Uber's very bad year just got a little worse. An Administrative Law Judge upheld a New York State Department of Labor Ruling that Three Former Uber Drivers were Employees, not Independent Contractors. The decision was announced June 13th, the same day that the embattled Ride-Hail Giant's CEO Announced he was taking a Leave of Absence.
The Department of Labor ruled last October that the Drivers were eligible for Unemployment Insurance Benefits. Uber Plans to Appeal the latest Decision, but if it stands it could mark a Major Blow to Uber's Economic Model. The eHail Service Classifies Drivers as Contractors, which Exempts the Company from having to Pay into the State's Unemployment Insurance Fund. Uber has more than 50,000 Drivers in New York.
The latest Ruling marks another Victory for the New York Taxi Workers Alliance, which had filed a Federal Lawsuit against Gov. Andrew Cuomo and the Department of Labor after the Drivers' Unemployment Claims were initially held up for "Executive Review".
According to the Alliance, once the Lawsuit was Filed, the Department of Labor began a Review of the Claims and found for the Drivers. In Overruling Uber's Objections to that Decision, Judge Michelle Burrowes of the Unemployment Insurance Appeal Board said in her June 9th Order that in addition to the Three Former Drivers, "all others similarly situated" at Uber were also Entitled to Employee benefits from the company, going back to January 2014.
"We believe this affects all Uber drivers in the state of New York and will have a significant effect on other pending cases," said Nicole Salk, Staff Attorney for Brooklyn Legal Services, which Represented the Three Drivers. "Moreover, the Department of Labor must consider this decision for all new unemployment insurance claims by any Uber driver going forward." Salk said there were more than a dozen other Pending Hearings in which the Department of Labor has found that Uber Drivers were Employees and which Uber has also Appealed.
“The message here is simple,” said Bhairavi Desai, Executive Director of the Taxi Workers Alliance, in a statement. “If you're going to control the workers to maximize your profits off their labor, you owe them their rights and benefits under the law.” Still, it may be a while before the Three Drivers: Levon Aleksanian, Jeffrey Sheppard, and Jakir Hossain, start Collecting Benefits.
"We are immediately requesting a new hearing and appealing this decision," an Uber Spokeswoman said in a statement. "We are confident we will prevail—the Department of Labor has already ruled that several drivers are independent contractors and a Federal Court has deemed all black-car drivers to be independent contractors."
Uber has until June 29th to File its Appeal. Once the Appeal Board renders a Decision, the next stops could be the Appellate Division of the State Supreme Court and, from there, the New York Court of Appeals.
"We were denied our due-process rights in this matter," the Spokeswoman added. "The administrative law judge forbade any other drivers from testifying, which means the evidence was drawn from three hand-picked drivers."
Lawyers for the Taxi Workers Alliance said they were puzzled by Uber’s responses. According to Salk, the Federal Court Ruling that Black-Car Drivers were Independent Contractors was “a very limited decision” that would not Apply to the current Case. Judge Burrowes said as much in a footnote to her ruling.
Salk also Disputed the Idea that these were “hand-picked drivers.” “These claimants came to the New York Taxi Workers Alliance for assistance,” she said. “The judge’s decision points out that the experience of these three drivers is typical of all Uber drivers.”
NYC Wins When Everyone Can Vote! Michael H. Drucker
