Labor law

  • 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.

  • May 5, 2015
    Guest Post

    by Bill Lurye, General Counsel, and Matt Stark Blumin, Associate General Counsel, at American Federation of State County and Municipal Employees (AFSCME)

    On February 9, less than a month into his first term as governor of Illinois, Bruce Rauner issued an executive order barring state employee unions from collecting fair share fees, thus unilaterally transforming Illinois into a right-to-work state for state employees.  He justified this extreme act by arguing that, in his opinion – though contrary to Supreme Court precedent dating to 1977 – such fees violate the First Amendment.  Rauner’s anti-union executive order is a blatantly illegal power grab, and unions have filed suit to overturn it.

    As is the case in many states, Illinois’ public sector labor relations statute expressly authorizes collective bargaining agreements allowing unions to collect fair share fees, and over 40,000 state employees are covered by collective bargaining agreements (CBAs) that include fair share fee provisions.  Yet, despite strong separation of powers language in the Illinois Constitution that prevents him from legislating, Governor Rauner has declared that he will not turn over any of the contractually owed fair share fees to unions, no matter what the duly enacted state labor law statute says.

    First, some background on fair share fees in Illinois.  Just like a private sector union under the National Labor Relations Act (NLRA), a public sector union under Illinois law is required to represent every employee in a unionized bargaining unit whether or not the employee is a member of the union.  This means that the unions have to do lots of costly work on behalf of nonmembers, like negotiating the CBA fairly on the nonmembers’ behalf and handling any grievances they have.  Fair share fees represent the cost to the union of providing those services to nonmembers, and nothing more.  (Members who pay full union dues additionally fund other work by the union, such as lobbying or political donations, that fair share fees don’t cover.)  As even Justice Scalia has recognized in his concurrence in Lehnert v. Ferris Faculty Association, fair share fees “allow the cost of . . . the union’s statutory duties to be fairly distributed; they compensate the union for benefits which ‘necessarily’ – that is, by law – accrue to the nonmembers.”

  • May 1, 2015
    Guest Post

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

    In a blog post following the Supreme Court’s decision last term in Harris v. Quinn, I predicted that the constitutionality of union fair share fees would soon be back at the Court. It took little prescience to make such a prediction and indeed, the plaintiffs in Friederichs v. California Teachers’ Association worked mightily to get the case on the Court’s docket as quickly as possible. The Court will decide whether to grant cert in the near future.

    Although this issue will no doubt return repeatedly to the Court, it should decline to hear the case. The 1977 decision of the Court in Abood v. Detroit Board of Education correctly concluded that fair share fees are constitutional, and the decision should not be disturbed. Abood allows the union to charge for its mandated representational duties, but not for political expenditures. In this context, the objectors’ first amendment interests are reduced and the interests of the government employer that has entered into an agreement with the union enhanced. Justice Alito suggested in Harris, however, that all union activity in the government sector implicates the highest first amendment interests. This is at odds with the Court’s cases on the first amendment interests of public employees following Abood.

    In recent years, the Court has held that the government has stronger interests in restraining speech when it acts as an employer. Accordingly, when employees speak pursuant to their job duties, their speech is unprotected. Additionally, when an employee’s speech is about an internal workplace grievance, it is similarly unprotected by the first amendment. It is precisely these grievances that the union is obliged to handle for all employees regardless of membership.  If speaking about the grievance is unprotected, why is compelling the unwilling employee to pay for this otherwise unprotected speech an interference with first amendment rights?  Further, Justice Alito’s Harris opinion suggests that when one employee asks for a raise, the speech is unprotected but when the union asks for a raise on behalf of all employees, it is high order political speech which the employee cannot be compelled to support.  As Justice Kagan pointed out in the Harris dissent, the fact that it takes more money to pay multiple employees does not transform the character of the speech when the substance, asking for a raise, is the same.

