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Solidarity Unionism v. Company Unionism in the Gig Economy


Veena Dubal (@veenadubal) is Professor of Law at the University of California, Irvine.

The CEOs of the two top-competing gig firms—Uber and Lyft—penned a June 12, 2019 OpEd in the San Francisco Chronicle in which they claim that after over six years of local, state, federal, and international law-breaking, ignoring the concerns of drivers, and viciously fighting any efforts to achieve living wage and benefits, they are ready to compromise…in California. They claim that in exchange for getting rid of a bill that just passed the state assembly—which would extend California labor protections to many “gig workers” by making it easier for them to claim employee status under state law—they will agree to establish a wage floor, a “workers’ association,” and potentially, a deactivation appeals process.

Why, after six years of legal and political intransigence, are these companies so ready to come up with a salve? And what should we make of their concessions?

“Gig economy” companies in California are terrified of two things: (1) the abundance of lawsuits that they will undoubtedly face if this bill becomes law, and (2) the power of an independent union. While CA Assembly Bill 5 (“AB5”) does not explicitly give drivers the right to collectively bargain, the bill would establish legislative precedent that could move state and federal regulators in that direction. In just the past year, leading Democratic presidential candidates have introduced legislation that resembles California’s AB5, making it easier for “gig workers” to establish employee status for the right to organize and collectively bargain as employees under federal labor law. (And yes, the Trump NLRB General Counsel recently released a non-binding advisory memorandum stating the opinion that Uber drivers were independent contractors, but this would easily be tossed under a Democratic administration.)

Although the details of the “workers’ association” that the Uber & Lyft CEOs lay out in their op-ed are murky, reports indicate that it would stop short of giving workers the right to collectively bargain. This raises extraordinary concerns about both worker independence and worker power—both in and out of the so-called “gig economy.” A hallmark of U.S. labor law for almost a century has been a ban against company unions—that is, a prohibition against any labor association that the employer helps to form or influence, either through financial or in-kind support. If California legislates around this for gig workers, such a “worker association”—or company union— could easily become a reality in other sectors.

Still, given that private union membership is at an all-time low, some in the labor community (including those currently negotiating with Uber and Lyft in California) contend that perhaps it is time to remodel US labor law to facilitate new and different kinds of organizing—even if it means giving up the legally-mandated rights of workers to form wholly independent organizations and to collectively bargain. Something—in their making—is better than nothing.

Political Economy, Independent Unions, & Radical Organizing

These debates about company unions versus independent unions are, in many ways, not new. Companies have long tried to skirt section 8(a)(2) and 8(5) NLRA restrictions[1] to allow such worker associations, and over the years. Some labor scholars have even supported NLRA amendments to make this possible. In 1994, for example, Professor Samuel Estreicher advocated in a famous article for a partial repeal of the prohibition against company unions to account for shifting industrial practices and what he called “paternalism” towards workers. Six years later, economist Bruce Kaufman contested the prevailing knowledge that company unions are as bad as they are made out to be and called the NLRA sanction, “counterproductive.”

The problem with both Professor Estreicher and Kaufman’s arguments—and any openness to legalizing a company-influenced worker association—is that they stop short of conceptualizing the full role of independent unions in our political economy. The NLRA prohibition against company unions does more than give individual workers freedom; it is one of very few remaining legal tools to sever the greater power of capital from both political and economic influence. With growing economic inequality and the legally uninhibited role of corporate “voice” in the political sphere, independent unions may be the most important sites of potential pushback against the corporatization of the state.

Worker associations that may be created through or with companies—and that deprive workers the right to collectively bargain—would necessarily impede such potential. The company unions like those being contemplated by gig companies would not just “perpetuate managerial power and exacerbate social divisions within a workforce,” as historian Nelson Lichtenstein has powerfully argued (my italics). They would also perpetuate managerial power outside the workforce. Instead of curtailing the power of capital, they would extend it.

Still, private union membership is at an all-time low, and so this treatment of independent unions as countervailing sites of corporate power may appear merely hypothetical. It is not. The past year saw more strikes than in almost two decades. One interpretation of this—the inverse relationship between the number of recent strikes and work stoppages in relation to formal union density—suggests that while labor law has been “deradicalized” and used to erect (in the words of Karl Klare) “boundaries of “legitimate” labor activity,” we are currently witnessing a groundswell of cross-sector, grassroots labor mobilization both inside and outside of traditional trade unions.