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Uber Drivers Are Deemed Independent Contractors by NLRB General Counsel

The National Labor Relations Board’s (“NLRB”) general counsel has concluded that Uber drivers are independent contractors, not employees, and thus are excluded from federal labor laws giving employees protections to engage in concerted protected activities and to form or join a union.FN1 The NLRB general counsel concluded that drivers using Uber’s app-based ride-share platform have “virtually complete control of their cars, work schedules,” and work locations, are able to work with or for Uber’s competitors, and have “a level of entrepreneurial freedom consistent with independent-contractor status.”FN2

The advice memorandum and a recent U.S. Department of Labor (“DOL”) opinion letterFN3 are promising indicators that the NLRB and DOL will honor freelancers’ and other independent workers’ agreements to work independently, and not as employees, so long as workers operate free from control and have the ability to “make their own entrepreneurial decisions.” Nevertheless, different independent contractor tests apply for purposes of state-law unemployment compensation claims, taxes, and equal opportunity laws, and companies should take steps to ensure their business models pass muster under each test.

Footnotes:

FN1:   Uber Technologies, Inc., NLRB Div. of Advice, Nos. 13-CA-163062, et al. (Apr. 16, 2019); available at http://src.bna.com/Ibt.

FN2:   The NLRB general counsel applied the recently-updated independent contractor test set forth in SuperShuttle DFW, Inc. and Amalgamated Transit Union Local 1338, 367 NLRB No. 75 (2019). Under this test, the NLRB considers:

(1)   The extent of control that the company may assert over the work;

(2)   Whether the worker is engaged in a business that is distinct from the company’s business;

(3)   The skill required by the worker;

(4)   Whether the company or worker supplies the tools and place for the work;

(5)   The method of payment (whether by time or job);

(6)   Whether the parties believe they have an independent contractor relationship; and

(7)   Whether the workers have significant entrepreneurial opportunity for gain or loss.

For a fuller discussion of this test, see https://www.rockymountainemployersblog.com/blog/2019/1/31/nlrb-gives-companies-and-workers-leeway-to-operate-under-independent-contractor-model.

FN3:   See https://www.dol.gov/newsroom/releases/whd/whd20190429. The DOL opinion letter concludes that workers who provide services to an unnamed company’s “virtual platform” are independent contractors and thus are not subject to the Fair Labor Standards Act.