NLRB rules Tucson taxi drivers are employees not independent contractors

A National Labor Relations Board (NLRB) regional director has ruled that Tucson, Arizona Yellow Cab taxi drivers are employees rather than independent contractors and that a union representation election at Yellow Cab can move forward.

NLRB Region 28 Director Cornele Overstreet reversed a decision he made in 2013 in which he ruled that the Tuscon taxi drivers were independent contractors.

Overstreet wrote that he reversed himself after the NLRB reviewed his original decision and remanded the case to him for further review in light of the Board’s 2014 ruling in the FedEx Home Delivery case that “refined (the NLRB’s) approach for assessing independent contractor status.”

I have concluded that the drivers in the petitioned-for unit are statutory employees and are not independent contractors. Accordingly, I shall direct an election in the petitioned-for unit,” writes Overstreet.

Back in 2013, the Tucson Hacks Association (THA) petitioned the NLRB for a union election at Yellow Cab. When Overstreet denied the association’s petition, it requested a review by the NLRB.

When the NLRB agreed to review the original decision, THA turned to the Office and Professional Employees International Union (OPEIU) for assistance.

OPEIU, which represents 4000 taxi drivers in Las Vegas and San Diego, provided attorneys who argued THA’s case before the NLRB.

Mel Schwarzwald, OPEIU’s general counsel said that the new ruling will have a far-reaching impact beyond Tucson.

“We believe that it means a great deal not only to these drivers but to many cab drivers across the country,” said Schwarzwald to Workers Independent News. “What the regional director has done is said that taxicab drivers are really employees, rather than independent contractors.”

Overstreet wrote that the NLRB’s refined test for determining independent contractor status requires that “empirical considerations should predominate over a surface reading of the bare terms of a contractual arrangement.”

The director noted that Tucson Yellow Cab drivers sign a contract in which their status is defined as an independent contractor, but that for a worker to be a truly independent contractor, the worker must have “actual entrepreneurial opportunity for loss or gain.”

When looking at the facts of the case, Overstreet determined that the drivers’ entrepreneurial opportunity was greatly restricted.

For example, Yellow Cab fired one taxi driver who set up his own dispatch system to service his personal clientele of about 100 regular riders even though the company encourages them to build personal clientele.

Overstreet also noted that the drivers have little control over setting rates for the service they provide and the hours that they work.

“Economic realities dictate their schedules,” writes Overstreet. “Drivers must work 60-119 hours a week to cover the cost of (leasing their cab) and expenses.”

Drivers also have little control of the dispatch system. According to Overstreet, the dispatch system is like a game of roulette over which drivers have little control.

“The Employer like the proverbial house, controls and benefits from the game by controlling the parameters.”

Driver pay, the amount left over after the driver pays to lease the cab and other expenses including fuel, is determined by the company.

Cab leases typically cost between $90 and $105 a day. Weekend lease rates increase to as high as $150 a day. Discounts are available for 12-hour leases and for new drivers.

Overstreet estimates that gross pay not including tips ranges between $12 an hour and $2 to $3 an hour. The estimated hourly wage for most drivers is somewhere in the middle of this wide spectrum.

Drivers pay the full amount of the Social Security tax if they want to be eligible to draw Social Security and the full amount of any health insurance they might purchase.

Both the THA and OPEIU are anticipating that a union election will be held soon, and in an open letter to fellow taxi drivers, Robert Aros, co-chair of THA, explained the benefits of unionizing.

“In 1982, when I started working as a cab driver, we were unionized,” said Aros. “We were paid by commission, worked eight hours a day, and had complete benefits. As independent contractors what have we gained? More importantly, what have we lost?”

He also emphasizes the precarious nature of the drivers’ present status. If they get hurt on the job, there’s no Workers Compensation; there’s no grievance procedure; and there’s no earnings guarantee.

“How many hours do you have to work just to live at subsistence level? Do you even make minimum wage?” he asks his fellow drivers.

The company may ask the NLRB to review Overstreet’s decision, and if it does, the union election could be delayed.

But Schwarzwald told Workers Independent News that he believes “there should be a vote fairly soon.”

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3 thoughts on “NLRB rules Tucson taxi drivers are employees not independent contractors

  1. Pingback: AFL-CIO: What’s More Important? Family or a Few Extra Bucks?: Winners and Losers of the Week | Berger Institute for Work, Family & Children

  2. Pingback: Whitewood Campground Files For Bankruptcy, Some Local Contractors Go Unpaid | Find a Contractor's Blog

  3. Pingback: NLRB rules Tucson taxi drivers are employees not independent contractors  - Employee or Independent Contractor?

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