Uber drivers are contractors, not employees, U.S. labor agency says






(Reuters) - Drivers for ride-hailing company Uber Technologies Inc are independent contractors and not employees, the general counsel of a U.S. labor agency has concluded, in an advisory memo that is likely to carry significant weight in a pending case against the company and could prevent drivers from joining a union.

The recommendation by the office of general counsel Peter Robb, who was appointed to the National Labor Relations Board by President Donald Trump, was made in a memo dated April 16 and released on Tuesday.

The general counsel said in the memo that Uber drivers set their hours, own their cars and are free to work for the company’s competitors, so they cannot be considered employees under federal labor law.

A ruling on the case is to be made by an NLRB regional director. Advisory memos from the general counsel’s office are generally upheld in rulings. Any decision could be appealed to the NLRB’s five-member board, which is also led by Trump appointees but is independent of the general counsel.

The memo will not affect scores of lawsuits claiming Uber drivers should be treated as employees under federal and state wage laws.

San Francisco-based Uber in a statement said it is “focused on improving the quality and security of independent work, while preserving the flexibility drivers and couriers tell us they value.”

Uber shares were up 6.4 percent at $39.46 in late trading on the New York Stock Exchange.

The memo signaled a sharp turn for the general counsel’s office, which acts like a prosecutor in NLRB cases, and during the administration of Democratic President Barack Obama maintained that many gig-economy workers are misclassified as independent contractors.

Under the National Labor Relations Act, independent contractors cannot join unions and do not have legal protection when they complain about working conditions.

Uber, its top rival Lyft Inc, and many other “gig economy” companies have faced dozens of lawsuits accusing them of misclassifying workers as independent contractors under federal and state wage laws.



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