Today’s News & Commentary — May 30, 2017

Uber and Lyft returned to Austin, TX on Monday after Texas Governor Greg Abbott signed HB 100 into law, eliminating Austin’s fingerprint requirements for drivers.  As the LA Times describes, the bill designates the state, not local, government as the regulator of the “ride-hailing industry.”  Uber and Lyft left Austin in May of 2016 after losing Proposition 1—Austin voters decided (56% to 44%) not to allow Uber and Lyft to continue using their existing background check systems.  Governor Abbott called HB 100’s passage a “celebration of freedom and free enterprise.”  Austin Mayor Steve Adler, in contrast, was “disappointed” and expressed his “hope that [Uber and Lyft] return ready to compete in a way that reflects Austin’s values.”

Last Thursday, the Court of Appeals for the Second Circuit agreed to hear en banc Zarda v. Altitude Express, 855 F.3d 76 (2d Cir. 2017), a case which held that Title VII’s ban on sex discrimination does not protect against sexual orientation discrimination.  As we have covered in a previous post, this issue has been addressed, and decided to the contrary, by the Seventh Circuit.  Notably, the Seventh Circuit’s ruling produced a split with the Eleventh Circuit (Evans v. Georgia Regional Hospital, 850 F.3d 1248 (11th Cir. 2017)).  Zarda’s case was originally dismissed on summary motion pursuant to Simonton v. Runyon, 232 F.3d 33 (2d Cir. 2000), another Second Circuit case holding that Title VII does not proscribe sexual orientation discrimination.  On appeal, the Second Circuit panel refused Zarda’s argument that it overrule Simonton, citing Christiansen v. Omnicon Group, 852 F.3d 195 (2d Cir. 2017) (court permitted an openly gay employee to pursue a Title VII claim, but on a sex-stereotyping, not sexual orientation discrimination, theory) for the proposition that only the en banc panel of the Court or SCOTUS could reverse circuit precedent.  Oral argument in the case will take place this September.

On Friday, a New Jersey judge denied the Jersey City teachers union’s motion to dismiss a lawsuit, brought by two NJ residents working with the Goldwater Institute (a conservative think tank), challenging the district’s “release time” policy as violative of the New Jersey Constitution.  The policy allows two top union officials to work exclusively on union activities while being paid by the district.  The suit alleges that “release time” is prohibited by the state Constitution’s ban on local governments giving gifts to individuals or entities.

Last Thursday, Rep. Phil Roe (R-Tenn.) reintroduced the Employee Rights Act (ERA).  The bill, if passed, would amend the NLRA to, among other things, require secret ballot elections in employee unionization decisions; require unionized workers to hold periodic secret ballot elections to verify a continued desire to be represented by the union; empower the NLRB to de-certify unions for intimidating members; criminalize union threats; and require unions to receive affirmative permission from members to use payments toward political spending.  Rep. Roe described the ERA as neither “pro- or anti-union,” but rather, “a commonsense measure to ensure a transparent and fair workplace.”

Gig News: NLJ Update on Gig Economy Legislation and Lawsuits

Last week, The National Law Journal published an update on state legislation and lawsuits regarding the classification of gig economy workers as independent contractors.

First, the article noted that the Florida Legislature has passed a bill, expected to be signed into law by Governor Rick Scott, “that classifies drivers for companies such as Uber and Lyft as independent contractors rather than employees, marking the latest state to attempt to regulate the rapidly growing and litigious ride-hailing workforce.”  Other states that have passed similar legislation include Arkansas, West Virginia and Colorado.

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Gig News: Court Enjoins Enforcement of Seattle Gig Unionization Ordinance

Judge Robert S. Lasnik of the U.S. District Court for the Western District of Washington has enjoined enforcement of Seattle’s first-in-the-nation ordinance giving gig economy independent contractors the right to unionize (the “Ordinance”.)  Judge Lasnik’s full decision granting the U.S. Chamber of Commerce’s motion for preliminary injunctive relief in Chamber of Commerce of the United States of America v. City of Seattle can be found here.  Uber, Lyft and a third ride hailing company had been due to submit driver information this week to a union recognized as a “qualified driver representative” pursuant to the Ordinance, but the requirements “are hereby enjoined until this matter is finally resolved.”

Notably, Judge Lasnik found that the Chamber may succeed on the merits of its antitrust claim, pending analysis of the City’s claim for antitrust immunity, but that the Chamber and drivers challenging the Ordinance in a consolidated lawsuit are unlikely to succeed on their National Labor Relations Act preemption claims at the moment.  Judge Lasnik stressed “that this Order should not be read as a harbinger of what the ultimate decision in this case will be when all dispositive motions are fully briefed and considered.  The plaintiffs have raised serious questions that deserve careful, rigorous judicial attention, not a fast-tracked rush to judgment based on a date that has no extrinsic importance.”

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Gig News: Seattle Gig Unionization Ordinance On Hold

Despite surviving multiple court challenges, the revolutionary Seattle municipal ordinance giving gig economy independent contractors the right to unionize appears to be on hold.

