Employee Classification and the Gig Economy – Court Leaves the Door Open for “On-Call” Time for Uber Drivers
On September 13, 2017, U.S. District Judge Michael Baylson of the Eastern District of Pennsylvania denied Uber’s Partial Motion for Summary Judgment in a putative class action brought by UberBLACK drivers in Philadelphia (Rezak, et al. v. Uber Technologies). In their original Class Action Complaint filed in January of 2016, the drivers alleged that Uber violated the Fair Labor Standards Act (“FLSA”) by misclassifying them as independent contractors and failing to pay them minimum wage and time-and-a-half overtime for hours worked over 40 per week. Plaintiffs also argued that their time spent “on call” when logged into the Uber application is work time and therefore compensable. Plaintiffs advanced this argument despite admitting that they conducted numerous personal activities while logged into the application while driving without Uber passengers, including: running errands, taking smoke breaks, and accepting personal phone calls.
In its Partial Motion for Summary Judgment, filed after substantial discovery regarding the “on call” pay issue, Uber maintained its position that its drivers are independent contractors and are therefore not covered under the FLSA. Uber also argued that even if the plaintiffs were covered by the FLSA, their time spent using the application when not transporting riders is not compensable under the FLSA. In its Memorandum Opinion denying Uber’s motion, the court refused to make a final ruling on whether the plaintiffs must be compensated for time spent online in the Uber application. The court reasoned that the novel issue of whether the drivers were “on-call” while logged into the application without transporting riders could not be determined via a motion for summary judgment, but should be addressed at trial instead. The court instructed the parties to engage in discovery regarding another key disputed issue – whether the drivers were employees or independent contractors under the FLSA.
Ride-sharing companies, and similar companies in the “gig economy” should pay close attention to this case because of plaintiffs’ novel “on call” time argument and its potential implications. As noted by the court, to date, the FLSA’s extension to “on call” time has only been applied to traditional shift work, not the gig economy. A future holding by the court that the plaintiffs are employees and their time spent driving “on call” without passengers is compensable could affect profitability across the industry. As always, stay tuned to HR Legalist as it continues to monitor gig economy legal issues, and this case as it continues to progress through the court.