Tamara Devitt in Slate: Can Uber Disrupt the Law?

07/02/2015

Rarely does a single worker inspire existential angst in a $50 billion company the way Barbara Ann Berwick has for Uber. On Wednesday, it came out that the California Labor Commission had determined earlier this month that Berwick, a former Uber driver, should be classified as an employee of the company rather than an independent contractor. The commission awarded Berwick some $4,000 in unpaid expenses. Uber immediately appealed...

The Berwick ruling applies only to one employee in one state. But it presages trouble for Uber and its on-demand peers. Imagine briefly if all of Uber’s drivers in the United States—more than 160,000 as of December—were deemed employees and awarded unpaid expenses. Uber would be looking at hundreds of millions of dollars, if not billions, in fees. The low-cost, thin-margin model that lets Uber keep prices low for riders might no longer be sustainable. Uber as we know it could cease to exist.

That’s the doomsday scenario, and it’s still far off. Uber’s appeal is heading to San Francisco Superior Court for what’s known as de novo review — literally “from the new” — where the company will get its best shot at a reversal. “It’s not like in a typical court of appeals where they’re just reviewing what the underlying court did, says Tamara Devitt, a labor and employment attorney at Haynes and Boone in Palo Alto, California. “They basically start from scratch. So once it’s appealed, it’s almost as though [the labor commission ruling] didn’t exist.” The case could linger at the trial court level for months or longer. “There’s a right to discovery and all that good stuff,” Devitt says. Any ruling that comes out of the trial court level could be appealed again to the California Courts of Appeal, and from there—if it got that far—to the Supreme Court of California. That could help explain why Uber has tried to downplay the labor commission’s ruling, stressing in multiple statements that the decision “is nonbinding.”

Excerpted from Slate. to read the full article, click here.

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