July 31, 2020
In a case with potentially wide-reaching implications for gig workers, the Pennsylvania Supreme Court found 5–2 that an Uber driver is not an independent contractor and therefore did not forfeit unemployment benefits by using the rideshare app as a driver.
“Uber controlled and directed the performance of... services as a driver-for-hire,” the majority opinion reads. Limiting its impact to UI eligibility, the opinion did not specifically conclude that the plaintiff was an employee for purposes of employer liability under other laws.
However, "The decision strongly suggests that the court believes Uber is an employer under Pennsylvania law, and is misclassifying its drivers as independent contractors," said Laura Padin, Senior Staff Attorney at the National Employment Law Project.
Pennsylvania uses a modified version of the strict “ABC” utilized in California and Massachusetts for determining independent contractor status, only considering the “A” – the amount of control a company has over a worker—and the “C”—whether the worker is engaged in an independent business.
The court rejected several commonly used arguments by gig companies, such as workers being able to refuse assignments and set their own hours. “Although relevant and somewhat weighty, we do not find these facts to be conclusive as to the determination that his activities amounted to an independently established business.”
Union activists see the ruling as a possible launching point for greater access to unemployment and disability insurance for gig workers, depending on how regulators apply the ruling. "We are ready to translate this legal victory into real worker power," said Philadelphia Drivers Union member Angela Vogel. "But we do need our state government and city governments to do their damn jobs."
Uber spokesman Harry Hartfield said in a statement, “While this decision did not determine the driver’s status, we stand ready to work with the Commonwealth to modernize our laws, so that independent workers receive new protections while maintaining their flexibility.”
The Coronavirus Aid, Relief and Economic Security Act passed by Congress in March extended eligibility for its unemployment insurance benefit to independent contractors. No state program, however, currently offers UI benefits to gig workers.