Court Rules Florida Uber Drivers are Contractors and Not Employees

Uber drivers in Florida are contractors and not employees, according to an appellate court ruling released today.

Florida’s Third District Court of Appeal, covering Miami-Dade and Monroe Counties, issued the ruling in the case Darrin E. McGillis v.Department of Economic Opportunity; and Rasier LLC, d/b/a UBER, 3D15-2758.

The Court heard the case on an appeal from a decision made by the Florida Department of Economic Opportunity, which also concluded that Uber drivers are not employees.

The issue arose when a Cutler Bay Uber and Lyft driver, Darrin E. McGillis, had a falling out with Uber, and the ride-sharing company terminated its relationship with him.

The Florida Department of Revenue sent McGillis notification classifying him as a former employee who could qualify for reemployment (unemployment) benefits. After an appeal was made by Uber and a hearing held, the Department of Economic Opportunity reversed the initial finding by the Department of Revenue and held that McGillis was actually an independent contractor and not entitled to reemployment assistance.

Judge Thomas Logue, writing for the Court, discussed the Department of Economic Opportunity’s ruling and the testimony provided at the hearing in coming to its opinion that Uber drivers are not employees in Florida.

In making its decision, the Court used Florida’s common law to distinguish whether there was an employee or contractor basis with Uber. First, it looked at the contract that prospective Uber drivers must agree to, which specifies that the driver is an intendent contractor and not an employee and thus not entitled to unemployment benefits. It also noted that while Uber provides additional insurance coverage for commercial operation of a vehicle, it doesn’t provide its drivers with other benefits such as medical insurance, vacation pay, or retirement pay.

The Court next considered other factors such as drivers are free to set their own schedule and area of operation, drivers own their own vehicles, and drivers are able to accept or reject requests at their will. A key fact the Court noted was that drivers are free to work for Uber’s direct competitors, such as Lyft, and switch between the two at their discretion.

The only factor that seemingly held any traction in favor of an employee relationship was that Uber had the power to deactivate a driver’s account under certain circumstances, effectively terminating the relationship between Uber and a driver. This wasn’t enough to persuade the Court, though, and it held that that factor alone doesn’t mandate that an employer/employee relationship exists.

Control, the Court reasoned, is confined by Uber to the results only and not to the means used to achieve those results.

As such, there exists a level of free agency that doesn’t exist at the employer/employee relationship, the Court affirmed the findings of the Department of Economic Opportunity that Uber drivers are contractors and not employees.

While this is the first such ruling to come out from the courts in Florida, other states such as California and Oregon have classified Uber drivers as employees under the basis that Uber couldn’t otherwise exist without its drivers. Each state has its own laws and methods for determining whether a person is an employee or contractor for state employment benefits so different results across the country can be expected. The federal government also has its own factors under the Fair Labor Standards Act, and there are already lawsuits filed by Uber drivers pending in federal courts.

As it stands today, the Third District’s ruling is controlling in Florida unless another district court of appeal rules otherwise, however based on the reasoning in the opinion I wouldn’t expect that to occur. On possible outcome, though, is that Uber could tweak its business model based on the Court’s opinion to bring it further within the safety of the contractor relationship, but that will remain to be seen.

George Palaidis is a criminal defense and civil attorney practicing in Miami, Fort Lauderdale and the South Florida region.