In the summer of 2019, Uber, Lyft and other companies that use contract drivers faced a crisis in California. The state Legislature was on the verge of passing a law that would require them to effectively treat their drivers as employees, meaning companies would have to pay drivers a minimum wage, cover their expenses and contribute to state unemployment, all new costs. and important.
Desperate to find a way out, the companies pressured lawmakers to exempt their drivers from the new law, saying they faced huge financial losses. But they wanted state unions’ support for the waiver and promised to extend some new benefits to drivers if unions came on board.
So Uber hired a team of high-powered consultants, including one whose union connections were impeccable: Laphonza Butler, former president of California’s largest union, a branch of the Service Employees International Union.
Butler, who works through a prominent California consulting firm, advised Uber on how to deal with unions such as the Teamsters and SEIU, and attended several face-to-face meetings between gig companies and union representatives, according to people familiar with the matter. . the negotiations.
The proposal toward workers divided union activists, some of whom became angry as they tried to negotiate with the companies and ultimately failed. But Butler’s chapter with Uber proved to be a pivotal moment in his career, moving from labor activism to the world of high-level political consulting, which also involved a role advising Vice President Kamala Harris on her 2020 presidential campaign. .
On Sunday, Governor Gavin Newsom of California announced that he was naming Ms. Butler as the state’s next senator, replacing Dianne Feinstein, who died last week. Many Democrats applauded the appointment of Ms. Butler, the third black woman to serve in the Senate and a prominent figure in Democratic politics for more than a decade, who recently served as chairwoman of Emily’s List, the political action committee that works to elect women. and candidates who support abortion rights.
But the appointment has also drawn the ire of labor rights advocates, who have not forgotten Butler’s work as a consultant with Uber, which some saw as an uncomfortable reversal of her history in the labor movement and the values she promoted there.
“The feeling was that he was betraying his commitment to workers,” said Veena Dubal, a professor at the University of California, Irvine School of Law, who has argued that Uber drivers should be classified as employees. “It sold big time.”
Negotiations in which Ms. Butler participated ultimately failed, and the concert companies turned to a ballot initiative with similar provisions, Proposition 22, which voters approved the following year.
Butler’s supporters said her time spent consulting for Uber was no blip compared to her long history of labor advocacy, which includes organizing hundreds of thousands of workers in nursing homes and home care and successfully lobbying for achieve a state subsidy of $15 per dollar. minimum wage per hour.
“The Labor Party has not had a union leader in the Senate in 60 years, let alone a union president who spent almost two decades leading successful campaigns to raise the minimum wage and help workers organize,” said Jeffrey Lerner, head Mrs. Butler’s acting cabinet. “That’s Senator Butler’s resume and those are her values.”
Ms. Butler declined to be interviewed for this article, but he told the San Francisco Chronicle this week that he believed drivers “should have employment protection” and said his role at Uber “was consistent with my resume.” Uber also declined to comment.
In 2019, Mr. Newsom’s administration encouraged concert companies and unions to resolve their differences on the issue, several people involved in the discussions said. Uber and Lyft wanted to persuade unions to back a bill they could bring to the Legislature that would exempt their drivers from Assembly Bill 5, which would treat many categories of gig workers, such as freelance writers and janitors. , as employees for employment purposes. law.
In exchange for the exemption, the companies would agree that drivers could receive some limited benefits and join “networks of driver advocacy organizations” in which state unions would represent them and negotiate some labor rights.
They also brought Ms. Butler, with Uber. pay the team at the consulting firm where he worked, SCRB Strategies, now known as Bearstar Strategies, $185,000 in 2019 and 2020. She was seen essentially as a translator, helping company managers understand the subtleties of union leaders’ positions and formulate arguments in ways that would appeal to unions, according to several people familiar with the discussions, who declined to be identified. because they were not authorized. to discuss internal issues at Uber or did not want to air internal conflicts in the union movement.
One person said Ms. Butler was also expected to take on other duties, including talking to her former union colleagues about a possible compromise. It was also hoped that she could help with a public relations strategy to persuade lawmakers and the general public that AB-5 could have negative effects on the self-employed, although it was unclear whether she agreed to do so.
