May 17, 2019
Following closely on the heels of a similar Labor Department opinion letter, the National Labor Relations Board General Counsel has informed its regional offices that he views Uber drivers as independent contractors, not employees, a decision that is being downplayed by drivers’ organizations who contend they do not need federal labor protections to form union-like groups.
Background: The advice was initiated by allegations that Uber had violated the labor laws in three instances by terminating relationships with UberX drivers and, in New York City, unlawfully assisting a union established to represent the drivers in that city. The latter violates a provision in the labor law intended to prevent companies from usurping the employees' role in setting up their own union.
The GC applied a traditional common law test in determining that the drivers were not employees. He focused primarily on the “significant entrepreneurial opportunity by virtue of their near complete control of their cars and work schedules, together with freedom to choose log-in locations and to work for competitors of Uber.”
GC Advice Memoranda do not have the status of law, but they signal the conditions under which the General Counsel will initiate an enforcement action against an employer or union. Since there is no private right of action under the NLRA, such memoranda can effectively serve as the law at least during that General Counsel’s tenure.
Drivers’ organizations had a somewhat muted response, acknowledging they had low expectations that the GC would have a different view. The reality is there is nothing to prevent the drivers from forming a union-like organization—it just won’t be protected under federal labor law. In fact, Bhairavi Desai, executive director of the New York Taxi Workers Alliance, observed: “In my experience, the more rights you take away from workers, the more militant the organizing becomes.”
Saga to continue: The test for determining independent contractor status under the various laws is in a state of flux, particularly at the state level, where some states, led by California, apply a much more stringent standard than the common law test. Moreover, a change in administrations could produce a shift at DOL and NLRB, though the federal laws will ultimately be determined by the courts, absent legislation. In any event, the DOL and NLRB decisions will prompt more calls for laws to provide specific protections for gig workers, which could also bring new requirements pertaining to all independent contractors.