Amended in Assembly April 13, 2016

Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1727

Introduced by Assembly Member Gonzalez

(Coauthor: Senator Allen)

January 28, 2016

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

LEGISLATIVE COUNSEL’S DIGEST

AB 1727, as amended, Gonzalez. Hosting platforms: independent contractors.

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

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.

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.

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.

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

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 exercise of any rights established by the bill would not be admissible as evidence that a person is an independent contractor in any judicial or administrative proceeding.

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The bill would make its provisions severable.

Vote: majority. Appropriation: no. Fiscal committee: yes. 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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(a) The Legislature finds and declares the
following:

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(1) A new form of work has proliferated in which individuals
work by the job through an electronic platform, such as the Internet
or telephone. These individuals are hired through these hosting
platforms to perform short-term work, usually of a day or less, for
multiple customers.

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(2) These individuals are not treated by the hosting platforms
as employees and do not receive the benefit of state labor
protection laws such as minimum wage, unemployment insurance,
and workers’ compensation. The platforms treat these individuals
as independent contractors and even though they perform work
for multiple clients, usually individual people, the individuals
securing work through a hosting platform are normally prohibited
from negotiating the terms of their services. Instead, the hosting
platforms dictate the terms and take a considerable portion of the
amount paid for services, even though the hosting platforms
purport that they provide only a means of connecting workers with
clients.

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(3) These are circumstances that inevitably lead to exploitation.
The people who secure work through the hosting platforms may
in fact be employees, but establishing their true status often
requires lengthy and expensive litigation during the pendency of
which they continue to have no protection.

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(b) The Legislature therefore finds and declares that the
bargaining power between the hosting platforms and the people
seeking work through them must be better balanced and creates
in this act a process for these workers to get together and negotiate
with the hosting platforms for the improvements they desire.

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(c) The Legislature further finds and declares that, through
these negotiations, these workers will be able to improve their
conditions, including their income, to the benefit of the economy
of this state and reduce pressure on public resources.

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begin delete SECTION 1. end delete

begin insert SEC. 2. end insert   

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

 

Chapter  4.8. Hosting Platforms

 

1080.  

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.

1081.  

(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 begin delete Sections ____ and ____. end delete

begin insert subdivisions (e) and (g). end insert

(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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begin insert 1082. end insert   

(a) The exercise of any rights established by this chapter
shall not be admissible as evidence that a person is an independent
contractor in any judicial or administrative proceeding.

(b) Nothing in this chapter is intended to impact the
determination of whether any worker is an employee or
independent contractor or to impact any pending litigation.

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begin delete 1082. end delete

begin insert 1083. end insert   

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.