By Robert Bryson
The gig economy is a more sophisticated version (or perhaps exploitation?) of contract workers. The classic contract worker is someone you hire for a discrete task, for example, someone to paint your house. They are independent small business owners that specialize in providing services that everyone needs but not on a full-time basis. Contract workers range from plumbers and painters to specialized business consultants brought on to shepherd specific projects or deals.
The gig economy is composed of a series of companies that harness the connectivity offered by the internet to offer a broader range of services that fill “gaps” in the traditional economy. In one way, it is by hiring contractor-based work to perform functions that were traditionally fulfilled by full-time employees. Gig economy workers can range from drivers, such as for Uber and Lyft; delivery drivers such as for DoorDash, GrubHub, Postmates, Uber Eats and Amazon Restaurants (rest in peace); and many other tasks in-between — I’m looking at you TaskRabbit. In another way, it is harnessing “assets” that are underutilized — such as Airbnb or Pavemint, which lets people rent their parking space.
The gig economy affects lawyers in two ways: (1) a source of work or income and (2) as a source for potential clients.
Source of Income
Attorneys can and do perform gig work. One of the more famous examples of attorneys successfully harnessing gigs is Kevin Ha of Minneapolis. Mr. Ha first became famous a few years ago when it was reported that he paid off all of his student loans in 2.5 years by living frugally and making thousands of extra dollars a year doing gigs.
Attorneys are not bound by any specific ethical duty when performing nonlegal work, however, we are required to “conduct [ourselves] at all times with dignity, courtesy and integrity.” Cal. Rules of Ct. R. 9.7.
In general, the issues attorneys will most likely face when working in the gig economy is fending off questions and concerns from your customers when they find out you’re an attorney. When confronted with these unsolicited “potential” client questions, remember that the attorney/client relationship can be expressed or implied by a written or oral contract. Koo v. Rubio’s Restaurants, Inc. (2003) 109 Cal. App. 4th 719, 729; Nichols v. Keller (1993) 15 Cal. App. 4th 1672, 1684. Therefore, being clear about the status of your relationship, and maybe a confirming email or text to get it in writing, is good practice.
Potential Clients
The gig economy has come a long way since its nascent start at the end of the “aughts.” The gig economy can serve as a source of clients in three ways: (1) contract workers whose rights were violated; (2) unclear commercial liability; (3) guests/customers whose rights were violated.
Contract Workers
The golden rule is that contract workers have little to no rights. However, Dynamex Operations v. Superior Court (2018) 4 Cal. 5th 903 rewrote California’s test for determining whether a worker is an employee or contractor. Dynamex adopted the following test for a worker to be properly classified as an independent contractor:
1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
2. The worker performs tasks that are outside of the usual course of the hiring entity’s business.
3. The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.
In the coming years, it is possible that entire industries within the gig economy will be redrawn based on the Dynamex ruling. Moreover, the California Assembly just passed AB-5, which could reclassify millions of gig workers, including Uber drivers.
Aside from improper classification, contract workers are also afforded a few protections in California. For instance, it is unlawful for a hiring entity to refuse to hire persons who “provid[e] services pursuant to a contract” [along with unpaid interns and volunteers] on the basis of a series of protected classes including race, religion, ethnicity and more. Cal. Gov. Code § 12940(j)(1); see also Fitzsimons v. California Emergency Physicians Medical Group (2012) 205 Cal.App.4th 1423. Finally, gig workers may also be protected by the Unruh Act. Cal. Civ. Code § 51.5.
Commercial Liability
The gig economy exists in a legal gray area, which takes advantage of a layperson’s unsophisticated understanding of the risks they are undertaking. For example, most (if not all) car insurance and home insurance policies expressly disallow coverage for any commercial uses. Driving for Uber and Lyft, or renting out a room or an entire house on Airbnb, could result in the nullification of that person’s liability coverage.
While Uber, Lyft, Airbnb and the other companies do provide commercial coverage, deconstructing each of their policies could be a law review article on its own. These companies’ policies depend on a strict series of events to occur before their coverage activates. For example, Uber’s liability policy provides $50,000 bodily injury per person with a maximum of $100,000 in bodily injury per accident for drivers who are “active” on their app and waiting for a ride request. First, this coverage is significantly below the California standard of 100/300 coverage. Second, it was only a few years ago that Uber refused to offer any coverage for drivers who did not have a passenger in the vehicle. Finally, drivers risk having their personal car insurance cancelled if they report an accident following commercial activity.
The liability issues also extend to gig workers who rent their assets. For example, Airbnb insurance is similarly restrictive. While it does offer Host Protection Insurance for up to $1M per occurrence in the “event of a third-party claim of bodily injury or property damage related to the stay,” it does not offer coverage in the event the host is injured due to the Airbnb stay. Moreover, most homeowners’ insurers will cancel any policy once a claim related to the commercial activity is filed. see also Lieber: “The Insurance Market Mystifies an Airbnb Host,” New York Times, December 19, 2014 (paywall).
Bear in mind the inverse of these issues is also a good source of clients — the more people use these services, the more they will get injured riding in Ubers and renting Airbnbs. In short, the liability exposure inherent to the gig economy creates plenty of opportunities for creative attorneys. There are potential claims against the companies for misclassification of employment status, bad faith insurance coverage, personal injury and more.
Guests/Riders/Customers/Clients
Aside from riders injured in Ubers and guests injured in an Airbnb rental, these gig-based companies are having to contend with anti-discrimination and harassment claims. While Uber gets the most attention — (1) “In Kidnapping Attempt, Uber Driver Told 2 Women ‘You’re Not Going Anywhere,’ Police Say”; (2) “They Thought It Was Their Uber But the Driver Was a Predator”; (3) “Uber Driver Accused of Sexually Assaulting Woman” and many, many more — it isn’t the only company connected to attacks and discrimination against its customers. Airbnb was famously engulfed in a firestorm of negative coverage after one of its hosts canceled a booking because the guest was Asian (he had to pay $5,000 and take an Asian-American studies class). The incident was so explosive that Airbnb agreed to test for racial discrimination by hosts. While the protections for contract workers are limited, guests/clients/customers/riders enjoy all the protections afforded by the California and U.S. Constitutions.
The gig economy offers many potential avenues for clients and avenues for income for attorneys who are willing to push the envelope and develop the law around these companies. The gig economy presents huge opportunity for an entire class of attorneys to develop niche practices and litigate cases that may define the industry; however, this much opportunity also equals a lot of uncertainty for legal advocates.
Robert Bryson is a litigator at Aguirre & Severson, LLP.