    There are many other reasons for the Court to deny cert. Abood has been settled law for almost 40 years, Justice Alito’s efforts notwithstanding. As Justice Kagan ably pointed out in Harris, principles of stare decisis, including the reliance interests of thousands of employers and unions and millions of employees, counsel restraint. Moreover, as I have argued in earlier posts, fair share agreements are an essential pillar of the system of labor relations that has served our country well for 80 years.  And finally, as pointed out in the opposition to cert, the record in this case has not been developed, as the plaintiffs rushed to accept Justice Alito’s invitation for an opportunity to overrule Abood.

  • April 28, 2015
    Guest Post

    by Charlotte Garden, Assistant Professor and Litigation Director of the Korematsu Center for Law & Equality, Seattle University School of Law. Follow her on Twitter @CharlotteGarden.

    In the wake of two major Supreme Court decisions about public sector unions, anti-union groups moved quickly, filing a raft of new complaints seeking to capitalize on and extend Harris v. Quinn and Knox v. SEIU Local 1000.  The first of those cases, Friedrichs v. California Teachers Association, has now reached the Court, which will consider granting cert later this summer.  A cert grant in Friedrichs will signal that at least four Justices believe that the Court is willing to go beyond Knox and Harris ― and possibly even impose “right to work” in the public sector.

    The Friedrichs petitioners call on the justices to overturn Abood v. Detroit Board of Education.  In Abood, the Court held that states and elected unions ― which are required to treat all the workers they represent fairly whether or not they join ― may agree to allow the union to charge each represented worker for his or her share of the union’s work on their behalf.  Abood’s caveat, though, is that employees have a First Amendment right to opt out of contributing towards their union’s other spending, including its spending on politics.  The Abood Court struck this balance in recognition of the relative weakness of workers’ First Amendment interests when their union is bargaining over pay, benefits and other working conditions with a public employer ― especially when weighed against employers’ and unions’ interests in promoting labor stability by preventing free ridership.  Abood is a foundational case that not only governs the relationship between public sector unions and the employees they represent, but also announced the principle that now undergirds other government regulatory programs that incidentally involve speech.

    The lawyers bringing Friedrichs and cases like it were likely encouraged by dicta in Harris and Knox, both authored by Justice Alito.  (Harris held that “partial public employees” ― those whose working conditions are set jointly by the state and individual private clients ― could not be required to pay anything towards the cost of union representation.  Knox held that unions must obtain affirmative consent from workers before charging them the optional portion of mid-year dues increases.)  And indeed, both opinions, but especially Harris, criticize Abood.  Nonetheless, it is telling that Harris left Abood entirely intact, despite the petitioners’ exhortations that the case should be overruled.  That suggests that at least one of the justices in the five-justice majority had significant reservations about overruling Abood just one year ago.

  • April 21, 2015

    by Jeremy Leaming

    Sheryl Sandberg and Anne-Marie Slaughter have drawn much attention for their thoughts about the professional working lives of women.  But Sandberg and Slaughter have failed to recognize or willfully ignored the stations of the vast majority of working women – those women who do not have the luxury of “opting out” or “leaning in.”  The inadequacies of our workplace laws leave many working women behind and perpetually struggling to survive.

    American Constitution Society for Law and Policy (ACS) President Caroline Fredrickson, a former labor lawyer and a longtime leader in the legal progressive community, declares a powerful response to “leaning in,” or “opting out,” which dominate discussion of inequalities facing women in the workforce.

    The discussion of workplace equality for women now focuses almost exclusively on white-collar professionals.  This discussion needs broadening.

    Fredrickson’s compelling book, Under the Bus: How Working Women Are Being Run Over, tells the stories of many women, who do not have the protection of our laws or the ability to stand up to their employers’ often illegal demands.  Indeed, for too long many employers have ignored or been exempted from laws meant to protect workers against corporate malfeasance.  Fredrickson also notes the inadequacy of our laws is ingrained in a history riven with racial and gender biases.  Time after time, Fredrickson notes that historical progressive movements to improve the lives of working Americans have left women behind.  If our nation fails to embrace collective solutions to collective problems, inequality will continue to fester in America while democracy suffers.