In his inaugural State of the State address Tuesday, Gov. Gavin Newsom called for “a new modern compact for California’s changing workforce” that will address technology’s impact on labor.

Newsom, addressing a joint legislative session in Sacramento, said his administration will create a commission of labor and business leaders charged with developing ideas to “expand worker opportunity” without hurting “innovation or flexibility.” His office did not immediately name the commission’s members or say when it will convene.

“This, respectfully, is much bigger than Dynamex,” Newsom said, referring to the 2018 California Supreme Court decision that makes it tougher for companies to classify workers as independent contractors.

“California needs a comprehensive statewide strategy to uplift and upskill our workers, to ensure that technological advancements in AI, blockchain, big data, are creating jobs, not destroying jobs,” Newsom said. “And I believe we need to reform our institutions so that more workers have an ownership stake in their sweat equity.”

The fight over Dynamex is expected to be one of the biggest issues in California’s Legislature this year. Lawmakers have already introduced competing bills, one to codify the ruling and the other to overturn it.

Newsom has not taken a position on the dueling Dynamex-inspired bills. Last month he told reporters that his chief of staff, Ann O’Leary, a former Boies Schiller Flexner partner who advised tech and other corporate clients, “has a lot of ideas about a new committee to address the issues that led to the Supreme Court decision. … You’ll be hearing a lot more.”

In his 45-minute address, Newsom also praised the Legislature for enacting the California Consumer Privacy Act last year, saying “companies that make billions of dollars collecting, curating and monetizing our personal data have a duty to protect it.” The governor said he’s asked his staff to come up with a proposal for a “data dividend” that will give Californians a “share of the wealth” companies generate by using their personal information.

Newsom did not offer specifics on his data dividend plan. Scholars and others have floated the idea of compensating consumers for use of their data as a way of rebalancing the financial and power relationships between customers and corporations reliant on their personal information. Facebook co-founder Chris Hughes suggested last year that one template could be Alaska’s Permanent Fund, which pays dividends to state residents from oil revenue-based investments.

James Harrison, a partner at Remcho Johansen & Purcell, the San Leandro firm that helped write the ballot initiative that led to the state’s CPA, said at a forum last week that corporate loyalty and rewards programs that rely on customers’ data should be tied to the average value of that information.


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