Today’s News & Commentary — March 14, 2017

While Uber attempts to discourage the unionization of drivers in Seattle, some drivers are challenging the municipal law giving drivers the right to organize.  According to the Seattle Times, “the drivers are seeking a temporary restraining order barring the city from enforcing the law — the first of its kind in the country — saying it goes against federal labor and privacy laws, as well as violates their rights to free speech and association.”  The lawsuit is being led by the National Right to Work Foundation and the Freedom Foundation.  The drivers primarily argue that the National Labor Relations Act pre-empts the municipal law.

Another innovative municipal law has gone into effect, in San Jose, CA.  The Mercury-News notes that ” San Jose businesses with 36 or more employees must now offer extra shifts to part-time workers before hiring new staff.”  Under the Opportunity to Work measure, “companies must offer — in writing — extra work hours to existing qualified part-time employees.  If those employees aren’t qualified or decline the extra hours, an employer can then hire additional workers to fill the shifts.  The idea, advocates say, is to give existing workers access to extra hours to boost their paychecks.”

Muslim workers in Europe suffered a legal setback in seeking to assert their right to wear the hijab in the workplace.  The Washington Post reports that “The European Court of Justice issued a non-binding ruling Tuesday that employers can prohibit the Muslim headscarf in the workplace, setting an important precedent for a continent in the midst of a fraught political climate.”  The ECJ concluded that rules against the wearing of the hijab in the workplace were in fact rules against the visible wearing of religious signs, and thus not direct discrimination.  Notably, “in the absence of official internal regulations prohibiting what employees can wear to work, the court suggested, Muslim women have a stronger case for wearing the hijab to the office.”

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Today’s News & Commentary — March 13, 2017

The confirmation hearing for President Trump’s Labor nominee, Alexander Acosta, has been rescheduled due to scheduling conflicts.  The hearing is now set for March 22.  In the meantime, Acosta has been meeting one-on-one with senators to drum up support for his nomination.  Several Democrats have still not made up their mind on Acosta, Bloomberg BNA reports, and will continue to scrutinize his reputation.

That reputation is mixed, according to The New York Times.  Some — including immigration advocates and his colleagues at Florida International University — believe that Acosta is “a fair leader” who won’t let his conservative values affect his decisions.  But former colleagues claim that during his time at the Justice Department, Acosta sometimes acted out of political expedience, hiring candidates based on political connections instead of merit.

Can an employee be punished for refusing to participate in genetic testing?  Maybe, if a new bill — H.R. 1313, the Preserving Employee Wellness Programs Act — becomes law.  The bill, which secured House committee approval last week, would allow employers to collect genetic information on employees who participate in workplace wellness programs (read our previous coverage of corporate wellness programs here).  The Washington Post has more.

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Today’s News and Commentary — February 28, 2017

The fate of several of President Obama’s signature labor and employment policies could soon hang in the balance.  The Hill reports that “President Trump is facing pressure to roll back union-friendly policy changes made by the Obama-era National Labor Relations Board” from the U.S. Chamber of Commerce.  In particular, the Chamber urged Trump to target “policies that hold companies accountable for labor violations committed by their partners, speed up union elections, and allow small groups of workers to organize multiple unions inside a single company.”  Meanwhile, a Washington Post columnist notes that the Republican Congress is targeting President Obama’s “Fair Pay and Safe Workforces” executive order aimed at ensuring the compliance of federal government contractors with labor laws.

As President Trump acts, Americans work confidently while those without or about to lose work struggle.  USA Today highlights data from payroll company ADP which shows that American workers are increasingly “shifting into new sectors, such as a marketing manager who leaves retail for finance.”  Notably, “in eight of the 10 major industries tracked by ADP, the share of job-switchers who came from a different industry increased from late 2014 to late 2016 while the share swapping jobs within the same industry fell.  That’s up from seven of 10 sectors that met that criteria in the third quarter.”  ADP attributes such shifts to a tight labor market and worker confidence.  Many workers are, of course, struggling.  USA Today also features the story of John Feltner, an Indiana machinist whose union job is being outsourced to Mexico.  Feltner “is left to wonder how Middle America will endure in the age of offshoring moves such as the one [his employer] is executing.”

