Uber Retirement

Although by no means a new question regarding retirement, the noteworthy growth of gig companies in the sharing economy has renewed concerns that even more American workers will lack access to employment-based retirement plans.  Although some argue that the gig economy offers workers advantages including more independence and flexibility, company-sponsored retirement saving is not one of them.  This is a dangerous state of affairs, as employment-based retirement plans make up a critical part of an individual’s strategy for retirement security.

Such retirement plans, like the nearly-ubiquitous 401(k) plans, provide a necessary bulwark against destitution in old age, especially given that Social Security provides only partial income replacement and few Americans have put away much in private savings.  Yet, independent contractors, which is how most gig companies classify their workers, are approximately two-thirds less likely than standard employees to have access to an employer-provided retirement plan.

Much academic and judicial ink has already been spilt over whether Uber drivers and other members of the sharing economy are members of the so-called “contingent” workforce or “precariat” (part-time, leased, temporary, and per diem workers), not entitled to receive retirement benefits as part of their employment.  Whether these employees are statutory employees is of utmost importance because it largely determines whether gig workers are covered by employment laws, as most such laws center on the employer-employment relationship.

What all these jobs have in common is that the work activity is happening outside of the traditional safety net of employment and are highly unstable.  Whereas statutory employees are covered in the United States by numerous labor and employment law statues that provide security and protection in the workplace, workers in these alternative work arrangements are not.  Once stable employment relationships have given way to relationships that are much more arms-length, regardless of whether it is a contractor situation, temporary employment, or a one-time encounter.

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US Supreme Court Review: Two Employee Benefit Cases (Dudenhoeffer and Hobby Lobby)

US Supreme Court logo(This is another post in our series, Looking Back at the U.S. Supreme Court’s 2013 Term.) This blog post is the third of three on labor and employment law cases by the United States Supreme Court in the last Term. This post focuses on two employee benefit law/ERISA cases: Fifth Third Bancorp v. Dudenhoeffer and Burwell v. Hobby Lobby Stores, Inc. First, a disclosure: Along with six other law professors, I co-wrote an Amicus Curiae brief in support of the Dudenhoeffer plaintiffs.

Dudenhoeffer involves so-called ERISA stock-drop litigation, which has been rampant in the federal courts for a couple of decades now. The basic formula of these cases is that, as part of the employer-sponsored retirement plan (whether an employee stock ownership plan (ESOP) or a participant-directed 401(k) plan), the employer offers its own stock as either the entire pension plan investment or part of the pension plan investment.   When the company goes south and its stock price falls, plan fiduciaries find themselves in a difficult position as far as whether to sell the stock or to hold on to it. This is especially so when the plan fiduciary has conflicting duties as an officer of the company and as a fiduciary of the plan. As a corporate officer, not only is the person supposed to act in the best interests of shareholders to maximize the value of the company, but securities law forbids them to trade stock based on non-public material information. As a fiduciary to the ESOP or 401(k) plan, ERISA gives that same person an obligation to act in the best interest and with the same care as a prudent fiduciary would when making decisions about that employee benefit plan. And in case you are wondering, ERISA Section 408(c)(3) gives employers the ability to assign the same person both officer and plan fiduciary roles or set up so-called “dual-role fiduciaries.”

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US Supreme Court Review: Two Labor Law Cases (Noel Canning and Harris v. Quinn)

US Supreme Court OT2013 logo(This is another post in our series, Looking Back at the U.S. Supreme Court’s 2013 Term.) Last month I commenced a series of posts of the United States Supreme Court’s labor and employment law decisions last term by blogging on the Court’s decision in the First Amendment public employee free speech case of Lane v. Franks, No. 13-483 (June 19, 2014).  In two separate blog posts, I will comment on two labor law Court decisions (NLRB v. Noel Canning and Harris v. Quinn) and two employee benefit/ERISA decisions (Burwell v. Hobby Lobby Stores, Inc. and Fifth Third Bancorp v. Dudenhoeffer).  This post discusses the labor law cases.

To begin, National Labor Relations Board v. Noel Canning, 134 S. Ct. 2550 (June 26, 2014), is obviously much more than just an ordinary labor law case.  Yes, it concerns the validity of decisions made by the National Labor Relations Board (NLRB or Board) when it had a quorum based solely on presidential recess appointments from roughly January 2012 through August 2013.  More specifically, on January 4, 2012, President Obama, faced with the prospect of another two-member Board (see below why this is a problem), used his constitutional recess appointment powers to make three intra-recess appointments.  In an effort to prevent any intra-session appointments, the Republican-controlled House of Representatives refused to give its consent to the Democratic-controlled Senate to go into recess.  See U.S. Const. Art. II, sec. 5 (“[n]either House, during the session of Congress, shall, without the consent of the other, adjourn for more than three days . . . .”).  In response, the Senate held very brief, pro forma sessions in which no business was conducted.

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