The Gig Economy Could Soon Reach Watershed Moments

by | May 26, 2022 | Gig Economy, NLRB

The conversation around gig working often involves a series of tradeoffs. On one hand, there is a sense of flexibility of being able to set one’s own work hours and provide services for multiple gig-based companies. As part of that deal, independent contractors generally do so without employee protections and benefits.

So, it’s not shocking to see that unions found a foothold to push for employee status for app-based gig drivers, who can shoulder considerable expenses that translate into taking home less than minimum wage. This union push, however, has so far led to some half-measures with no one (not workers, companies, or unions) fully satisfied with the outcome. Massachusetts (a battleground state for the issue) could push the decision to voters, and if that happens, companies who use gig drivers could see change on wage and tax-liability fronts.

The Massachusetts Supreme Judicial Court will soon rule on the ballot initiative, which would potentially categorize these gig workers under the umbrella of an existing labor law. What happens in this case could lead to change for companies (like Uber, Lyft, and DoorDash, of course, but potentially extending into a wide range of industries) who rely on gig workers. If unions get what they want here, gig drivers could gain more rights and benefits, but the gig economy could eventually be transformed significantly.

On a federal level, NLRB General Counsel, Jennifer Abruzzo, argues that misclassifying independent contractors violates the NLRA. At Abruzzo’s behest, the NLRB wants to overturn the 2019 Velox Express decision, which found that a courier company shouldn’t have to reclassify independently contracted drivers as employees, even though the NLRB found that the drivers were erroneously misclassified, and Velox’s termination of a driver (engaged in a protected activity) was an unfair labor practice.

The majority Velox opinion relied upon the NLRA’s Section 8(c) “free speech” provision but also a public policy consideration, meaning that the board found it unfair to hold the company responsible for a violation because classifying independent contractors is frankly difficult territory to navigate. If Abruzzo’s board overrules Velox, that would open a whole new can of worms, so it’s unlikely to happen, yet it’s still a case to watch.

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