Data, signature collectors allege AB 5 violates Constitution

The proprietors of several data collection and polling operations, along with some of the independent contractors they hire, have sued the state on the grounds AB 5, the new labor reclassification law, violates their constitutional rights to run their businesses and participate in elections.

Firms such as Let The Voters Decide LLC and In The Field Inc. are hired by political campaigns to drum up support for ballot initiatives by canvassing people in public settings and convincing them to sign petitions. The people doing the canvassing are contractors who negotiate their own rates, often payable per signature.

The individual plaintiffs, acting alongside the companies, are two collectors who “rendered services to various of the company plaintiffs pursuant to separately-executed independent contracts.” Michael Crossley and Bart Bailey et al. v. State of California et al., 3:20-cv-00284-GPC-JLB (S.D. Cal. Filed Feb. 14).

Dan Baxter of Wilke Fleury LLP filed the lawsuit last week in the Southern District of California. He did not respond to a request for comment.

Most gathering operations are small, staffed by one or two managerial employees who handle large staffs of contractors. When contacted for this story at the number listed for Let The Voters Decide, a woman who did not give her name said she signed the business over to her partner in 2019 and did not wish to speak about the company. The number for Bay Area Petitions routed to a full voice mail box that did not take messages but did provide detailed directions for contractors to submit their signatures. One of the seven named plaintiff companies returned calls for comment by press time Wednesday.

Under AB 5, workers are now presumed fully benefited employees unless they pass a three-pronged “ABC” test, proving they are a) free from the hirer’s control and direction, b) work outside the usual course of the hirer’s business, and c) engage in the same kind of work as the hirer independently.

The large number of workers who now qualify as full employees has roiled California’s industrial sector from trucking to journalism.

Large gig economy firms such as Uber and Postmates have previously challenged AB 5 on the basis of lack of equal protection and due process under federal and state law, only to be denied injunctions from the courts they petitioned. Built into one denial was an acknowledgment from U.S. District Judge Dolly M. Gee that AB 5 does not target gig economy workers or their ability to contract with their employers.

However, opponents of the law have seen some success. In January, U.S. District Judge Roger T. Benitez in the Southern District granted a preliminary injunction in California Trucking Association v. Becerra, 18-CV02485 (S.D. Cal., filed Oct. 25, 2018). Benitez barred the state from enforcing AB 5 on motor carriers, including trucking companies and independent owner-operator truck drivers. Earlier this month a judge denied a Teamsters Union effort to remove the injunction.

The primary difference in the new lawsuit and the previous ones filed by gig economy giants is the assertion of the alleged damage AB 5 could cause to democratic institutions, such as ballot initiatives, the plaintiffs argue.

The complaint warns of a chilling effect on political organizing which would pinch the industry to the point that it would become impossible to remain in business. Ballot initiatives like Proposition 72 in June 2018, which excluded rainwater capture systems from property tax assessments, and Propositions 1 and 4 in November 2018), which set aside billions in bond money for housing programs, veterans home loans, and children’s hospitals, would go unsupported, the complaint alleged.

One of the individual plaintiffs, Bart Bailey, as described in the complaint, is a gig-economy worker who said he started collecting names for ballot initiatives after learning he could supplement his already multi-job income.

The complaint contends Bailey has worked as a collector nearly every day for the past two years while maintaining a job as an insurance salesman and ride-share driver.

Such arrangements allow individual workers to set their own schedules and work as little, or as much as they see fit, wrote Baxter, the plaintiffs’ attorney.

“Similarly-situated data processors would be forced to change their business model. Existing independent contracts between the data processors and the collectors would be invalidated,” Baxter wrote.

The lawsuit and others like it contend that the negotiated rate Bailey and others contractors have secured for themselves would be voided, presumably because such companies would need to provide employees with the benefits of full-time employment, such as health care, sick time and vacation.

Eileen Ray, who operates one of the companies bringing the suit, Discovery Petition Management, explained, “You cannot pay somebody by the hour to circulate petitions. ... It would cost the clients too much.”

Ray said employees would make less money, even accounting for insurance and other benefits, if she and other employers were forced to pay them hourly.

“All of the people are incredibly opposed to AB5,” she said, referring to the contractors. “It would take away their money.”

The complaint, mirroring prior efforts, also singles out another perceived imbalance in the AB 5’s construction, in that a freelance writer or editor is exempt from the law if they sell fewer than 35 freelance articles, but become bound by the law if they exceed that limit. The complaint cites a response from the bill’s author, Assembly Member Lorena Gonzalez, D-San Diego, who when asked about this particular cutoff said, “Was it a little arbitrary? Yeah.”