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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Today’s News & Commentary — October 31, 2016

Happy Halloween! In order to get your fright night started right, check out this list of union-made candies from the AFL-CIO.

The Washington Post reports that federal workers earn 34.07% less on average than comparable workers in the private sector. The number was derived by the Federal Salary Council, a group that oversees the General Schedule pay system that covers most government workers. This figure is around the same as it has been the last three years, which has led federal employee unions to call for higher wages, though the number has been disputed by conservative and libertarian groups (finding a 14 to 78% pay advantage) and the Congressional Budget Office (finding a 2% pay advantage).

A new poll by the National Employment Law Project found 84% of voters, both Republican and Democrat, “bristle when corporations illegally misclassify employees,” as put by the NELP’s Rebecca Smith in The Hill. These voters are in favor of policies that make it harder for companies to classify workers as independent contractors and that subject such companies to higher fines.

In Uber news, a new study from researchers at MIT, Stanford, and University of Washington found that Boston Uber drivers “canceled rides for men with black-sounding names more than twice as often as for other men” and “Black people in Seattle faced notably longer wait times for a car using Uber and Lyft Inc. than white customers,” as reported in Bloomberg. The researchers proposed fixes such as hiding passenger names and increasing repercussions to canceling rides, as well as periodic discrimination reviews. The paper researchers also noticed that “women were sometimes taken on significantly longer rides than men.”

Today’s News and Commentary — September 13, 2016

In a historic move, California will grant farm workers an expanded right to overtime pay that now matches that of other workers.  According to The Los Angeles Times, new rules will be phased in over four years beginning in 2019, and “will lower the current 10-hour-day threshold for overtime by half an hour each year until it reaches the standard eight-hour day by 2022″ as well as ” phase in a 40-hour standard workweek for the first time. The governor will be able to suspend any part of the process for a year depending on economic conditions.”  More than 90% of California farm workers are Latino, and more than 80% are immigrants.

The faculty lockout at Long Island University continues.  Inside Higher Ed reports that “Long Island University’s American Federation of Teachers-affiliated faculty union filed an unfair labor charge against the university with the National Labor Relations Board.”  Charges include “repudiation of contract, refusal to bargain/bad faith bargaining, changes in terms and conditions of employment, and lockout.”

The battle over the classification of gig economy workers is just as robust across the Atlantic.  The Guardian published an op-ed on whether UK employment law adequately protects gig economy workers.  As in the US, UK law looks to the activities performed by workers to determine their status, irrespective of any contractual agreements.  The writer concludes that “the law ought to be reviewed, given that more and more people are working within the gig economy and losing out on rights.

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Gig News: Federal Judge Rejects Uber Settlement

Last month, Judge Edward M. Chen of the Northern District of California rejected a proposed settlement in the O’Connor v. Uber litigation, a suit challenging Uber’s classification of drivers as independent contractors.  The rejection comes after another judge rejected a proposed settlement in Cotter v. Lyft, a similar suit before the same court brought by the same plaintiff’s attorneys, earlier this year.

Following the Lyft precedent, Judge Chen reviewed the proposed O’Connor settlement and applied “with full force” the factors used by the Ninth Circuit in reviewing such settlements. First, Judge Chen considered the risks to both the plaintiffs and Uber in continuing the litigation.  He acknowledged the risk to the plaintiffs that the Ninth Circuit would overrule his previous invalidation of Uber’s mandatory arbitration agreements, thus compelling individual driver arbitrations.  Judge Chen also opined (contrary to Professor Sachs’ conclusion here and here) that the factors used to determine the proper classification of workers under California law do not conclusively support a finding of either employee or independent contractor status for Uber drivers.  He further recognized that Uber challenged recovery and reimbursements even in the event drivers are found to be employees, and that drivers might not prevail on claims with respect to a) unavailability of meal and risk breaks, b) minimum wage and overtime, and c) workers’ compensation.

Judge Chen also reviewed the substantial risk to Uber of a finding that drivers are employees under California law, estimating a penalty against Uber in excess of $1 billion.  He noted that, even if Uber is successful in enforcing its mandatory arbitration agreements, a court could still decide the proper classification of drivers in considering non-waivable California Private Attorneys General Act (PAGA) claims.  Judge Chen additionally considered that absent a settlement one or more drivers not bound by arbitration (such as those who opted out) could litigate their proper classification and thus affect arbitration results, and that the costs of many individual arbitrations would be significant for Uber.

