Gig News: Court Enjoins Enforcement of Seattle Gig Unionization Ordinance

Judge Robert S. Lasnik of the U.S. District Court for the Western District of Washington has enjoined enforcement of Seattle’s first-in-the-nation ordinance giving gig economy independent contractors the right to unionize (the “Ordinance”.)  Judge Lasnik’s full decision granting the U.S. Chamber of Commerce’s motion for preliminary injunctive relief in Chamber of Commerce of the United States of America v. City of Seattle can be found here.  Uber, Lyft and a third ride hailing company had been due to submit driver information this week to a union recognized as a “qualified driver representative” pursuant to the Ordinance, but the requirements “are hereby enjoined until this matter is finally resolved.”

Notably, Judge Lasnik found that the Chamber may succeed on the merits of its antitrust claim, pending analysis of the City’s claim for antitrust immunity, but that the Chamber and drivers challenging the Ordinance in a consolidated lawsuit are unlikely to succeed on their National Labor Relations Act preemption claims at the moment.  Judge Lasnik stressed “that this Order should not be read as a harbinger of what the ultimate decision in this case will be when all dispositive motions are fully briefed and considered.  The plaintiffs have raised serious questions that deserve careful, rigorous judicial attention, not a fast-tracked rush to judgment based on a date that has no extrinsic importance.”

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Gig News: Seattle Gig Unionization Ordinance On Hold

Despite surviving multiple court challenges, the revolutionary Seattle municipal ordinance giving gig economy independent contractors the right to unionize appears to be on hold.

According to Bloomberg BNA, a Seattle city attorney announced the city will delay enforcement of the law in proceedings before the district court hearing the challenge to the ordinance last week.  Uber, Lyft and a third ride hailing company had been due to submit driver information today to a union recognized as a “qualified driver representative” pursuant to the ordinance.  Seattle will not requite the companies to disclose the driver information until Judge Robert S. Lasnik of the U.S. District Court for the Western District of Washington rules on a motion filed by the U.S. Chamber of Commerce, which brought the lawsuit challenging the ordinance.

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Today’s News & Commentary — March 2, 2017

The Wall Street Journal reports that the Trump Administration has developed a new draft policy deemphasizing the role that the World Trade Organization plays in trade enforcement.  Instead, the Administration would rely more aggressively on U.S. law and “all possible sources of leverage to encourage other countries to open up their markets.”  The draft document outlining this strategy could be released as early as today.  In his speech to Congress on Tuesday, President Trump said, “I believe strongly in free trade, but it also has to be fair trade. It’s been a long time since we had fair trade.”  Trade was a popular issue for President Trump in his campaign, and he vowed to be tougher on enforcement.  Read more here.

While some workers in the U.S. have celebrated the United States’ withdrawal from the Trans-Pacific Partnership (TPP), the New York Times published an article focusing on the workers who fear that the United States’ departure from the agreement could lead to an abandonment of labor and environmental commitments in TPP countries.  Do Thi Minh Hanh, a Vietnamese labor activist, fears that “[t]he Vietnamese government will use this as an excuse to suppress the labor movement” because “[t]hey never wanted to have independent unions in Vietnam.”  The United States and Vietnam had a side agreement, or consistency plan, to ensure compliance with certain basic labor standards including criminalizing forced labor and the elimination of a government ban on independent unions.  While critics of these protections have maintained that they are largely ineffectual, some proponents including law professor David A. Gantz, an expert on international trade agreements, argue that the provisions in the TPP “might have made a real difference.”

Uber continued to make headlines when a video of Travis Kalanick, Uber founder and CEO, arguing with an Uber driver, Fawzi Kamel, became public.  Responding to Kamel’s contention that Uber has slashed rates for drivers, Kalanick told Kamel that he needs to “take responsibility” for his own issues.  Yesterday, in a memo to workers at Uber, Kalanick stated that “[i]t’s clear this video is a reflection of me” and “the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up.”  The video’s release and Kalanick’s apology comes shortly after former-Uber engineer Susan Fowler published a blog post exposing sexism at the company, which garnered significant media attention.  In an optimistic New York Times piece, Farhad Manjoo opines that the Uber scandal “feels like a watershed” and predicts a change in the treatment of women in tech.  In an industry where Fowler’s complaints ring true for many, diversity advocates suggest that the recent actions by Uber to address the incident are only the beginning.

Veronica Escobar, an El Paso County Judge, authored an op-ed in the New York Times, describing how President Trump’s immigration policies could harm the U.S. and in particular, her community of El Paso.  She highlighted the jobs created by cross-border trade and the contributions of dreamers, undocumented immigrants who entered the United States as children, to the U.S. economy.  She says that if given work authorization, dreamers are estimated to increase government revenues by $2.3 billion.  Read more here.

