Monday, May 20, 2019

Uber Drivers: Employees or Independent Contractors? NLRB GC weighs in.

You may recall that the NLRB recently held that employee/independent contractor classification is now resolved using an employer-friendly version of the common law test (SuperShuttle). Now, the NLRB Office of General Counsel has used that new test to recommend dismissal of several charges brought by Uber drivers.

You can read the advice memo here (ht: Bloomberg Law).  The Conclusion really does a nice job of summarizing the NLRB GC's position:
Not official use.
Considering all the common-law factors through “the prism of entrepreneurial opportunity” set forth in SuperShuttle, we conclude that UberX drivers were independent contractors. Drivers’ virtually complete control of their cars, work schedules, and log-in locations, together with their freedom to work for competitors of Uber, provided them with significant entrepreneurial opportunity. On any given day, at any free moment, UberX drivers could decide how best to serve their economic objectives: by fulfilling ride requests through the App, working for a competing rideshare service, or pursuing a different venture altogether. The surge pricing and other financial incentives Uber utilized to meet rider demand not only reflect Uber’s “hands off” approach, they also constituted a further entrepreneurial opportunity for drivers. Although Uber limited drivers’ selection of trips, established fares, and exercised less significant forms of control, overall UberX drivers operated with a level of entrepreneurial freedom consistent with independent-contractor status. In addition, drivers’ lack of supervision, significant capital investments in their work, and their understanding that they were independent contractors also weigh heavily in favor of that status. Although Uber retained portions of drivers’ fares under a commission based system that may usually support employee status, that factor is neutral here because Uber’s business model avoids the control of drivers traditionally associated with such systems and affords drivers significant entrepreneurial opportunity. The other factors supporting employee status—the skill required and our assumption that drivers operated as part of Uber’s regular business, and not in a distinct business or occupation—are also of lesser importance in this factual context. Accordingly, we conclude that UberX drivers were independent contractors.
The memo goes on to reach the same conclusion for UberBLACK drivers.

Of, course, this comes with the usual caveats:

  • Different courts, agencies, and jurisdictions use different classification tests depending on the underlying law at issue; and
  • NLRB precedent is only as binding as the current makeup of the NLRB - and this isn't even an NLRB decision, it's just an advice memo.  

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