Articles Posted in Freelance

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On February 15, 2018, Judge William Alsup of the U.S. District Court for the Northern District of California granted class certification in Dulberg v. Uber Technologies, Inc., a suit filed in February 2017 alleging that Uber’s pricing and payment model deprives drivers of fair pay for their work. This decision will allow as many as 9,197 Uber drivers from across the United States to pursue their claims as a class.

Uber is among the most successful of a number of rapidly growing companies that are part of the so-called “gig economy.” The U.S. Department of Labor defines a “gig” as a “single project or task for which a worker is hired, often through a digital marketplace, to work on demand.” Gig economy and freelance workers, such as Uber drivers, are becoming an increasingly visible and important component of the U.S. workforce; an estimated nearly four million freelancers work in the New York City area alone. Yet while gig economy workers may enjoy certain benefits—such as scheduling flexibility—they are also often at a disadvantage in comparison to traditional employees. Gig economy workers are almost invariably classified as independent contractors and are thereby cut off from most of the legal protections afforded to employees, including minimum wage and overtime laws, as well as employment benefits like health insurance—and many freelancers report difficulty getting paid for their work on time or at all.

Uber’s treatment of its gig economy workers has gained particular attention over the past several years, as drivers have brought a number of lawsuits against the company and have protested many of Uber’s internal policies, such as its recently revoked harsh termination policy, under which any driver with three complaints would be automatically terminated without investigation. Recently, a U.K. court issued a landmark decision, finding that Uber’s London drivers were employees, not independent contractors, and we have previously reported on several lawsuits brought by Uber drivers concerning whether drivers’ on-call time is compensable, drivers’ arbitration agreements with Uber, and class actions challenging Uber’s classification of drivers as independent contractors.

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Last week, on September 13, 2017, the U.S. District Court for the Eastern District of Pennsylvania denied Uber’s motion for partial summary judgment in Razak v. Uber Technologies, Inc. This decision allows a putative class of Philadelphia-based Uber drivers to move forward with claims against Uber for failing to compensate them for “on-call” time they spent logged into the Uber app, but not driving customers.

The Fair Labor Standards Act (FLSA) requires employers to compensate employees for all hours worked, including on-call time: hours worked where “the employee is required to remain on the employer’s premises, or […] although not required to remain on the employer’s premises, finds his time on call away from the employer’s premises is so restricted that it interferes with personal pursuits.” The recent rise of gig economy work— individual projects and tasks picked up at a worker’s discretion, often using apps like Uber and TaskRabbit—has presented a challenge to the existing model of on-call time, as courts are asked to consider what constitutes compensable on-call time for workers who may never report to a central place of employment or who are, at least to some degree, able to work whenever they choose.

In Razak, a group of Uber drivers alleged that their time spent logged into the Uber driver app and waiting for ride requests, but not actually driving customers, qualified as on-call time under the FLSA and that Uber’s failure to compensate them for such time had led to minimum wage and overtime violations. Uber moved to dismiss the drivers’ complaint; the court denied Uber’s motion to dismiss and ordered expedited discovery on the issue of whether the drivers’ time spent online qualified as compensable on-call time under the FLSA. After the parties completed expedited discovery, Uber moved for partial summary judgment. The court denied this motion as well, determining that it could not find that this on-call time was not compensable under the FLSA.

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On April 12, 2017, the Second Circuit affirmed the district court’s decision in Saleem v. Corporate Transportation Group, Ltd., finding that a group of black-car drivers had been properly classified as independent contractors under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). The court held that the drivers’ significant degree of independence prevented them from establishing that they were employees within the meaning of the FLSA or NYLL.

Under New York law, black cars are defined as a “type of for‐hire vehicle (along with livery vehicles and limousines) that provide ground transportation by prearrangement with customers.” The Saleem plaintiffs are a group of black-car drivers serving clients throughout the tri-state area; the defendants were operators and administrators of a black-car dispatch, which sells black-car franchises to individual drivers and refers the dispatcher’s clients to the driver. Each driver signed an agreement with a franchisor, stating that the driver was not an “employee or agent” but instead a “subscriber to [the franchisor’s] services offered,” that the driver would “at all times be free from [the franchisor’s] control or direction,” and that the franchisor would not “control, supervise or direct” the driver’s work. The agreements did not prohibit drivers from transporting customers for other companies, including competitors, but did require that drivers comply with policies set out by each franchisor, such as rules concerning dress code and vehicle cleanliness.

In November 2012, a group of drivers filed suit in the U.S. District Court for the Southern District of New York, alleging that the franchisors had violated the overtime provisions of the FLSA and NYLL by misclassifying the drivers as independent contractors and thus depriving them of overtime compensation; under the FLSA and NYLL, employees are entitled to overtime pay for hours worked over 40 in a work week, while independent contractors are not. In June 2013, the case was conditionally certified as an FLSA collective action, and in 2014, the parties cross-moved for summary judgment. The district court granted summary judgment in favor of defendants, finding that “all Plaintiffs in this suit — both named Plaintiffs and opt-in Plaintiffs — are independent contractors for purposes of the FLSA and the NYLL.” Plaintiffs subsequently appealed to the Second Circuit.

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Last week, we blogged about proposed legislation that would open up health insurance benefits to New Yorkers who are members of the so-called “gig economy,” an emergent employment sector that is moving away from traditional employer-employee relationships in favor of short-term, task-based work. The New York City Council recently passed the Freelance Isn’t Free Act, a new bill—the first of its kind in the country—which creates protections for gig economy workers and freelancers in the New York metropolitan area.

A “gig” is defined by the U.S. Department of Labor as a “single project or task for which a worker is hired, often through a digital marketplace, to work on demand. While gig jobs and career paths have always existed—music, for instance, or graphic design—technological developments in the past decade have made it unprecedentedly easy for companies and clients to connect with a network of freelancers via websites and mobile apps. Services like Uber and TaskRabbit allow workers to pick up individual gigs, like driving a client to a destination or cleaning a client’s apartment, at their discretion. Nontraditional employment arrangements constitute a rapidly growing share of the labor force: a 2014 survey found that 34% of U.S. workers were engaged in some type of freelance work. Freelance work is particularly popular in the New York metropolitan area, which is home to an estimated nearly 4 million freelancers.

Gig and freelance work has wide appeal because of its freedom and flexibility. Workers can choose projects that interest and excite them, set their own schedules, and gain varied experience that might be inaccessible to someone locked into a full-time career track. But the same autonomy that makes freelance work so attractive can also lead to major drawbacks. Freelancers often don’t enjoy the benefits—such as healthcare, as we wrote about last week—or the job security that a traditional employment relationship can provide, and they typically aren’t covered by the same legal protections that are extended to employees. According to a recent survey, half of freelancers experienced difficulty collecting payment for their work in 2014, and of those, over a third reported not getting paid whatsoever for some amount of the work they had performed, leading them to lose thousands of dollars in unpaid income.

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