Approximately eight months before the name Harvey Weinstein became practically synonymous with sexual harassment the world over, there was Susan Fowler.
On Feb. 19, 2017, Fowler, who had just recently left her position at Uber, accused her employer of failing to follow up on repeated allegations of sexual harassment in the workplace by a "high-performing" manager. Fowler's blog post touched off a media frenzy as well as a closer look at workplace dynamics in which star performers are considered too valuable to face consequences for inappropriate — in some cases, criminal — behavior.
The incident at Uber preceded the rise of the #MeToo movement, but it also forced a reorganization of one of the biggest firms driving the growth of the gig economy. Uber's status as a gig economy heavyweight seemed tangential to the issue of sexual harassment until last month when, as part of the larger initiative to tweak its policies, Uber decided to drop mandatory arbitration agreements for full-time employees and drivers who bring individual claims of sexual harassment and assault.
Effectively, this decision rendered Uber one of the first gig economy companies to drop the practice for its users, who are generally considered independent contractors (a classification that hasn't gone uncontested). "Our message to the world is that we need to turn the lights on," Uber's chief legal officer, Tony West, said in a statement announcing the decision, reflecting on CEO Dara Khosrowshahi's statement that sexual predators "look for a dark corner."
But sources who spoke with HR Dive don't expect a sea change in the way gig economy firms treat independent contractors as employees as a result. What's more, legal experts are still split over the issue of whether the arbitration process helps or hurts victims.
A vulnerable, growing group of workers
The rise of temporary, gig, independent contractor employment — collectively categorized as "non-traditional employment arrangements" — in recent years is well documented. Research from the American Staffing Association found that the number of workers in temporary or contract roles reached historic highs in May 2018.
Employers seem to be encouraging the trend, too: a late 2017 report from Randstad Sourceright found that 61% of global HR leaders planned to convert at least a third of their full-time permanent positions into jobs for independent contractors, freelancers and/or temporary workers.
Yet non-traditional work is a path with more than a few potential pitfalls: how, for example, will those workers get access to benefits like health insurance? And should those workers experience sexual harassment or assault within the context of a complicated work arrangement, what recourse is available?
"This sector of the workforce is rapidly growing, pushing millions of workers into a legal no-man's land where they lack basic protections against sexual harassment," Debra Katz, partner at Katz, Marshall and Banks, said in testimony at the U.S. Equal Employment Opportunity Commission (EEOC) June 11. "Without any kind of protection, they're not only vulnerable to sexual harassment, but if they leave a harassment situation, they're usually trading down to a less-paying job where they're again more vulnerable to harassment."
In its latest Strategic Enforcement Plan, EEOC said it would seek to clarify and prioritize its monitoring activities on a set of emerging issues, including non-traditional work. But Commissioner Chai Feldblum said in a press briefing that this inclusion wasn’t meant to argue for the expanded definition of who exactly is an independent contractor. Rather, the agency is working to ensure that the law as it stands is covering the workers that it should, Feldblum said. That means looking into cases of those who are deemed independent contractors but are actually not.
"It's really about collecting information so that we can indicate to federal and state legislators the information we have," Feldblum said. "Let's be clear: a lot of action is happening in this space, and most companies cross state lines. I think this issue of sexual harassment has raised the visibility of that problem. Presumably, the solution is not sexual harassment-specific. It is about the nature of work placement."
Uber's decision may not prove to be a trend
Adding to the complexity of the classification issue is whether or not those who operate in the gig economy consider themselves employees. For Marion McGovern, a gig economy consultant, the majority of the workers she's communicated with say they don't treat their gig work like a full-time job.
"One thing that often gets lost is that there's a very large cohort in the on-demand world who are supplemental workers," McGovern told HR Dive. "The truth of the matter is that for a lot of them, it's extra income."
"[Of] the things that companies in the gig economy are doing, some of them will have wide-scale changes. This isn't one of them."
Don Schroeder
Partner, Foley & Lardner
But McGovern does recognize the different sentiments that exist within the gig worker contingent, and perhaps that could mean new models for classification. McGovern said her personal favorite is a legislative provision identifying "certified self-dependent workers." The reality, however, is that this would require legislation in an area on which officials have been slow to act.
Another factor in the discussion is that gig workers can move relatively freely between platforms — an example being the ability to switch between driving for Uber and Lyft, or driving for multiple competing platforms. This helps to build a strong case for why gig workers should not be considered employees, Don Schroeder, partner at Foley and Lardner, told HR Dive in an interview.
Beyond the public relations element of Uber's decision to nix mandatory arbitration clauses, Schroeder said he was confused by the decision, particularly given the case law supporting gig workers' independent contractor status in Raef Lawson v. Grubhub, Inc.
"I think it was more of a face-saving attempt," Schroder said. "[Of] the things that companies in the gig economy are doing, some of them will have wide-scale changes. This isn't one of them."
The future of arbitration
Others in the employment law space have fought back against calls to drop both mandatory arbitration agreements and non-disclosure agreements (NDAs), mainly in the employee context.
Employees should be entitled to some form of confidentiality, according to Proskauer Rose attorney Kathleen McKenna, because victims might prefer to settle matters confidentially rather than having the details of their harassment go public. Non-disclosure agreements, she argued, are a "powerful incentive" for corporations to settle claims.
"Almost invariably we are talking about payment by corporations for behavior that they don't condone, that they prohibit and that they often don't know about," McKenna said in testimony to the EEOC.
Those on the other side of the issue, however, worry about the adverse effect such mechanisms have on the ability of victims to bring their cases to court; attorneys are less likely to represent those who are subject to mandatory arbitration clauses, according to a report from the Economic Policy Institute.
"Mandatory arbitration embodies many of the worst forces that have led to pervasive sexual harassment and assault in the American workplace," Katz said. "Perhaps most harmfully, mandatory confidential arbitration enables harassers to continue their patterns of abuse with no meaningful accountability."
Individuals in nontraditional work arrangements may not see action on the issue for some time. Not even the presence of HR is a given for businesses in this sector of the economy.
"A lot of companies don't have HR," McGovern said. "These young companies are gigging everything ... Do they know the risk? Maybe not."
