On September 13, U.S. District Judge Michael Baylson of the Eastern District of Pennsylvania denied Uber's motion for partial summary judgment in Razak v. Uber Technologies. It is the first time a district court in the Third Circuit is addressing the issue of compensation for Uber drivers.
The case is a putative class action and concerns Uber Black drivers, who provide limo services. The drivers claim Uber violated the Fair Labor Standards Act (FLSA) overtime and minimum wage requirements. They are seeking compensation for time spent online (while they were available to accept rides) but not transporting riders. Uber argued the time cannot be compensable because the drivers can go offline any time.
Pointing out that drivers have only 15 seconds to respond to a trip request, Judge Baylson noted this requirement "may reasonably be considered" that "drivers are required by Uber to be tethered to their phones while online. Similarly, that drivers are automatically switched from online to offline after ignoring three trip requests could reasonably be considered a severe restriction on their ability to engage in personal activities."
The court ordered the parties to complete discovery and to address whether Uber drivers are employees or independent contractors under the FLSA. Although currently being addressed in other Circuits, this will be an interesting case to watch. In June, a New York Department of Labor administrative judge ruled that Uber drivers are employees under state law and entitled to unemployment benefits in a case concerning an Uber black-car subsidiary. There, the court held that Uber's exercising supervision and control over the drivers created an employer-employee relationship. Uber is appealing that judgment.
As more service-oriented companies enter the market, whether employers classify workers as employees or independent contractors will become even more significant. We will continue to monitor developments in these cases.
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