Uber Engineer on Prop 22 & Human Capital - Why He Spoke Out

Greetings and welcome back to Human Capital, your source for the newest developments in workforce issues, diversity initiatives, and inclusion within the technology sector.

The most striking development this week occurred on Wednesday when the U.S. Department of Labor leveled accusations against Microsoft, effectively suggesting discriminatory practices against white individuals (a legally unrecognized concept) due to the company’s commitment to increasing its representation of Black employees.

However, even this wasn’t the most significant story of the week. That distinction belongs to Kurt Nelson, an engineer at Uber, and his public stance against his company, encouraging individuals to reject the Uber-backed ballot proposition in California designed to maintain the classification of drivers as independent contractors. I had the opportunity to interview Nelson and learn about the factors that led him to voice his concerns. His insights are detailed below in this newsletter.

Before we proceed, I’m pleased to announce some personal news: Human Capital will also be available as a newsletter starting Friday, October 23. Register here to ensure you receive it.

Let’s move on to the details.

Stay Woke

Coinbase adjusts workforce following positions on societal concerns

Coinbase previously offered departing benefits to employees who disagreed with the cryptocurrency firm’s approach to social issues. This week, Coinbase Chief Executive Brian Armstrong reported that approximately 5% of the workforce (totaling 60 individuals) accepted these packages, with further departures anticipated as “several other discussions” are ongoing.

Armstrong addressed concerns that his position might lead to the exit of people of color and other underrepresented groups. However, in a company blog post, Armstrong stated that these groups “have not utilized the exit package at a rate disproportionate to the overall employee base.”

Department of Labor investigates Microsoft’s diversity initiatives

Microsoft recently revealed that the U.S. Department of Labor’s Office of Federal Contract Compliance Programs has contacted the company regarding its commitments to racial equity and diversity, initially announced in June. Microsoft pledged to double the number of Black managers, senior individual contributors, and senior leaders within its U.S. operations by 2025. The OFCCP now suggests this action could be interpreted as unlawful discrimination, potentially violating Title VII of the Civil Rights Act, as the commitment “seems to indicate that employment decisions might be based on race.”

“We firmly believe that the law prohibits discrimination based on race,” Microsoft stated in a blog post. “We also recognize our affirmative responsibilities as a federal government contractor to continually enhance the diversity of our workforce, and we take these obligations seriously. We possess extensive experience in creating opportunities for individuals without diminishing opportunities for others. Moreover, we understand the importance of expanding access to opportunities, including through targeted programs designed to attract a broad range of talent for careers at Microsoft.”

This development follows the Trump administration’s expansion of its prohibition on diversity and anti-racism training to encompass federal contractors. While this situation doesn’t directly fall under that ban, it raises concerns to see the DOL scrutinizing a technology company for attempting to increase diversity. It appears the impact of the ban is extending into the technology sector.

Joelle Emerson, the founder and CEO of diversity training provider Paradigm, reports losing her first client as a consequence of the executive order. While the identity of the client remains undisclosed, Paradigm serves numerous technology companies.

Crunchbase data highlights venture capital funding for Black and Latinx entrepreneurs

It is generally acknowledged that Black and Latinx founders receive significantly less funding compared to their white counterparts. A recent Crunchbase report provides further insight into this disparity. Key findings from its 2020 Diversity Spotlight report are as follows.

Gig Work

An Uber employee publicly advocates against Proposition 22, supported by Uber

In a departure from his company’s stance, Uber engineer Kurt Nelson authored an opinion piece for TechCrunch detailing his opposition to Prop 22. This California ballot measure aims to maintain the classification of rideshare and delivery drivers as independent contractors. Following the publication of his article, I spoke with Nelson to understand the motivations behind his decision to voice his concerns regarding Prop 22. 

“The situation was influenced by the impact of COVID-19 on unemployment benefits and healthcare access for many individuals, combined with the proximity to the election and a noticeable absence of commentary from former employees of Uber or similar gig companies,” Nelson explained. 

Furthermore, Nelson was preparing to leave Uber – a fact he had openly discussed with his manager. He had already experienced dissatisfaction with the company’s handling of workforce reductions earlier in the year, but Uber’s campaign in favor of Prop 22 proved to be the decisive factor. 

Uber’s primary arguments for preserving the independent contractor status of its drivers center on the assertion that this is the drivers’ preference and that reclassifying them as employees would incur significant costs. Uber has also stated that providing drivers with both flexibility and employee benefits is incompatible. 

“It would present substantial difficulties,” Uber Director of Policy, Cities and Transportation Shin-pei Tsay shared during TC Sessions: Mobility this week. “We would need to guarantee sufficient driver availability to meet demand, requiring careful forecasting. The number of available positions would be limited by the fixed hours people would be working. Consequently, there would likely be fewer overall work opportunities, particularly those drivers currently value.”

However, Nelson points out that Silicon Valley is renowned for its ability to overcome complex challenges. 

“We are a technology company, and solving difficult problems is our core competency,” he stated. 

Nelson reported that some of his colleagues contacted him after his opinion piece was published – some expressing their gratitude for his willingness to speak out. Even before the article, Nelson noted he was among the few who would express any criticism of Prop 22 within Uber’s internal communication channels. This reluctance is understandable, given the company’s strong advocacy for Prop 22. 

Nelson described how, during company-wide meetings, members of the executive team displayed support for Prop 22 by wearing “Yes on 22” apparel or utilizing related virtual backgrounds. Uber also provided employees with complimentary “Yes on 22” car decals and shirts, according to Nelson. 

Regarding his future career plans, Nelson affirmed that he has no intention of returning to the gig economy. “That’s a certainty,” he said. “I am finished with the gig economy.”

Union Life

Kickstarter reaches agreement with NLRB regarding the termination of a union organizer

Kickstarter has consented to provide $36,598.63 in lost wages to Taylor Moore, a previous Kickstarter staff member who experienced dismissal in the prior year, as detailed in a report by Vice. Moore was actively involved in the efforts to establish a union within the company, which received official recognition earlier in the current year. As a component of the agreement reached with the National Labor Relations Board, Kickstarter will also display a notification concerning the settlement to its workforce both on its internal network and at its workplace locations when they are reopened. 

Back in September 2019, Kickstarter terminated the employment of two individuals who were actively participating in unionization activities. Approximately one year later, the Labor Board determined there was sufficient evidence to support the claim that Kickstarter had unlawfully dismissed a union organizer.

NLRB issues complaint against Google contractor HCL America

Roughly one year has passed since 80 contractors working with Google decided to establish a union affiliated with the U.S. Steelworkers. However, these contractors, who are formally employees of HCL America, have been unable to begin negotiations as a collective group, as indicated in a recent complaint filed by the National Labor Relations Board, as reported by Vice.

The complaint asserts that HCL has not engaged in bargaining with the union and has additionally reassigned tasks performed by union members to non-union personnel located in Poland. The NLRB contends that HCL took these actions “because employees formed, joined and assisted the Union and engaged in concerted activities, and to discourage employees from engaging in these activities.”

News bites

• A concerning report from Games Industry Biz detailed instances of sexual harassment, racial discrimination, and further instances of misconduct occurring within the Twitch platform.
• Google is distributing financial grants to 76 emerging companies as part of a program focused on racial equality, which was initially revealed in June.
• White Ops is undergoing a rebranding process, prompted by the realization that their current name inadvertently reinforces harmful racial connotations and associations.