According to Bloomberg BNA, a Seattle city attorney announced the city will delay enforcement of the law in proceedings before the district court hearing the challenge to the ordinance last week.  Uber, Lyft and a third ride hailing company had been due to submit driver information today to a union recognized as a “qualified driver representative” pursuant to the ordinance.  Seattle will not requite the companies to disclose the driver information until Judge Robert S. Lasnik of the U.S. District Court for the Western District of Washington rules on a motion filed by the U.S. Chamber of Commerce, which brought the lawsuit challenging the ordinance.

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Today’s News & Commentary — March 14, 2017

While Uber attempts to discourage the unionization of drivers in Seattle, some drivers are challenging the municipal law giving drivers the right to organize.  According to the Seattle Times, “the drivers are seeking a temporary restraining order barring the city from enforcing the law — the first of its kind in the country — saying it goes against federal labor and privacy laws, as well as violates their rights to free speech and association.”  The lawsuit is being led by the National Right to Work Foundation and the Freedom Foundation.  The drivers primarily argue that the National Labor Relations Act pre-empts the municipal law.

Another innovative municipal law has gone into effect, in San Jose, CA.  The Mercury-News notes that ” San Jose businesses with 36 or more employees must now offer extra shifts to part-time workers before hiring new staff.”  Under the Opportunity to Work measure, “companies must offer — in writing — extra work hours to existing qualified part-time employees.  If those employees aren’t qualified or decline the extra hours, an employer can then hire additional workers to fill the shifts.  The idea, advocates say, is to give existing workers access to extra hours to boost their paychecks.”

Muslim workers in Europe suffered a legal setback in seeking to assert their right to wear the hijab in the workplace.  The Washington Post reports that “The European Court of Justice issued a non-binding ruling Tuesday that employers can prohibit the Muslim headscarf in the workplace, setting an important precedent for a continent in the midst of a fraught political climate.”  The ECJ concluded that rules against the wearing of the hijab in the workplace were in fact rules against the visible wearing of religious signs, and thus not direct discrimination.  Notably, “in the absence of official internal regulations prohibiting what employees can wear to work, the court suggested, Muslim women have a stronger case for wearing the hijab to the office.”

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Gig News: Brazilian Judge Finds Uber Driver Is Employee

A labor court judge in the state of Minas Gerais, Brazil has found that an Uber driver there is an employee of the company, taking the debate over the classification of drivers to another country.  The Brazilian newspaper Zero Hora reports that the decision is the first in Brazil to recognize Uber as an employer of drivers.  According to Reuters, the judge “ordered Uber to pay one driver around 30,000 reais ($10,000) in compensation for overtime, night shifts, holidays and expenses such as gasoline, water and candy for passengers.”  Uber announced that it will appeal the decision.  The ruling only applies to a single driver, but could open the door to more challenges.

Brazilian news portal G1 notes that the judge applied a multi-factor test for employment status under Brazilian law.  Key factors included that a) users are assigned a driver by Uber, unable to select from options; b) Uber (not the passenger) pays drivers at the end of each week after withdrawing a percentage, thus going beyond simple mediation of passenger-driver business; c) transport is Uber’s primary business, as partially evidenced by its investment in automobiles vehicles; and d) Uber drivers are submissive to the company, forced to comply with strict rules in order to drive for the company.

Zero Hora also emphasized that the judge found that drivers were encouraged to drive regularly despite flexibility, and that Uber engaged in a hiring process by approving drivers.

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Guest Post: A Third Category Is Not The Right Path for Gig Workers – A View From The UK

Hannah Reed works on employment and labour law policy for the UK Trades Union Congress (TUC).  She is currently attending the Harvard Trade Union Program

The recent Uber case in the UK was hailed by unions as a monumental victory, securing basic ‘worker’ rights to rest breaks, paid vacation time and the national minimum wage for 30,000 Uber drivers in the UK.

The decision is certainly welcome and may have useful implications in the US.  But no one should presume that the issue of rights for gig workers is now settled or that legislators are off the hook. The case will be appealed.  Uber continues to argue its drivers are self-employed and that the tribunal decision would require it to adjust its business model.  The current ruling is also not binding for other groups of gig workers.

The intense media interest in the case has, however, helped to reignite policy debates on who should qualify for which statutory employment rights and whether protections should be extended to those working on the edge of the labour market.

Following pressure from unions, think tanks and civil society groups, the UK government has commissioned a review into modern employment practices.  The House of Commons Business Committee has similarly launched an inquiry into the Future World of Work and Rights of Workers.

The central question for both reviews is the whether the law needs to be modernised to respond to the new ‘gig economy.  Despite the rapid expansion in temporary, insecure employment and complex supply chains, UK employment law remains wedded to the notion that permanent, stable employment is the norm.  Those that do not meet this norm are simply not protected.

But whilst some US commentators are advocating the creation of third category of worker in response to the growth of the gig economy, the opposite debate is starting to take place in the UK.

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