John Blomster: Welcome to Ƶ, a podcast where we explore today's biggest legal topics with distinguished guests and experts from around the globe. I'm John Blomster. And today we're speaking with Orly Lobel, Warren Distinguished Professor of Law at the University of San Diego School of Law. Professor Lobel is an award-winning author, renowned scholar and a prolific speaker who has appeared all over the world and whose most recent book “You Don't Own Me: How Mattel v MGA Entertainment Exposed Barbie’s Dark Side” was a national bestseller. A distinguished expert in labor and employment law, Professor Lobel recently joined Ƶ for a special Law in the Time of COVID-19 panel on the pandemic’s impact on gig economy workers, and it's a topic that we're going to unpack today. So, we are excited to get into it.
Orly, thank you very much for taking the time.
Orly Lobel: Thank you for having me.
JB: So, before we get into COVID-19, we'll just set the stage with a couple terms. What is the the gig economy and what types of jobs fall under this umbrella?
OL: Great, that's actually a great place to start and a really big question because that is a question that's very contested, both within the law and in the public debates. What are gigs? Who works in the gig economy? How big it is? And do workers really want to be gig workers? All of those questions are subject to a lot of controversy and class actions and regulation and a lot of coverage by the media right now. So, the most basic definition is that we think about gig workers as what they are not. So, they are not employees, they are not full time workers with one stable employer, even though as we'll talk about, you know, even that concept of a stable employer is very much in flux for everybody during this crisis, but employees are kind of more the traditional workers as defined by laws. And they're covered by all the laws that we have under employment and labor regulation, versus gig workers are sometimes we call them freelancers or independent contractors, the self-employed. So, these are people in a lot of different industries. They can range from delivery and ride sharing or, you know, like Uber workers to freelancers who do things online, like web design, or programming, or even architects that just take gigs and don't have like an office, a firm or work for, for one corporation.
JB: Well before the COVID-19 pandemic hit there are all these issues that gig economy workforce and companies were already facing. And the pandemic has really exposed those vulnerabilities that gig economy workers are facing. Why are gig economy workers particularly vulnerable?
OL: We have a spectrum of employment and labor laws. And really if we want to be more systemic about it, I've argued that we have these four buckets or four pillars of what work law includes. And one of them is what we call labor law, which are all the rights for employees to engage in concerted activity. So, the National Labor Relations Act allows employees—only employees, but not independent contractors—to form unions to collectively bargain. So, that's labor law.
The other bucket is kind of pure employment law contracts, all the rights of employees to claim wrongful termination, something went wrong in the way that they were fired, for example, for retaliation for exposing corruption or blowing the whistle and health and safety regulations, and wage and hour regulations, like all the overtime and minimum wage. All of that is the big bucket of employment law that again only applies to employees and not independent contractors.
The third one is the pillar of employment discrimination, which is, of course related to all of these other regulations like health and safety, but it's in the practice of employment lives, pretty much kind of a field of its own of all of the rights that Title VII of the Civil Rights Act and our other discrimination laws, including both at the federal and state level, which protect employees against being disparately treated because of their identity if it's race or gender or age or disability. So again, all of that bucket, it only applies to employees.
And then the fourth one, again, very important to our, you know, for our discussion right now, but always is the whole world of benefits. So medical and sick leave, unemployment insurance, worker compensation. But the way that we've structured all of them is that they only apply to somebody who's classified as an employee and not to gig workers, if they're classified and they are by these digital platforms by these apps or by any other company that uses their labor as independent contractors. So, that bringing it to our current situation with mass hiring that has occurred with delivery people, for example, with Instacart. Instacart, during the pandemic jumped from pretty small workforce, already quite significant before the pandemic, to the latest I've seen as they hired a half a million delivery people. So, we're talking about huge numbers of people who are working for a company and sometimes they're working full time. And definitely they're working in very difficult conditions right now and risky circumstances and all of these rights that I just described—for example, the right to healthy and safe environment that's provided by the Occupational Safety and Health Act, or the right to sick leave, that's provided by the family medical leave act—all of those have been applied to employees and if there are these gig workers are not classified as employees, they're left bare with no protection.
