Governor Newsom recently signed two important pieces of legislation for California workers. If most of us won’t notice a difference at work when these new laws go into effect, it’s because most of us have responsible employers. These two laws—both championed by Assemblymember Lorena Gonzalez—attack some of the most exploitative practices keeping workers both silent and in poverty. These two laws go to the heart of Cinefamily’s business model.
AB-5 makes it harder for companies to misclassify employees as independent contractors. Companies that misclassify workers save 30–40% on their labor costs, and reduce their own legal liability by denying workers basic protections and legal rights like minimum wage, workers comp, and Social Security. Worker misclassification was the rule at Cinefamily, according to interviews with 23 former staff, volunteers, top management, and board members. One staffer who was injured on the job told me Cinefamily denied the workers comp claim and required the staffer to return to work while injured. Former staffers also reported misclassification at Cinespia, run by longtime Cinefamily board member John Wyatt.
AB-51 bans forced arbitration agreements as a condition of employment. When companies say they prefer arbitration (to litigation) for its “speed and lower cost,” they mean that by avoiding class action lawsuits they avoid true liability, and that with a captured set of private arbitrators employers rarely lose. (This is true in consumer contexts as well.) One lawsuit filed against Cinefamily in 2014—three years before the reckoning—was reportedly pushed out of the legal system and into arbitration under the now-banned practice.
Had Cinefamily leadership not silenced workers—had claims been heard in open court—would the worst abuses have been avoided?