Butler occasionally participated in conference calls with the company’s public affairs team, according to two people with knowledge of the calls. She responded to her questions and advised Uber to use fewer vague tech industry buzzwords and be more direct in communicating with unions.
Ms. Butler told Uber employees that she would help them as long as they did not betray her values, one of the people recalled.
Still, Ms. Butler’s presence on the other side of the negotiating table irritated many of the state’s most prominent unions, several union officials said, although they did not want to discuss the matter publicly because they did not want to anger Mr. Newsom and Mrs. Butler.
Months of discussions stretched from consultants’ offices in Sacramento to hotels in Oakland to the headquarters of Uber and Salesforce in San Francisco. They included large group negotiations, forums for drivers to share their views with labor organizers, and smaller meetings between top union negotiators and gig company executives, including John Zimmer, former Lyft president, and Tony West, Uber’s chief legal officer. and brother-in-law of Vice President Harris.
Ms. Butler’s role during the meetings she attended was minimal, according to several people. She sat on the sidelines listening, exchanged brief pleasantries with union leaders she knew and once made presentations during a meeting in which the drivers gave their perspective to both sides.
Leaders of SEIU, the union where Butler had previously worked, were the most willing to reach an agreement, according to two people involved in the discussions. But many other unions strongly opposed it, fearing they were bargaining away crucial labor rights for vulnerable workers. The talks failed.
Assembly Bill 5 passed that fall and went into effect the following year, but Uber and Lyft ultimately got what they wanted anyway, joining DoorDash in spending more than $200 million on Proposition 22, passed by the voters. voters in 2020, which maintained gig drivers’ status as independent contractors and provided them with limited benefits, such as a minimum wage and some health insurance stipends. The measure is currently facing a legal challenge.
Ms. Butler was not involved in the Proposition 22 campaign and left the consulting firm in 2020 to become Director of public policy at Airbnb.the short-term housing rental company launched in San Francisco.
Like Uber, Airbnb has faced regulatory pressure in Democratic and union-friendly strongholds such as New York, where the company was blamed for raising rents for working-class residents and hurting hotel jobs. (Airbnb has said that many other factors have caused rents to rise in New York and that its business model has helped reduce accommodation costs for consumers.) One of the company’s main adversaries in New York had been the Hotel Trades Council, a powerful union.
Mary Kay Henry, international president of SEIU, said Ms. Butler was a “transformative” labor leader and suggested that her pro-worker voice as part of Uber’s negotiating team may have been a benefit to workers.
“She is the one I would like to help corporations understand what workers want and need,” Ms. Henry said.
But the animosity Butler generated among unions persists, and supporters of those running for the permanent Senate seat, including Reps. Adam Schiff, Barbara Lee and Katie Porter, were quick to resurrect the issue. If Ms. Butler runs for a full term, unions will have to decide whether to support her. Some, including a firefighters unionto film set workers union and a public transport union we have already supported Mr Schiff.
The deadline to seek the California Democratic Party’s endorsement was originally Oct. 13, but the party decided this week to postpone that date to Oct. 27 to give Ms. Butler time to apply if she decides to run, he said. Rusty Hicks. president of the state party.
For some Democrats, Butler’s appointment draws attention to a deeper messaging problem within the Democratic Party. Newsom might get credit for appointing a Black LGBTQ senator, but his consulting work, to some, highlights the party’s ties to big business.
“That’s why a lot of working-class voters have this distaste for the Democratic Party and a lot of them turned to Trump,” said Larry Cohen, former president of the Communications Workers of America, which represents hundreds of thousands of corporate workers. like Verizon. and AT&T.
Cohen is now president of Our Revolution, a progressive advocacy group that recently endorsed Lee.
But Anthony York, Newsom’s spokesman, defended the governor’s appointment. “Anyone who questions Senator Butler’s record fighting for working families either doesn’t know what they’re talking about or has some kind of political ax to grind,” he said.
