Employment Law Daily Uber gets out in front of bargaining rights issue
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Friday, May 13, 2016

Uber gets out in front of bargaining rights issue

By Pamela Wolf, J.D. On May 10, Uber Chief Advisor and Board Member David Plouffe (and President Obama’s former advisor) and the International Association of Machinists launched a new “independent guild” that will represent drivers who use Uber in New York City. The move followed a landmark $100 million proposed settlement last month that would resolve class actions brought by drivers in California and Massachusetts based fundamentally on charges it misclassified its drivers as independent contractors. The proposed settlement would maintain the drivers’ status as independent contractors, but it would also fund and facilitate the creation of a Driver Association and provide protection against deactivation for no reason. And there is movement afoot elsewhere around the country to extend protections to “gig” economy workers via legislation, for example, in Seattle and California. Could it be the Uber sees the handwriting on the wall? Class action proposal. The $100 million deal, filed with the court on April 21, would cover two class actions: O’Connor v. Uber Technologies, Inc., No. CV 13-03826-EMC (N.D. Cal.), and Massachusetts drivers covered by Yucesoy v. Uber Technologies, Inc., No. 3:15-00262-EMC (N.D. Cal.). It would also cover drivers who were excluded from the certified class in O’Connor (and whose claims are asserted in Colopy v. Uber Technologies, Inc., CGC-16-549696 (San Francisco Sup. Ct.). Under the deal, the Driver Association would be comprised of elected driver leaders who can create a dialogue for further programmatic relief that comes from the drivers themselves. Uber would meet quarterly with the elected leaders of this association to discuss and, in good faith, try to address driver concerns, the settlement agreement suggests. The Driver Association would not be a union, however, and it will have no right or capacity to bargain collectively. There is a question as to whether this type of apparently employer-dominated “meet and confer” association potentially could be considered unlawful under the National Labor Relations Act Section 8(a)(2), but because the proposed agreement retains the drivers’ classification as independent contractors rather than employees, the NLRA would not apply The agreement provides that Uber would only be able to deactivate drivers from the Uber platform for sufficient cause. Drivers would be provided with at least two warnings prior to many types of deactivations (except for reasons of safety, fraud, discrimination, or illegal conduct), a written explanation of the reasons for any deactivation, and an appeals process overseen by fellow drivers for certain types of deactivations. A low acceptance rate would not be grounds for deactivation. Should a driver not be satisfied with the result of the appeals process, the driver would be able to arbitrate her claim at Uber’s expense (and Uber would also pay all arbitration fees for arbitrations of certain other disputes as well, including claims stemming from an alleged employment relationship with Uber), the agreement stipulates. Time to change the Uber model? First, citing the benefits of the “gig” job, Plouffe called apps like Uber “a proven complement to public transit: they also help increase transportation options in traditionally underserved areas, cut drunk driving and reduce congestion through carpooling.” Less understood, Plouffe said, are “positive social and economic benefits that come from being able to push a button and earn money.” He pointed to Bureau of Labor Statistics data showing that 20 million Americans work fewer hours than they would like due to existing commitments, for example childcare or school. He also invoked a recent study by the University of Chicago, finding that half of all hourly workers have no say over the schedule set by their employers, for the notion that it’s hard to find flexible work. According to Plouffe, drivers who use Uber love the freedom to decide when, where, and for how long to work—being their own bosses. He called on-demand apps “a real alternative to debt” in a world where 47 percent of Americans say they couldn’t pay an unexpected $400 bill. Turning to the down-side of the “gig” job, Plouffe acknowledged that Uber, which will be six years old this summer, hasn’t “always done a great job working with drivers.” The company’s CEO said two weeks ago that it’s time for a change. NYC Drivers Guild. What is that change? Uber and the IAM are putting in place what they call an “innovative agreement”—an independent Drivers’ Guild designed to:
  • improve communication between drivers and Uber;
  • provide benefits without jeopardizing independence and flexibility; and
  • give drivers who have been barred from the app an additional voice in the deactivation appeals process.
The Drivers Guild will be an affiliate of the Machinists Union. It will provide these additional protections to all current and future drivers who use Uber in New York City (at no cost to the drivers):
  • regular meetings with Uber’s regional general manager and the New York City management team;
  • the ability for individual drivers to appeal if Uber denies them access to the app—as well as representation from the Guild during the appeals process;
  • discounted legal services, life and disability insurance, education courses, and roadside assistance; and
  • access to an online worker center that will provide a central hub for driver assistance and resources.
Many New York City Uber drivers use the Uber app more than 35 hours a week—pretty much full-time—in contrast to the rest of the United States, where the majority of drivers use the app less than 10 hours a week, according to Plouffe. Another important difference is that the city taxes rides with Uber or Lyft more heavily than trips taken in taxis and other private-hire vehicles, according to Plouffe. “It’s why we’ve agreed to campaign with the Machinists Union for a level playing field—with rides on Uber, taxi and private hire being taxed at the same rate for the first time,” Plouffe said. “This would not only mean more money for drivers, it would also free up resources for a new benefits fund administered by the Guild and used to cover benefits such as paid time off or parental leave, for example.” Broader change in progress. Plouffe said that the new agreement between Uber and the IAM is part of an ongoing effort by Uber to work more closely with drivers who use the app. That effort is primarily about better communications, including listening to feedback more carefully. Plouffe pointed to a newly minted pilot to have passengers pay when they keep drivers waiting for more than two minutes and a feature in the app that enables drivers at JFK and LaGuardia to estimate how long they’ll have to wait for a fare, both of which have resulted from driver feedback in New York. Uber is also making fundamental changes to the way it operates around the country. It recently published a driver deactivation policy, which explains in simple, easy-to-understand language why a driver might lose access to the Uber app. In Seattle Uber has implemented a new appeals process—where highly rated Uber partners hear the appeals of drivers who have been deactivated. Both these changes will significantly increase transparency and accountability, Plouffe said. Plouffe also said that the Freelancers Union, a longtime leader in advocating for independent workers, will advise Uber on how to best bring flexible benefits to independent workers in the on-demand economy. Handwriting on the wall. Likely, the changes announced in New York and being implemented elsewhere are also a signal that Uber sees the handwriting on the wall. In December 2015, the Seattle City Council passed a bill, CB 118499, that became law despite the mayor’s refusal to sign it, which created a process whereby a majority of independently contracted drivers working for the same company could choose to join a “Driver Representative Organization” to negotiate pay rates and conditions of their employment. Last month, legislation that could put a new legal framework in place for gig economy workers who need the muscle to negotiate for workplace rights that they currently lack due to their status as independent contractors advanced in California. On April 20, updated amendments to AB 1727, known as “The California 1099 Self-Organizing Act,” were approved by the Assembly Committee on Labor and Employment. The measure stalled the next day, however, when the proposal’s author announced her decision to continue discussions regarding the legislation’s “complex legal issues” over the next year and to hold AB 1727 in the Assembly Judiciary Committee without consideration at this point.

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