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How Bosses Use “Open Shop” Campaigns to Crush Unions

Wednesday, December 6th, 2017

U.S. employers have never been particularly accepting of unions. Yes, there were a few decades after World War II when most employers engaged in a largely stable pattern of collective bargaining that recognized unions as junior partners in industry. Wage increases kept pace with gains in productivity, and union endorsements were courted by both parties. But, as heavily as that postwar labor relations compact features in the rosy rhetoric of union boosters who decry global capitalism and the modern GOP, the truth is that corporations have been periodically going to war against their workers far more often they’ve occasionally conceded their basic humanity.

Two new books shed light on the sustained union-busting campaigns that bookended that all-too brief period of labor-management détente. One focuses on the innocuously named “open shop” drive, which was a vicious nationwide union-busting campaign that began at the dawn of the 20th century and lasted well into the New Deal era. The other documents how the last great wave of worker militancy was smashed by a coordinated union-busting drive that anticipated Ronald Reagan’s presidency by more than a decade.

Reform or repression?

The unions that managed to survive the turbulent boom-and-bust cycle of the 19th century were largely organized on a craft union model that bears only a slight resemblance to today’s trades. Unions not only trained their members in their craft skills, but also determined the process, materials and speed of production. Employers had to contract with strong unions for a certain number of orders at prices that the unions determined.

The “open shop” drive was a coordinated effort by industry associations like the National Association of Manufacturers for bosses to gain complete control over production decision-making. This is the subject of Chad Pearson’s Reform or Repression: Organizing America’s Anti-Union Movement.

As Pearson compellingly documents, open shop campaigners sought to place their movement within the mainstream of the vaguely-defined “progressive movement” that preceded the Great Depression.  Corporate executives railed against “union dictation,” and claimed their aim was to wrest control from union contracts in order to promote harder-working men. The breakfast cereal magnate C.W. Post claimed his union-busting work was necessary to protect children from picket-line violence. Some of the earliest appearances of the noxious slogan “right to work” come from this era.

That phrase was disingenuously employed to convey a sense of freedom for workers to not have to pay fealty to a union in order to get hired for a job. In practice, the “freedom” to not join a union was paired with a blacklist for those who chose to do so. Promoting “harder-working men” was a way of speeding up Taylorist production lines to sweatshop standards. And violence on picket lines was almost always instigated by privately hired armies of Pinkertons and other assorted spies and mercenaries.

Open shop campaigners did find allies within the broad political class of self-styled “progressives” who—then as now—did not root their efforts in the centrality of class politics. For example, it is somewhat shocking to read in Reform or Repression about “open shop” endorsements from Louis Brandeis—the attorney who negotiated the vaunted “Protocols of Peace” in the New York City garment industry. Without a base of actual workers, these earlier progressive men supported unions in the abstract, but were uncomfortable with the grisly details of strikes, boycotts and enforcing the union shop that were necessary to maintain unions as a permanent presence in the economy.

In this hair-splitting, open shop advocates probably found their biggest hero in Theodore Roosevelt. The trust-busting “progressive” was the first sitting president to weigh in on industrial disputes and mediate settlements that involved pay increases and other concessions to striking workers. He also steadfastly refused to endorse any deal that forced any employer to recognize any union as the exclusive representative of its workers.

Open shop organizations also recruited “free men” to be face of their drives. We can call them scabs, but forcing workers to join a union before they could get the job rubbed some the wrong way, and bosses exploited this.

Pearson has a good eye for vivid character studies. A particularly engrossing chapter contrasts the stories of two very different class traitors in the Cleveland open shop movement: John A. Penton and Jay P. Dawley. In the 1880s, Penton was president of a craft union of ironworkers that competed for worker loyalty with a more established union called the Iron Molders Union (IMU). In those days, unions competed to see who could organize the most militant protests. A campaign that ended in a union contract could mean terms that forced workers to join the victorious union—or face termination—If they wanted work. By 1893, Penton’s union had been forced to merge with the larger IMU.

The bitterness of that defeat curdled and warped Penton’s principles. He became an “open shop” advocate, ostensibly because men should be free to choose which organization to join—or not join. In practical effect, he served as a propagandist and recruiter of scabs for the industry’s campaign to break the Cleveland IMU in 1900, where he was regarded as “The Dr. Jeckyl and Mr. Hyde of the Labor Movement.”

Dawley was a compatriot of Penton’s, a lawyer who secured injunctions against union picket lines and defended Penton’s efforts to arm his scabs with .38 caliber revolvers. The former president of the Cleveland Employers Association shocked his white shoe comrades by coming to the aid of the city’s striking garment workers in 1911. It was no small coincidence that Dawley’s conversion-by-fire came just two months after the actual fire at New York’s Triangle Shirtwaist Factory. That the picket lines were mostly full of women helped him finally see that the violence and law-breaking that he so abhorred in industrial conflict was a mostly one-sided affair—and that it was his (former) side that was perpetuating most of it.

Dawley spent the rest of his life as an advocate of union causes—albeit one who counseled peaceful bargaining and arbitration over strikes and boycotts. There’s a lesson about the power of narrative and visible leaders here. The average union member today is more likely to be a black or brown woman than some Archie Bunker cliché. Labor can pick up unexpected allies by putting the actual workers whose livelihoods are on the line front and center in our campaigns.