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Today’s News & Commentary — August 30, 2016

A new study released by the Economic Policy Institute and co-authored by OnLabor Senior Contributor Jake Rosenfeld won’t surprise readers with its key finding – a significant link between the decline in union membership and increased income inequality in America.  Salon notes that the researchers “looked at both urban and rural regions of the country as well as areas with strong and weak union representation to gain a better perspective on how declining union numbers affect nonunion working men and women as well as those workers with some higher education and those with just a high school diploma or less,” finding that “working-age men without high school diplomas have been hurt the most in comparison with such workers nearly four decades ago.”  The American Prospect further reports that “union membership makes a tremendous difference for people who do not have college degrees.”

Following up on last week’s National Labor Relations Board ruling that graduate students at private universities are statutory employees who can unionize under the National Labor Relations Act, Inside Higher Ed highlights a crop of “anti-union” websites launched to deter students from organizing.  Since the ruling “Columbia, along with HarvardPrinceton and Yale Universities and the University of Chicago, have posted information online about the possible effects of unionization.  Most point out that all union members must pay dues and are expected to participate in strikes, should they occur, and that unionization won’t necessarily improve their working conditions.  Some contain concerns previously voiced to, and largely rejected by the NLRB — namely that unionization compromises the student experience in a number of ways.”

In March, OnLabor’s Sara Ziff asked if Donald Trump’s modeling agency was flouting immigration and employment agency law – and a new Mother Jones report confirms the answer is in fact a ‘yuge’ yes.  In fact, “the mogul’s New York modeling agency, Trump Model Management, has profited from using foreign models who came to the United States on tourist visas that did not permit them to work here, according to three former Trump models, all noncitizens, who shared their stories with Mother Jones.  Financial and immigration records included in a recent lawsuit filed by a fourth former Trump model show that she, too, worked for Trump’s agency in the United States without a proper visa.”

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Guest Post: The Status of Uber Drivers – Part 3: Applying the Tests

Guy Davidov is the Elias Lieberman Professor of Labour Law at the Hebrew University of Jerusalem, and currently a visiting scholar at Berkeley Law.

This is the final post in a three-part series.

In the previous post I argued that subordination and dependency should be the key to attaching employee status.  These tests are not unlike the ones already in existence in the U.S.  and elsewhere, albeit with some important changes and additions, as briefly explained there.  I have also argued that dependency alone should be sufficient to trigger the application of some (in fact many) work-related protections.

To what extent is there subordination (or “control”, in a very broad sense) in the typical relationship between Uber and its drivers? Benjamin Sachs has argued in several posts here that such control is present.  Indeed, the drivers have to abide by detailed rules of the firm regarding the way they provide the service; and they are monitored at least to some degree through the app.  Moreover, the fact that drivers provide the Uber service to Uber customers on behalf of Uber suggests that they are integrated in the organization, explaining why a relatively high degree of control is necessary (poor service would harm Uber’s reputation and its business vis-à-vis its customers; they are not the driver’s customers).

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Guest Post: The Status of Uber Drivers – Part 1: Some Preliminary Questions

Guy Davidov is the Elias Lieberman Professor of Labour Law at the Hebrew University of Jerusalem, and currently a visiting scholar at Berkeley Law.

This post is the first in a three-part series.

The status of Uber drivers – and others who work for on-demand platforms – has been the subject of a heated debate (and of course an elaborate and highly useful discussion in this blog).  Are they independent contractors, as argued by the firms operating the platforms, or employees?  The recent settlement in one of the suits, in which the plaintiffs agreed to remain independent contractors in return for other concessions, does not settle this crucial issue.  Other suits claiming misclassification remain active.  And crucially, the normative questions are still being debated. In the current post and two following ones I focus on the normative question of what the law should be in this regard (rather than the current state of the law).  Before directly addressing the question of how such workers should be classified, it would be useful to raise a few preliminary questions.

First, does it make sense to retain the employee/independent contractor distinction?

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