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June 2 — An alliance of New York City taxi drivers has filed a pair of challenges under federal wage and labor laws to being classified as independent contractors by Uber Technologies Inc., the group announced ( N.Y. Taxi Workers All. v. Uber Techs., Inc., S.D.N.Y., No. 1:16-cv-04098, complaint filed 6/2/16 ).
In a class-action complaint filed June 2 in the U.S. District Court for the Southern District of New York, the New York Taxi Workers Alliance alleged that the level of control exerted by the e-hailing service over its drivers constitutes an employer-employee relationship and places their pay arrangements under wage and hour law.
The case, which also relies on New York labor law, is one of the first federal class-action wage lawsuits filed against Uber. At least two others are pending in the U.S. District Court for the Eastern District of New York.
Taxi and limousine drivers in the city are allowed to sign up to drive for Uber’s e-hail services, and many alliance members take Uber fares on top of their work for private fleets. The city is Uber’s largest and “reportedly most lucrative” market, the plaintiffs said.
The group has also filed a charge with the National Labor Relations Board making similar claims to employee status, said Ria Julien of the New York law firm Mirer Mazzocchi Schalet and Julien PLLC, which represents the alliance and 10 named plaintiffs.
The NLRB case argues that the company’s contract terms requiring claims to be submitted for individual arbitration violate the National Labor Relations Act protections for concerted activity.
As support for its position, the alliance pointed to a May 26 decision by the U.S. Court of Appeals for the Seventh Circuit in a worker classification case, which created a split with other federal circuits by finding that employment contract requirements for individual arbitration violated the NLRA (102 DLR AA-1, 5/26/16).
The New York lawsuit also coincided with a fairness hearing for a $100 million Uber settlement with drivers in the U.S. District Court for the Northern District of California, which didn’t include any company concessions on the worker classification issue (78 DLR AA-1, 4/22/16).
Dozens of California Uber drivers have petitioned that court to reject the settlement, said Bhairavi Desai, executive director of the alliance, which is a worker service organization affiliated with the AFL-CIO.
“A settlement by one side of attorneys doesn’t speak for the entire workforce,” she said of the California case at a press conference on the Manhattan federal courthouse steps.
The New York case is the latest in “an increasingly long list of misclassification claims against rideshare companies,” said Charlotte Garden, an associate professor at Seattle University Law School, in an e-mail message.
While the claims in the cases are “fundamentally similar,” they may meet with varied outcomes depending on how the courts apply different laws in different states, she told Bloomberg BNA.
On the NLRA claim, Garden said, the U.S. Court of Appeals for the Second Circuit, which covers New York, is among the courts that have rejected the NLRB's approach to the individual arbitration issue. Only the Seventh Circuit has backed the board, she said.
But the drivers in the New York case who have opted out of the Uber arbitration policy may have a stronger case than others who agreed to it, she said.
The New York lawsuit alleged that Uber commits wage “theft” and breaches its own driver contract by making unlawful deductions from driver fares for the cost of sales tax and a surcharge for a disability fund for injured drivers of limousines in so-called black car fleets in New York.
It also maintained that, contrary to the view that driving for Uber is temporary “gig” work, most drivers work 60-hour weeks. Once costs and deductions are figured in, the lawsuit alleged, drivers don't make the minimum wage or earn overtime. In some cases, it said, drivers even lose money.
The Uber drivers should be covered by wage and hour laws, the plaintiffs said, because they “must strictly follow a litany of very specific company-imposed regulations that govern” how, when and where they work.
The company has strict vehicle controls, route directions, deactivation rules, and “unilateral control over fares and fees,” as well as “compensation and bonuses based on hourly wage rates,” the alliance said.
That “creates a level of control more pervasive and far-reaching” than found in federal and state cases where New York limousine fleets have been found to be employers, it argued.
“Many of our drivers work as employees for the black car services, and they know the difference between working as an employee and working as an independent contractor,” Desai said.
In a statement, an Uber representative said, “Nearly 90 percent of drivers say the main reason they use Uber is because they love being their own boss.”
“As employees, drivers would have set shifts, earn a fixed hourly wage, and lose the ability to drive with other ride-sharing apps—as well as the personal flexibility they most value.”
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