Numerous studies confirm that "gig" workers – freelancers, temporaries, and the like – make up a fast-growing segment of the U.S. workforce.
Numerous studies confirm that "gig" workers – freelancers, temporaries, and the like – make up a fast-growing segment of the U.S. workforce. Now, the modern gig economy is coming face to face with traditional industrial relations. A New York local chapter of the International Brotherhood of Electrical Workers has filed a representation petition with Region 29 of the National Labor Relations Board (NLRB) seeking to organize 600 Uber drivers who transport passengers to and from LaGuardia Airport.
Uber has been party to ongoing litigation in California federal court since 2013, arguing that its drivers are independent contractors and not employees. Trial in that matter is scheduled to begin in June 2016. While the California case plods along, this issue could be tried at the NLRB within a matter of weeks. Uber will likely argue before the NLRB that its LaGuardia drivers are independent contractors and thus not subject to being organized as "employees" under the National Labor Relations Act. Under the NLRB's current representation case rules, with the exception of "cases presenting unusually complex issues," the Regional Office will schedule a hearing eight days after service of the notice of hearing. We will continue to monitor the NLRB's docket for hearing and decision information.
Technology and innovation frequently outpace the laborious process of modernizing outdated laws. The National Labor Relations Act was passed in 1935. Its drafters could not have contemplated the need to define the status of entrepreneurial automobile drivers who conduct transactions directly via smartphone apps with people who need local transportation. In light of the lack of specific direction from existing labor law, reactions to the emerging gig economy are all over the board. The Seattle city council recently took the extreme measure of passing a local ordinance giving ride-for-hire drivers the right to organize and collectively bargain. The Brookings Institute recently proposed a new category of workers called "independent workers" to occupy a middle ground between traditional definitions of employees and independent contractors. There is no unifying trend signaling how workers in the gig economy should or will be treated under existing labor laws. Practitioners in this area will need to respond with innovation and creativity as nontraditional business models test the boundaries of antiquated labor laws.
We will continue to keep you updated on this rapidly developing area of the law. If you have any questions regarding this Alert or other labor or employment law issues, please feel free to contact the author, Brian Kurtz, bkurtz@fordharrison.com, who is a partner in our Chicago office.