The Other Shoe Drops: NLRB Finds Uber Drivers are Independent Contractors

It’s been a good month for gig economy employers. First, the Department of Labor (DOL) issued an advisory opinion letter making it clear the agency considers your classic gig economy workers who provide services through a connection platform are independent contractors and not employees.  And now the National Labor Relations Board (NLRB) issued an advice memo unambiguously declaring Uber drivers independent contractors who, therefore, cannot unionize.  This is a big win for Uber and companies whose business is to offer digital marketplaces for buyers and sellers of services and, another, defeat for unions.

The shift by the current administration clearly indicates a preference toward finding that more workers in this economy are independent contractors (versus employees).  This preference contrasts starkly with the Obama administration’s perspective that a finding of independent contractor status was inappropriate in all but very limited circumstances.  In many cases however, the federal government does not have the final say on the issue.  Notwithstanding the shift by the federal government courts have generally moved over the years toward finding in favor of an employer-employee relationship and not an independent contractor relationship. 

The DOL and NLRB use different tests to determine whether a workers is an independent contractor or employee, meaning it is possible for one agency to classify a worker as an employee while the other finds the worker to be an independent contractor (not to be outdone the IRS also has its own test).  Under the DOL’s test the agency looks primarily at whether the worker is economically dependent on the company.  Similarly, but different, the NLRB poses this question: do the circumstances of the work offer the employee significant entrepreneurial opportunity?  For the NLRB if the answer is yes the worker is an independent contractor, or at least not an employee of the company for which the person is performing services, and therefore, unable to join in a collective bargaining unit and unionize with the company’s employees.  In the recent case of the Uber drivers the NLRB addressed this issue in the context of a unionizing effort and determined that Uber drivers were independent contractors and, therefore, could not unionize.  Earlier this year the NLRB similarly found that airport shuttle drivers at the Dallas/Fort Worth airport were independent from employees for the shuttle company andcould not join in a unionizing effort with them. 

 Without question, this month has been a relief for gig economy employers worried about DOL investigations and unionizing efforts by workers they consider to be independent contractors.  Whether this same perspective holds up in courts is yet to be determined.  Employers should continue to watch this developing area of law. 

If you have any additional questions with regard to the new NLRB  Opinion or how it may affect your business and its existing policies and practices, please contact your Thompson Coe attorney at (651) 389-5000 or at myHRgenius@thompsoncoe.com. You can also find additional information and tips for your company and HR professionals at  https://myhrgenius.co.

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