'Coming for You and Your Job': With Prop. 22, Are Grocery Staff Layoffs Just the Beginning?

When Derrick Neal moved back to the Los Angeles area from Florida last year, after his mother died, he needed to find a job quickly to keep paying his bills.

Neal, 40, has been working ever since he turned 18, mostly in retail jobs at big chain stores like Walmart and Home Depot. In L.A. last May, he started delivering groceries for the supermarket chain Vons and was surprised how much he enjoyed it.

He likes arriving at work in the morning and seeing all his routes for the day, he says. Vons provides him with a company phone and a van with compartments that he fills with various delivery items.

“It’s like I am bringing the whole store to the customer,” he said.

Neal says he has felt especially good about doing his job during the pandemic, delivering food to the elderly or sick who would otherwise have to risk their health by going to the grocery store.

The job has been a lifeline for him, too.

“There weren’t many people hiring at the start of the pandemic,” Neal said. “So I was happy to get the job.”

After one of his shifts in December, Neal says he and other non-union delivery employees were called to a meeting by their managers and informed they would all be laid off by the end of February. Independent contractors working through DoorDash were going to take over their jobs, they were told.

“It was devastating,” Neal said. On top of that, he also had to move out of his apartment that month after his landlord sold the building. Unable to find another place he can afford, he has been living in his car since then.

Neal says he doesn’t understand the company’s decision, particularly given how much delivery work has recently been available.

“If I were able to talk to them, I would just ask them, ‘Why?’ ” Neal said. “Who did the cost analysis on this and deemed that it was more cost efficient to go with independent contractors than the people we already have, that are there day in and day out, blood sweat and tears, going through it?”

Vons is one of many grocery chains owned by Albertsons, the second-largest grocery company in the country. Earlier this month, Albertsons announced it would discontinue its in-house delivery services in parts of California and other states starting late February.

The company has not specified how many delivery employees will be replaced by DoorDash contractors, but the United Food and Commercial Workers union estimates it will be in the high hundreds.

“This decision will allow us to compete in the growing home delivery market more effectively," Albertsons spokeswoman Christine Wilcox said in a statement. She added, “Albertsons Companies Divisions plans to offer positions to each impacted associate.”

Wilcox did not respond to a request for clarification on the nature of these jobs and the process by which they will be offered to delivery employees like Neal. The company has also not provided proof of any legal commitment to offering new jobs, or any guarantees of equivalent pay, benefits and job locations.

The replacement of employees by contractors is exactly what labor advocates warned would happen with Proposition 22, which California voters approved in November.

“I’m not surprised that it happened this quickly, because what the Proposition 22 worker category that was created does is significantly lower labor costs for corporations,” said Veena Dubal, a UC Hastings law professor.

Proposition 22 creates a new sub-employee category that allows app-based delivery and transportation gig companies to legally deny workers access to employee benefits like overtime, unemployment insurance and a guaranteed minimum wage. Instead, companies have to offer workers in this category certain watered-down employee benefits like health care subsidies and the option to purchase insurance.

The proposition was written by DoorDash, Uber, Lyft and other gig companies, which collectively spent over $200 million on the campaign, making it the most expensive ballot measure in state history. Now that the measure is law, it has nullified recent efforts by all three branches of California government to force gig companies to classify their workers as employees.

Dubal says logistics and delivery employees will just be the first to lose their jobs.

“Proposition 22 is essentially a blueprint for how to lower labor standards across the board,” she said. “For those who have been thinking of this as a whole different type of work, as something that would never affect them, this is really the time to start paying attention. This model of work is coming for you and your job.”

Venture capitalists already see opportunity.

Shawn Carolan is a partner at Menlo Ventures. In a recent opinion piece titled “What Proposition 22 Now Makes Possible” published on The Information, he said there’s potential for this new labor category to extend to fields like nursing, executive assistance, tutoring, programming, agricultural work and even zoo keeping.

Executives at most gig companies have always described their businesses as “platforms” that connect independent workers to customers.

But that argument doesn’t add up for David Weil, dean of the Heller School for Social Policy and Management at Brandeis University. Even though the work is through an app, he says, the business strategy is nothing new.

“It is just a part of the evolution of the erosion of workplace standards that has happened in lots of different ways,” he said.

Weil came up with the term “fissuring” to describe what is happening to American workplaces. Since the 1970s, executives have increasingly replaced full-time employee jobs with part-time, subcontracted and outsourced work. Weil says gig companies are just pushing that fissuring further by labeling their workers independent contractors.

“They’re using the platform as a way to get out of the obligation of actually treating those workers as employees,” he said.

DoorDash declined an interview with KQED. But in a statement, a spokesperson said the company provided a vital service.

“DoorDash has always supported local economies, and as e-commerce and delivery have become even more important for many businesses during these challenging times, we remain committed to helping brick-and-mortar local merchants reach consumers with the best of their neighborhood,” DoorDash spokesman Taylor Bennett said in a press release.

The news of Albertsons' new arrangement with DoorDash has spurred other grocery delivery workers in California to unionize.

“I can’t tell you how many times I’ve told people that I feel so lucky to have this job,” said Leigh Littlefield, a Bay Area delivery worker for Safeway, another grocery chain owned by Albertsons.

Littlefield is one of 250 delivery workers for Safeway that just joined the United Food and Commercial Workers International union. They first started organizing to receive guaranteed benefits, she says, after managers began blocking them from working the minimum number of hours required to qualify. The effort was well underway when they got wind of the DoorDash threat, which Littlefield says spurred workers to quickly finish unionizing.

Workers wrote into their contract that employees could not have shifts replaced by DoorDash, Littlefield says. “If we didn’t have this contract,” she says, “I imagine we would have been laid off with everyone else.”

Derrick Neal was not part of a union. He’s living out of his car, trying to figure out what to do next. He hopes he can find another job with some kind of safety net.

In America, that is becoming harder and harder to find.