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Nov
2015
3

NLRB: Tucson Cabbies are Employees; Precedent Strengthens for Fighting On-Demand Misclassification

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As drivers for “on-demand economy” companies, such as Uber and Lyft, continuously fight their status as independent contractors, another National Labor Relations Board (NLRB) ruling has emerged that may help their cause.  Using the FedEx Home Delivery case as guidance, a regional NLRB director found that over 200 drivers employed by Tuscon’s AAA Transportation/Yellow Cab were in fact employees and therefore eligible for union representation. 

Two years ago, the Tucson Hacks Association brought forward the case, only to have it shot down.  The  Office and Professional Employees International Union (OPEIU), an AFL-CIO affiliate, then joined in and filed a request for review. Their assistance led to the recent decision.  

OPEIU International President Michael Goodwin said in a release:

“Within three months of turning to OPEIU, we’re pleased to see a favorable decision from the NLRB and are now preparing for an election.”

The OPEIU provided background on the historic decision:

The ruling is the first of its kind for taxi drivers, following a number of cases where taxi drivers were instead ruled to be independent contractors, and is in line with new analysis used in the FedEx Home Delivery, Inc. decision that found those drivers qualified as employees. The key clarification in that ruling was a consideration of whether the individual has an “actual entrepreneurial opportunity for loss or gain” when determining whether an individual is an independent contractor.  In both the Fed Ex and Tucson drivers’ cases, it was determined that the opportunities for loss or gain were not “real or feasible,” and therefore, they couldn’t be classified as independent contractors.

In his October 23 decision, the NLRB Regional Director Cornele A. Overstreet found that the employer, AAA Transportation/Yellow Cab, exerts significant control over the drivers in a number of ways, specifically controlling the majority of the business through its dispatch system – a system that the employer can modify at will and which directly affects the driver’s’ income.

An election has been ordered by Regional Director Overstreet and will take place before the end of the year.

The precedent could be powerful for independent contractors currently involved in class action lawsuits against Uber, Lyft, Handy, Postmates, and other “on-demand” companies.  Already, the rising likelihood of the courts siding with workers has spurred reclassification of employees.
Such is the case with the used car startup, Shift, which recently announced that their “car enthusiasts” (language as Orwellian as Walmart referring to employees as “associates”) will now be treated as employees.  Speaking to BuzzFeed News, Shift representatives claimed that the decision wasn’t based on potential legal actions:

While lawsuits are a definite threat, those on-demand companies that forego the savings associated with hiring independent contractors often say it’s because hiring employees is better for business long term. A car is a big purchase, a Shift representative said in an email, and W-2 employees help the company deliver “premium, white glove service” to customers. As employees, the “enthusiasts” are now eligible for equity in the company as well; a spokesperson for Shift said the news was greeted with cheers.

Late last year it was announced that Shift Technologies had raised $23.8 million to build its used car marketplace.  Now it is investing in its future by classifying its workers as employees.

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