Aug 25, 2021 • 10M

🗞️ Cali's gig worker law is out

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Raad Ahmed
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Episode details

This week: What to know from an EY survey of GCs and the reasons why Prop 22 was ruled unconstitutional. Plus: the FTC amends its Facebook antitrust complaint.

🙌 5 major takeaways from EY's extensive study on GCs 

EY dropped a major report on the opportunities and challenges of GCs and their legal departments.

We’re summarizing five of the most important takeaways and details. (You can read the whole thing here.)

Outsourcing legal work will be key

  • GCs expect the workload in their departments to increase by 25% in the next three years while their staffs increase by just 3%. 

More and more GCs are using Alternative Legal Service Providers (like Lawtrades)

  • The share of legal departments that used ALSPs rose from 72% in 2019 to 85% in 2020.

Budget cuts are happening

  • 88% of GCs said they intend to cut legal budgets in the next three years, prompted by either the CEO or the Board.

The good news about the budget cuts is technology could help

  • 59% of GCs believe more efficient use of tech will lead to cost savings.

Data breaches are a major concern

  • 65% of GCs say they do not have the requisite data and technology to respond to data breaches.

👩‍⚖️ Judge rules Cali's Prop 22 gig worker law unconstitutional 

Early last year, California rolled out a law making gig workers -- like those driving Ubers and Lyfts -- similar to full-time employees until it was stricken months later by voters in Prop 22.

Now, just a few months after that, Prop 22 has been ruled unconstitutional.

  • Ride-hailing drivers sued the state over Prop 22 in January: Their lawsuit was dismissed by the California Supreme Court, and everything seemed like it was over. But another suit was filed and heard by a lower court. That judge deemed it unconstitutional because of a provision in the law limiting gig workers’ ability to receive workers’ comp.

  • One legal expert says the decision makes sense: Law professor Veena Dubal told the NYT, “I think the judge made a very sound decision in finding that Prop. 22 is unconstitutional because it had some unusual provisions in it. It was written in such a comprehensive way to prevent the workers from having access to any rights that the Legislature decided.” 

Not surprisingly, Uber and Lyft do not agree

They spent millions on Prop 22 last year and are planning an appeal. One coalition repping gig economy groups called the judge’s decision “outrageous” and an “affront” to California voters.  

The Verdict

Nothing is likely to change in California because of the judge’s decision -- yet. The gig economy companies’ representatives say the appeals process will have to play out first. 

🧭 FTC files amended antitrust complaint against Facebook 

Well that didn’t take long. 

A few weeks after a federal judge dismissed the FTC’s hyped Facebook lawsuit, the FTC filed its modified attempt to prove Facebook has violated antitrust laws. 

  • The original complaint failed for one major reason: It wasn’t thorough enough. The court said the FTC hadn’t provided sufficient evidence that Facebook was a monopoly, particularly concerning developments over the past couple of years. 

  • This time the FTC explained social networks in greater depth: According to the Verge, the amended complaint described Facebook as a dominant provider of a social space, separating it from companies like Reddit, Twitter, and TikTok. 

Was anything else new?

The argument was roughly the same: That Facebook’s widespread power in social media is bad for consumers. The FTC basically just gave more examples, another being the way it recovered from the Cambridge Analytica scandal. “Facebook’s ability to harm users by decreasing product quality without losing significant user engagement,” the complaint reads, according to The Verge, “indicates that Facebook has market power.  

The Verdict

Facebook can take until early October to craft a response. It will likely be a few more months after that before the judge hears the case again.

💌 What else we're forwarding

Bill Ackman takes action after SPAC lawsuit: Ackman may return investors’ money in his SPAC and shift his attention to a new investment structure that’s being called a SPARC. 

White-collar prosecutions are way down: Some 5,000 white-collar crime cases are expected to be announced by prosecutors by the end 2021, roughly half as much as a decade ago, and not many experts believe it’s because people are committing proportionally fewer crimes.

🎧 Music we’re working to

Today we’re listening to Büşra Kayıkçı, a Turkish pianist and composer based in Istanbul. Her debut LP Eskizler is predominantly made up of arpeggio progressions with surprise minor melodies thrown in to keep you interested. The serene tone of these improvised pieces makes this album the perfect accompaniment to your working day.

Eskizler - Büşra Kayıkçı
Spotify / Apple Music / YouTube MusicAmazon Music 

See you next week!

✌🏽 Raad