Dive Brief:
- Uber drivers are independent contractors without federal protections for organizing activity and unfair labor disputes, the National Labor Relations Board (NLRB) has concluded. The board issued its conclusion in an advice memo from Associate General Counsel Jayme L. Sophir, of the NLRB's advice division.
- According to the memo, the board formed its conclusion using the "common-law agency test," which distinguishes employees from independent contractors based on 10 factors, including the extent to which a supervisor controls the work's details, whether the worker is engaged in a distinct occupation or business, and whether the employer or an unsupervised specialist directs the work.
- The memo summed up the board's analysis this way: "[W]here the common-law factors, considered together, demonstrate that the workers in question are afforded significant entrepreneurial opportunity, [the Board] will likely find independent-contractor status."
Dive Insight:
The NLRB essentially leaves Uber drivers with few protections under the National Labor Relations Act (NLRA). Disputes over Uber drivers' classification under the Fair Labor Standards Act, a different federal law, have largely ended in settlements, including a $1.3 million settlement reached by Uber at the beginning of 2019. The agency that enforces that law, however, recently opined that service providers working for an unnamed virtual marketplace company were independent contractors, not employees.
"We are focused on improving the quality and security of independent work, while preserving the flexibility drivers and couriers tell us they value," Uber said in a statement to multiple news outlets Tuesday. Uber has made clear its interest to expand the benefits its drivers receive and has thrown its voice behind numerous attempts to create a "portable benefits" system for independent contractors.
Bhairavi Desai, executive director of New York Taxi Workers Alliance, told Bloomberg Law that although the NLRB's memo is a setback for Uber drivers, local governments like New York City are creating worker-friendly laws, such as those that set pay standards for on-demand drivers. Local movement on the issue will likely continue; California's Supreme Court last year adopted a test that automatically assumes most workers are employees, painting a picture of the difficulties that may arise for gig-worker employers operating in multiple states.
The National Employment Law Project (NELP) noted, however, that the NLRB memo "was hardly a surprise" from the current administration. "This NLRB advice memo ignores the reality of Uber's relationship with its drivers and the myriad ways in which it controls the terms and conditions of their work," NELP said in a statement. Federal lawmakers have considered updates to workplace laws for some time to accommodate the changing workforce, but no substantial movement has occured.
