SJC Becomes New Forum In Fight Over Drivers

Judges Wrestle With Complexity As They Weigh Relatedness Arguments

MAY 6, 2024…..Gig economy power players have five potential ballot questions in the mix that would redefine their legal relationships with drivers. Unions are pursuing a measure that would let those same drivers organize and collectively bargain with the companies. And at the same time that campaigns are taking the final steps to secure a spot on the ballot, a trial will begin in the attorney general’s labor lawsuit against Uber and Lyft.

That’s a lot for voters to keep straight, and some of the state’s sharpest legal minds are also working to unwind all the threads.

The Supreme Judicial Court is the latest forum for a precedent-setting fight between influential ride- and delivery-for-hire apps and the drivers on which they rely. Justices hosted arguments Monday about whether the full suite of ballot questions affecting the industry — five versions of a measure that would deem drivers as independent contractors, not employees, and a separate question allowing some of them to unionize — are eligible to go before voters, as Attorney General Andrea Campbell has ruled.

The central question at play in each case is whether the measures combine too many disparate topics, which would run afoul of Constitutional requirements for ballot questions. With so many moving pieces at once, getting to an answer could take some effort.

Complexity of industry-backed questions wrinkles brows

Justices spent a chunk of Monday’s proceedings trying to parse the differences between the five independent contractor questions and understand whether, when and how campaigners will narrow it down to one final proposal for the ballot.

“I’m just trying to understand: there are five different petitions out there right now. People signed different ones, probably unable to sort through the differences, because we can’t,” said Justice Scott Kafker.

“Not outside of a Wegmans, your honor,” replied Jennifer Grace Miller, an attorney for the opponents who challenged the questions, in a reference to the common signature-gathering technique of approaching shoppers outside grocery stores.

Judge Dalila Argaez Wendlandt interjected to exclude herself from Kafker’s generalization: “Well, some of us can,” she said.

“Justice Wendlandt can sort through that, but an average voter who sees the big picture but has a job and a family and doesn’t spend hours discerning fine differences between different initiative petitions — those are the people we’re dealing with, right?” Kafker asked. “We’re not dealing with trained lawyers who have the time to read through all these briefs and sort this out. Is there a danger of real confusion here?”

The questions would declare in state law that drivers are independent contractors and not employees, and some versions also lay out new benefits such as paid sick time and accident insurance that drivers could access as contractors.

In a broad sense, the proposals would create a third, middle-ground category for drivers, removing them from the existing “binary” of employee or independent contractor, according to Assistant Attorney General Anne Sterman.

Attorney Thaddeus Heuer, who represents the industry-funded campaign pushing the ballot questions, told the court Monday that precedent shows ballot questions can touch multiple existing state laws so long as the provisions are related.

“That’s what we have here, because we have a common purposes of defining that relationship as not employer-employee,” Heuer said.

But Miller argued that classifying drivers as independent contractors, exempting them from existing benefits requirements and then creating new systems for them presents too many unrelated topics for voters to consider with a single yes or no vote.

Miller offered a hypothetical: if Massachusetts had no employment laws on the books, and a labor group proposed a ballot question standing up wage and hour requirements, unemployment insurance and anti-discrimination protections — ideas sought for app drivers — it would fail the relatedness test, she argued.

Kafker asked whether the proposals were similar to the 2016 ballot question legalizing recreational marijuana, which also laid out a wide range of reforms.

“I don’t think so, your honor, because in the marijuana case, you had a clear public policy: shall we legalize marijuana?” Miller replied. “That is something that’s concrete, that’s easily understood by the average voter in the voting booth. Then you had a series of implementations. Voters could get their arms around the public policy without necessarily understanding all of the vagaries of the tax scheme or the regulatory scheme.”

“That’s not the question here,” she added. “The question here is, shall we define the relationship between these two parties? That simply begs the question. It begs the question “how?” … When you ask how, that’s when you get into all of these unrelated subjects.”

Kafker said proponents might contend their question creates a unified scheme for defining benefits for gig workers.

“It’s setting up a benefit system for these people in total. There is at least a relatedness to that,” Kafker said. “An employee has the following benefits: workers’ comp, unemployment insurance, and they have pregnancy rights and other things. Here, they’re saying these are the benefits you get, and it seems like a voter could get their arms around at least that part of this.”

Wendlandt asked if the question before voters might be boiled down into whether to rewrite employment laws because existing statute does not work for drivers, who are able to set their own hours and decline rides.

“So for that gig economy of these drivers and careers, we’re going to set up a new Chapter 159AA, and that’s what’s going to govern this different kind of relationship. Why isn’t that a common purpose?” she asked.

