Editorials

California Labor Commission: Uber Driver is an Employee

Benjamin Sachs

Benjamin Sachs is the Kestnbaum Professor of Labor and Industry at Harvard Law School and a leading expert in the field of labor law and labor relations. He is also faculty director of the Center for Labor and a Just Economy. Professor Sachs teaches courses in labor law, employment law, and law and social change, and his writing focuses on union organizing and unions in American politics. Prior to joining the Harvard faculty in 2008, Professor Sachs was the Joseph Goldstein Fellow at Yale Law School.  From 2002-2006, he served as Assistant General Counsel of the Service Employees International Union (SEIU) in Washington, D.C.  Professor Sachs graduated from Yale Law School in 1998, and served as a judicial law clerk to the Honorable Stephen Reinhardt of the United States Court of Appeals for the Ninth Circuit. His writing has appeared in the Harvard Law Review, the Yale Law Journal, the Columbia Law Review, the New York Times and elsewhere.  Professor Sachs received the Yale Law School teaching award in 2007 and in 2013 received the Sacks-Freund Award for Teaching Excellence at Harvard Law School.  He can be reached at [email protected].

As reported in the New York Times, and elsewhere, a hearing officer for the California Labor Commissioner has ruled that Barbara Ann Berwick, an Uber driver, is an employee of Uber.  The decision is getting widespread attention today because it is attached as an exhibit to Uber’s appeal of the decision.  As does the federal court in O’Connor v. Uber, the Labor Commissioner here relies on the Borello test for employee status.  Deploying that test, the Commissioner concludes that Berwick is an employee.  What follows is the most relevant language of the Commission’s award, the full text of which we’ve linked here:

Defendants [Uber, Inc.] hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation.  The reality, however, is that Defendants are involved in every aspect of the operation.  Defendants vet prospective drivers, who must provide Defendants their personal banking and residence information, as well as their Social Security number . . . .  Defendants control the tools the drivers use; for example, drivers must register their cars with the Defendants, and none of their cars can be more the ten years old. . . .  Defendants monitor the Transportation Drivers’ approval ratings and terminate their access to the application if the rating falls below a specific level (4.6 stars). . . .  The passengers pay Defendants a set price for the trip, and Defendants, in turn, pay their drivers a non-negotiable service fee. . . . Defendants discourage drivers from accepting tips because it would be counterproductive to Defendants’ advertising and marketing strategy.  Plaintiff’s car and her labor were her only assets.  Plaintiff’s work did not entail any ‘managerial’ skills that could affect profit or loss.  Aside from her car, Plaintiff had no investment in the business. . . .

In light of the above, Plaintiff was Defendants’ employee.

Concluding Berwick is an employee, the Commission finds Uber liable for $4,152.20 for violations of various provisions of the California Labor Code, primarily the provision that requires employers to indemnify their employees for business expenses, here including millage that Berwick put on her car, tolls paid, etc.

As I’ve said before, I believe the facts in the Uber cases do reveal an employment relationship between Uber and its drivers. A federal judge agrees that these facts are sufficient to allow this question to go to a jury (as did a second judge in the Lyft litigation), and now the California Labor Commissioner has held as much.

One big question, of course, is how major a decision Berwick is. Time will tell, but it unquestionably is relevant.  For one thing, Berwick contributes to a developing trend in Uber cases, pointing collectively in the direction of employment status.  And because the federal courts in both the Uber and Lyft litigation are interpreting California employment law, the views of the California Labor Commission on what California law says and means has some particular relevance.

We’ll continue to provide updates as these cases develop.

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