From the Pickup Line to the Picket Line: What Employers Need to Know About the Gig Economy Labor Movement

The gig economy has emerged as a defining aspect of the modern workforce, transforming how people work, earn, and engage with employers. Unlike traditional full-time jobs, gig workers benefit from significant flexibility. Digital platforms, such as popular, widely used ridesharing services, and other platforms like TaskRabbit have played a key role in this shift, making gig work more accessible than ever.

Despite this newfound freedom, many workers have found themselves with limited power to influence a platform’s policies, including those involving compensation, benefits, and other working conditions. As a result, an organized labor movement has been gaining momentum within the gig economy, advocating for unions and the use of collective action to negotiate with employers for better protections and fairer treatment for workers.

Gig workers are frequently classified as independent contractors, which — if properly classified — excludes them from protections under the National Labor Relations Act (NLRA); specifically, the right to form unions and engage in collective bargaining. As frustrations among gig workers have increased, they have pushed for the right to collectively bargain under the NLRA and advocated for state laws that grant them this right, despite their classification as independent contractors. With the passage of “Question Three,” Massachusetts is the most recent example of gig workers securing collective bargaining rights despite their classification as independent contractors.

Classification as Independent Contractors Under the NLRA

The risk of misclassifying gig workers as independent contracts under the NLRA has become a growing concern as the test for worker classification continues to evolve. In a number of recent matters, workers have challenged their classification as independent contractors for labor law purposes, accusing their employers of violating the NLRA. Employers who rely on the use of freelance and gig workers must therefore remain vigilant to ensure they are correctly classifying these workers as employees where appropriate.

The factors currently considered when determining worker classification under the NLRA include:

• The extent of control by the employer
• Whether or not the individual is engaged in a distinct occupation or business
• Whether the work is usually done under the direction of the employer or by a specialist without supervision
• Skill required in the occupation
• Whether the employer or individual supplies instrumentalities, tools, and place of work
• Length of time for which the individual is employed
• Method of payment
• Whether or not work is part of the regular business of the employer
• Whether or not the parties believe they are creating an independent contractor relationship
• Whether the principal is or is not in business
• Whether the evidence tends to show that the individual is, in fact, rendering services as an independent business

It is important to note that this classification test is not static and can shift as the National Labor Relations Board (NLRB) updates its interpretation of the law. Employers run the risk of violating the NLRA when their employees are not properly classified.

Moreover, those who engage independent contractors should also be mindful of the multiple independent contractor tests for other purposes, such as federal and state wage and hour, unemployment, and tax laws.

What You Need to Know: Massachusetts’ Question Three

Gig workers have also advocated for the enactment of state laws that provide for their right to collectively bargain despite their classification as independent contractors. In November 2024, in a historic vote, Massachusetts residents approved a ballot question (“Question Three”) allowing rideshare drivers to form unions and collectively bargain. With just over 53% of the voters in favor of the ballot, there will likely be many speed bumps and challenges from opponents along the road to implementation.

Question Three sets up a first-of-its-kind state-run collective bargaining scheme for independent contractors working in the transportation network space. This law allows drivers to form unions and collectively bargain. Further, it establishes a hearing process and an appeals board to oversee the bargaining process and resolve disputes. In essence, Massachusetts has created a unique hybrid model that gives gig workers the power to collectively negotiate for better pay and conditions without fundamentally altering the classification of their work status.

What to Expect Next

There are likely legal challenges ahead with respect to Question Three. With the voices of many drivers going unheard in the process, we anticipate there will be litigation challenging the formation of these unions. Additionally, both sides will likely quarrel over the implementation of this new system.

Unrest in the gig economy is not unique to Massachusetts. For example, the U.S Court of Appeals for the Ninth Circuit (covering a number of Western states) has ruled against local ordinances that gave rights for rideshare drivers to collectively bargain, citing antitrust concerns and NLRA preemption (meaning that the local laws are invalid because federal labor law controls with respect to collective bargaining-related issues). Unrest has also been seen in California, where voters, in a closely fought battle, voted to classify ride share drivers as “independent contractors” rather than “employees”. Similar movements are likely to continue to pop up across the country. We will likely see additional workers in various gig industries advocate for similar laws to Question Three to secure their rights to collectively bargain.

Conclusion

There is growing unrest in the gig economy. Employers must stay vigilant to ensure they are not misclassifying their workers as independent contractors instead of employees. While the passage of Question Three is a significant development in labor law, it will take some time before we see the full impact of this measure. Other states and industries are likely going to keep a close eye on developments and seek to implement similar programs. We will monitor and keep our readers posted as to significant future developments.