The New York Law Blog: Independent Contractor or Employee? Taxi Union Sues Uber
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Tuesday, June 7, 2016

Independent Contractor or Employee? Taxi Union Sues Uber

Labor Union Sues Uber in NYC
Photo Courtesy:  Crain's New York
Lawyers, in New York, representing 5,000 Uber drivers in New York City filed a lawsuit in NY on behalf of 10 of these alleged New York employees in federal court in Manhattan last week accusing the ride-share company of depriving these New York drivers of various employment protections they should have by declaring them as "independent contractors" rather than treating them as employees.

This independent contractor lawsuit is a pivotal case that can lead to changes in Independent Contractor Law/Employment Law in the United States.  We suggest a review of your independent contractor agreements by your attorney and, also, advise following this case closely if you have hired independent contractors. Get your New York attorney on this matter immediately.  It is essential to have a carefully drafted independent contract agreement and protocols in place to assist in guaranteeing that an independent contractor is not deemed an employee.  

New York Taxi Workers Alliance v. Uber Technologies Inc. in New York Court Federal Court
This New York lawsuit is the latest salvo in the growing tension between Uber and the New York Taxi Workers Alliance, a labor union that said it also filed a separate complaint with the National Labor Relations Board claiming arbitration agreements Uber drivers signed illegally prohibit them from bringing class action claims.  

As we know, many employers consider hiring independent contractors a necessity for doing business in New York. Obviously, the main benefit to employers in New York is tax & expense savings and a more flexible labor pool.   New York Labor & Employment Laws protect employees, who must be paid a minimum wage on a regular basis, limits deductions, and must be provided health insurance, among other benefits like sick pay, overtime pay and expense reimbursement.  The costs can be substantial if an individual is considered an employee and no longer an independent contractor.  The expenses can be borne on the employee retroactively.  

New York Law on Independent Contractors vs. Employees under New York Law
While the New York Courts have found no single factor or group of factors that conclusively define that an employer-employee relationship exists, New York courts will look to the degree of supervision, direction and control exercised over the services rendered.  New York Courts, however, may consider the following factors as essential in determination if an individual is an independent contractor or an employee of a company:

Factors in Determining if an Individual is an Employee or Independent Contractor under New York Law
  1. Can the individual work based on his own convenience?;
  2. Does the individual receive fringe benefits from the company?;
  3. Is the individual on the payroll of the company?;
  4. Can the individual be engaged in other employment?; and
  5. Is the individual on a fixed schedule or flexible schedule? (Bynog v. Cipriani Group, Inc., 1 N.Y.3d 193 (Court of Appeals of New York, 2003).
At least eight similar cases are pending in seven states including New York and Texas, and four others have been sent to arbitration, where drivers can bring only individual claims.

The case is New York Taxi Workers Alliance v. Uber Technologies Inc, U.S. District Court for the Southern District of New York, number 1:16-cv-04098.

We advise, strongly, to have your New York independent contractor agreements reviewed by an attorney experienced in labor & employment law.  
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.