HR Intel: Gig Economy Clashes with Traditional Labor

USA Labour movement, workers union strikeA regular round up of news, legal trends and workplace developments to help keep HR ahead of the curve.

Is Uber’s recognition of the Independent Driver’s Guild (IDG) in New York a step in the right direction or an evil red herring? It depends, of course, on which lawyer you ask.

On one hand, lawyers for the IDG say the agreement with Uber will guarantee drivers monthly meetings to raise concerns, create an appeals process for driver termination decisions and provide legal services and benefits to drivers at discounted rates.

Some view this agreement as a positive development – the forging of an unlikely and unsteady alliance. The agreement will provide some protection for drivers while also helping Uber stem the flow of litigation. Uber also gains an ally in its attempt to repeal a New York law taxing “black car” rides 9%, but which exempts traditional yellow taxi cabs.

On the other side of the debate, we have Senator Elizabeth Warren, who says the “gig economy” is merely a symptom of the erosion of worker rights over time. Taking on-demand taxi gigs is a sort of last-ditch effort to create economic security and autonomy by workers who’ve been marginalized and squeezed by corporate America while all the wealth flowed to the top. She may have a point.

To be fair to Uber, unionizing gig economy workers is really difficult. It starts with the mentality of such workers, having watched as their influence over wages at the corporate level dissipated steadily over the years and as traditional trade unions were pushed out. Union membership rates have been declining consistently for about 50 years. And during that time, wages for the vast majority of Americans remained stagnant while the C suite got paid. About that, Senator Warren is correct.

Now, however, workers have the technology to fight back. They can use apps like Uber and Lyft to provide transportation, Miniluxe or Shortcut to provide onsite hairstyling and even source temporary staffing apps like Shiftgig and TaskRabbit to find short-term jobs. They can choose their own wages, essentially, by choosing how often they want to work. The catch, of course, is that workers who want both the flexibility and the money are hung out to dry when they have a medical or financial crisis because their “employer” doesn’t provide health insurance. Not to mention, the lack of a practical, portable retirement savings account (in the absence of employer-sponsored 401(k)s for contractors) means those workers may be left hanging in retirement as well.

The other catch is that being a contractor (employee?) for one of these companies means your choices about work are going to be very personal. The amount of individual control workers have over these apps and their work schedules makes it very difficult to get them to agree on broad labor terms, let alone specifics like benefit plans or wages. That makes it extremely impractical and difficult to get them to band together and that is why the formation of the IDG and its recognition by Uber is a big development, albeit on a small scale.

As usual, the solution is a compromise and perhaps a reimagining of some labor regulations to reflect modern working conditions. Uber drivers are not, after all, gathering at some shady parking lot in downtown San Francisco at 5 a.m. every day to wait for work. They’re scanning smartphones for gigs in their downtime between hipster beard trimming class and Yoga.

Senator Warren says there should be three major objectives for policy makers, legislators and worker unions in trailblazing the gig economy’s path when it comes to labor regulations:

  • Improve the safety net by providing catastrophic insurance coverage,
  • Make healthcare benefits portable; and
  • Make retirement benefits portable.

Those goals remain lofty and far off for now as the IDG won’t do much of that for Uber drivers in New York. But Uber’s recognition of the IDG is a small, tentative step in the right direction.

Discrimination Nation

Colleen Dominguez’s sex and age discrimination suit against Fox Sports 1 (FS1) will proceed to trial after the employer’s motion to dismiss the case on First Amendment grounds was denied. FS1 argued that it withheld assignments from Dominguez based on its right to craft its own programming message, but according to the court, that argument completely misses the point of the lawsuit. If crafting a corporate message results in the marginalization of individuals based on their sex or age, it’s still illegal.

In this case, Dominguez claims she was asked to get an “Erin Andrews makeover” (complete with a facelift and hair extensions). This was in addition to numerous other comments and critiques about her physical appearance, issues which were not common with male or younger female colleagues. Now that the case can proceed, that will open up the “discovery” phase, during which time lawyers for Dominguez may get to see exactly what FS1 had to say about her when it chose not to let her cover big assignments like the 2015 Super Bowl, for example. Uh oh.

Good news for employers that have faced frivolous or otherwise “unreasonable” EEOC lawsuits. In CRST Van Expedited v. EEOC, the Supreme Court held that the employer may recover up to $4 million in attorney’s fees from the EEOC after defending itself against a charge of systemic sexual harassment. During the investigation and resulting lawsuit, the EEOC (allegedly) failed to make witnesses available for depositions and otherwise allowed the statute of limitations on claims to expire in some cases.

In these types of situations, attorney’s fees may be recoverable, but something tells me that pretty much every single employer that has ever been sued would view the lawsuit as “unreasonable.” Tread carefully when seeking attorney’s fees as it’s immensely difficult to prevail on those types of cases and you will accrue additional attorney’s fees in the process of trying to collect them. Gotta love lawyers!

Compliance Carousel

New York State is suing Domino’s (corporate) together with several Domino’s franchisees, claiming that they collaborated to underpay workers by about $565,000 in 10 different stores. To bring corporate Domino’s into the case, the state will have to make the “joint employer” argument which means proving allegations that corporate Domino’s micromanaged employee relations issues at the franchisee level.

The “ignorance of the law” defense rarely, if ever, works in court. In Craig v. Bridges Bros. Trucking, the 6th Circuit ruled that ignorance of FLSA regulations did not excuse an employer’s failure to pay proper overtime. The district court had ruled in the employer’s favor because the employee in question had failed to notify her employer about the missed overtime payments. The 6th Circuit found, however, that the employer likely knew about its overtime pay obligation to the employee because of some internal communications about capping her work hours.

How is this song related to HR?

In the last edition of HR Intel, we asked you how “Candidate” by Joy Division is related to HR. This song is very much about politics, but you don’t need much experience in the modern work setting to know that politics are hyper-relevant. Not only do people bring their political persuasions into the workplace, but office politics add a whole other layer of complexity.

Candidate is about the struggles that go on between individuals or groups with different value systems and ultimately, a recognition that we’re all different and unique, yet we have similar objectives in that we need to work together. Sounds like something relatable to HR.

We leave you with “Burn the Witch” by Radiohead from their new album: A Moon Shaped Pool.

Tell us how you think this song is related to HR in the comments section below.

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