Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Employee Misclassification Issues Are Highlighted By Uber
Author: Scarinci Hollenbeck, LLC
Date: July 2, 2015
Key Contacts
Back
Uber’s recent legal setback in California over employee misclassification issues highlights the dilemma faced by many employers across the country.
As many other employers confront similar legal controversies in terms of employee misclassification issues, this as well as other cases suggest that new classification tests may be needed to keep up with the pace of technology.
As we have previously discussed, Uber is no stranger to legal controversy. The ride-sharing company records approximately one million ride requests each week, and is now valued at an estimated $18.2 billion. Despite such apparent commercial success, it struggles to overcome regulatory hurdles and employment lawsuits.
Berwick v. Uber
In , the California Labor Commission recently ruled that Uber improperly classified one of its drivers as an independent contractor. Plaintiff Barbara Berwick alleged that she should be classified as an employee of the ride-sharing company and should be reimbursed for expenses, such as mileage and toll fees, incurred while transporting customers.
As with many employee misclassification lawsuits, the crux of the case is whether Uber exerted so much control over Berwick that she does not qualify to be classified as an independent contractor. Citing Uber’s rigorous background checks and performance evaluation standards, the Labor Commission deemed Berwick an employee. In so ruling, the hearing officer rejected Uber’s contention that it merely acts as a conduit through its cell phone “app” to connect drivers using their personal vehicles with passengers who need a ride.
“Defendants hold themselves out as nothing more than a neutral, technological platform, designed simply to enable drivers and passengers to transact the business of transportation,” the hearing officer’s ruling stated. The hearing officer dismissed this contention, observing “[that the] reality however, is that defendants are involved in every aspect of the operation.”
Long road ahead for Uber
While the decision is a clearly a setback for Uber, which currently faces several class action from employee misclassification lawsuits, it is not the end of the story. The company has already filed its appeal in a California court. “The California Labor Commission’s ruling is nonbinding and applies to a single driver,” a company spokesperson stated. “It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control.”
Our employment lawyers will continue to closely monitor the legal developments surrounding the classification of Uber’s drivers. In the meantime, companies in all industries should be wary of misclassification lawsuits involving independent contractors, which have risen dramatically in recent years. For additional legal tips, please see Employers Beware: Misclassification of Workers Is the Focus of DOL Action.
- Practices: Labor & Employment
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Employee Misclassification Issues Are Highlighted By Uber
Author: Scarinci Hollenbeck, LLC
Uber’s recent legal setback in California over employee misclassification issues highlights the dilemma faced by many employers across the country.
As many other employers confront similar legal controversies in terms of employee misclassification issues, this as well as other cases suggest that new classification tests may be needed to keep up with the pace of technology.
As we have previously discussed, Uber is no stranger to legal controversy. The ride-sharing company records approximately one million ride requests each week, and is now valued at an estimated $18.2 billion. Despite such apparent commercial success, it struggles to overcome regulatory hurdles and employment lawsuits.
Berwick v. Uber
In , the California Labor Commission recently ruled that Uber improperly classified one of its drivers as an independent contractor. Plaintiff Barbara Berwick alleged that she should be classified as an employee of the ride-sharing company and should be reimbursed for expenses, such as mileage and toll fees, incurred while transporting customers.
As with many employee misclassification lawsuits, the crux of the case is whether Uber exerted so much control over Berwick that she does not qualify to be classified as an independent contractor. Citing Uber’s rigorous background checks and performance evaluation standards, the Labor Commission deemed Berwick an employee. In so ruling, the hearing officer rejected Uber’s contention that it merely acts as a conduit through its cell phone “app” to connect drivers using their personal vehicles with passengers who need a ride.
“Defendants hold themselves out as nothing more than a neutral, technological platform, designed simply to enable drivers and passengers to transact the business of transportation,” the hearing officer’s ruling stated. The hearing officer dismissed this contention, observing “[that the] reality however, is that defendants are involved in every aspect of the operation.”
Long road ahead for Uber
While the decision is a clearly a setback for Uber, which currently faces several class action from employee misclassification lawsuits, it is not the end of the story. The company has already filed its appeal in a California court. “The California Labor Commission’s ruling is nonbinding and applies to a single driver,” a company spokesperson stated. “It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control.”
Our employment lawyers will continue to closely monitor the legal developments surrounding the classification of Uber’s drivers. In the meantime, companies in all industries should be wary of misclassification lawsuits involving independent contractors, which have risen dramatically in recent years. For additional legal tips, please see Employers Beware: Misclassification of Workers Is the Focus of DOL Action.