The nation's top labor arbiter says that Uber properly classifies its drivers as independent contractors. The tech company has faced protest over working conditions in recent weeks.
On Tuesday, the National Labor Relations Board General Counsel's office found that drivers for Uber do not meet the standards of typical employees, which would give them greater protections under federal labor law. The memo, which was dispatched to the agency's regional offices in April, urges regulators to dismiss charges brought against the company on behalf of drivers who challenge their classification as independent contractors.
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"Applying the common-law agency test … we conclude that the drivers were independent contractors," the memo said. "The Regions should therefore dismiss the charges, absent withdrawal."
The NLRB oversees workplace disputes and union organizing campaigns and enforces the National Labor Relations Act. Uber has been on the agency's radar since 2013 when some drivers began filing unfair labor practice complaints against the company. The memo found merit in arguments the company has made during previous legal challenges to its workplace policies. The general counsel's office said that the ability of drivers to control their own work schedules demonstrated that they were closer to entrepreneurs than workers overseen by the company.
"The level of company control should be assessed in the context of its effect on entrepreneurial opportunity," the memo says. "On any given day, at any free moment, drivers could decide how best to serve their economic objectives: by fulfilling ride requests through the App, working for a competing ride-share service, or pursuing a different venture altogether."
The NLRB differentiated ride-sharing apps from traditional black car services in which employers can punish drivers or restrict their access to fares. The memo also noted that ride sharing drivers are free "to work for competitors of Uber" without fear of reprisal. The level of control and freedom to work enjoyed by drivers "outweigh all countervailing facts supporting employee status," such as the inability to subcontract work or set their own fares.
The public release of the memo came at an opportune time for the company, which has plunged in value since its initial public offering on Friday. The disappointing financial performance followed a series of protests and public strikes from dissatisfied drivers in the week leading up to the IPO. Those movements received the support of organized labor, which urged people to boycott the service.
The company did not return request for comment.