{"id":12017,"date":"2018-05-02T05:08:48","date_gmt":"2018-05-02T05:08:48","guid":{"rendered":"http:\/\/www.lifeandnews.com\/articles\/?p=12017"},"modified":"2018-05-03T05:11:55","modified_gmt":"2018-05-03T05:11:55","slug":"end-of-the-gig-economy-dont-read-too-much-into-a-california-court-ruling","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/end-of-the-gig-economy-dont-read-too-much-into-a-california-court-ruling\/","title":{"rendered":"End of the gig economy? Don’t read too much into a California court ruling"},"content":{"rendered":"

Elizabeth C. Tippett<\/a>, University of Oregon<\/a><\/em><\/span><\/p>\n

A recent California Supreme Court ruling is being hailed as a \u201cgame changer\u201d<\/a> for the gig economy. <\/p>\n

That\u2019s because the court adopted a more streamlined test for deciding whether a worker is an independent contractor or an employee. Gig economy companies, like Uber and Lyft, overwhelmingly<\/a> classify their workers as independent contractors. As a result, they don\u2019t comply with basic employment laws, like minimum wage and workers\u2019 compensation insurance. <\/p>\n

If courts decide these workers are misclassified and actually meet the legal test for employee status, gig companies can be on the hook for back pay or unpaid insurance premiums, as well as penalties for past noncompliance.<\/p>\n

So does this mark a turning point for the gig economy? Maybe not. <\/p>\n

A new test for gig workers<\/h2>\n

In the decision, Dynamex Operations West Inc. v. Superior Court<\/a>, the justices adopted a much simpler test than California has applied in the past. The new test asks three questions: Is the worker free from the company\u2019s control? Is the worker performing a core business function of the company? And does the worker have his or her own independent business? <\/p>\n

This test strikes at the heart of the gig economy, a system built on providing workers on demand for all sorts of tasks, whether it be picking you up, assembling furniture<\/a> or delivering a new toaster or a burrito<\/a>. The services that gig workers perform are core to the each company\u2019s business, making it much harder for the companies to defend their decision under this streamlined test.<\/p>\n

But plaintiff\u2019s lawyers shouldn\u2019t sharpen their pencils just yet. That\u2019s because gig economy companies have what amounts a \u201cget out of jail\u201d free card \u2013 arbitration agreements containing class action waivers. <\/p>\n

\u2018Get out of jail\u2019 free<\/h2>\n

Put simply, companies can<\/a> force<\/a> workers to sign agreements that they will only pursue their legal rights through arbitration \u2013 and not in courts. These agreements can also waive a worker\u2019s right to bring any class or collective claims against the company.<\/p>\n

A lot of legal claims are not economically viable unless they are brought as class actions. The amount of money at stake is not enough to make it worth a lawyer\u2019s time, unless you group everyone\u2019s claims together. This is especially true of lawsuits involving wage and hour violations \u2013 like failure to pay minimum wage or overtime.<\/p>\n

A study<\/a> I completed with law student Bridget Schaaff found that these waivers are very common in the gig economy. For 2016, around 70 percent of the contracts we reviewed contained arbitration agreements with class action waivers. This likely underestimates the proportion of workers subject to these waivers, because it was the larger, most established gig companies that tended to use them.<\/p>\n

\"TheGig companies are unlikely to change their practices without the threat of class actions. Although state agencies can help by stepping up enforcement, it\u2019s ultimately up to Congress to take away the \u201cget out of jail\u201d free card. And that would mean amending the Federal Arbitration Act<\/a>.<\/p>\n

Elizabeth C. Tippett<\/a>, Associate Professor, School of Law, University of Oregon<\/a><\/em><\/span><\/p>\n

This article was originally published on The Conversation<\/a>. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Elizabeth C. Tippett, University of Oregon A recent California Supreme Court ruling is being hailed as a \u201cgame changer\u201d for the gig economy. That\u2019s because the court adopted a more streamlined test for deciding whether a worker is an independent contractor or an employee. Gig economy companies, like Uber and Lyft, overwhelmingly classify their workers […]<\/p>\n","protected":false},"author":44,"featured_media":12018,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[277],"tags":[2215,272,361,4419,579,2197,506,1666],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/12017"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=12017"}],"version-history":[{"count":1,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/12017\/revisions"}],"predecessor-version":[{"id":12019,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/12017\/revisions\/12019"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/12018"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=12017"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=12017"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=12017"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}