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- 1. Regulating Distributed Work Alek Felstiner 5/10/10
- 2. Problem: Old, Stale Law Physical workplace Long-term, stable employment One to many Contractors vs. Employees
- 3. Looming Problems Jurisdiction Location of Parties Location of Work
- 4. Jurisdiction Hypo AMT Worker Firm Crowdflower
- 5. Looming Problems Jurisdiction Employment Status
- 6. Employment Status Terms of Use Terms of Use ?
- 7. Terms of Use (excerpts) As a Provideryou are performing Services for a Requester in your personal capacity as an independent contractor and not as an employee of the Requester. (AMT) Each user acknowledges and agrees that this Agreement does not constitute an employment agreement or create or acknowledge an employment relationship (neither with LiveOps nor with any other User.) (LiveWork) Each User acknowledges and agrees that the relationship between Users is that ofindependent contractors. (Freelancer) Employer and Freelancer each acknowledges and agrees that their relationship is that of independent contractors. (Guru) Provider's relationship with Buyer will be that of an independent contractor, and nothing in this Agreement should be construed to create a partnership, joint venture, or employer-employee relationship. (oDesk) Providers acknowledge that they are not employees of OnForce and will not indicate to any third party (Buyer, Provider, unemployment agency, etc.) that they are an employee of OnForce. Providers are completely independent contractors. (OnForce)
- 8. Independent Contractors Not covered under the FLSA, NLRA, etc. Not covered under most state laws Etc.
- 9. Labels Aren’t Everything “Where the work done, in its essence,followsthe usual path of an employee, puttingon an ‘independent contractor’ label does nottake the worker from the protection of the [law].” Rutherford Food Corp. v. McComb 331 U.S. 722, 729 (1947). Justice Stanley Reed
- 10. FLSA Test: “Economic Realities” 1) The extent to which the services rendered are an integral part of the principal’s business. 2) The permanency of the relationship. 3) The amount of the alleged contractor’s investment in facilities and equipment. 4. The nature and degree of control by the principal. 5) The alleged contractor’s opportunities for profit and loss. 6) The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor. 7) The degree of independent business organization and operation.
- 11. Looming Problems Jurisdiction Employment Status Group Rights Defining Community & Property Protected activity
- 12. Potential Regulatory Responses Direct Incorporation “Employee” Presumption Agency Rulemaking Regulate Vendors
- 13. The End.
Editor's Notes
- Going to skip over the question of why regulation is good or bad for this industry, leave that for Q&A.Take as given that there will be some regulatory response. Focus on Employment Law.
- Underlying problem – leaving aside online work, employment & labor laws were already old and stale at the end of the 20th Cent. Developed between the 1930s and the 1950s, relying on the prevalent employment models at the time. Physical workplaces, long-term, stable employment, one-to-many relationships between employer and employee, and a clear distinction between contractors and employees. Since then, all of these have eroded.Distributed work threatens to basically nullify them, and that’s why it’s such a thorny challenge for laywers.
- Hardest question in cyberlaw – not going to answer it.How do you adjudicate employment disputes between parties in different locations? We have some answers from remote work and telecommuter cases, but nothing directly applicable.How do you regulate work when you’re not sure where it actually takes place? So many regulations are aimed at the workplace itself - Here we run up against the question of whether cyberspace can properly be considered a workplace.
- Where is the work actually taking place? Which state law should govern? Which federal court should have jurisdiction?
- Here’s the typical arrangement in the crowd labor market. We know what governs the relationships between the firm and the vendor, and between the worker and the vendor – terms of use.But what about the Firm-Worker relationship? A few crowdsourcing vendors allow for negotiation of terms beforehand, but the majority do not.All the legal consequences flow from the nature of this relationship.
- So, unsurprisingly, the vendors themselvestry to define the contents of that relationship using their terms of service.
- Why ICs?
- Luckily for crowd workers, unfortunately for vendors.
- Some group rights at work, such as collective bargaining, depend on the legal definition of a community of workers. Difficult to do in this context – courts have been hostile to cybercommunity as a legal concept.Some constitutional rights dealing with conduct and assembly also depend on property determinations – easy to make when you have a factory or office building on private property, a little more difficult when you’re dealing with crowdsourcing platforms – courts have applied quasi-property concepts to cyberspace, but not in the geographical sense, not in this context.Then there’s the question of protected activity – NLRA guarantees workers the right to engage in protected concerted activity for mutual aid and protection. Usually means communication, group meetings, petitions, training, sometimes pickets and boycotts. How will this be protected, and against whom?
- Direct Incorporation: Simply define crowd work and list it in the employment and labor statutes. “These kinds of workers are covered.” Fairly blunt, not usually used in employment laws, but not unheard-of.Presumption: More flexible – creates a presumption of Er-Ee status, can be rebutted with a certificate or a showing of a valid independent contract.Rulemaking: Agencies that enforce the law have some latitude in how they do so, and they create rules. DOL, NLRB, OSHA, etc. could begin to develop a body of rules to guide employers and courts in dealing with crowd labor. This is a good alternative because the idea behind delegating regulatory responsibility to those agencies in the first place is that they will develop a sensitive and informed approach to complex, context-specific topics such as crowd labor.Regulate Vendors: Most controversial, and the best (in my view). It recognizes the reality of the crowdsourcing pyramid.