(Bloomberg) -- A US labor board ruling on Tuesday laid the groundwork for drivers from Uber Technologies (NYSE:UBER) Inc. and Lyft Inc (NASDAQ:LYFT). and other gig workers to formally unionize – a still difficult but potentially transformative task.
In a ruling concerning workers at the Atlanta Opera (NASDAQ:OPRA), the National Labor Relations Board’s Democratic majority voted to make it easier for workers to prove they’re employees rather than independent contractors, granting them the right to organize.
“Applying this clear standard will ensure that workers who seek to organize or exercise their rights under the National Labor Relations Act are not improperly excluded from its protections,” NLRB Chairman Lauren McFerran said in a statement.
While the decision directly involves hair and makeup workers at the opera, it also changes the precedent for who should be considered an employee at companies throughout the economy. The new ruling is likely to embolden workers at companies like Uber, Lyft and DoorDash Inc. to pursue cases, arguing they are also employees with union rights.
Gig company executives have argued that the flexibility they offer workers and the prices they offer consumers depend on their ability to keep classifying their workers as non-employees. Even with the opera precedent, the companies can try to persuade the government that their workers still qualify as contractors, as they have tried to do in states that passed laws cracking down on contractor misclassification. And even if gig workers are deemed to be employees, labor organizers might struggle to sign up enough workers to petition for a unionization election and win the ensuing vote.
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Labor advocates have long complained that US labor law lets companies deploy aggressive tactics to defeat organizing drives — such as holding mandatory anti-union meetings about how unionizing could harm them — and provides only weak penalties for companies that illegally retaliate. The nature of jobs like ride-hailing, in which drivers largely work alone and with varying schedules and locations, can make organizing particularly difficult.
But the past year-and-a-half has seen unions notch historic wins at several major US companies that had previously seemed impregnable to organizing, including Amazon.com Inc (NASDAQ:AMZN)., Apple Inc (NASDAQ:AAPL)., and hundreds of Starbucks Corp (NASDAQ:SBUX). cafes. A serious organizing campaign could pose major headaches for gig company executives.
That’s one reason the companies have worked in recent years to neutralize potential threats by cutting deals with unions and state lawmakers that provide workers with perks without requiring the companies to agree to full-fledged collective bargaining or employment benefits.
Gig workers face a number of hurdles to a successful organizing drive. First they would have to successfully petition for an election at some company. Even if they were deemed employees by the labor board and voted to unionize, management would be legally required to negotiate with them.
But the company could still refuse to do so, forcing the issue into a federal appeals court. A ruling on the issue could blunt the threat to the companies, or exacerbate it much further.
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