JB: And they're working more, which thereby puts them at a higher risk, right? They are on the front lines, they are interacting with people where, you know, others who are more classified as employees are in different kinds of jobs, you know, are working from home. How does a company square that where it's, you know, we'd know that these people are working to provide and they're on the front lines? But we still don't have an obligation to offer them basic protection and medical coverage?
OL: Immediately, when the pandemic started, companies like Instacart and Lyft and DoorDash and Uber announced that they're sort of voluntarily, because they're not under obligation of the law, said that they will be granting two weeks of sick leave, but it was very limited and still very limited. It would only extend to a gig worker that actually had proof of contracting COVID-19. So, it would not be for having being exposed or having some higher risk, preexisting condition. So, that's one thing said—I don't want to call it PR because it was a good step forward—but there was this effort to show that you don't need to classify us as employers, we are going to do some things that will provide at least some protection.
And then on the kind of policy front, there is a very strong argument that a lot of gig workers are quite happy being gig workers. And there are also advantages. There is a lot of flexibility of managing one's own hours, controlling one's career, not being obligated to turn on the app at any given day or week even, being able to work in parallel with many different apps. So, normally, if you're an employee, you can't while you're employed by one company work for a direct competitor. That's just not even when you don't even have to sign a contract about that or, you know, promise not to do it. It's just part of the duty of loyalty that every employee has inherent in their classification. Whereas if you're a freelancer, it's very much accepted that you have the Uber and Lyft and DoorDash and Instacart apps all on your phone, and you turn them on when you want. And I do think that there is compelling evidence that a lot of gig workers are quite satisfied in having all of these different opportunities, having kind of competition over their time with different apps and they make what they feel is a more significant livelihood, than if they were employed by Walmart as employees, like very low level, you know, badly treated Walmart employees that also don't have that many rights and can be fired at any time. So, that's been very significant for the platform companies to get that message out and to produce data to that effect.
JB: So, earlier this year, the federal government addressed some of these issues when it passed the Coronavirus Aid Relief and Economic Security Act, the big stimulus bill known as the CARES Act. What did the CARES Act do for workers in the gig economy?
OL: Yeah. The CARES Act is quite original and maybe groundbreaking in the sense of actually granting unemployment insurance coverage to the self-employed—self-employed being these freelancers also and the gig workers, whatever you call them, anybody who's not an actual classified employee. This is really the first time in American history that we have provided a federal program—insurance program—for unemployment that covers the self-employed. A big part of the labor market are workers who are not classified as employees. And the pandemic brought mass layoffs, of course of regular employees, but also of these gig workers and the self-employed, like the small business owners, the platform workers or the gardener who has a small business that goes from home to home or a small cleaning business or whatever, wherever you find different industries. So, the purpose of the CARES Act is to provide more than the usual unemployment insurance that was provided under state law plus cover all of these categories of workers and self-employed people in the market that have suffered economic loss and are unable to be of service really and to use their talents and labor during the pandemic.
JB: It should be noted that these measures are temporary, right? So, where are the opportunities to go a step farther?
OL: Right. So, I think they only lasts until June at the moment. And that's exactly the right question to ask, you know, the path forward. I think what we're seeing is that the pandemic really is exposing the vulnerabilities that were already in the market. Because we have many different kinds of paths in the way that people manage their careers these days, there really shouldn't be an insistence on this black and white employee, non-employee classification for the purposes of benefits like unemployment insurance, but also for sick leave and health and safety. So, I see the CARES Act as doing what I've actually argued in my scholarship for a long time now. I have several articles about this, where I sort of call it the Lobel Four-Step Program.
One is, I think, that we should be simplifying the test of who is an employee, the classification test employee versus non-employee. And it really should be something that's more certain, more predictable, not these 20-factor, multi-weighted tests that have been with us for a long time and have been bringing about so much litigation and uncertainty in really every industry that we have so many class actions. So, simplifying the test, that's sort of the path that was just adopted in California with the ABC test and some other states have done this. I'm just saying, sort of, if it smells like an employee, it looks like an employee, it’s probably an employee. And the default is that if you're working, providing your labor to a company, and the capacity is in things that are integral to their business, you are probably an employee. And it's really the burden on the company to disprove that, so as to reduce misclassification. So, that's only kind of the first step.
