It’s been a roller coaster two weeks for gig economy companies. On April 29, the U.S. Department of Labor handed gig economy companies a nice outcome by issuing an opinion letter confirming that typical gig workers are, indeed, independent contractors. Just days later, the 9th Circuit spoiled the party by saying that the California ABC test should be applied retroactively, opening the door for massive potential exposure against companies with a California presence. And on May 9, gig companies felt the second hit from a one-two punch when California’s Division of Labor Standards Enforcement issued an opinion letter extending the reach of the ABC test. Today, however, gig companies are feeling the good kind of whiplash after the National Labor Relations Board’s General Counsel released an advice memo concluding that a group of Uber drivers are properly classified as independent contractors and shouldn’t be permitted to proceed with their labor claims. The advice memo means it is much less likely that a traditional gig economy company, structured in a typical fashion when it comes to workforce operations, will face a valid unionization effort or could be found liable for an unfair labor practice charge.
When considering the place of unions in the gig economy, many jump to the conclusion that the National Labor Relations Act does not apply because gig workers are usually independent contractors. While it is true that the NLRA does not apply to independent contractors, businesses should not discount the ability of gig workers to find ways to bargain for certain working conditions and get similar protections.
If you’ve been following the legal fight over Seattle’s 2015 proposal to permit ride-sharing drivers who work for companies such as Uber and Lyft to organize and form the country’s first gig economy unions, you might feel like you have been watching a tennis match. At first a court granted a preliminary injunction to block the ordinance from taking effect in April 2017, but a few months later the court dismissed a legal challenge and cleared the way for the ordinance to eventually take effect. But just today, before the law could become official, the 9th Circuit Court of Appeals revived a challenge filed by the U.S. Chamber of Commerce to the ordinance on antitrust grounds, sending the case back down to the lower court for further action.
The 9th Circuit Court of Appeals heard argument today over a proposal that would permit ride-sharing drivers who work for companies such as Uber and Lyft to organize and form unions. Given what could be at stake—the potential for the first-ever gig worker union—this has been a hard-fought legal battle to date, and today’s argument has been no different in nature.
Of all the public policy debates surrounding the gig economy of late, one of the hottest topics has been “portable benefits” – the concept that gig economy workers should have flexible, portable benefits that they can take with them from job to job, or “gig to gig.” This push just got a major jumpstart that may turn out to be a game-changer.
As union membership in the private sector continues to dwindle (down to 6.4% in 2016), the American labor movement finds itself at a crossroads with the momentous, non-union gig economy. Just as the economy has evolved juristically over time, organized labor will also be forced to reinvent itself to maintain any form of relevancy. One way this is being done is through micro-unions.
The gig economy just got a strong ally in its fight to remain union-free: the federal government. The latest development in the ongoing saga involving an attempt to put into place the nation’s first unionization law that would cover certain gig economy companies involves the U.S. Department of Justice and the Federal Trade Commission throwing its support behind gig companies.
Chalk this round up to the unions. In a pair of decisions issued last week, a Seattle federal judge ruled that Seattle’s January 2016 Ordinance that seeks to allow for-hire drivers to form unions and collectively bargain with their rideshare companies should stand, and dismissed a series of challenges pending against the law.
The battle over organizing workers in the on-demand economy continues to heat up. Yesterday, a federal court in Washington dismissed a lawsuit filed by the U.S. Chamber of Commerce and others challenging the City of Seattle’s landmark ordinance that essentially authorizes ride-hailing drivers to unionize. However, the law remains on hold as an injunction remains in place pending the outcome of related litigation.
Not two weeks ago, we discussed several active court cases seeking to challenge the City of Seattle’s first-of-its-kind ordinance aimed at unionizing ride-sharing drivers, pointing out that the battle was about to reach a critical point. We’re happy to report that a federal court struck a blow against the ordinance yesterday and blocked it from proceeding for the time being. While this is just the first step in what is sure to be a long and complex fight, and it is only temporary in nature, it is incredibly positive news and a step in the right direction.