargaining by "concentrating power in an extremely small percentage of network drivers." Lyft warned that the bill threatens "the flexibility and control that drivers currently enjoy" by creating "a working environment skewed towards a small minority of drivers" given collective bargaining power.

Bill HB 6343: Employees, not independent contractors

Another bill, HB 6343, was introduced and co-sponsored in February by Democratic state representatives (including Michel, who co-sponsored SB 1000), and offers more explicit protections for gig workers by seeking to “prevent companies with alternative business models from improperly classifying employees as independent contractors.” 

Instead of pursuing a partial fix that would provide some employee benefits, the bill would try to update labor laws so that reclassification for gig workers would become much easier. One proposal put forward by supporters of the bill would center on amending the state’s ABC test to better reflect how gig workers don’t work in traditional workplaces but are still tightly managed by the platform that hires them. 

Advertisement

Raiser, LLC (on behalf of Uber), DoorDash, and the Internet Association all testified against the bill. Raiser said it would mean that "a large portion of the current workforce lose out on an earnings opportunity,” while DoorDash said it would "significantly alter" the flexibility of gig work. According to the Internet Association, it would "cause significant economic hardship for numerous businesses already struggling to maintain a workforce and continue operating during the COVID emergency.” 

The University of Connecticut Law School's chapter of the People's Parity Project—a law student group aimed at helping workers and marginalized groups—expressed support for the legislation in hopes that it would end a carve-out for "out of state gig platforms.” 

As things stand, gig platforms can and do misclassify workers to reduce labor costs so as to unfairly compete with local businesses that don’t exploit their workers so severely and with such technological prowess. On top of that, they refuse to contribute to the state's unemployment insurance and workers' compensation funds, leaving states or the federal government to plug the hole.

The Service Employees International Union also testified that the bill was “another step” towards protecting the right of gig workers to organize, enjoy livable wages, receive benefits, and improve working conditions. 

"All workers should have the right to form a union, and this bill is another step toward recognizing the value and worth of all workers,” the union said in the public hearing.