I think that we also should be recognizing the rigidities that come with a classification of employee for all of the different spectrum of that I described of employment and labor relations, like wage and hour, over time. For example, for over time, gig working doesn't fit this requirement that employers will monitor exactly the number of hours you've worked and then pay extra for the twelfth hour or the eighth hour, because gig workers are again hopping on and off the apps and jumping on multiple apps all the time and we want to introduce specific rules for this kind of work.
The third step is to just do away with the classification altogether for some protections. So, in particularly, I'm thinking about discrimination, when Title VII was passed in the 1960s the idea was that for the first time, we're going to extend these constitutional laws that we have of not discriminating somebody on the basis of race or gender, to the private market to private interactions. And this idea of employment was still kind of very strong, though, that we can tell who's an employee versus, you know, all other interactions were maybe less significant. But again, now that we have had our discrimination laws for over 50 years, I think it's really a time where we understand that it doesn't really doesn't matter if you are a company that's using labor in some way, using the talents and skills and time and experience of somebody, why does it matter at all how we classify them? You cannot, as a company discriminate on the basis of some protected identities. So, doing away with classification for certain employment laws would be a good idea.
And the final part, which will be quite costly, and I think it's the most politically challenging, but it's also probably the most important as we see it right now is that so much of our social security network or, you know, our social safety network in the United States, has been based on this idea of full-time employment. So, health care is a great example because the Affordable Care Act actually starts moving to this new direction of portable benefits and delinking your healthcare rights from your status as an employee or your relationship with a single employer. And that, I think, understanding should carry into these other forms of benefits. So, if somebody is sick, is out of the job market and needs retraining reskilling, and we'll see a lot of this as we start thinking about recovery, really creating much more of these safety nets that have nothing to do with who your previous employer was, who is the one company that has to like pay into the tax system for this, which is creating a lot of discontent actually because you asked me about the CARES Act and I said, “Oh, this is great. It's extending to gig workers as well.” But who's funding it? The funds have come from those defined as employers. And so if Uber drivers, for example, are tapping into these funds, Uber itself has not paid into the unemployment insurance fund. So, again, kind of this changing our concept of, you know, how do we provide a social safety net, and having all companies pay into this really insurance and tax system and providing much more of a robustness of reskilling, retraining, sick time and leave and benefits that are not linked to whether you spent enough time with one employer just before this hit you?
JB: Finally, are there efforts underway pushing towards these aims that we need to be aware of or that can get involved in? Where are we pushing forward on this looking beyond the pandemic and as we move into recovery?
OL: There's interesting efforts right now. I mentioned labor law where that doesn't cover non-employees. And so gig workers can't unionize. But what they are being active with are associations that are like the Freelancer Association. There's various organizations right now that are creating a place of voice and lobbying efforts and grassroots efforts, seeing Amazon workers go on strikes now during the pandemic. And Instacart workers kind of do these walkouts. So, I think that's something to watch the way that voice will be different. And then, on the policy front, I mentioned that California and some other states are at the front lines of this. So, I recently spoke at a big convention of state senators and all eyes were on California and other legislators were thinking about emulating these new rules that were passed in California.
Again, this would all started before the pandemic, but I think the pandemic has accelerated some of the need to think about this. On the other hand, the pandemic has halted some efforts, because I think there's such huge numbers, unprecedented numbers of unemployment. And such a fear of, you know, how are we going to recover and create new jobs that I also think that anything that will be costly for a company will be resisted very strongly. So, that's kind of these two forces that are pushing against each other, the need and the and the cost. I want to end on an optimistic note. Hopefully, we'll see more efforts and understand that, again, the pandemic is exposing how much we're all tied together and economically and public health wise and so we need investment and infrastructure and hopefully we'll all recover from this stronger and stay safe and healthy.
JB: Orly Lobel is Warren Distinguished Professor of Law at the University of San Diego School of Law. She is also a best-selling author and you can find her latest “You Don't Own Me: How Mattel v MGA Entertainment Exposed Barbie’s Dark Side” as well as her previous work on Amazon, wherever else you can get your books and especially at orlylobel.com. We have links in the show notes to all of this, plus more on what we discussed today.
Orly, thank you so much for joining us here on Ƶ.
OL: Thank you. It's a pleasure.