Knocking on labor’s door

How women and people of color began to organize themselves into the mainstream of the labor movement is the subject of Lane Windham’s new book, Knocking on Labor’s Door: Union Organizing in the 1970’s and the Roots of a New Economic Divide. It is also a tale of how the open shop drive came roaring back to life.

This is an essential read for anyone grappling with the question of why modern union organizing isn’t more successful. It is also a much-welcome corrective to the false narrative that unions simply stopped trying to gain new members sometime after the merger of the AFL and CIO.

In fact, the early 1970s brought a major wave of worker militancy, the kind that periodically roils the United States. The massive teacher rebellion of unionization that began in New York City in the early 1960s was still in full-swing. Unprotected by the National Labor Relations Act and still with few public-sector labor laws to fill the gaps, teachers continued to stage illegal strikes for union recognition throughout the decade. Other public sector workers fought for union recognition, too. The 1968 Memphis sanitation workers’ strike, which Martin Luther King was in town supporting when he was assassinated, was a notable flashpoint in that struggle.

The unionized private sector was also in the midst of a historic strike wave. Many of the strikes were formally sanctioned by union leadership seeking wage increases that kept up with record-high inflation. A large number of workers rocked the postwar labor relations framework by waging wildcat strikes in defiance of contracts that traded impressive-sounding wage increases for brutal speed-ups in productivity. There’s a whole bookshelf of material written about how one General Motors factory in particular—its Lordstown, Oh. plant—simply could not maintain smooth production between its periodic wildcats and the thousands of workers who quit every year. 

During this same period, unions sought to organize roughly half a million private sector workers a year in NLRB elections. Much of this organizing was led by women and workers of color. It represented, Windham argues, a second wave of the civil rights era, as regulations like the Equal Employment Opportunity Commission opened up new industries and jobs to workers who had previously been excluded. Once in the job, women and minorities soon concluded that actual fair treatment would only come with unionization.

Although the number of eligible workers voting in union representation elections did not decline in the 1970s, the percentage of successful union yes votes did. For the first time since the NLRB was established in 1935, unions began to lose a majority of all representation elections—a decline that has continued to the present day.

Egged on by a then-new cottage industry of “union avoidance” consultants and anti-union law firms, employers aggressively pressed against the limits of labor law when campaigning against union organizing drives. They skirted the prohibition against threatening the jobs of union supporters by phrasing those threats as predictions of the negative impact that a union would have on the company’s bottom line. They threw out fantastical scenarios about how unions might trade away benefits. They swore the unions would make no gains unless the workers went on strike—and that the company would permanently replace them if they did so. They froze planned pay increases and told the workers that the unions and the law forced them to do so.

And when they got caught actually breaking the law—by being too obvious in their espionage of organizing activity or materially punishing a union leader—the paltry punishments that were meted out sparked a new union-busting revolution. Why obey the law at all? Paying an illegally fired union activist just the wages she was owed—minus whatever unemployment insurance or moonlighting money she earned in the years it took for the case to get adjudicated—was far less money that a successfully negotiated union contract would ever cost.

At the heart of American corporations’ renewed resistance to union organizing was the increase in domestic competition from foreign competitors. This was not strictly the dumping of products made cheaper in overseas sweatshops that we tend to think of as the driver of inequality in the global economy. The first pangs of competitive anxiety were triggered by German and Japanese manufacturers who had finally recovered from the world war and could export quality products at affordable prices. Their competitive edge was that the cost of their workers’ health and retirement benefits were not loaded onto their payroll and then passed on to consumers as a higher retail price: Those social welfare benefits were the responsibility of the state.

Since most U.S. corporations—to this day—are unlikely to embrace social democracy, those in the 1970s resolved to fight the global pressure by fighting their own workers. But union supporters must grapple with an uncomfortable fact about our system of labor relations, which bases the very existence of a union, as well as the additional expenses of pensions, health insurance and other “fringe” benefits, on the individual firm level. In any industry that is not 100% unionized, the decision by workers to form a union really can make a company less competitive. And high-union-density industries are just juicier targets for capitalist vampires like Airbnb and Uber to compete by undercutting those standards.

In her conclusion, Windham writes “As the twentieth-century version of industrial capitalism gives way to new forms, working people find themselves in need of a wholesale redefinition of collective bargaining.” She finds some hope in the “alt-labor” organizations that are “struggling to shore up workers’ economic security in new ways, such as through workers’ centers, new occupational alliances, and public campaigns to raise wages.”

Both Pearson’s and Windham’s books, by highlighting the controversies in two of labor’s roughest periods, help us sharpen the question of how we regroup and reform to fight back in the 21st century. I would encourage more creative thinking about “all-in” labor rights models. What if we pushed for laws to end the “at-will” legal doctrine and grant a “Right to Your Job” to all workers? And what if we looked to countries that we compare ourselves to that have labor laws that apply wage increases and work rules to entire sectors all at once?

What these books make clear is that bosses rarely stop trying to blow up whatever system workers have won to enforce basic standards of decency—and that their strategies evolve with the times. How much longer will we spend trying to patch-up a badly battered 70-year-old labor relations system?

