Today’s News & Commentary — May 4, 2017

The New York Times reports that Apple plans to create a $1 billion fund for the advancement of manufacturing jobs in the United States. In an interview with CNBC, Apple’s chief executive Timothy D. Cook noted, “Those manufacturing jobs create more jobs around them because you have a service industry that builds up around them.” The company hopes to announce its first investment from the new fund sometime this month.

The House Rules Committee will meet this week to discuss an amendment to the FLSA. The Working Families Flexibility Act is a Republican-sponsored bill that would create the option for employers to offer one-and-a-half hours of paid time off in lieu of one hour’s worth of time-and-a-half overtime wages. The bill recommends capping the paid time off hours available at 160. A blog post notes that the House Education and Workforce Committee approved the bill last week.

The Circuit Court for the District of Columbia reversed an NLRB decision last week in the case of Bellagio LLC v. National Labor Relations Board, finding that the Bellagio Hotel and Casino did not interfere with a bellhop’s “Weingarten rights” under the NLRA. Weingarten rights assert that employees have the right under the NLRA to have union representation during any investigatory interviews. This right must be affirmatively requested by the employee, after which an employer may (1) grant the request, (2) end the interview, or (3) offer the employee the option between holding an interview without representation or not having an interview.

Following a complaint from a hotel guest about the bellhop, Bellagio management attempted to interview the bellhop, Gabor Garner, who requested union representation. Bellagio suggest Garner contact a union representative on his own, but he refused. The hotel then attempted to find a representative, but was unsuccessful. Upon returning to the interview room where Garner was waiting, management asked Garner if he would like to make a written statement instead, which he also refused. Management then ceased the interview and placed Garner on paid suspension pending investigation until Garner returned the following day with his union representative to conduct the interview. Continue reading

Uber and Progressive Federalism

As Jon reported last night, an individual arbitrator has issued an award finding a California Uber driver to be an independent contractor rather than an employee.  The award is wrongly decided. I won’t engage in a complete analysis here, but, to find employee status, the arbitrator relies primarily on four California cases, three of which involved FedEx drivers. The arbitrator concludes that the facts of the Uber case resemble previous cases in which workers were found to be independent contractors. She holds:

Uber drivers are not supervised; supply the cars they drive; do not wear Uber uniforms or signage; can drive simultaneously for any competitor, including Lyft, Uber’s biggest competitor; are paid for each ride and have the unfettered option to work as little or as much as they want and whenever they want in the geographical location assigned to their platform.

But to find independent contractor status on this basis, the arbitrator has to ignore some other highly relevant cases, including a 2006 California decision involving drivers who worked for a courier company, JKH Enterprises, Inc. v. Dep’t of Industrial Relations. In JKH, the court found that the drivers were employees despite the following:

[T]he drivers are free to decline to perform a particular delivery when contacted by the dispatcher, even if the driver has indicated his or her availability for the day . . . .  All drivers [] use their own vehicles . . . They pay for their own gas, car service and maintenance, and insurance . . . . The drivers’ cars do not bear any JKH marking or logo. And the drivers themselves do not wear uniforms or badges that evidence their affiliation or relationship with JKH.  Some of the drivers perform delivery services for other companies as well . . . .  The drivers receive no particular training. . . . All drivers set their own schedules and choose their own driving routes.  Their work is not supervised.  Indeed, JKH only has a vague idea of where its working drivers are during the business day. . . . The drivers take time off when they want to and they are not required to ask for permission in order to do so.

So, this particular Uber arbitration award is wrongly decided. Of much broader importance, however, the award brings home something critical about progressive federalism: namely, progressive states need to clarify that gig workers, like Uber drivers, are employees within the meaning of state employment law. Continue reading

Weekend News & Commentary — December 3-4, 2016

Yesterday afternoon, the largest public-employee union in California announced a deal with the state government to avert a Monday strike.  Though terms of the contract have yet to be released, leaders of Service Employees International Union Local 1000 called the agreement a win for the group’s 95,000 members.

Following up on our earlier coverage of President-elect Trump’s deal with Carrier to keep 1,000 factory jobs in Indiana, Politico reports that criticism has begun to emerge on the right from none other than Sarah Palin.  The former Alaska governor and rumored Trump Cabinet pick called the agreement, which will apparently grant the company substantial tax relief, “crony capitalism” bearing the “hallmark[s] of corruption.”

In further manufacturing news, the New York Times looks into how heated rhetoric from Trump and others may negatively impact domestic production.  Noting the reliance of many American manufacturers on imported parts, the Times spoke with factory owners and academics afraid that a trade war — especially one involving the imposition of new tariffs on goods from China — could ultimately make U.S. goods less competitive.

Also at the Times, Patricia Cohen analyzes recent economic news and observes that President Obama will be handing off an economy far stronger than those generally present when the White House switches parties.  After 80 straight months of job growth in the private sector, unemployment is at its lowest level since the summer of 2007 — and, with 5.5 million open jobs, two major deficiencies in the current recovery (wage growth and labor force participation) seem poised to creep up.  More analysis on the contrast between current economic conditions and those in 2008 comes from Jared Bernstein, the former chief economist to Vice President Joe Biden.

