• July 1, 2015
    Guest Post

    by Ann C. Hodges, Professor of Law, University of Richmond

    The recent decision by a California labor commissioner that an Uber driver is an employee rather than an independent contractor is of limited significance in and of itself. What it may signal for the future of the sharing or gig economy is far more interesting.

    The decision is based on California law and, unless reversed on appeal, will require Uber to pay the driver several thousand dollars in business expenses. Determining whether an individual is an employee or an independent contractor is a complex decision based on a multi-factor test. Most employment statutes exclude independent contractors from their coverage, based on the theory that contractors are independent business owners that do not need the legal protection. In recent years, however, misclassification of employees as contractors has become a common practice. In some cases, misclassification may be mere error, but in others it is an attempt to evade employment laws, avoid deducting and remitting income taxes and escape payment of the employer portion of social security. Other advantages to the employer of the independent contractor classification are reducing the potential liability for any negligent or wrongful actions of the individual and avoiding payment of employee benefits.

    The IRS is attuned to the issue and watching for misclassification, along with enforcement agencies for employment statutes and plaintiffs’ employment lawyers.  Enforcement resources are limited, however, so misclassification remains rampant. While all courts and agencies use similar multi-factor tests, differences in emphasis and weighting of factors result in different conclusions about similar workers.  For example, in a series of cases about FedEx drivers under a variety of employment laws, some courts and agencies have found them to be employees and others, contractors.  Some decision makers emphasize the amount of control exercised by the business while others put more weight on the availability of individual entrepreneurial opportunities.

    The recent Uber decision is similar, emphasizing Uber’s control over many aspects of the drivers’ jobs. But this is just the application of one state statute, which is more employee protective than many, by one decision maker to one employee.  If more decisions find drivers to be employees under more statutes, however, the business model that supports the gig economy may be threatened.

    The more interesting issue that the decision raises is the relationship between the gig economy and existing law.  Depending on the details of the business model, workers in the gig economy might be considered independent contractors, part-time employees, temporary employees, or casual workers.  Many laws exclude some or all of these groups of workers.   If this becomes the dominant work pattern of the future, laws will need to be changed to protect workers against exploitation by businesses.

  • April 27, 2011
    Practical Advice

    For those contemplating a career in law and therefore potentially investing in a legal education, this article for The New Republic by University of Colorado law school professor Paul Campos is a must-read.

    Campos reports on the “main sources of information on post-law-school employment rates,” and how faulty they are. His report suggests that prospective students would do well to examine closely or ignore the claims by most of the ABA-accredited schools that within nine-months of graduation almost all their graduates have full-time employment.

    The professor says the numbers do not represent the true employment of recent graduates. In fact, according to his own study of the available information, he says the numbers of gainful employment are likely much, much lower.

    Campos writes:

    In the course of my research, I audited a representative sample of individual graduate responses and found several instances of people describing themselves as employed permanently or full-time, when in fact they had temporary or part-time jobs (I found no instances of inaccuracies running in the other direction). Perhaps some graduates exaggerate their employment status out of embarrassment, or for strategic reasons, but, whatever their reasons might be, this apparently not uncommon practice suggests that the true employment rate should be lowered even further.

  • June 17, 2009
    The National Football League has announced an expansion of the "Rooney Rule" on minority hiring. NFL Commissioner Roger Goodell said the rule, which requires NFL teams with head-coaching vacancies to interview one or more minority candidates, would be expanded to cover hiring of front-office personnel.

    The Washington Post reported that the expanded rule would require teams seeking to fill front office positions to interview at least one minority candidate. In a statement, Goodell said, "The discussion at the league meeting identified the strong reason for taking this step, which in large part simply confirms a recommended practice that clubs have voluntarily embraced. The recommendation also recognizes that this process has worked well in the context of head coaches, and that clubs have deservedly received considerable positive recognition for their efforts in this respect."

    An NFL committee, headed by Steelers President Dan Rooney (left with Steelers head coach, Mike Tomlin), proposed the adoption of the rule on hiring head coaches in 2002 after the committee concluded that the league's hiring practices were discriminatory.

    In December, ACS distributed an Issue Brief on the impact of the Rooney Rule.