In an Opinion Letter released on Tuesday, May 14, the Office of the National Labor Relations Board’s General Counsel opined that Uber drivers are not legal “employees” for the purposes of federal labor laws. This opinion, written by Associate General Counsel Jayme L. Sophir, comes less than a month after a similar Opinion Letter was issued by the Department of Labor signaling a trend in favor of federal agencies classifying gig economy employees as independent contractors. Applying the common-law agency test, the Office of the General Counsel concluded that UberX and UberBLACK drivers should be classified as independent contractors rather than employees. In explaining their decision, they noted that factors such as the “virtually unfettered freedom” that drivers had to set their own work schedules, that drivers chose their own work location by choosing where to log into the app, and that drivers could—and often did—work for competitors belied a finding that Uber maintained the sort of control over its drivers that is indicative of an employer-employee relationship.
This decision could significantly curtail certain protections afforded to Uber drivers under federal law including their ability to form a union. That being said, the opinion should not be looked at as precedent with respect to determining whether an employee is misclassified as an independent contractor. This is because many states, including California, Massachusetts, and New Jersey apply a much more employee-friendly standard when determining whether an employee is misclassified. As we have previously noted, this is a pivotal time for the shifting landscape of the gig economy and Tuesday’s Opinion Letter represents a victory for those who believe gig economy workers should be classified as independent contractors rather than employees. The Employment Group at Hogan Lovells is committed to following the latest developments in labor and employment law and will continue to provide updates as they occur.