AB1340 - Transportation network company drivers: labor relations.

Assembly Bill No. 1340 CHAPTER 335 An act to add Chapter 10.7 (commencing with Section 7470) to Division 3 of the Business and Professions Code, and to add Section 7927.710 to the Government Code, relating to transportation. [ Approved by Governor October 03, 2025. Filed with Secretary of State October 03, 2025. ] LEGISLATIVE COUNSEL'S DIGEST AB 1340, Wicks. Transportation network company drivers: labor relations. Existing law declares the public policy of the state regarding labor organization, including, among other things, that it is necessary for a worker to have full freedom of association, self-organization, and designation of representatives of their own choosing, to negotiate the terms and conditions of their employment, and to be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection. Existing law, the Protect App-Based Drivers and Services Act, added by Proposition 22, as approved by the voters at the November 3, 2020, statewide general election (the initiative), categorizes app-based drivers for network companies, as defined, as independent contractors if certain conditions are met. Existing law requires, among other things, that the network company provide a health care subsidy to qualifying app-based drivers, provide a minimum level of compensation for app-based drivers, and not restrict app-based drivers from working in any other lawful occupation or business. Existing case law holds that specified provisions of the initiative are invalid on separation of powers grounds; however, the court severed the unconstitutional provisions, allowing the rest of the initiative to remain in effect. Existing law also establishes the Public Employment Relations Board (board) in state government as a means of resolving disputes and enforcing the statutory duties and rights of specified public employers and employees under various acts regulating collective bargaining. Existing law vests the board with jurisdiction to enforce certain provisions over charges of unfair practices for represented employees. This bill, the Transportation Network Company Drivers Labor Relations Act (act), would establish that transportation network company (TNC) drivers have the right to form, join, and participate in the activities of TNC driver organizations, to bargain through representatives of their own choosing, to engage in concerted activities for the purpose of bargaining or other mutual aid or protection, and to refrain from such activities. The bill would require the board to enforce these provisions. This bill would require all TNCs to submit certain information every quarter, including information identifying and related personal work information about TNC drivers to the board in a list format, as prescribed. The bill would establish various procedures governing the certification and decertification of TNC driver organizations for purposes of representing drivers in the collective bargaining process. In this connection, the bill would require the board to determine if an entity is a TNC driver organization, as prescribed, and make certain determinations as to whether a specific organization has been designated as the bargaining representative for TNC drivers pursuant to an election process. The bill would establish various notice requirements, conditions, and timelines governing the representation of TNC drivers. The bill would, among other things, require TNCs and certified driver bargaining organizations to negotiate in good faith pursuant to the act, as described, and would set forth procedures for mediation and arbitration for purposes of reaching a sectoral agreement. The bill would set forth procedures and guidelines for the board to approve or disapprove sectoral agreements. The bill would require a TNC that was not a covered TNC when a sectoral agreement took effect but subsequently became a covered TNC to be bound by all terms of the sectoral agreement, as specified. This bill would make it an unfair practice for a TNC, an agent of a TNC, or a multicompany committee, as defined, to fail or refuse to negotiate in good faith with a certified driver bargaining organization, among other things. The bill would also make it an unfair practice for a certified driver bargaining organization or its agents to fail to negotiate in good faith with a TNC or multicompany committee, among other things. The bill would set forth unfair practice charge procedures and remedies for those practices. The bill would define terms for purposes of the act, make the provisions of the act severable, and make related legislative policy statements. Existing law, the Bagley-Keene Open Meeting Act, generally requires all meetings of a state body to be open and public. This bill would exempt any meeting of a mediator or arbitrator with any party or group to the negotiations process and the mediation and arbitration processes in the act from the Bagley-Keene Open Meeting act. Existing law, the California Public Records Act, requires state and local agencies to make their records available for public inspection, unless an exemption from disclosure applies. This bill would exclude from public disclosure information regarding TNC drivers that is submitted to the board pursuant to the act, except as specified. Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Chapter 10.7 (commencing with Section 7470) is added to Division 3 of the Business and Professions Code, to read: CHAPTER 10.7. Transportation Network Company Drivers Labor Relations Act 7470. This chapter shall be known, and may be cited as, the Transportation Network Company Drivers Labor Relations Act. 7470.1. (a) It is the policy of the State of California to encourage and protect the right of transportation network company drivers to full freedom of association, self-organization, and designation of representatives of their own choosing to negotiate the compensation that they receive as well as other terms and conditions of their agreements with transportation network companies. (b) The benefit to the state’s economy from negotiated agreements between transportation network company drivers and the transportation network companies, including where those agreements are multiparty, sectoral agreements, outweighs the anticompetitive effect of those agreements. It is the state’s intent that the state action antitrust exemption to the application of federal and state antitrust laws shall apply to the activities of transportation network company drivers, transportation network company driver organizations, bargaining representatives for transportation network company drivers, and transportation network companies when they are participating in negotiations and other activities as authorized or regulated by this chapter. (c) The purposes of this chapter are to provide transportation network company drivers the opportunity to self-organize and designate representatives of their own choosing in order to bargain with transportation network companies, to facilitate the prevention or prompt resolution of disputes between transportation network companies and transportation network company drivers, and to improve the