Worker classification and secure work in the “sharing economy”

Worker classification and secure work in the “sharing economy”

FullSizeRender-1By Veena Dubal

Last month, a California Labor Commissioner decided that Barbara Ann Berwick was an employee of (venture capital darling) Uber for purposes of employment protection under California law.   A charged media flurry followed.   If Uber drivers were employees, then was the company’s highly profitable business model kaput?   Were casual Uber drivers going to be entitled to minimum wage and business expenses (like gas and car upkeep)?  What did this mean for the potential success of other aspiring businesses in the so-called “sharing-economy”?  How did the commissioner come to this decision?  What defines an employee?

While the Berwick decision forced many non-lawyers to think about worker classification for the first time, this debate is nothing new in the tort context.   Courts have long struggled to distinguish independent contractors and employees when determining vicarious liability.   Who should be responsible for the negligence of a worker?  This question, under the common law, turned on an unwieldy analysis of whether that worker was an independent businessman, engaged in his own entrepreneurial dealings, or an employee laboring for an employer.  Far from being easily identifiable, the definition of an employee for tort purposes has resulted in much head scratching, with courts coming down differently while applying the same facts to the same (capacious) set of rules.

But where did this idea that only common law “employees” get work safety net benefits come from?  What few understand is that applying this dichotomous classification in tort law to the context of employee protections is not natural or necessary.   In fact it is relatively recent.  Whether or not the application makes good legal sense or serves broader social goals is worth pondering.

In the tort context, the inquiry boils down to an analysis (crudely put) about who deserves blame, that is, who is really in charge (or, in legal terms, who controls the means and manner of production).   U.S. courts first began to borrow this analysis and utilize it in the employment protection context when businesses tried to evade New Deal legislation put in place to protect the ordinary worker.   Prior to efforts by business representatives to dodge the costs associated with secure work, service workers – including insurance salesmen, taxi drivers, and newspaper boys – were protected under the law.   Indeed, the legislative history of the New Deal reveals no Congressional debate on whether or not “independent contractors” should be covered.  The term used over and over again, by both representatives of manufacturing and of labor, is “worker.”

Today, in what is popularly termed the corporate “sharing economy” – or perhaps more aptly, the “sharing-the-scraps economy” – companies are borrowing from post-New Deal efforts by businesses to increase their own profit through use of “contractors,” evading laws intended to force them to take responsibility for their workers.  Uber, for example, is reaping huge profits from the labor of casual drivers by calling those workers “independent businessmen.”  The company’s position has been that this contractor status of workers means that the company is not liable for the worker’s negligence – OR for the health, safety, and financial security of Uber drivers.

While across the country, judges, commissioners, and regulators have come down differently about whether or not Uber drivers are employees, the history and legislative intent of employment protections begs the question:  why are courts applying the reasoning of tort law to social policy that is intended to create a safety net for workers?

As we enter a historical moment when half the working population will be laboring casually and precariously as a result of evolving business models, we must ask not, “who is an employee” under the common law, but how do we use laws and regulations to create stable and secure work environments?

Veena Dubal is an Associate Professor at University of California Hastings College of Law.  Professor Dubal’s research focuses primarily on law and social change in the context of work law.  Her dissertation, a three year ethnography, examines the work lives and worker collectivities of taxi drivers in San Francisco. Her research suggests that conventional wisdom on lawyering on behalf of low-income independent contractors needs to be re-examined and re-configured based on the desires and everyday realities of these workers.  An earlier version of this blog post was published on the author’s blog.

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