Employment Law Poised to Take Center Stage at Legislature

The 2016 Legislative session is still a week and a half away, but several bills have already been filed that could impact employers in Utah. A handful of other likely issues to be brought up in the 45-day session were discussed at an employment law briefing at Holland & Hart Wednesday.

One of the biggest issues likely to be tackled by lawmakers this winter and spring is trying to better define worker classification and the shifting employer-employee relationship in some sectors of industry. Case in point? Uber and Lyft.

“Uber is invested in litigation all over the country over whether they are classifying their employees correctly,” said Elizabeth Terry Dunning, a partner at Holland & Hart. “Unlike the taxicab that’s all the time on the street collecting fares, Uber [and Lyft] works on demand—you need a ride, and someone, hopefully, is there.”

In addition to Uber and Lyft, independent contractors are increasingly popping up in home-based telemarketing work, online personal assistant companies and other businesses that allow workers to work as much or as little as they like, and on their own schedules—essentially, be their own bosses.

Workers of these companies are technically independent contractors, not full-time or part-time, regardless of how much they work.  Employees are federally guaranteed a minimum wage, overtime pay and unemployment benefits, whereas independent contractors have none of those guarantees. But legally, these independent contractors also don’t qualify as being in business for themselves as a business owner would, because they don’t have to invest in their livelihood in the same way as someone who owned a company.

Applying existing employment law to independent contractors is becoming increasingly becoming a sort of legal square-peg-round-hole situation, Dunning said.

“The courts and agencies are struggling with these folks. Who are they? Which of the round holes do they fit in?” she said. “People can be in business for themselves in unprecedented ways.”

Issues surrounding insurance on vehicles used for contracted driving and other considerations that are filling courts in other states will also likely come up, Dunning said, if not in this Legislative session, then in the near future.

As Utah’s tech corridor enjoys explosive growth, the question of employee mobility becomes increasingly important, said Kate Bradshaw, director of government affairs at Holland & Hart. HB88, already introduced by Rep. Brian Green, a Republican from Pleasant Grove, would amend the statue concerning non-compete agreements. The bill proposes requiring employers to offer existing employees new “consideration”—i.e. a raise or a promotion—to sign a non-compete agreement; continued employment would not count as such consideration. The bill would also presume the non-compete agreement was made in bad faith by the employer if the employee is fired within the next year without a good reason, whereas now bad faith, while still illegal under current law, is not presumed if an employee is terminated within any specific time frame.

The bill, what situations may have spurred Green’s backing of it and its potential impact on Utah employment law, are interesting, but the bill likely has a long way to go before it has a shot at becoming law, Bradshaw said. “There are a lot of concerns about this bill,” he said.

Bradshaw also noted two bills focused on medical marijuana—one sponsored by Sen. Mark Madsen, a Republican from Saratoga Springs, and the other by Sen. Evan Vickers and Rep. Brad Daw, Republicans from Beaver and Orem, respectively— would likely compete for Legislative attention and support.