Note: Killing the Goose that Laid the Golden Egg: Outdated Employment Laws Are Destroying the Gig Economy

By Emily C. Atmore. Full text here.

Would you rather protect employee rights or stimulate economic growth? It seems like an impossible choice. This is a dichotomy that has been debated by scholars and lawmakers throughout history. Most recently, this issue has arisen in the context of the so-called gig economy. The gig economy uniquely challenges the theory that business and individual interests are entirely at odds. In fact, the gig business model is designed to align these interests by utilizing technology to offer a digital platform that directly connects the workforce to consumers, empowering workers to take control of their own employment. Thus the gig gconomy’s answer to this question is not one or the other but both.

The gig economy has the potential to revolutionize and revive our economy just as the Industrial Revolution once did. But it is threatened by a web of legal complications. Most central to these concerns is that gig workers are not easily classified under existing federal and state employment laws. Gig workers do not fit into either of the existing categories of employee or independent contractor. As one judge put it, they are “square pegs” being forced to fit into “two round holes.” Worker misclassification leaves workers without needed rights and protections and exposes companies to the risk of financial destruction. Thus, at the forefront of the legal discussion is the question of how our laws can best protect workers while at the same time reaping the benefits of the gig economy. Many scholars think the answer lies within existing employment law; others are decidedly unsure. This has led to increased litigation on the issue, which further impedes the gig industry and ultimately fails to secure an authoritative answer.

This Note explores this dispute. It begins with a full explanation of the rise the gig economy and an outline of the development of employment laws and worker classification tests. It uses the O’Connor v. Uber lawsuit to highlight the inability of existing law to resolve this issue. It then proposes a comprehensive resolution to this issue that protects workers and harnesses the benefits of the gig economy. The proposal contains three legal actions, to be completed in the short, long and very long term. The first step calls for a legal safe harbor for gig companies. The second step argues for a review of employment laws and the addition of a third classification of worker. The third and final step advocates for universalization of employee benefits. Together, these three steps compose a balanced and practical action plan for legislators that protects workers in this new environment, but at the same time captures the incredible benefits of the gig economy’s change and innovation.