Monday Morning Minute
In This Issue
Uber Drivers Cannot Unionize
Best Practices in Light of the Steak n' Shake Fiasco
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                  May 20, 2019


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The National Labor Relations Board, Division of Advice, recent announced that Uber driver are independent contractors and cannot organize into a union under the National Labor Relations Act (NLRA).  The decision follows strikes by Uber drivers in various locals including Chicago, seeking better working conditions in the "gig" economy.
In finding that Uber drivers were independent contractors and therefore unable to organize under the NLRA, the Division of Advice ("Advice") relied upon its recent precedent in Super Shuttle DFW.  (See Feb. 18, 2019 MMM).   In determining whether the drivers were employees or independent contractors, Advice relied upon ten non-exhaustive common law factors, paraphrased as follows:
  • Whether the putative employer controlled the way the work was performed;
  • Whether the putative employee is employed in a distinct occupation or business;
  • Whether the work is performed under direction and supervision;
  • The skill required in the occupation;
  • Whether the putative employer provides the tools, equipment, and location of the work;
  • The length of time that the putative employee is employed;
  • The method of payment (by hour or job);
  • Whether the work is part of the regular business of the putative employer;
  • Whether the parties believe there is an employer-employee relationship;
  • Whether the putative employer is or is not in business.
In analyzing the various facts, Advice concluded that the facts showed that the drivers exercised significant entrepreneurial opportunity and had nearly complete control over their working conditions and schedules, as well as freedom to work for competitors.  Accordingly, they were found the drivers to be independent contractors.
Spognardi Baiocchi, LLP has extensive experience representing businesses operating "gig" technology business models.  Call the firm if you would like to discuss your issues on a confidential basis.  
In a class action lawsuit, 286 managers from the St. Louis area at Steak n' Shake said they were required to work at least 50 hours, and sometimes as many as 70 hours a week with no overtime pay. 

At first glance, many critics may say it was because exempt employees were required to work a certain number of hours.  However most employers know this cannot possibly be the reason.  Many companies set forth expectations that full time exempt employees work a certain number of hours (sometimes full time exempt is 35 hours, 40 hours, 45 hours or even more) to fit that classification as well as fulfil normal working hours for overnight travel compensation.  

It turns out that in addition to the required hours, the b ase salaries were typically less than $40,000 a year and much of their time was spent performing duties classified as non-exempt, such as washing dishes, cooking, cleaning, waiting tables and running the cash register, or so the plaintiffs claimed.

The true take away is that the duties test it typically key.  Please make sure this is constantly being reviewed, revised and updated in job descriptions.  The salary test is pretty cut and dry:  either the employee meets this test based on salary or does not.  

The duties test is the one that consistently changes, especially in small to mid size companies when growth occurs and employees may be asked to wear many hats. 

SPOGNARDI BAIOCCHI llp is a law firm dedicated to partnering with companies of all sizes to address the full spectrum of legal concerns for its business.  Our commitment is to find common sense solutions that fit each clients' unique situation to labor, employment, human resources and general business needs. 

With over 50 combined years of experience among its 2 founding partners in these areas, we can assist businesses in developing custom solutions to today's tough issues.  And as litigators, who combined have over thousands of trials  "under their belts" before state and federal courts as well as administrative agencies (such as the NLRB) you will find no better advocate and partner. 


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