Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1727

Introduced by Assembly Member Gonzalez

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(Coauthor: Senator Allen)

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January 28, 2016

begin delete An act to amend Section 2750.5 of the Labor Code, relating to employment. end delete begin insert An act to add Chapter 4.8 (commencing with Section 1080) to Part 3 of Division 2 of the Labor Code, relating to employment. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1727, as amended, Gonzalez. begin delete Employment relations. end delete begin insert Hosting platforms: independent contractors. end insert

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Existing law relating to employment governs the grant of restraining orders or injunctive relief in labor disputes, as defined.

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This bill would establish for eligible groups of independent contractors the right to organize and negotiate with hosting platforms, and would declare the activity of such a group to be a labor dispute for purposes of injunctive relief. The bill would require a hosting platform to meet and negotiate with a group on specified subjects. The bill would define terms for those purposes.

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The bill would require that, at the request of the group, a written contract for independent contractor services, entered into on or after the date of the conclusion of negotiations conducted in accordance with the bill, by the hosting platform and a member of that group, incorporate any agreement reached in those negotiations.

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The bill would require the State Mediation and Conciliation Service to facilitate negotiations, provide mediation services, and investigate any complaint by a group claiming a violation of the negotiation requirement. The bill would require the service, if it finds that there is probable cause to believe a violation has occurred, to bring an action in a specified superior court for injunctive and other appropriate equitable relief to remedy the violation.

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The bill would prohibit a person from penalizing or retaliating against an independent contractor for taking specified actions within the scope of the bill.

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The bill would authorize an independent contractor or a representative of independent contractors claiming a violation under this bill to bring an action in superior court for prescribed remedies, and would provide for treble damages with regard to lost income for a willful violation.

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The bill would make its provisions severable.

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Existing law provides a rebuttable presumption affecting the burden of proof that a worker performing services for which a license is required under the Contractors’ State License Law, or performing services for a person who is required to obtain that license, is an employee, rather than an independent contractor, and specifies factors to establish proof of independent contractor status.

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This bill would make nonsubstantive changes to these provisions.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Chapter 4.8 (commencing with Section 1080) is
added to Part 3 of Division 2 of the end insert begin insert Labor Code end insert begin insert , to read: end insert

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Chapter   begin insert 4.8. end insert Hosting Platforms

 

begin insert 1080. end insert   

As used in this chapter:

(a) “Group activity” means to self-organize, to negotiate as a
group with one or more hosting platforms, or to engage together
in other activities for the purpose of group negotiations or other
mutual aid or protection, which activity includes, but is not limited,
to the following:

(1) Communicating with each other and with hosting platforms,
customers, and the public through any medium, including, but not
limited to, social media and other electronic modes of
communication.

(2) Withholding or restricting the amount of work done through
a hosting platform at any time and for any duration. This
paragraph does not apply to an independent contractor who
performs “supportive services,” as defined in Section 12300.1 of
the Welfare and Institutions Code.

(3) Boycotting or critiquing a hosting platform’s business
practices.

(4) Reporting to law enforcement authorities or making public
practices of a hosting platform which an independent contractor
reasonably believes violate local, state, or federal law and
adversely affect either workers or clients, or both.

(b) “Hosting platform” is a facility for connecting people or
entities seeking to hire people for work with people seeking to
perform that work, using any medium of facilitation, including,
but not limited to, a dispatch service, an Internet Web site, or other
Internet-based site. “Hosting platform” does not include a service
provider if that entity provides only listings of goods or services
that are contracted directly between buyers and sellers without
the involvement of the provider and receives no income related to
the price of the transaction.

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(a) An independent contractor who is not treated by a
hosting platform as an employee and who does not employ his or
her own employees shall have the right to engage in group activity
with respect to one or more hosting platforms.

(b) Work by an independent contractor, including the use of
equipment or goods supplied as part of the work performed by the
independent contractor, is labor within the meaning of Section
16703 of the Business and Professions Code and group activity
by independent contractors shall not be subject to any statutory
or common law prohibition or limitation on combinations in
restraint of trade, including, but not limited to, Chapter 2
(commencing with Section 16700) of Part 2 of Division 7 of the
Business and Professions Code.

(c) Group activity is a “labor dispute” within the meaning of
Section 527.3 of the Code of Civil Procedure and Section 1138.1,
provided that a court may issue injunctive relief to remedy
violations of this chapter pursuant to Sections ____ and ____.

(d) (1) A hosting platform shall meet at reasonable times and
negotiate in good faith about allowed subjects for negotiation with
any group of independent contractors constituting at least 10 of
the independent contractors using the platform on an average of
at least once per week. As used in this paragraph, “allowed
subjects for negotiation” are pricing, division of revenue, priority
for assignments or listings, advertising by independent contractors
on the hosting platform, insurance, acceptance and termination
of independent contractor participation on the hosting platform,
acceptance or refusal of services by independent contractors or
customers, and responsibility for nonpayment by customers.

