Monday, November 25, 2019

Gig Economy Article by Keith Cunningham-Parmeter (Williamette Law School) is One-stop Shopping to Understand the Misclassification Debate Surrounding Platform-based Gig Workers

            In a new article, the author argues that the traditional common law right of control test is inappropriate, and unworkable, for analyses of whether workers in the platform-based gig economy are employees or independent contractors. See Keith Cunningham-Parmeter, Gig-Dependence: Finding the Real Independent Contractors of Platform Work, 39 Northern Illinois University Law Review 379 (2019).

            The author, Keith Cunningham-Parmeter, identifies the long-appreciated reality that the control test was developed centuries ago as the criterion of establishing whether the negligence of an agent of an enterprise, towards a third party, could be ascribed to the enterprise via respondeat superior. If control, or the right of control, existed, then the enterprise would be considered the master, the agent the employee, and vicarious liability would attach.

            This test has, over the last century, been cut-and-pasted over to areas like wage and hour protections and, of course, workers’ compensation. Certainly this describes the Pennsylvania experience and the current law, 104 years after enactment.

            But all of this, the author correctly argues, really does not make any sense. Respondeat superior is based on the idea that an entity which has the power to control a disempowered, subordinate actor presumably also has the economic wherewithal to answer for such an agent’s torts. When such control does not exist, and the agent can be viewed as economically autonomous, it makes sense for that party, a truly independent actor, to be responsible for its torts – and the enterprise protected.  

            Programs like the Fair Labor Standards Act and workers’ compensation, on the other hand, were intended to expand the responsibilities of such enterprises to workers. The control criterion does not vindicate this purpose. In the author’s view, economic autonomy, and not control, should be the controlling test when considering whether a worker is really an independent contractor.

            The author commences his article with an account of the efforts of platform-based gig enterprises – via “clever branding” – to establish their workers as independent contractors. He refers to this practice as reflecting “platform exceptionalism.” The idea here is that the gig economy presents a whole new type of business innovation that does not have employees in the first place. After all, for example, Uber is not a transportation enterprise but, instead, a technology company. The author is, rightly, suspicious of this rhetoric.

            In any event, to remedy the situation, the author argues that courts and legislatures should follow the example of the California Supreme Court in the recent Dynamex case. See Dynamex Operations, W. v. Superior Court, 416 P.3d 1 (Cal. 2018). That case, he explains, “embraced a simplified standard – the so-called ‘ABC Test’ – to determine whether contemporary workers are genuine independent contractors. Rather than engage in the … [control-dominated] multifactorial balancing – a process guaranteed to yield muddled results – the ABC test begins with the presumption that most workers who provide labor to firms are employees. If firms want to overcome this presumption, they must prove three separate elements to establish that their workers possess the marketplace strengths of legitimate independent contractors.”

            Those three elements, notably, are inquiries into whether the worker is engaged in the firm’s usual course of business; whether he or she is operating a separate business; and whether the worker is free from control of the purported principal.

            The author notes that use of this test does not necessarily mean that all platforms will be deemed employers. For example, delivery services workers (as in Dynamex) for enterprises like GrubHub may well be deemed employers, but handymen working for a “chore” platform like TaskRabbit may well be deemed independent contractors.

            The author’s footnotes feature a seemingly unabridged recounting of all the latest cases and scholarship in this area. This straightforward and well-written article is one-stop shopping for the lawyer or judge seeking out the latest arguments, pro and con, on the misclassification debate surrounding platform gig workers.

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The more things change the more they stay the same. Judge Smith made many of these arguments in his 1956 dissent in Powell v. Employment SEC. Comm., 75 N.W.2d 874, 345 Mich. 455 (1956). The point of the control test under 19th century tort law was to avoid findings of servant status. But as underinclusive as the test has been, the gig economy, platform laws are full-on deregulatory. So now the 10-factor Restatement 2nd control test is kind of “moderate” with the ABC test at one end of the continuum (the inclusive one) and the platform laws at the other, exclusive end.

Posted by: Michael C. Duff | Nov 26, 2019 7:04:54 AM

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