After five years of litigation, the fight for Uber drivers’ labor rights led by Julia Simon-Mishel L’13, Supervising Attorney at Philadelphia Legal Assistance (PLA), ended in victory. On July 24, the Pennsylvania Supreme Court agreed with Simon-Mishel’s argument that her client, UberX driver Donald Lowman, Jr. was not “self-employed” while driving for Uber. The Court recognized that “[i]n the virtual world in which Uber operates, it monitored and supervised Lowman’s provision of driving services.”
The Court also rejected the argument that Lowman’s ability to choose his own hours defined the nature of the employment relationship, finding “[t]he fact that Uber’s business model does not require regularly scheduled work hours from its workforce does not translate into an automatic independent contractor relationship.” The driver could therefore not be disqualified from unemployment benefits based on his work for Uber.
The way that governments classify gig workers is central to whether they are eligible for certain social insurance benefits, such as unemployment compensation.
Lowman filed for unemployment compensation on June 14, 2015 after he lost his job in the behavioral health sector. While he was waiting to hear back from the Unemployment Compensation Service Center, he entered into an agreement to drive for Uber. He began providing rides through the ride share app on July 1, 2015. When the Unemployment Compensation Service Center got back to Lowman on August 17, 2015, they informed him that, though he would have been entitled to unemployment benefits from his initial job loss, his ensuing employment with Uber now rendered him ineligible to receive them.
“Getting disqualified from benefits because I drove for Uber was financially stressful and challenging,” Lowman told PLA. “It was detrimental to my family, especially after I lost the ability to drive due to a car accident. I felt the need to challenge the determination; it was important for me, my family and other rideshare drivers who may face similar challenges. The decision was worth fighting for.”
After the Supreme Court’s decision, Pennsylvania will no longer be able to disqualify Uber drivers from unemployment benefits; instead, the state will factor in Uber earnings when determining the amount of unemployment benefits an applicant should receive.
“Mr. Lowman’s work for Uber can now be considered the same as finding a job in retail, in that his earnings will reduce his unemployment benefits instead of completely disqualifying him,” Simon-Mishel explained in a statement.
According to Simon-Mishel, who represents low-wage workers at PLA, one of the biggest difficulties in fighting for proper classification of ride share workers has been managing to bring the issue before a court. In order to drive for companies like Uber and Lyft, drivers must sign contracts that include arbitration clauses. In the case of a dispute, the arbitration clause obligates drivers to go through the ride share company’s private arbitration system before going to a court. As a result, very few courts have had the opportunity to analyze whether ride share drivers truly are “independent” contractors or employees of the company.
“This case, similar to the PostMates decision that came down in New York a few months ago, is one of the few cases to get to a state Supreme Court, or really any court, for a decision that really is able to analyze the facts of the employment relationship,” Simon-Mishel said.
Both in litigation and in their own advertising campaigns, ride share companies often promulgate the idea that drivers operate “independently” by pointing to the drivers’ ability to structure their own schedules and use their own vehicles. Ride share drivers, on the other hand, have pointed out that these illusory freedoms functionally backfire when drivers are denied employment protections such as unemployment compensation, minimum wage, and overtime pay.
Simon-Mishel has long been familiar with the paradox that comes with driving for ride share companies. Prior to the Pennsylvania Supreme Court’s recent decision, driving for a ride share company equated to “self-employment.” This means that if a person receiving unemployment benefits decided to drive for Uber to make ends meet while searching for a new job, their unemployment benefits would immediately cease. At the same time, if the Uber driver suddenly became unable to drive, they would not be eligible to receive unemployment based on the Uber income they now lack.
“Philadelphia Legal Assistance has been fighting for rights of low-income workers for years, and we’ve seen how destructive it is for people who drive for these companies to be without a safety net,” Simon-Mishel said.
This decision comes at a crucial time in the conversation about labor rights in the gig economy. As the COVID-19 pandemic continues to spur record numbers of layoffs nationwide, many have turned to app-based gig work to help make ends meet.
Moreover, this decision also comes within the context of a movement for gig worker rights nationwide. Last year, California passed California Assembly Bill 5, known as the “gig worker bill,” which requires companies like Uber, Lyft, and DoorDash to re-classify their “independent contractors” as “employees.” Earlier this month, the California Superior Court issued a preliminary injunction ordering companies to comply with the bill. Additionally, a New York court recently confronted the related predicament of what to do when COVID-19 rendered ride share drivers unable to continue to drive. In a preliminary injunction, the New York court instructed the state to pay drivers their unemployment benefits. Simon-Mishel is hopeful that the Pennsylvania Supreme Court’s decision can be used as a stepping-stone to continue to fight for gig worker employment protections.
“The court’s comprehensive analysis of the relationship between my client and Uber is going to be really impactful when cited in other cases that are addressing issues in the gig economy,” Simon-Mishel said. “[The court] focused almost exclusively on Uber’s conduct and communication toward my client. Very little of this was individualized to my client. What they analyze is no different from any other driver. Therefore, I think it’s pretty widely applicable to other drivers for Uber and other drivers for ride services in general, and even beyond ride sharing, they really do focus on what virtual ‘control’ looks like in this age.”
This fall, PLA will argue another case against the Unemployment Compensation Board of Review centering on the due process question of whether the UCBR is allowed to address whether an activity is “self-employment” or “sideline activity” when neither the employer nor the Pennsylvania Department of Labor has raised the issue.
Simon-Mishel began volunteering with the Toll Public Interest Center’s Employment Advocacy Project, a pro bono project through which law students represent workers in unemployment compensation hearings and appeals, during her 1L year and has now “come full circle” as the project’s Supervising Attorney, she said with a laugh.
Read more about the University of Pennsylvania Carey Law School’s commitment to public service, including the pro bono requirement for all students.