The reports of sexual harassment of female engineers at Uber continue to make headlines.  According to The New York Times, “the company dismissed the head of its engineering efforts for failing to disclose a sexual harassment claim from his previous job.”  If Americans are surprised by the allegations, many female engineers are not.  The CBC interviewed women in the tech world who note the commonality of harassment and misogyny in the industry.

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Gig News: Uber, Lyft & Airbnb Respond to Trump’s Muslim Ban

Major players in the gig economy have responded to President Donald Trump’s action to bar refugees and citizens of seven Muslim countries from entering the United States.

Most controversially, in the face of a 1-hour strike at New York’s John F. Kennedy International Airport yesterday by the union representing 19,000 New York taxi drivers in protest of Trump’s Muslim ban, Uber suspended surge pricing.  In effect, Uber broke the strike despite their claim that it wasn’t their intent to do so.  Both Buzzfeed and Slate report on a movement by consumers to cease using Uber and delete the application in response.

Uber also released a email sent to employees by CEO and co-founder Travis Kalanick, in which he stated Uber is “working out a process to identify…drivers [affected by Trump’s executive order] and compensate them pro bono during the next three months to help mitigate some of the financial stress and complications with supporting their families and putting food on the table.”  Kalanick serves on President Trump’s business advisory group.

Uber’s chief rival Lyft, on the other hand, released a much stronger statement.  Per Mashable, in an email to consumers entitled “Defending Our Values,” co-founders Logan Green and John Zimmer called Trump’s order “antithetical to both Lyft’s and the nation’s core values,” noting they stand firmly opposed to the action.  Most notably, Green and Zimmer stated that Lyft is “donating $1,000,000 over the next four years to the ACLU to defend our constitution.”

Airbnb, for its part, “has offered free accommodation to people left stranded by President Donald Trump’s travel restrictions,” according to the BBC.

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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Uber and Progressive Federalism

As Jon reported last night, an individual arbitrator has issued an award finding a California Uber driver to be an independent contractor rather than an employee.  The award is wrongly decided. I won’t engage in a complete analysis here, but, to find employee status, the arbitrator relies primarily on four California cases, three of which involved FedEx drivers. The arbitrator concludes that the facts of the Uber case resemble previous cases in which workers were found to be independent contractors. She holds:

Uber drivers are not supervised; supply the cars they drive; do not wear Uber uniforms or signage; can drive simultaneously for any competitor, including Lyft, Uber’s biggest competitor; are paid for each ride and have the unfettered option to work as little or as much as they want and whenever they want in the geographical location assigned to their platform.

But to find independent contractor status on this basis, the arbitrator has to ignore some other highly relevant cases, including a 2006 California decision involving drivers who worked for a courier company, JKH Enterprises, Inc. v. Dep’t of Industrial Relations. In JKH, the court found that the drivers were employees despite the following:

[T]he drivers are free to decline to perform a particular delivery when contacted by the dispatcher, even if the driver has indicated his or her availability for the day . . . .  All drivers [] use their own vehicles . . . They pay for their own gas, car service and maintenance, and insurance . . . . The drivers’ cars do not bear any JKH marking or logo. And the drivers themselves do not wear uniforms or badges that evidence their affiliation or relationship with JKH.  Some of the drivers perform delivery services for other companies as well . . . .  The drivers receive no particular training. . . . All drivers set their own schedules and choose their own driving routes.  Their work is not supervised.  Indeed, JKH only has a vague idea of where its working drivers are during the business day. . . . The drivers take time off when they want to and they are not required to ask for permission in order to do so.

So, this particular Uber arbitration award is wrongly decided. Of much broader importance, however, the award brings home something critical about progressive federalism: namely, progressive states need to clarify that gig workers, like Uber drivers, are employees within the meaning of state employment law. Continue reading

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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