Attorney General Campbell’s office certified the five remaining independent contractor questions as meeting requirements to go before voters, as it did for the driver unionization measure. Meanwhile, Campbell’s office is also gearing up to argue that Uber and Lyft violate existing law by failing to treat their drivers as employees, following through on a lawsuit Gov. Maura Healey filed in 2020 when she was the state’s top prosecutor.

“Define ‘wreak havoc’ “

The current election cycle is the second in a row that Uber, Lyft, DoorDash and Instacart have funded a high-profile campaign seeking to define drivers as independent contractors in state law.

On June 14, 2022, the SJC spiked an earlier version of the question, ruling at the time that it contained “at least two substantively distinct policy decisions.”

Heuer said Monday that the proposals this time around “took seriously and intentionally reflect” the court’s 2022 decision.

One area of focus during Monday’s hearing was anti-discrimination protections available for drivers. The lengthiest version of the question would exclude the ride-app companies like Uber and Lyft from the definition of employer under anti-discrimination laws known as Chapter 151B, Sterman said. Asked if the other four drafts would effect a similar change, she said it’s “debatable.”

“Since we don’t know for certain, we don’t know that it’s reasonably clear that that is an implication, that that is a necessary consequence of adopting any of these petitions,” Sterman said.

Wendlandt asked whether the lack of clarity on how existing anti-discrimination law would apply could create unnecessary voter confusion, potentially implicating the relatedness requirements laid out in Article 48 of the state Constitution.

“The framers of Article 48 were concerned about voter confusion, but there is not in Article 48 a general provision that says the AG can refuse to certify any petition that might cause voter confusion,” Sterman replied.

Campaign leaders say they plan to put only one question before voters this fall, but want to keep their options open in case the court deems one or several versions ineligible or organizers are unable to collect the remaining required signatures on all five.

Their decision likely needs to come before July 3, the deadline to submit the last batch of paperwork to secure a ballot spot.

“So if we don’t issue our decision by the first Wednesday in July, we will wreak havoc, is that right?” Kafker asked.

“I mean, define ‘wreak havoc,’” Sterman replied. “[It would] probably result in these petitioners submitting all five to the secretary. I think that’s probably the foreseeable consequence.”

Justice Gabrielle Wolohojian, the newest member of the court, asked the attorney representing the companies why “four-fifths of this case [are] not moot” if organizers intend to submit only one version to the ballot.

“I’ll just put my cards on the table: I don’t think that’s a fair situation for the court to be in,” Wolohojian said, later adding, “Our problem is not to decide moot issues.”

Federal unionization rules step into spotlight

The other ballot question judges took up Monday would let drivers for transportation network companies like Uber and Lyft organize and bargain over workplace benefits.

The Fiscal Alliance Foundation, a right-leaning watchdog group, challenged the measure, arguing that it should be ineligible because it simultaneously seeks to give workers a path toward collective bargaining and also grants the state labor secretary power to approve or reject negotiated changes.

“Collective bargaining is a process whereby workers organize and then they bargain, and the bargain connotes that they enter into an agreement that then controls what they do,” said David McGinty, an attorney for the plaintiffs. “Here, that doesn’t happen, because the says that all they have is a recommendation, and then what happens instead is that the secretary of labor, in the exercise of discretion, gets to decide whether to approve, deny or modify those provisions.”

Several judges focused their questions on the interplay between federal and state labor laws, pondering whether state supervision might be necessary to allow independent contractors to collectively bargain without violating anti-trust requirements.

“What level of interaction is lawful in your world? Because it seems to suggest that anything other than a rubber stamp from the state wouldn’t suffice,” asked Judge Serge Georges Jr.

“Anything but a rubber stamp makes it not collective bargaining,” McGinty replied.

First Assistant Attorney General Pat Moore, whose office certified the question as eligible to advance in its current form, said simultaneously proposing a new policy and state oversight of that policy has been a “common feature” in many ballot questions that went before voters, including one legalizing recreational marijuana and creating the Cannabis Control Commission.

With an eye on the intertwined nature of the topic, Kafker asked what might happen if the SJC allows both questions to head to the ballot, and then a Superior Court judge rules in the AG’s lawsuit against Uber and Lyft.

Assistant Attorney Moore called it a “multifaceted question.” The unionization ballot measure, he said, was drafted to be viable regardless of whether voters support the independent contractor question and whether a judge sides with prosecutors that drivers should be defined as employees.

“[Drivers] would need to be employees as defined by the National Labor Relations Act to have the ability to unionize and collectively bargain” under existing federal law, Moore said. “The National Labor Relations Board has not held that they are employees. It is a different test. It is a multi-factor test where no one factor is determinative, and there are factors that are perhaps more favorable to the companies than are the ABC factors in state law.”