Uber faces a number of lawsuits in which it could be held liable if its drivers are found to be classified as employees. A regulatory tribunal across the Atlantic may have given U.S. drivers suing the company a slight boost in their claim that they aren’t independent contractors.
Whether gig workers like Uber drivers are entitled to minimum wage is a question that has been a focus of litigation against Uber and other gig economy companies in the U.S. A company has to pay minimum wage and overtime to employees but not to independent contractors, which is how gig economy companies often classify their workers.
Earlier this month, the British Employment Appeal Tribunal said Uber has to pay minimum wage to drivers because they aren’t self-employed. To what extent, if any, can the U.K. tribunal’s decision affect cases in the U.S. against Uber and other gig economy companies?
“The way the law works in the U.K. is not identical, but the concepts are very similar to the concepts here,” said Shannon Liss-Riordan, a lawyer representing thousands of Uber drivers in a lawsuit in federal court in California who say they’ve been incorrectly classified as independent contractors.
“I think it’s useful for the argument we’re making that the drivers are employees,” Liss-Riordan, with Lichten & Liss-Riordan, PC in Boston, told Bloomberg Law. “It rejects a number of the arguments Uber has been making in our case here.”
“Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed,” Tom Elvidge, Uber UK’s acting general manager, said in a statement emailed to Bloomberg Law. “The main reason why drivers use Uber is because they value the freedom to choose if, when and where they drive and so we intend to appeal.”
Uber didn’t directly address whether the British tribunal’s Nov. 10 decision could have an influence on employee status claims in the U.S. It said the British judge based her decision on an inaccurate assertion that drivers must accept 80 percent of trips sent to them while logged into the app.
The federal case in California is far from the only one against a gig economy business that would require a determination that workers are employees in order to hold the company liable. Liss-Riordan also represents a food delivery driver who worked for GrubHub Inc., a website and app where customers can order from nearby restaurants. The driver says he should have been classified as an employee entitled to minimum wage and overtime. It’s the first gig economy worker classification to reach trial. The judge heard arguments Oct. 30 and could rule at any time.
Employee status is an issue in other cases that don’t involve wages. After Uber and competitor Lyft Inc. ended operations in Austin, Texas, former drivers filed a lawsuit alleging the companies violated a law that requires advance notice to employees of a mass layoff. The case against Lyft was dismissed because the plaintiff died, but the case against Uber is ongoing.
And drivers aren’t the only ones suing.
Women who say they were sexually assaulted by Uber drivers filed lawsuits Nov. 14 and 15 claiming the company’s “flawed” background check procedure puts customers in danger. The Department of Labor also filed a lawsuit Nov. 16 saying couriers that move packages for Google Express misclassified their delivery drivers as independent contractors.
For all these cases, a major linchpin is the question of the worker’s status as employees or contractors. If gig workers are employees, workers could have an easier time showing the companies are liable for their legal claims.
U.S. courts are guided in their decision-making process by previous decisions by other tribunals. For example, a federal trial court has to follow precedent established by the Supreme Court and the circuit court of appeals for the geographic circuit in which it’s located.
Decisions by courts in other jurisdictions, however, are only persuasive and not binding. If there’s a novel legal question that hasn’t been resolved in a particular jurisdiction, a trial court might explore how other courts have tackled the issue.
The U.K. tribunal isn’t binding on any court in the U.S. And the concepts it weighed don’t easily translate to the U.S., Brett Bartlett, a national co-chair of Seyfarth Shaw LLP’s wage and hour litigation practice group and chair of the firm’s labor and employment department in Atlanta, told Bloomberg Law.
“In the U.K. there is already kind of a third type of worker,” Bartlett said. The U.K. tribunal decided among classifications called employee, worker, and self-employed.
“Worker has certain rights like the right to be paid the national minimum wage, but doesn’t enjoy the protections that come along with various discrimination related protections,” Bartlett said. In the U.K., “an employee is someone who operates under an employment contract.”
In the U.S., one of the factors for determining whether someone is an employee is the degree of control the company exercises over the worker and the way the work is performed. “There need not be a finding of control to determine that an Uber driver is a worker under U.K. law,” said Bartlett, who isn’t involved in litigation over Uber driver classification. “The goal was to find that there was a contract but not necessarily control.”
But Veena Dubal, a professor at UC Hastings College of the Law in San Francisco, said the U.K. decision may give a boost to drivers in the U.S. “Given that the tests for employee status under U.S. law are subjectively applied, the U.K. decision may influence how triers of fact (both judges and juries) look at Uber drivers,” she told Bloomberg Law by email.
“Workers and their attorneys can point to the U.K. decision as evidence that they should be considered employees,” Dubal said. She represents a group of drivers included in a class action settlement Liss-Riordan negotiated with Uber. On behalf of clients who objected to the proposed settlement, Dubal told the court the ruling was problematic in part because it would put drivers in a worse position by creating a presumption of independent contractor status.
Judge Edward Chen of the U.S. District Court for the Northern District of California rejected the proposed settlement because its $100 million payout fell short of what the drivers might win if they were to prevail at trial.
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Text of the U.K. Employment Appeal Tribunal judgment is available at http://src.bna.com/uiy.
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