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Today’s News and Commentary — September 13, 2016

In a historic move, California will grant farm workers an expanded right to overtime pay that now matches that of other workers.  According to The Los Angeles Times, new rules will be phased in over four years beginning in 2019, and “will lower the current 10-hour-day threshold for overtime by half an hour each year until it reaches the standard eight-hour day by 2022″ as well as ” phase in a 40-hour standard workweek for the first time. The governor will be able to suspend any part of the process for a year depending on economic conditions.”  More than 90% of California farm workers are Latino, and more than 80% are immigrants.

The faculty lockout at Long Island University continues.  Inside Higher Ed reports that “Long Island University’s American Federation of Teachers-affiliated faculty union filed an unfair labor charge against the university with the National Labor Relations Board.”  Charges include “repudiation of contract, refusal to bargain/bad faith bargaining, changes in terms and conditions of employment, and lockout.”

The battle over the classification of gig economy workers is just as robust across the Atlantic.  The Guardian published an op-ed on whether UK employment law adequately protects gig economy workers.  As in the US, UK law looks to the activities performed by workers to determine their status, irrespective of any contractual agreements.  The writer concludes that “the law ought to be reviewed, given that more and more people are working within the gig economy and losing out on rights.

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Gig News: Ninth Circuit Upholds Enforceability of Uber’s Driver Arbitration Agreements

In a major ruling with significant ramifications for class actions challenging the classification of Uber drivers as independent contractors, the Ninth Circuit Court of Appeals in Mohamed v. Uber held that the majority of Uber’s driver arbitration agreements are in fact enforceable.  In so doing, the Ninth Circuit reversed the determination of Judge Edward Chen of the Northern District of California (in prior proceedings and other cases) that the agreements were invalid and unenforceable since they contained what he found to be non-severable waivers of California’s Private Attorney General Act (PAGA).  The arbitrability of the claims in Mohamed thus should have been determined by an arbitrator pursuant to the agreements, and not by Judge Chen.

As a result, Uber can compel arbitration of the claims in Mohamed, with the exception of claims arising under the PAGA.  While the ruling technically only applies to the particular case, it serves as precedent and indicates the Ninth Circuit will compel arbitration in many claims by drivers against Uber, significantly limiting the scope and size of class action lawsuits.  As we noted earlier today, Judge Chen recently rejected a proposed settlement in O’Connor v. Uber, the major class action suit challenging Uber’s classification of drivers as independent contractors.  The O’Connor plaintiffs would have been forced to arbitrate their claims individually had Judge Chen not found the mandatory arbitration claims invalid and unenforceable.

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Gig News: Federal Judge Rejects Uber Settlement

Last month, Judge Edward M. Chen of the Northern District of California rejected a proposed settlement in the O’Connor v. Uber litigation, a suit challenging Uber’s classification of drivers as independent contractors.  The rejection comes after another judge rejected a proposed settlement in Cotter v. Lyft, a similar suit before the same court brought by the same plaintiff’s attorneys, earlier this year.

Following the Lyft precedent, Judge Chen reviewed the proposed O’Connor settlement and applied “with full force” the factors used by the Ninth Circuit in reviewing such settlements. First, Judge Chen considered the risks to both the plaintiffs and Uber in continuing the litigation.  He acknowledged the risk to the plaintiffs that the Ninth Circuit would overrule his previous invalidation of Uber’s mandatory arbitration agreements, thus compelling individual driver arbitrations.  Judge Chen also opined (contrary to Professor Sachs’ conclusion here and here) that the factors used to determine the proper classification of workers under California law do not conclusively support a finding of either employee or independent contractor status for Uber drivers.  He further recognized that Uber challenged recovery and reimbursements even in the event drivers are found to be employees, and that drivers might not prevail on claims with respect to a) unavailability of meal and risk breaks, b) minimum wage and overtime, and c) workers’ compensation.

Judge Chen also reviewed the substantial risk to Uber of a finding that drivers are employees under California law, estimating a penalty against Uber in excess of $1 billion.  He noted that, even if Uber is successful in enforcing its mandatory arbitration agreements, a court could still decide the proper classification of drivers in considering non-waivable California Private Attorneys General Act (PAGA) claims.  Judge Chen additionally considered that absent a settlement one or more drivers not bound by arbitration (such as those who opted out) could litigate their proper classification and thus affect arbitration results, and that the costs of many individual arbitrations would be significant for Uber.

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Today’s News & Commentary — July 8, 2016

“I have known Philando ‘Phil’ Castile since he joined the Teamsters back in 2002 and he was an amazing person who did his job at St. Paul’s Public Schools because he loved the children he served.  He will be deeply missed by his colleagues and his community,” Teamsters Local 320 remembers Philando Castile who was killed by a police officer on Wednesday. Alton Sterling was killed by a police officer while at work selling CDs the night before.  A neighbor who knew Sterling said, “If you wanted Blues, and he didn’t have any Blues CDs, he’d find a Blues CD for you and sell it to you later, …He would hunt down classical music if you asked him for it.”  Nola.com reports that the table where Alton Sterling sold CDs was covered in flowers and messages by Wednesday evening. And five police officers were killed while working at a demonstration in Dallas last night, with 6 more injured. “Police in Dallas were on duty doing their jobs, keeping people safe, during peaceful protests,” said President Obama.

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