This article was originally published at In These Times on December 5, 2017. Reprinted with permission. 

About the Author: Shaun Richman is a former organizing director for the American Federation of Teachers. His Twitter handle is @Ess_Dog.

Jimmy John’s Fired Workers for Making a ‘Disloyal’ Meme. A Court Just Ruled That’s Okay.

Friday, July 14th, 2017

In a decision emblematic of the new climate of Trumpian governance, a federal appeals court in St. Louis ruled on July 3 that it is acceptable for the boss of a fast-food chain to fire workers for the sin of being “disloyal.”

The U.S. Court of Appeals for the Eighth Circuit reversed a ruling issued by the Obama-era National Labor Relations Board (NLRB) in a case spawned by a labor organizing drive at the Jimmy John’s fast-food chain. The court held that Miklin Enterprises, the owner of Jimmy John’s franchises in Minneapolis, had the right to fire six pro-union advocates because they demonstrated “disloyalty” by distributing flyers in 2011 that implied the company was selling unsafe food contaminated by employees obliged to work while sick with the flu.

The organizers designed and distributed memes that showed images of identical Jimmy John’s sandwiches. One was “made by a healthy Jimmy John’s worker,” the other by a “sick” worker. “Can’t tell the different?” the poster continued. “That’s too bad because Jimmy John’s workers don’t get paid sick days. Shoot, we can’t even call in sick. We hope your immune system is ready because you’re about to take the sandwich test.”

The Minneapolis union campaign, launched by the Industrial Workers of the World (IWW or ‘Wobblies’), has been high-profile from the start. First erupting in 2010, the effort quickly developed into an intense legal fight at the NLRB before advancing to the federal courts. It even spilled over into the U.S. Congress in 2014 with the revelation that Jimmy John’s routinely required its low-paid sandwich makers to sign questionable “non-compete agreements.”

Threatened with punitive action by the attorneys general in several states, Jimmy John’s rescinded its non-compete policies in 2016, but not before the company’s reputation had been tarnished.

Like the non-compete agreements, the July 3 court decision is an unwarranted attack on labor rights, says William B. Gould IV, a labor law professor at Stanford University and former chairman of the federal labor board.

“The first thing that strikes you is how archaic this feels,” Gould tells In These Times. “The legal basis is from a case in the 1950s when people had a whole different concept of loyalty owed to their employer.

“In those days,” Gould continues, “the assumption was that loyalty was a two-way street: You were loyal to the company and the company was loyal to you. Now, with Uber and Lyft and the others, companies are even refusing to admit that you are one of their employees, so there isn’t much talk about loyalty owed to the employer anymore.”

The July 3 decision turns on the interpretation of ‘loyalty’ articulated in the 1953 Supreme Court case National Labor Relations Board v. Local Union 1229 International Brotherhood of Electrical Workers, known as “Jefferson Standard” for short. Earlier in the process of the more recent NLRB case, the labor agency’s Obama appointees had ruled that the firing of the workers was an illegal violation of their rights to form a union. But the appeals court decision reversed that decision, asserting that the disloyalty displayed by the pamphlets gave the employer the right to fire the workers, Gould explains.

The court stated, “(W)hile an employee’s subjective intent is of course relevant to the disloyalty inquiry—”sharp, public, disparaging attack” suggests an intent to harm the Jefferson Standard principle includes an objective component that focuses, not on the employee’s purpose, but on the means used—whether the disparaging attack was ‘reasonably calculated to harm the company’s reputation and reduce its income,’ to such an extent that it was harmful, indefensible disparagement of the employer or its product.”

Erik Forman was fired six years ago for organizing a union at a Jimmy John’s in Minneapolis. He told In These Times, “The big takeaway for me is that this ruling means workers do not have the right to tell the truth about their employer,” he said, adding: “The ruling is incredibly slanted towards the employer. They frame our campaign for sick days as an attack on the employer and turn logic on its head. We told the truth about the risk to the public.”

“Employers’ motivation wasn’t just to stop the sick-day campaign,” Forman continued. “It was to stop our unionization effort.”

According to Gould, “This case comes from the 8th Circuit which is the most conservative in the country. It’s the worst circuit in the country for a labor union, or for labor rights.”

The ultra-conservative nature of the ruling may have the unintended benefit of limiting its applicability to workers other than the Minneapolis Jimmy John’s employees, the former NLRB chairman adds. Other judicial districts may not be eager to follow its lead because many traditionally defer to the NLRB in matters of this kind, he says, and few employers will want to take the legal risk of relying on a circuit court ruling that has not been confirmed by the Supreme Court.

The reversal of the Obama-era NLRB decision mirrors action in Congress, where several measures are under consideration to roll back pro-worker measures adopted by the labor board during Obama’s tenure. This week, the U.S. Senate is considering thenomination of two Trump NLRB appointees, both of whom have been criticized as anti-worker by the AFL-CIO.

Carmen Spell, an NLRB representative at the agency’s Washington, D.C. headquarters, would only comment that “(w)e are considering options at this time” on how the agency will respond to the court ruling.