Gig News: Brazilian Judge Finds Uber Driver Is Employee

A labor court judge in the state of Minas Gerais, Brazil has found that an Uber driver there is an employee of the company, taking the debate over the classification of drivers to another country.  The Brazilian newspaper Zero Hora reports that the decision is the first in Brazil to recognize Uber as an employer of drivers.  According to Reuters, the judge “ordered Uber to pay one driver around 30,000 reais ($10,000) in compensation for overtime, night shifts, holidays and expenses such as gasoline, water and candy for passengers.”  Uber announced that it will appeal the decision.  The ruling only applies to a single driver, but could open the door to more challenges.

Brazilian news portal G1 notes that the judge applied a multi-factor test for employment status under Brazilian law.  Key factors included that a) users are assigned a driver by Uber, unable to select from options; b) Uber (not the passenger) pays drivers at the end of each week after withdrawing a percentage, thus going beyond simple mediation of passenger-driver business; c) transport is Uber’s primary business, as partially evidenced by its investment in automobiles vehicles; and d) Uber drivers are submissive to the company, forced to comply with strict rules in order to drive for the company.

Zero Hora also emphasized that the judge found that drivers were encouraged to drive regularly despite flexibility, and that Uber engaged in a hiring process by approving drivers.

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Guest Post: A Third Category Is Not The Right Path for Gig Workers – A View From The UK

Hannah Reed works on employment and labour law policy for the UK Trades Union Congress (TUC).  She is currently attending the Harvard Trade Union Program

The recent Uber case in the UK was hailed by unions as a monumental victory, securing basic ‘worker’ rights to rest breaks, paid vacation time and the national minimum wage for 30,000 Uber drivers in the UK.

The decision is certainly welcome and may have useful implications in the US.  But no one should presume that the issue of rights for gig workers is now settled or that legislators are off the hook. The case will be appealed.  Uber continues to argue its drivers are self-employed and that the tribunal decision would require it to adjust its business model.  The current ruling is also not binding for other groups of gig workers.

The intense media interest in the case has, however, helped to reignite policy debates on who should qualify for which statutory employment rights and whether protections should be extended to those working on the edge of the labour market.

Following pressure from unions, think tanks and civil society groups, the UK government has commissioned a review into modern employment practices.  The House of Commons Business Committee has similarly launched an inquiry into the Future World of Work and Rights of Workers.

The central question for both reviews is the whether the law needs to be modernised to respond to the new ‘gig economy.  Despite the rapid expansion in temporary, insecure employment and complex supply chains, UK employment law remains wedded to the notion that permanent, stable employment is the norm.  Those that do not meet this norm are simply not protected.

But whilst some US commentators are advocating the creation of third category of worker in response to the growth of the gig economy, the opposite debate is starting to take place in the UK.

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Guest Post: Uber Retirement

Paul M. Secunda is Professor of Law and Director, Labor and Employment Law Program at Marquette Law School.

Although by no means a new question regarding retirement, the noteworthy growth of gig companies in the sharing economy has renewed concerns that even more American workers will lack access to employment-based retirement plans.  Although some argue that the gig economy offers workers advantages including more independence and flexibility, company-sponsored retirement saving is not one of them.  This is a dangerous state of affairs, as employment-based retirement plans make up a critical part of an individual’s strategy for retirement security.

Such retirement plans, like the nearly-ubiquitous 401(k) plans, provide a necessary bulwark against destitution in old age, especially given that Social Security provides only partial income replacement and few Americans have put away much in private savings.  Yet, independent contractors, which is how most gig companies classify their workers, are approximately two-thirds less likely than standard employees to have access to an employer-provided retirement plan.

Much academic and judicial ink has already been spilt over whether Uber drivers and other members of the sharing economy are members of the so-called “contingent” workforce or “precariat” (part-time, leased, temporary, and per diem workers), not entitled to receive retirement benefits as part of their employment.  Whether these employees are statutory employees is of utmost importance because it largely determines whether gig workers are covered by employment laws, as most such laws center on the employer-employment relationship.

What all these jobs have in common is that the work activity is happening outside of the traditional safety net of employment and are highly unstable.  Whereas statutory employees are covered in the United States by numerous labor and employment law statues that provide security and protection in the workplace, workers in these alternative work arrangements are not.  Once stable employment relationships have given way to relationships that are much more arms-length, regardless of whether it is a contractor situation, temporary employment, or a one-time encounter.

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Gig News: In First Uber Classification Arbitration, Driver Ruled Independent Contractor

The Recorder reports that Uber has “successfully persuaded a private arbitrator that a California driver for the transportation company is an independent contractor, not an employee, in the first arbitration in the United States to test that issue.”  While drivers continue to challenge Uber’s mandatory arbitration agreements in court, the arbitrator’s decision represents the outcome of the first of what could become many individual challenges by drivers asserting proper classification as employees, if arbitration agreements are enforced.

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