Dive Brief:
- Three former Uber drivers won employee status in a June 9 court decision, reports Quartz. A New York state labor department judge said the plaintiffs were eligible for unemployment benefits, as ex-employees.
- Michelle Burrowes, the administrative law judge, wrote that Uber created an employer-employee relationship by exercising enough supervision, control and direction over the plaintiffs' work.
- Uber considers its drivers independent contractors rather than employees, which lets the ride-hailing company off the hook regarding certain wages and benefits. Uber has 600,000 drivers in the U.S., says Quartz.
Dive Insight:
This recent court decision is one in a string of legal setbacks for the troubled company. New York-based Uber drivers won a similar decision last October, in which they were granted unemployment benefits.
In the past, the National Labor Relations Board (NLRB) sided with Uber drivers who were trying to protect their wages. The NLRB also questioned the legality of Uber's contract, which bars drivers from being plaintiffs in class-action suits. That position isn't surprising, as the current NLRB supports the expansion of employee rights in a variety of contentious ways, including the joint employer rule.
Many of the legal questions surrounding contract work involve how long an employee has worked at a company and whether they are considered financially dependent on that company. Uber isn't alone in confronting this issue. Even more "traditional" industries, including trucking, have struggled with classification, meaning the questions will continue for some time.
Uber has had a few court victories regarding classification, but the vast number of claims filed against the company — along with the developing story on sexual misconduct allegations — continues to harm its brand.