Jane Hardey, a spokeswoman for Jimmy John’s, declined any comment, asserting that the legal case involved only the Minneapolis franchise owner, and did not involve the sandwich chain company itself. Hardey did not respond to a request from In These Times for a telephone interview with Jimmy John Liautard, the controversial founder of the franchise.

According to the Jimmy John’s web site, the rapidly growing chain currently has 2,701 locations in 48 states. The number of employees is estimated at over 100,000.

“The fact that we were fired over six years ago in retaliation for union organizing should tell everyone that you cannot rely on labor law in this country,” says Forman. “Every single decision can now be appealed up to a Trump Supreme Court. We need to find new ways of building and exercising power on our own.”

This article was originally published at In These Times on July 13, 2017. Reprinted with permission.

About the Author: Bruce Vail is a Baltimore-based freelance writer with decades of experience covering labor and business stories for newspapers, magazines and new media. He was a reporter for Bloomberg BNA’s Daily Labor Report, covering collective bargaining issues in a wide range of industries, and a maritime industry reporter and editor for the Journal of Commerce, serving both in the newspaper’s New York City headquarters and in the Washington, D.C. bureau.

Uber has started firing employees following harassment probe

Wednesday, June 7th, 2017

Heads are starting to roll at Uber following thecompany’s internal investigation into hundreds of claims regarding sexual harassment, discrimination, retaliation, and other workplace transgressions. The ride-sharing company has fired at least 20 people, Bloomberg reported on Tuesday.

Perkins Coie LLP, the legal firm hired to conduct the investigation, handed out recommendations to Uber executives regarding the 215 human resource claims submitted for review.

No action was taken on 100 of those claims, while 57 are still being investigated. In addition to the firings, 31 Uber employees are in counseling or training, and seven have gotten written warnings.

The dismissals follow revelations from former engineer Susan Fowler, who published a story in February detailing her experiences with unchecked harassment at the company. CEO Travis Kalanick then fired engineering VP Amit Singhal for his history of sexual harassment allegations. Following Fowler’s blog post, Kalanick pushed forward with an investigation and vowed to root out injustice.

“It is my number one priority that we come through this a better organization, where we live our values and fight for and support those who experience injustice,” he said in a memo to employees in February.

The company has since suffered several public relations disasters, including a messy lawsuit with Google over their rivaling self-driving car programs, video of Kalanick berating an Uber driver, his former girlfriend seemingly confirming the company’s sexist culture, losing its communications and policy head, the suicide of one its black engineers after just months on the job, and activating (and then removing) surge pricing following the London attacks in June. Uber also kicked off the year with driver protests and the loss of more than 200,000 customers in response to the company’s initial tepid stance on the Trump administration’s travel ban targeting predominantly Muslim countries.

More recently though, Uber has made some dynamic hires that could help the company’s persistent diversity problem. In January, Uber hired Bernard Coleman as the company’s global diversity and inclusion head.

Coleman, who oversaw the company’s release of its first diversity report in March, said the report was “the first step of many” to help improve workplace culture. “I’m kind of excited to see some progress,” he said at TechCrunch’s diversity and inclusion event in San Francisco Tuesday. “I want to make Uber a better and better place to work.”

As of this week, Uber also hired Harvard Business School’s Frances Frei will join the company as its first senior vice president of leadership and strategy, Recode reported. The academic and prominent business management expert will occupy a broad role that covers training managers, executives, recruiting, and overall coordination with Uber’s human resources department leads. Uber has also reportedly hired Bozoma Saint John, Apple Music’s head of global marketing.

This article was originally published at ThinkProgress on June 6, 2017. Reprinted with permission. 

About the Author: Lauren Williams is the tech reporter for ThinkProgress. She writes about the intersection of technology, culture, civil liberties, and policy. In her past lives, Lauren wrote about health care, crime, and dabbled in politics. She is a native Washingtonian with a master’s in journalism from the University of Maryland and a bachelor’s of science in dietetics from the University of Delaware.

Lyft releases its first-ever diversity report

Friday, June 2nd, 2017

Lyft has produced its first-ever diversity report, months after its chief competitor Uber released its own data about the make-up of its staff.

While its numbers ring similar to other tech companies—which are predominantly white and male?—?Lyft does have more female employees than Uber. Overall, 42 percent of Lyft’s employees identify as women, compared to Uber’s 36 percent.

Lyft, however, is more white than Uber with 63 percent white employees opposed to Uber’s 49 percent. Uber bested Lyft by having a better representation of Asian, black, and Latinx employees overall, with 30 percent, 8 percent, and 5 percent respectively?—?compared to 19 percent, 6 percent, and 7 percent for Lyft.

All of those numbers shrink considerably for tech and leadership roles. At Lyft, only 18 percent and 13 percent of its tech staff and leadership respectively are women. There are no black people in tech leadership roles while Latinx leaders make up just 4 percent. Thirty-four percent of tech leaders at Lyft are Asian while the remainder, 59 percent, are white.

In a blog post releasing the inaugural report, Lyft said releasing diversity data will help keep the company accountable.

[W]e have a lot of work to do. Releasing our data will hold us accountable, but it’s the actions we take that will make a difference to the people who come to work every day at Lyft. Our diversity data exposes gaps in important areas. So we’re doing something about it.

