A California agency ruled in August that a former Uber driver should have been considered an employee, according to recently unearthed documents.
The decision was made by the California Employment Development Department’s Inglewood office, which ruled that an unnamed driver who filed for unemployment benefits in April of 2014 should have the right to receiving those benefits.
“The evidence showed a distinct and strong right to control by the appellant Uber in the manner and means in which these services were provided,” the ruling stated, which was evidence of an “employer/employee” relationship.
The ruling, which was first reported by Reuters, is the latest in a string of small losses for Uber, the ride-hailing company, which has long contended that its more than one million active drivers were independent contractors, not official employees of the company.
That question is crucial to Uber’s future. By labeling its drivers contractors, Uber is able to avoid certain costs such as unemployment taxes and work-related driving expenses that it would have to pay if they were considered employees.
Any wide-ranging decision to grant employee status to drivers would likely have a great effect on Uber’s soaring valuation as the most richly valued private venture-backed company in the world. Uber has raised more than $7 billion in venture capital and is valued at more than $51 billion.
In June, the California Labor Commissioner’s office ruled that another former Uber driver, Barbara Ann Berwick, should have also beeen considered as an employee, and therefore should be eligible for compensation for past expenses. Uber also received a similar decision by a Florida agency.
Uber has rebuffed the wider implications of such rulings, including the recent decision made by the California Employment Development Department, and has highlighted the narrow focus of each decision.
“This decision applies to one person — it does not have any wider impact or set any formal or binding precedent,” an Uber spokesperson said in a statement. “Many public bodies have found that individual driver partners are independent contractors, including unemployment and labor departments” in Indiana, Georgia, Pennsylvania, Colorado, Texas, Illinois, New York and California.
Most of Uber’s high-profile efforts have been focused on battling a class-action lawsuit in California, which, like previous complaints, contends that Uber drivers are employees, not independent contractors, and are entitled to back reimbursement and unemployment benefits.
Recently, a federal judge ruled that the lawsuit should be allowed to proceed as a class-action challenge for some of the drivers who filed suit. Uber has said that the company will likely appeal the ruling.