Firm Updates:
Tristan & Cervantes congratualtes Partner, Pedro Cervantes, for being selected to serve as a member of the Board of Trustees of his Alma Mater, Augustana College (Rock Island, IL.)
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Employee Misclassification Strikes Again: Navigating Employer-Employee relations in the “Uber” Economy
Worker misclassification is a long standing issue that has gained recent attention with the rise of on- demand platforms that dispatch private drivers, delivery services, cleaning services, and other personal services to customers, all within the push of a button. Chicago-based Grubhub, which delivers food to customers from various restaurants, and Uber, a personal chauffeur service, have both been named in numerous lawsuits for the misclassification of their drivers as independent contractors as opposed to employees.
Most recently, the Chicago regional office of the National Labor Relations Board (“NLRB”) filed a complaint (13-CA-163079) against Postmates, Inc., challenging the company’s mandatory arbitration agreements for its drivers. Postmates operates a technology platform that allows customers to connect with local couriers who can deliver anything from any store or restaurant, directly to the customer within minutes. Although the primary claims within this lawsuit are to determine whether Postmates’ arbitration policies are lawful under the National Labor Relations Act (NLRA), the complaint actually assumes that Postmates’ drivers (and potentially drivers like Postmates’) are employees and not independent contractors.
Ultimately, the NLRB is seeking an order against Postmates that would require the company to review and revise their overly broad provisions in their arbitration agreements. However, this decision may not only have an impact in the area of arbitration agreements, but it could also change the manner in which individuals who act as drivers for these on-demand platforms are classified and treated in the employment setting. If these drivers are considered employees under the NLRA, employers would be required to pay overtime, worker’s compensation benefits, and other benefits to its employees. Moreover, the drivers would be entitled to the additional protections offered by the NLRA, including the right to unionize and engage in concerted activity.
With the rise of these on-demand business models within the economy, employers should be wary of the consequences of utilizing these business models and misclassifying employees as independent contractors. The attorneys at Tristan & Cervantes have worked with numerous employers regarding employment related issues. Please feel free to contact us.