The diversity report comes on the heels of Uber’s, which released its numbers following a massive sexual harassment scandal earlier this year. Lyft hasn’t had such a scandal but its numbers, which can be improved all around, suggest that it’s doing much better on gender representation than race and ethnicity.

Tech companies in general, however, have struggled to improve their diversity numbers in spite of releasing transparency reports. For example, Apple has previously called improving diversity “unduly burdensome” and recently shot down a proposal to diversify its all-white board led by CEO Tim Cook. Even Google, which started the diversity report trend in 2014, hasn’t been able to solve its race and gender diversity?—?and retention?—?problems.

Along with the its diversity report, Lyft mentioned its hiring of Tariq Meyers, formerly the company’s community organizer, in 2016 to lead its diversity and inclusion efforts as well as its partnership with the diversity strategy firm Paradigm.

“We’re investing in more programs and taking stronger actions,” the company wrote. “Being a culture of inclusion requires continuous, purposeful work. And it’s work that we must do. Because Lyft is for everyone: no matter who are you, where you come from, or which seat you’re sitting in.”

This article was originally published at ThinkProgress on June 1, 2017. Reprinted with permission.

About the Author: Lauren Williams is a tech reporter at ThinkProgress.

Uber admits underpaying New York drivers approximately $45 million

Thursday, May 25th, 2017

Uber’s gotta pay—with interest.

The infamous ride-sharing app admitted Tuesday that it had been underpaying its New York drivers since November 2014 due to an accounting error that took out more than the company’s 25 percent commission, the Wall Street Journal first reported.

Uber typically takes its commission after taxes and fees are deducted from a driver’s fare, but the accounting glitch that took it out beforehand resulted in a larger pay deduction for drivers. Uber’s terms of service did not specify that it took commissions out of gross fare earnings.

To make things right, Uber is repaying an average of $900 per driver with interest, which is estimated to cost a total of at least $45 million. One driver is receiving a $7,000 payout, Recode reported.

“We made a mistake and we are committed to making it right by paying every driver every penny they are owed, plus interest, as quickly as possible,” Uber’s regional manager in the U.S. and Canada, Rachel Holt, said in a statement. “We are working hard to regain driver trust, and that means being transparent, sticking to our word, and making the Uber experience better from end to end.”

Uber has had a rough year with multiple public relations disasters spanning a consumer and driver backlash for the company’s tepid response to the Trump administration’s immigration ban and a sprawling sexual harassment scandal. But the company’s issues with drivers over pay have also persisted.

In January, Uber settled a lawsuit that claimed the company misled drivers regarding earning potential and conditions of the company’s auto financing program. Drivers protested against poor pay throughout 2016, demanding higher pay.

Through it all, Uber has fought drivers on granting employee status and benefits, fair pay, and unionization. But despite the influx of lawsuits, it appears that drivers are going to keep fighting the company on issues.

Following news of Uber’s repayment of New York drivers, the Independent Drivers Guild, which represents more than 50,000 app drivers, called for a widespread investigation into the company’s payment practices.

“Drivers have been complaining about this and other shady accounting tactics to no avail,” said IDG’s executive director Ryan Price in a statement. “Drivers are relieved to be paid the money they are owed plus interest and we hope other companies follow suit.”

“We also call for regulators to launch an immediate investigation into ride hail applications fare and payment practices in our city.”

This article was originally published at ThinkProgress.org on May 24, 2017. Reprinted with permission.

About the Author:  Lauren C. Williams is the tech reporter for ThinkProgress with an affinity for consumer privacy, cybersecurity, tech culture and the intersection of civil liberties and tech policy. Before joining the ThinkProgress team, she wrote about health care policy and regulation for B2B publications, and had a brief stint at The Seattle Times. Lauren is a native Washingtonian and holds a master’s in journalism from the University of Maryland and a bachelor’s of science in dietetics from the University of Delaware.

If Uber Wants to Take Away Its Customers’ Rights, It Should Tell Them

Tuesday, December 13th, 2016

It’s bad enough that a ton of corporations require their customers and employees to submit all their legal claims to private arbitration, a secretive system that is rigged against the individual. But to compound the unfairness, a growing number of corporations are hiding their forced arbitration clauses to make them more and more obscure. As corporations become more secretive, and try harder to slip these by consumers so they won’t notice, it makes it less and less likely that people will actually read and agree to them (or choose not to). Here at Public Justice, we are fighting back against this trend: we have repeatedly argued to courts around the country that arbitration clauses should be held to the same standards as other types of contract terms – people should never be bound by these clauses unless they agree to them.

Recently, in the case of Meyer v. Uber, federal judge Jed Rakoff, who is both nationally prominent and widely respected, held that Uber had failed to form an enforceable agreement to arbitrate with customers through its mobile app. Judge Rakoff looked at the two things that a corporation must do to form a contract – it must conspicuously disclose the contract term, and it must ensure that individuals unambiguously agree – and found that Uber had failed to do either of these things. This was a puzzling error by Uber, which has been able to meet this basic standard in its arbitration clauses with both customers and workers in a number of other parts of its business.