(2) An individual or organization that represents independent
contractors in negotiations with a hosting platform regarding the
allowed subjects of negotiation pursuant to this section shall not
be funded directly or indirectly by a hosting platform.

(3) Participation in the group shall be evidenced by an
electronic communication from an independent contractor using
the same address the independent contractor uses to communicate
with the hosting platform, or a physical document signed by the
independent contractor, sent to either the hosting platform or to
one or more other members of the group accepting participation
in the group and agreeing to be bound contractually by the
outcome of any negotiations between the group and the hosting
platform. An independent contractor shall not be bound by the
outcome of any negotiations between a group and a hosting
platform unless the independent contractor has given that
authorization.

(4) At the request of the group, a written contract for
independent contractor services, entered into on or after the date
of the conclusion of negotiations conducted in accordance with
paragraph (1), between the hosting platform and a member of that
group, shall incorporate any agreement reached in those
negotiations.

(e) The State Mediation and Conciliation Service shall facilitate
the performance of the obligation of a hosting platform under
subdivision (d). The State Mediation and Conciliation Service shall
provide meeting space for negotiations unless the hosting platform
and the group make other arrangements that are mutually
agreeable. The State Mediation and Conciliation Service shall
provide mediation services at the request of either the hosting
platform or the group. The State Mediation and Conciliation
Service shall investigate any complaint by a group claiming a
violation of subdivision (d), and, if it finds that there is probable
cause to believe a violation has occurred, bring an action in the
Superior Court of the State of California for the City and County
of San Francisco for injunctive and other appropriate equitable
relief to remedy the violation. The court shall award reasonable
attorney’s fees and costs to the State Mediation and Conciliation
Service if it prevails in any enforcement action.

(f) A person shall not terminate, discriminate against, or
otherwise penalize or retaliate against any independent contractor
for exercising any rights established in this chapter or for making
a complaint, participating in any enforcement proceedings under
this chapter, using any civil remedies to enforce his or her rights,
or otherwise asserting his or her rights under this chapter or
demonstrating his or her support for the policies of this chapter.
A person terminating or taking any other adverse action against
any independent contractor who has engaged in any of the
foregoing activities within one year preceding the termination or
other adverse action shall provide to the independent contractor
at or before the time of the termination or other adverse action a
detailed written statement of the reason or reasons for the
termination or other adverse action, including all the facts
substantiating the reason or reasons and all facts known to the
person that contradict the substantiating facts.

(g) An independent contractor or a representative of one or
more independent contractors claiming a violation of this chapter
may bring an action in superior court and shall be entitled to all
remedies available under the law or in equity appropriate to
remedy that violation, including, but not limited to, injunctive relief
or other equitable relief, including reinstatement to participation
in a hosting platform and compensatory damages. For a willful
violation of subdivision (d), the amount of damages attributable
to lost income due to the violation shall be trebled.

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The provisions of this chapter are severable. If any
provision of this chapter or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.

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SECTION 1.  

Section 2750.5 of the Labor Code is amended to
read:

2750.5.  

(a) There is a rebuttable presumption affecting the
burden of proof that an individual performing services for which
a license is required pursuant to Chapter 9 (commencing with
Section 7000) of Division 3 of the Business and Professions Code,
or who is performing such services for a person who is required
to obtain such a license is an employee rather than an independent
contractor. Proof of independent contractor status includes
satisfactory proof of these factors:

(1) That the individual has the right to control, and discretion
as to the manner of, performance of the contract for services in
that the result of the work and not the means by which it is
accomplished is the primary factor bargained for.

(2) That the individual is customarily engaged in an
independently established business.

(3) That the individual’s independent contractor status is bona
fide and not a subterfuge to avoid employee status. A bona fide
independent contractor status is further evidenced by the presence
of cumulative factors such as substantial investment other than
personal services in the business, holding out to be in business for
oneself, bargaining for a contract to complete a specific project
for compensation by project rather than by time, control over the
time and place the work is performed, supplying the tools or
instrumentalities used in the work other than tools and
instrumentalities normally and customarily provided by employees,
hiring employees, performing work that is not ordinarily in the
course of the principal’s work, performing work that requires a
particular skill, holding a license pursuant to the Business and
Professions Code, the intent by the parties that the work
relationship is of an independent contractor status, or that the
relationship is not severable or terminable at will by the principal
but gives rise to an action for breach of contract.

(b) In addition to the factors contained in paragraphs (1), (2),
and (3) of subdivision (a), a person performing any function or
activity for which a license is required pursuant to Chapter 9
(commencing with Section 7000) of Division 3 of the Business
and Professions Code shall hold a valid contractors’ license as a
condition of having independent contractor status.

(c) For purposes of workers’ compensation law, this presumption
is a supplement to the existing statutory definitions of employee
and independent contractor, and is not intended to lessen the
coverage of employees under Division 4 and Division 5.

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