News & Commentary

September 12, 2019

In response to the California legislature’s passage of Assembly Bill 5 (AB5), a bill that largely codifies the California Supreme Court’s decision last year in Dynamex Operations West, Uber is claiming that it will continue to classify its workers as independent contractors.  Under prong B of the ABC test established in Dynamex, a worker who performs work that is within the usual course of the hiring entity’s business must be classified as an employee.  In a statement yesterday, Uber’s chief legal officer Tony West said that Uber is a technology company rather than a transportation company, meaning that “drivers’ work is outside the usual course of Uber’s business.”  In an editorial applauding the passage of the bill, the Editorial Board of The New York Times noted it was “unlikely that California courts will sympathize with [West’s] argument.”  The Board also called it “a bad look for Uber, which under its new management has made a lot of noise in recent years about turning over a new leaf and setting aside its old reputation as a scofflaw.”

Yesterday the Third Circuit vacated a lower court ruling compelling arbitration in a putative class action brought by Uber drivers in New Jersey.  Section 2 of the Federal Arbitration Act (FAA) typically requires that arbitration agreements are treated as enforceable like other contracts.  But Section 1 of the FAA exempts transportation workers engaged in interstate commerce, whether or not they are classified as employees or independent contractors.  The district court held that the drivers did not fall into the FAA’s exemption for transportation workers “because that clause only extends to workers who transport goods, not those who transport passengers.”  The Third Circuit rejected this reading of the clause and remanded the case to the district court to determine whether the drivers were engaged in interstate commerce.

As Vail mentioned on Tuesday, the Forced Arbitration Injustice Repeal (FAIR) Act, which would bar forced arbitration of employment, consumer, anti-trust, and civil rights disputes, came before the House Judiciary Committee this week.  The bill cleared the committee by a 22-14 vote and now heads to the House floor for the first time.

Instructors at YogaWorks, a nationwide yoga chain, are seeking to unionize and join the International Association of Machinists and Aerospace Workers.  The union would be the first in the nation with yoga instructors in the bargaining unit.  In addition to viewing the union as a way to fight for bread-and-butter issues like raises, benefits, and job security, some workers are see it as a means to push back against the industry’s shift from spiritualism to fitness.  After officials and instructors in New York asked YogaWorks for voluntary recognition on Monday, the company’s regional vice president sent an email to employees exclaiming: “DON’T SIGN A CARD.”

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