Now the case is on appeal to the U.S. Court of Appeals for the Second Circuit. Uber is essentially arguing (with support from the U.S. Chamber of Commerce) that the normal rules of contract do not apply to apps. Uber’s position is that arbitration clauses don’t need to be conspicuously disclosed in this setting, and that we can just assume that any customer who uses Uber has “agreed” to arbitrate even if they haven’t taken any step to indicate that this is so. Public Justice filed an amicus brief in this case, explaining both (a) why Uber’s position violates core principles of contract law, and (b) how arbitration clauses are not exempt from these basic rules of law. Even if courts have favored enforcement of arbitration agreements, they still insist that there BE an actual agreement.

Both of the basic legal rules – conspicuous disclosure and unambiguous agreement – are essential. If Uber wins that it need not conspicuously disclose information, that would open the door to arguments that even if an arbitration clause is hidden in ways that no (or almost no) consumers would ever find it, they’re still enforceable. In other settings, we’ve already seen corporations try increasingly bizarre ways to slip arbitration clauses past people (e.g., one car manufacturer put an arbitration clause deep in the manual for a car, wrapped up in fake leather in the glove compartment, and argued that all consumers should be “deemed” to have read it), and it’s crucial that courts draw the line against such adventurous mistreatment of consumers.

Similarly, courts should insist on an unambiguous signal from a consumer that they’ve agreed (like a signature on a contract, or clicking “yes, I agree” to terms and conditions). Uber’s position is that if the consumer does the same thing they would have done if they’d never known about the terms and conditions (essentially inferring consent from silence by the consumer), that’s enough. But assuming that people agree to something when they’ve never said so is dangerous and wrong. The silliness of reading consent into a consumer’s silence was made clear in a famous episode of The Simpsons:

Homer Simpson talking to God: “Here’s the deal: you freeze everything as it is, and I won’t ask for anything more. If that is OK, please give me absolutely no sign.”

[No response]

“O.k., deal. In gratitude, I present you this offering of cookies and milk. If you want me to eat them for you, please give me no sign.”

[No response]

“This will be done.”

(This scene was actually cited in Jude Boyce Martin’s dissent in Seawright v. American General Financial Services, Inc. [6th Cir. 2007]).

The upshot, as we set out in our amicus brief, is that courts need to insist that corporations trying to impose arbitration on consumers at least follow basic rules of contract law.  Hiding arbitration clauses where no one will read them, and then assuming that consumers agreed if they just do nothing, is a recipe for enforcing a lot of fine print without any consent.

We are very grateful to the fantastic team of lawyers who wrote this amicus brief, spearheaded by Andrew Kaufman of Lieff Cabraser Heimann & Bernstein, along with Jonathan Selbin and Jason Lichtman also of Lieff Cabraser; and Jahan Sagafi, Nantiya Ruan, Paul Mollica, and Peter Romer-Friedman of Outten & Golden LLP.

This blog originally appeared on publicjustice.net on December 7, 2016. Reprinted with permission.

Paul Bland, Jr., Executive Director, has been a senior attorney at Public Justice since 1997. As Executive Director, Paul manages and leads a staff of nearly 30 attorneys and other staff, guiding the organization’s litigation docket and other advocacy. Follow him on Twitter: .

New Survey Reports Uber Drivers Are Investing Big in the Company But Get Little Stability

Friday, June 3rd, 2016

Don Creery had been driving for Uber in Seattle for several months when in May 2014 the clutch wore out on his Kia Soul. A former music teacher, Creery had enjoyed his work for Uber and said he made enough to live comfortably. So, anticipating much more driving in the future, he took out a $10,000 loan to purchase a brand new Soul with an automatic transmission—a smart investment, he judged, for his career as an Uber driver.

“I never go into debt,” Creery told me, “but this seemed totally logical.”

Initially, everything went according to plan. But soon, Uber would cut the rates it charges customers for rides, effectively slashing the wages of its drivers. The move triggered protests and caused Creery to suddenly second-guess the wisdom of his choice to take out the loan.

“It all of a sudden went from being a good decision to being a bad one,” Creery says. “Before that rate cut, it was a middle-class job as far as money goes, and now it’s not. It’s a lower-class job or in some instances a desperate-class job.

Creery’s experience is not entirely unique, according to a survey of hundreds of Uber Drivers across the country that is being released today. Conducted by the Partnership for Working Families and Coworker.org, an online platform meant to generate worker campaigns, the survey polled more than 300 Uber drivers between March and May of this year and found that a majority of them have, like Creery, made significant personal investments for their future with the service. Fifty-seven percent of Uber drivers have “have bought, leased, or made substantial investments in vehicles to drive for Uber,” according to the report.

Despite having taken on risk to maintain their freelance career with Uber, only 23 percent of the drivers polled see driving for the ride-hailing app as a source of stable income.

“Anecdotally both in and outside the survey, we have heard from drivers who were struggling to make payments on cars that they have purchased to drive with Uber,” says Mariah Montgomery, the Future of Work Strategist for The Partnership for Working Families. “These drivers are investing substantial funds to be able to drive.”

