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Political law firm Nielsen Merksamer Parrinello Gross & Leoni has drafted a ballot initiative that would shield app-based ride-hailing and delivery services from a new California law that makes it tougher for companies to label workers as independent contractors.

Lyft, Uber, DoorDash and Instacart are backing the "Protect App-Based Drivers and Services Act," a proposed 2020 ballot measure aimed at circumventing the California Supreme Court's employee friendly ruling in Dynamex and the subsequent state legislation codifying much of that opinion, Assembly Bill 5.

Nielsen Merksamer and Kurt Oneto, a partner at the firm, are listed as attorneys for the initiative, which was expected to be filed with the attorney general's office Tuesday.

The California-based firm often serves as drafting and campaign counsel for state and local initiatives. The firm worked on more than a dozen proposed and qualified voter measures for the November 2018 election.

Uber, Lyft and DoorDash pledged a combined $90 million in September to finance an initiative campaign to limit the reach of AB 5. The new law is already central to new worker classification lawsuits targeting Uber and Instacart.

The ballot measure, unveiled at a Sacramento press conference, defines an app-based driver as "an independent contractor and not an employee" who would be entitled to overtime, minimum wage and certain benefits under existing workplace laws. The initiative would instead set industry standards for workers.

Drivers would be paid at least 120% of the state or a local entity's minimum wage, according to the terms of the measure. They would also receive an additional 30 cents per mile for wear and tear on their vehicles, a rate that's currently less than the U.S. Internal Revenue Service's 58-cents-per-mile figure.

Affected companies would also be required to pay health care subsidies to drivers who log more than 15 hours a week. The measure calls for occupational accident insurance, disability payments and a 12-hour cap on driving in any 24-hour period.

The initiative "respects the way these drivers are working today," said Brandon Castillo, a Sacramento public affairs consultant serving as a spokesman for the initiative campaign. The provisions are "very narrowly tailored to" ride-hailing and delivery work and would not apply to other gig economy companies, such as Handy.

Labor groups and the author of AB 5, Assemblywoman Lorena Gonzalez, called the initiative "another brazen attempt by some of the richest corporations in [California] to avoid playing by the same rules as all other law-abiding companies."

"Every employer is required to pay at least minimum wage for their workers … during every hour worked," Gonzalez tweeted Tuesday. "And overtime, in CA, for more than 8 hours a day/40 a week. @uber, @lyft & @doordash want to average less than that. Why? Because they hire their workers through an app."

The initiative includes language preempting related city and county regulations, but only those enacted after Tuesday. Existing local ordinances, including those requiring business licenses and regulating ride-hailing pickups and drop-offs at airports would remain in tact, said Oneto.

The measure could only be amended by a seven-eighths vote of the Legislature, an unusually high threshold for initiatives. If voters approve the measure but the attorney general and governor refuse to defend a legal challenge, the initiative requires the state to pay for an independent counsel to do the work. Oneto said such a provision has become "boilerplate" in recent initiatives.

 

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