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].
A federal district judge has denied Uber’s motion for judgment on the pleadings in an important wage and hour case brought by UberBlack drivers (Razak v. Uber Technologies, Inc.). The order, from October, contains important rulings on what Uber drivers have to plead on the “employee” question to survive such a motion, and on what it takes for drivers to plead a minimum wage claim in Uber litigation.
With respect to employee status, the judge found that the drivers’ complaint contains allegations that make it “plausible” that they are employees, and not independent contractors, under the Fair Labor Standards Act. Here’s the key part of the order:
[W]ith respect to the degree of control exercised by Defendants (factor one), Plaintiffs allege, inter alia, that Defendants “control the number of fares each driver receives,” “have authority to suspend or terminate a driver’s access to the App,” “are not permitted to ask for gratuity,” and “are subject to suspension or termination if they receive an unfavorable customer rating[.]” (Compl. ¶ 91). As to whether the services Plaintiffs rendered require a special skill (factor four), Plaintiffs allege that, in order to serve as Drivers, “drivers must undergo PPA training, testing, examination, a criminal background check and driving history check.” (Id. ¶ 51). As to the importance of Plaintiffs’ services to the Defendants’ business (factor six), Plaintiffs aver that Defendants’ business is to “provide on-demand car services to the general public,” and that Plaintiffs are “drivers that perform on-demand transportation services for defendants.” (Id. ¶ 1, 24). Plaintiffs also specifically allege that they are “dependent upon the business to which they render service.” (See, e.g., id. ¶157 (“Plaintiffs and Class members are financially dependent on the fare provided to them by Defendants.”))
And, as the judge concludes, “[c]ourts in this district have found that plaintiffs had adequately pled the existence of an employer-employee relationship based on far less detailed complaints.” (The court also concludes that the drivers sufficiently alleged an employer-employee relationship under Pennsylvania state law, ruling that “Plaintiffs’ Complaint sufficiently alleges facts to demonstrate that Defendants exercised a high degree of control over the way Plaintiffs’ work was conducted.”) Given that the drivers here have essentially alleged the basics of the Uber business model, the order has broad implications for Uber drivers nationally.
Two, the judge finds that the drivers have adequately alleged that Uber violated their minimum wage rights. In a ruling that would again seem to have clear relevance for a wide range of Uber drivers, the judge concludes:
Plaintiffs’ Complaint contains sufficient factual allegations to permit the Court to allow the reasonable inference that Plaintiffs were not paid minimum wage. Specifically, Plaintiffs have alleged that, “at the end of each week, the driver receives an electronic earnings statement from Uber and Ge[g]en,” [Uber’s “transportation company in Pennsylvania”] which amounts to the driver’s “trip earnings’ less ‘miscellaneous’ expenses.” (Compl. ¶¶ 40- 41). “Trip earnings,” the Complaint alleges, “equal the driver’s fare less Uber’s fee” of twenty-five percent “taken off the top.” (Id. ¶¶ 42-43). Additionally, Plaintiffs allege that “Uber automatically deducts various expenses from the driver’s earnings,” including, but not limited to, “(1) regulatory fees accessed by the PPA, (2) vehicle payments, and (3) insurance premium payments.” (Id. ¶ 43). “The aforesaid expenses are automatically deducted from the driver’s earnings, regardless of whether the driver earned enough money to cover expenses. If there is a net negative balance, the driver must go to Gegen office and pay the balance in order to maintain access to his or her Uber account.”
This is to say, the Uber business model itself – according to which drivers get trip earnings minus Uber’s fee and expenses, irrespective of whether the total is greater than the minimum wage requirement – constitutes a sufficiently pled minimum wage claim. As with all orders at this stage of litigation, we can’t predict what the outcome of this particular case will be. But the judge here has held that a minimum wage complaint can withstand a motion for judgment on the pleadings by, in essence, outlining the Uber business model.
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December 13
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December 11
In today’s News and Commentary, Biden’s NLRB pick heads to Senate vote, DOL settles a farmworker lawsuit, and a federal judge blocks Albertsons-Kroger merger. Democrats have moved to expedite re-confirmation proceedings for NLRB Chair Lauren McFerran, which would grant her another five years on the Board. If the Democrats succeed in finding 50 Senate votes […]
December 10
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December 9
Teamsters file charges against Costco; a sanitation contractor is fined child labor law violations, and workers give VW an ultimatum ahead of the latest negotiation attempts
December 8
Massachusetts rideshare drivers prepare to unionize; Starbucks and Nestlé supply chains use child labor, report says.
December 6
In today’s news and commentary, DOL attempts to abolish subminimum wage for workers with disabilities, AFGE reaches remote work agreement with SSA, and George Washington University resident doctors vote to strike. This week, the Department of Labor proposed a rule to abolish the Fair Labor Standards Act’s Section 14(c) program, which allows employers to pay […]