These results appear in tension with survey data that Uber has touted as proving that drivers most often do not rely on the service as their only source of income but see it instead as a convenient, highly flexible way to supplement their existing work. “Uber Fits Around Drivers’ Lives, Not The Other Way Around,” the company declared last year, referring to a survey that states that 88 percent of Uber drivers polled started “driving for Uber because it fits their life well, not because it was their only option.”

Today’s survey, which included drivers who had previously used coworker.org, found that the vast majority (80 percent) of drivers polled identified their wages as a top priority and support raising fares. In recent months, Uber has slashed fares in cities across the country, arguing that the fee reduction will actually benefit workers due to a resulting increase in customer demand. “This survey suggests that drivers don’t necessarily agree,” says Montgomery.

Perhaps in response to such issues, 70 percent of the surveyed Uber drivers—who are independent contractors with no shared setting to naturally meet each other—said they were interested in connecting with one another to communicate about things like maximizing earnings, sharing information and forming drivers’ associations.

In response to a request from In These Times, Uber did not comment on the study’s findings.

Today’s survey also states that it found anecdotal evidence that, after Uber’s announcement in April that it will officially condone drivers receiving tips, the freelancer respondents want the company to go further in facilitating such transactions. Namely, there is no option in the app through which customers can pay a tip via credit card. “Although the survey did not specifically ask Uber drivers about tips, many drivers wrote in that they would like an option for riders to provide tips within the app, like Lyft,” according to the report released today. “One driver wrote: ‘Please put a place [in the app] where people can tip. People want to tip me all the time but do not have cash.’”

The survey’s release coincides with a hearing today where a federal judge in San Francisco will weigh whether or not to accept a proposed settlement in one of the most high-profile legal actions drivers have brought against Uber. In April, the company agreedto pay $100 million to settle two class action lawsuits that alleged the ride-hailing service had wrongfully classified its drivers in California and Massachusetts as independent contractors and thus denied them the rights and benefits of full-employee status.

The proposed settlement infuriated some drivers and advocates, not only because of what appeared to many as a paltry sum for a company valued in the tens of billions of dollars, but also because its terms appeared to have the effect of helping cement in place Uber drivers’ status as independent contractors, the very issue many drivers have most fiercely protested.

As independent contractors, Uber drivers are responsible for paying for their own cars, vehicle repairs, tolls, gas and other inputs necessary for the job. Drivers like Creery, who also sells rides for Lyft and is a leader of an Uber driver association in Seattle, say that being on the hook for such expenses, including interest payments for auto investments, means the job hardly pays a living wage.

Drivers’ own financial borrowing to pay for their vehicles is part of what has propelled Uber’s rapid global expansion. This week, Bloomberg News published a look into Uber’s Xchange program, which offers vehicle leases at subprime rates for would-be drivers with poor credit history—people who often would not otherwise be able to drive for the company. Uber says that Xchange and other financing programs will expand its fleet by 100,000 in coming years.

The company says that Xchange offers a high degree of flexibility by allowing drivers to walk away from a lease at any point after the first month. But several Uber drivers expressed displeasure with the arrangement. One driver told Bloomberg that, like Creer, he could hardly keep up on his vehicle payments after one of Uber’s rate cuts.

“It got to the point that I would drive just to meet my payment,”the driver said. “If you were short on your payment for a week it would roll onto the payment for next week. It starts adding up.”

This blog was originally published on inthesetimes.com on June 2, 2016.  Reprinted with permission.

Spencer Woodman is a journalist based in New York. He has written on labor for The Nation and The Guardian. You can follow him on Twitter at@spencerwoodman and reach him via email atContactspencerwoodman@gmail.com

Seattle City Council Votes That Uber and Lyft Drivers Can Unionize

Wednesday, December 16th, 2015

LauraClawsonCompanies like Uber and Lyft consider their drivers to be “independent contractors,” which is all about freedom—specifically, the company’s freedom to not pay for things like workers comp, unemployment, or even the minimum wage. That’s a system facing significant court challenges in some places, and now another form of challenge in Seattle. The Seattle City Council on Monday night passed a bill giving drivers union rights.

Under the bill passed Monday, “for-hire drivers” would be legally entitled to seek out “exclusive driver representatives” for the purpose of collective bargaining — i.e., labor unions. If a majority of drivers at a particular company designate a union as their representative, then by law the company will have to bargain with the union within the city of Seattle.

The law has implications well beyond Uber and Lyft. Many traditional taxi drivers are classified as independent contractors as well, and would have new rights under the law.

At least, they would if the law ever goes into effect. Uber and others in the industry are expected to challenge the law in two possible ways: by claiming that it conflicts with federal labor law, and by arguing that it runs afoul of antitrust law.

Seattle Mayor Ed Murray said he won’t sign the law, but he can’t block it. Despite the delays the law will face thanks to legal challenges, the pressure is growing—on multiple fronts—for Uber and Lyft and other gig economy companies to quit using the weakness of American labor law to exploit their workers.

This blog originally appeared in DailyKOS.com on December 15, 2015. Reprinted with permission.

About the Author: Laura Clawson has been a Daily Kos contributing editor since December 2006  and Labor editor since 2011.

