SACRAMENTO, Calif. (CN) – Coming to the aid of California journalists, a state lawmaker on Thursday proposed exempting freelance reporters and newspaper distributors from a new labor law that has many industries scrambling to protect their business models.
Joining the chorus of critics that includes gig-economy titans like Uber and Lyft, Republican state Sen. Patricia Bates is pushing back on a union-backed bill that cleared the Legislature last fall and took effect this month. Referred to as the Dynamex law, Assembly Bill 5 establishes a three-prong test that companies must meet in order to classify workers as independent contractors and not employees.
Bates, R-Laguna Niguel, says the law has cost hundreds of freelance journalists contracts already in 2020 and wants to exempt them from what she calls an “anti-independent contracting law.”
“Assembly Bill 5 took a sledgehammer approach to an employment problem that required a scalpel, which consequently hammered many Californians who truly wish to remain their own bosses,” Bates said in a statement.
The proposal by Assemblywoman Lorena Gonzalez, D-San Diego, was one of the most high-profile bills of the 2019 legislative session as it aligned labor unions and Democrats against the gig economy and the minority Republican party. She said it was time for the Legislature to codify the ruling in Dynamex v. Superior Court and bring much-needed clarity to state employment law.
In Dynamex, the state Supreme Court ruled that to classify workers as contractors, a company must show it does not directly control the worker, that the work falls outside its usual course of business, and that the worker is “customarily engaged in an independently established trade.”
Dispute over the landmark labor law reached a crescendo during the final week of the legislative session in the Senate chambers.
Democrats argued that AB 5 would extend sorely needed benefits to millions of workers and force the gig economy to play by the same rules as other industries.
Bates and her Republican colleagues blasted Gonzalez for “picking winners and losers” by exempting a handful of professions, including lawyers, doctors, real estate agents and hairstylists. The Republicans bargained for carve-outs for independent truck drivers, journalists and other professions, but the Senate eventually voted along party lines, 29-11, and sent the bill to Gov. Gavin Newsom.
In the months since Newsom signed the bill, a series of challenges have been filed in state and federal courts by a variety of professions.
The American Society of Journalists is fighting AB 5 on behalf of freelance journalists in Los Angeles federal court, while Uber and Postmates have also sued in federal court. Uber, Lyft and DoorDash are also in the process of spending up to $90 million to qualify a ballot measure that would allow voters to overturn the bill in November.
Meanwhile the California Trucking Association is fighting another case on behalf of independent truckers, and last week a company that hires court reporters sued in state court.
The assorted plaintiffs claim AB 5 violates the Equal Protections Clause and the First Amendment by capping the amount of pieces freelancers can produce per year.
Under Bates’ Senate Bill 868, freelance journalists would be allowed to surpass the 35-story hard cap set by AB 5 and remain independent contractors.
The bill has had an immediate impact in the Golden State, as the popular sports blogging site Vox Media ended contracts with hundreds of writers and smaller outlets have announced they would have to cut back on content to comply. Many smaller outlets, particularly weekly newspapers, are warning that AB 5 could soon put them out of business.
“All this ties the fate of local columnists and other freelancers who are paid by the piece to truckers and gig economy workers like the thousands of contract employees at some of the same companies that now get advertising revenue that once paid for news coverage,” said Thomas Elias in a recent Napa Valley Register column. “This includes outfits like Google, for one, which pays little or nothing to aggregate huge amounts of news that other people and companies produce at great trouble and expense.”
Bates says she hopes her proposed legislation will offer some protections for news outlets operating in the Golden State.
“The Legislature can begin to fix some of AB 5’s flaws by helping California’s newspapers and journalists continue to operate normally as they have in our state. Passing my legislation will help preserve quality journalism in many communities,” Bates said.
Bates’ other proposal seeks to give newspapers more flexibility in how they deliver their daily and weekly products.
Senate Bill 867 would permanently exempt newspaper distributors and carriers from AB 5. Toward the end of the legislative session, lawmakers approved a one-year freeze to allow the industry to adapt to the contentious law.
The California News Publishers Association, which pushed for the one-year freeze, says Bates crafted her proposals without consulting with it and that it hasn’t taken a position on the bills. Jim Ewert, the association’s general counsel, called AB 5 an “existential threat” to the newspaper industry and said the nonprofit is focused on helping its members adapt to the prickly labor law.
“We’re not sure where the path forward will be,” Ewert said of potential changes to AB 5. “But it’s up to us to draw attention to it.”