working conditions of transportation network company drivers and therefore the services provided to the general public. (d) It is the policy of the state to establish various notice requirements, conditions, and timelines governing the representation of transportation network company drivers. It is the policy of the state to require transportation network companies and certified driver bargaining organizations to negotiate in good faith pursuant to the act and to set forth procedures for mediation and arbitration for purposes of reaching a bargaining agreement. (e) In November 2020, the California voters approved Proposition 22, the “Protect App-Based Drivers and Services Act,” which has been codified in Chapter 10.5 (commencing with Section 7448). That measure establishes certain minimum standards for app-based drivers, while allowing, as the California courts have held, the state to create a system for negotiations between transportation network company drivers and transportation network companies, including, by agreement, to voluntarily increase the standards that were established by Proposition 22. This chapter establishes a robust system to authorize those negotiations, while accommodating Proposition 22, which limits the state’s ability to impose certain terms through the binding interest arbitration process that applies if the parties are otherwise unable to reach an agreement but does not otherwise impose limits on that process. (f) Because of the nature of the industry, many individuals who perform work as transportation network company drivers have only a short-term or highly intermittent relationship with the industry. For both logistical and policy reasons, this chapter establishes a threshold for eligibility to participate in the selection of a union representative so the choice can be made by those drivers who have more than a casual or short-term relationship with the industry and, therefore, have a more significant interest in making that choice. 7470.2. For purposes of this chapter, the following definitions apply: (a) “Active TNC driver” means a transportation network company (TNC) driver who has driven at least the minimum number of rides during the past six months with a covered TNC’s platform in the State of California, as determined by the board pursuant to Section 7470.6. (b) “Board” means the Public Employment Relations Board established pursuant to Section 3541 of the Government Code. (c) “Certified driver bargaining organization” means an organization that has been certified by the board as the representative of all TNC drivers in the state for purposes of bargaining pursuant to this chapter. (d) (1) “Company union” means any committee, worker representation plan, or association of TNC drivers or others that exists for the purpose, in whole or in part, of dealing with TNCs concerning grievances or terms and conditions of work for TNC drivers, for which either or both of the following is true: (A) A TNC has initiated or created the union, proposed its initiation or creation, participated in the formulation of its governing rules or policies, or participated in or supervised its management, operations, or elections. (B) A TNC has maintained, financed, controlled, dominated, or assisted in maintaining or financing the union, unless required to do so by this chapter or any regulations implementing this chapter, whether by compensating anyone for services performed on its behalf or by donating free services, equipment, materials, office or meeting space, or anything else of value, or by any other means. (2) A TNC driver organization shall not be deemed a company union solely because any of the following are true: (A) It has negotiated or been granted the right to designate TNC drivers to be released with pay for the purpose of providing representational services in labor-management affairs on behalf of TNC drivers represented by the TNC driver organization. (B) In the course of providing representational services to workers for whom it is the certified driver bargaining organization, a TNC has allowed agents of the TNC driver organization to meet with drivers at the TNC’s premises. (C) It has received from a TNC the voluntary membership dues deductions of TNC drivers or the TNC has processed or transmitted membership dues pursuant to subdivision (d) of Section 7470.9. (D) It has received funds from a TNC for the administration of benefits and services to TNC drivers pursuant to a bargaining agreement in its capacity as the certified driver bargaining organization. (e) “Covered TNC” means a TNC that is a covered TNC based on ride-share volume, as determined pursuant to Section 7470.5. (f) “Multicompany committee” means a committee formed by multiple TNCs for purposes of bargaining pursuant to this act. (g) “Scope of representation” has the same meaning as set forth in Section 7470.11. (h) “Sectoral agreement” means an agreement between covered TNCs and the certified driver bargaining organization that meets the requirements of Section 7470.13 and that, if approved by the board, will apply to all covered TNCs. (i) “Transportation network company” or “TNC” is a person or company that falls under the definition set forth in subdivision (c) of Section 5431 of the Public Utilities Code. A TNC is covered by this chapter only if it provides prearranged transportation services in the state and connects passengers with TNC drivers and only with respect to those TNC drivers. (j) “Transportation network company driver” or “TNC driver” means any person who uses a personal vehicle in connection with a TNC’s online-enabled application or platform to connect with passengers in the state pursuant to the TNC license of the TNC. However, this term does not include any individual, who, with respect to the provision of services through a TNC’s online-enabled application or platform, is determined by a final order of a court of competent jurisdiction or the National Labor Relations Board, or declared by a TNC to be a person who is an employee within the meaning of Section 152(3) of Title 29 of the United States Code or within the meaning of Section 31.3121(d)-1 or Section 31.3401(c)-1 of Title 26 of the Code of Federal Regulations. (k) “Transportation network company driver organization” or “TNC driver organization” means an organization that has all of the following characteristics: (1) The organization has engaged in advocacy for drivers who transport passengers in California, or is affiliated with an organization that has engaged in advocacy for drivers who transport passengers in California, for a minimum of five years. (2) The organization has experience, or is affiliated with an organization that has experience, in negotiating collective bargaining agreements and representing workers under those agreements, including the representation of workers in filing unfair labor practice charges and in grievance proceedings. (3) The organization has as one of its main purposes the representation of workers in their labor relations. (4) The organization’s bylaws or other internal governing documents will give TNC drivers the right to be [Text truncated for display. Full text available on Congress.gov.]