Uber Drivers Could Gain Thousands in Pay, Benefits as Full-time Employees

Wednesday, August 19th, 2015

NerdWallet logoUber drivers in six major U.S. cities would receive paid holidays and health care benefits worth an average of $5,500 a year, plus thousands more in mileage reimbursement, if the company provided them with the same benefits as its full-time employees, according to a new NerdWallet study.

The California Labor Commissioner’s Office ruled in June that Barbara Berwick, who worked as an Uber driver for just under two months, was an employee of the company rather than a contractor. The ruling ordered Uber to reimburse Berwick $3,878 for mileage and tolls plus $274 in interest.

Similarly, the Florida Department of Economic Opportunity decided in May that former Uber driver Darrin McGillis had been an employee, entitling him to unemployment benefits, according to a report in the Miami Herald.

While both decisions apply to the individuals involved only and Uber is appealing, if upheld, drivers across the nation could be motivated to seek status as full-time Uber employees.

The decisions related specifically to expenses and unemployment insurance. Drivers stand to gain even more if Uber recognizes them as full-time employees. Based on what Uber offers employees, drivers might expect:

  • Fully covered health insurance, including dental and vision benefits
  • Nine paid holidays
  • Business-driving reimbursement

Although the current rulings only apply to a few individuals, it may set a precedent for all drivers in the future. This analysis, while an estimate, is still an indicator of how much money is at stake.

Jeffrey Chu is an analyst covering insurance for NerdWallet. NerdWallet staff writer Aubrey Cohen contributed to this articleNerdWallet is a consumer-focused website dedicated to saving people money every day by helping them make better, more informed financial decisions.

 

California Labor Ruling Deals A Blow To Uber’s Strategy For Denying Drivers Benefits

Friday, June 19th, 2015

AlanPyke_108x108Uber must pay its drivers benefits, overtime, working expenses, and other standard compensation that the company has thus far avoided providing, the California Labor Commission has ruled.

The decision is not self-executing across the state and can only be directly applied in one specific driver’s case. But it signals to the company’s other employees that the body charged with adjudicating California labor law views Uber to be an employer with all the obligations that come with the label. Uber notes in a statement that the same commission had ruled the opposite way in a 2012 case, and that neither of those rulings would be binding in any other individual lawsuit over similar complaints by other drivers.

The ridesharing start-up, whose market value recently hit $50 billion, has relied upon paying drivers as though they were independent contractors rather than employees. Classifying a worker as a contractor negates most provisions of federal labor law, saving an employer thousands of dollars per year for each person they treat as a contractor.

If a company treats a contractor like an employee by exerting substantial control over day-to-day job activities, though, it risks being found guilty of misclassifying workers. Misclassification is a widespread problem, with complaints popping up everywhere from trucking to strip clubs to beauty parlors.

In California, Uber argued that its relationship with drivers is not controlling enough to constitute an employer-employee relationship, pointing out that they don’t set drivers’ hours or require a minimum number of trips in a shift. But California’s definition of the line between employment and contract work is primarily based on whether the worker is providing a service that’s integral to the main line of business of the company paying her. Labor commission lawyers examined Uber’s policies for drivers and overall business model and found the company’s argument weak.

“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 reality, however, is that defendants are involved in every aspect of the operation,” the commission ruled. By vetting would-be drivers, requiring them to register their vehicles with Uber, and terminating them if their approval ratings dip too low, the state found, Uber positioned itself as an employer rather than a non-controlling party to a contract.

The case that generated the ruling will only cost Uber about $4,000 in reimbursement payments to a driver named Barbara Ann Berwick. But its consequences could be much grander. If it cannot successfully appeal the finding, it will have to choose between fielding further individual lawsuits or reclassifying all its California drivers as regular employees to pre-empt the suits. That means paying unemployment insurance and other payroll taxes that aren’t triggered for contractors, as well as potentially being subject to overtime rules and made to reimburse drivers for work expenses like gas, tolls, and some traffic tickets.

Any multi-billion-dollar corporation should theoretically be able to absorb such costs. But they threaten to turn Uber into a much smaller-margin enterprise, one more akin to the traditional taxi company business model that the firm has made so much money disrupting. And because Uber’s market value is a fluid, on-paper number that depends on investor confidence and market analyst’s reading of the economic tea leaves, the California ruling could lead to some shrinkage in the car service’s worth and ability to raise private funds.

The ruling isn’t the end of the story, either. There are other civil cases outstanding in California and elsewhere that touch on similar issues and could be decided differently. And the sheer variety of different driver experiences, from people who drive a few hours a week for supplementary income to those who log long hours in vehicles leased from the company itself, suggests that it’s hard to pin down the entire category of workers with either the “employee” or “contractor” label that the law provides.

This blog was originally posted on Think Progress on June 17, 2015. Reprinted with permission.

About the Author: The author’s name is Alan Pyke. Alan Pyke is the Deputy Economic Policy Editor for ThinkProgress.org. Before coming to ThinkProgress, he was a blogger and researcher with a focus on economic policy and political advertising at Media Matters for America, American Bridge 21st Century Foundation, and PoliticalCorrection.org. He previously worked as an organizer on various political campaigns from New Hampshire to Georgia to Missouri. His writing on music and film has appeared on TinyMixTapes, IndieWire’s Press Play, and TheGrio, among other sites.

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