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McGillis v. Department of Economic Opportunity

Florida Court of Appeals, Third District

February 1, 2017

Darrin E. McGillis, Appellant,
v.
Department of Economic Opportunity; and Rasier LLC, d/b/a UBER, Appellees.

         Not final until disposition of timely filed motion for rehearing.

         An Appeal from the Department of Economic Opportunity Lower Tribunal No. 0026283468-02.

          Darrin E. McGillis, in proper person.

          Shutts & Bowen LLP, and Daniel E. Nordby (Tallahassee), and Andrew E. Schwartz (Fort Lauderdale), for appellee Department of Economic Opportunity; Littler Mendelson, P.C., and Courtney B. Wilson, for appellee Rasier, LLC.

          Before LAGOA, SALTER, and LOGUE, JJ.

          LOGUE, J.

          Darrin E. McGillis, a former Uber driver, appeals the decision of the Florida Department of Economic Opportunity concluding that an Uber driver is not an employee for the purpose of reemployment assistance. Because the parties' contract explicitly provides that an Uber driver is not an employee and the nature of the parties' relationship was consistent with this classification, we agree. We therefore affirm the Department's order denying McGillis' claim for reemployment assistance.

         FACTS AND PROCEDURAL HISTORY

         Uber is a technology platform that connects drivers with paying customers seeking transportation services. McGillis served as an Uber driver until Uber revoked his access to the technology based on alleged violations of Uber's user privacy policy. McGillis then filed a claim for reemployment assistance against Rasier LLC, d/b/a Uber.[1] The threshold issue raised by McGillis' claim was whether he provided service to Uber as an employee entitled to reemployment assistance under section 443.1216, Florida Statutes (2015), or whether he served Uber as an independent contractor.

         The Department of Revenue initially found that McGillis served as an Uber employee. Uber contested this determination, and an evidentiary hearing was held before the Department of Economic Opportunity. Following the hearing, a special deputy recommended a reversal of the Department's order. The special deputy found McGillis had served Uber as an independent contractor and was therefore not entitled to reemployment assistance. McGillis filed exceptions to the recommended order. In a detailed final order, the executive director of the Department of Economic Opportunity adopted the special deputy's recommended order and overruled McGillis' exceptions. McGillis filed this timely appeal.

         At the hearing before the Department, witnesses explained in detail how Uber's transportation network software works. The software consists of two applications that are generally accessible on smartphones: a "user application, " used by individuals seeking transportation services, and a "driver application, " used by individuals willing to provide transportation services.[2] Drivers receive a percentage of the fare charged to the passengers, [3] and Uber processes payments to drivers weekly by direct deposit.

         Uber supplies additional insurance coverage for commercial operation of a vehicle, but it does not provide other benefits such as medical insurance, vacation pay, or retirement pay. At the end of each year, Uber sends each driver a "Form 1099"-an Internal Revenue Service form used to report payments to independent contractors-setting out the amounts paid to the driver for the year.

         A prospective Uber driver must agree to the terms and conditions of Uber's "Software Sublicense and Online Agreement." This contract specifies that the driver is an independent contractor and not an employee. It further explains that the driver, as an independent contractor, is not entitled to unemployment benefits:

This Agreement is between two co-equal, independent business enterprises that are separately owned and operated. The Parties intend this Agreement to create the relationship of principal and independent contractor and not that of employer and employee. The Parties are not employees, agents, joint venturers or partners of each other for any purpose. As an independent contractor, you recognize that you are not entitled to unemployment benefits following termination of the Parties' relationship.

         The contract further specifies that each trip request accepted is considered a "separate contractual engagement, " that drivers are "entitled to accept, reject, and select" requests as they see fit, and that drivers have no obligation to accept any request.[4] Drivers are free to set their own schedules and to determine what locations they will serve.

         A prospective driver is subject to a background check and must provide Uber with information about the driver's vehicle, registration, license, and insurance. Drivers are responsible for supplying, maintaining, and fueling their own vehicles. Uber does not require drivers to display Uber signage in their vehicles, nor does Uber control the drivers' attire. Drivers are free to switch between using Uber's driver application and the application of a competitor, such as Lyft.

         Uber does not directly evaluate or supervise its drivers. Instead, passengers rate their drivers on a scale ranging from one to five stars. If a driver's overall rating falls below the level set by the region's general manager and no ...


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