Tuesday, June 23, 2015

Ohio Employers Law Blog

independent-contractor loss? 
 In March, I reported on a lawsuit filed against Uber by a class of its drivers claiming that the taxi company mis-classified them as independent contractors. Apparently, that is not the only claim pending against Uber on this very issue. Earlier this month, a California Labor Commission hearing officer concluded that Uber had mis-classified one of its drivers. Uber has appealed the ruling. Frankly, I think Uber has a pretty good argument on appeal.

Here’s the full decision [pdf].

The hearing officer relied on the following factors to conclude that Uber’s drivers are employees, not independent contractors (with my critique in the parenthetical).

Drivers must provide Uber their personal address, banking information, and social security number. (Doesn’t a company want contact info for anyone providing services for it, and doesn’t it need other information so it can pay its contractors?)

Drivers cannot drive for Uber without a background check. (If a background check is the standard for an employee, then we might as well get rid of independent contractors all together.)

Drivers must register their cars with Uber, which cannot be more than 10 years old (Cannot a company set reasonable standards for its contractors?)

Uber monitors drivers’ ratings from passengers, and terminates the relationship if the rating falls below 4.6. (Contractors are not guaranteed contracts for life; if a contractor falls below certain standards, a company always has the right to terminate the relationship.)

Uber requires drivers to use its app to drive, and they cannot drive without using it. (How is this different than a taxi company tracking its drivers via GPS and directing routes; if anything, Uber drivers have more independence because they can turn down the fare at any time.)

Drivers are paid a set percentage of the total cost of each ride. (Isn’t this the hallmark of an independent contractor—pay by the job, not by the hour?)

Last week, I called for a “duck” test for independent contractors. Dear readers, Uber drivers absolutely look, swim, and quack like independent contractors. They control when and where they work; they are paid by the ride; they drive their own cars and are responsible for their own expenses; Uber does not supervise the drivers, but merely holds them to reasonable performance standards. If Uber’s drivers are employees, then what is left for independent contractors? Or, is this the beginning of the end of the ability of companies to use the services of contractors?

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Does Title VII permit an employer to staff its stores based on the racial composition of its customers? That’s the question at the heart of EEOC v. AutoZone, currently pending in federal court in Chicago.  In the lawsuit, the EEOC alleges that the auto-parts retailer transferred African-American employees to certain stores in the Chicago area based on its conception that its Hispanic customers preferred to interact with Hispanic employees.

According to Employment Law 360 [sub. req.], AutoZone claims that the EEOC cannot prove its claim because the transferees would have suffered no loss in pay, benefits, position, or responsibilities, and therefore suffered no adverse employment action under Title VII.
Meanwhile, the EEOC claims that this brand of segregation is the exact type of discrimination Title VII is supposed to prohibit: “Structuring a workforce or work assignments by race is at the core of what Title VII was enacted to combat. Autozone’s argument boils down to the proposition that an employer is free to segregate its workforce so long as it is careful to do so through lateral transfers. Title VII is not that narrow.”
It seems to me that even if the pay, benefits, etc. were exactly the same in both stores, we abolished “separate-but-equal” 61 years ago, and Title VII should not permit an employers to Plessy v. Ferguson its workforce for any reason.

For more on customer preference as discrimination, check out the following two posts from the archives:

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