After the Supreme Court ruled a few weeks ago that independent contractors working “in interstate commerce” were exempt from arbitration pacts due to a broad interpretation of the Federal Arbitration Act (New Prime v. Oliveira), I wrote a blog post about how labor law commentator Ross Runkel wondered whether gig business ride-share drivers and others would be able to extend that ruling in their favor and escape typical arbitration agreements. National Law Journal’s Erin Mulvaney followed this thinking by writing an article recapping how gig economy plaintiffs will soon be test-driving the New Prime decision to see if it can work in their favor. As she says, “already in the weeks since the ruling was issued, there are signs plaintiffs lawyers will use the opinion to reinforce their arguments that drivers who signed arbitration agreements should nonetheless be allowed to sue their employers in court.”
I recently wrote about the January 25 decision from the National Labor Relations Board that makes it easier for businesses to classify their workers as independent contractors (SuperShuttle DFW, Inc.). You can read the full article here. In a nutshell, now that the Board is comprised of Trump appointees and majority Republican, it reversed a 2014 Obama-era decision that claimed to have “refined” the independent contractor test, but in practical terms, had made it harder to classify workers as contractors. The SuperShuttle case overturned the 2014 case and returned to a more balanced standard, one that gives more of an equal weight to both the right-to-control aspects of the relationship and the role of the workers’ entrepreneurship in operating their own businesses.
My colleagues Andy Scott and Felix Digilov reported on last week’s Supreme Court decision that rejected a trucking company’s effort to force its drivers to arbitrate their wage and hour claims against the company, despite the fact they had signed otherwise enforceable arbitration agreements (New Prime Inc. v. Oliveira). The reasoning behind that ruling? The SCOTUS held that the Federal Arbitration Act’s exemption that excludes “contracts of employment of workers engaged in interstate commerce” includes not only interstate transportation workers with employment agreements, but also those interstate transportation workers with independent contractor agreements. Now, a prominent labor law commentator posits whether this same decision could cause trouble for Lyft, Uber, and other gig economy companies.
Last week, the French Court of Appeals dealt another blow to global gig businesses, ruling that the agreement between Uber and a former driver was “an employment contract,” because the former driver was “dependent” on Uber “for work.” In so ruling, the court rejected the company’s long held position that it is “merely a service provider with drivers who are self-employed, able to work when and where they want.” The decision overturned a lower court ruling in favor of Uber.
As I wrote previously, it is no secret that labor laws have been unable to keep pace with the changing economy, despite challenges from the bench to address the needs of the gig economy. Certain state legislatures (e.g. Washington) have taken steps to address needs of gig workers, with their ‘Paid Family and Medical Leave’ program expanded to include self-employed workers. And efforts to make portable benefits available to the gig workforce are ongoing, mostly at the state level. However, federal legislative and regulatory entities are seemingly mulling their options and allowing the change to occur from the bottom. Voices from the gig upper strata are becoming impatient, and want immediate legislative change, at the top.
The next shot has been fired in the long-running misclassification dispute between plaintiff Raef Lawson and gig economy giant Grubhub, as the company filed its Answering Brief with the 9th Circuit Court of Appeals late last night. As regular readers of this blog know, Lawson and Grubhub squared off in the nation’s first-ever gig economy misclassification trial in late 2017, leading to a victory for Grubhub in February 2018. Things took a turn for the worse in April 2018 when the California Supreme Court dropped a bombshell and changed the misclassification standard with its infamous Dynamex decision, which ushered in the notorious ABC test, and Lawson’s attorneys quickly pounced and argued that he should now be declared the victor given the new standard. Lawson filed an appeal with the 9th Circuit Court of Appeals and filed his opening brief in November 2018. Now, it’s Grubhub’s turn.
The first-ever national misclassification case brought against Uber has now been put to bed. A federal court judge in North Carolina today gave her blessing on a $1.3 million settlement wrapping up the litigation, handing some 5,000 workers payouts ranging from $50 to almost $5,000.
For businesses and workers alike, the New Year means new beginnings and new opportunities. To that end, participation in the rapidly developing gig economy is no exception. In fact, freelancers, side hustlers, and independent workers making up the gig economy now total nearly 60 million people in the U.S. alone. The gig economy workforce is currently growing three times faster than the traditional U.S. workforce, and businesses should not expect this trend to slow down anytime soon. By 2027, half of U.S. workers are expected to be freelancers.
The Pennsylvania Supreme Court just agreed to weigh in on a question that could prove critical to the growth—or stagnation—of the gig work labor pool: does performing gig work in between full-time jobs disqualify a worker from receiving unemployment benefits? By accepting the case of Lowman v. Unemployment Compensation Board of Review for review yesterday, the state’s high court has decided that 2019 will be the year that it enters the fray on this crucial question.
On the eve of the holidays, gig businesses got a gift in the form of a ruling from a Massaschusetts federal court where a clickwrap agreement was held to be sufficient to bind a worker to an arbitration clause. The ruling in favor of Lyft will not necessarily help all businesses across the country—especially because the court specifically pointed out that his ruling might have been different had he been applying California or New York law—but it does continue the trend of holding workers to the terms of an electronic arbitration agreement.