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.
