PA Supreme Court Rules on Uber Driver’s Demand for Unemployment Benefits in Lowman v. Unemployment Compensation Board of Review

On July 24, 2020, the Supreme Court of Pennsylvania decided a matter of first impression: whether an otherwise eligible claimant seeking unemployment benefits is “self-employed” and therefore ineligible for those benefits while working as an Uber driver. The Court’s opinion analyzed the appropriate test for determining self-employment under the Pennsylvania Unemployment Compensation Law (“Act”)[1] and carefully evaluated the “control and direction” Uber allegedly exerts over Uber drivers.

The Supreme Court held that § 4(I)(2)(B) of the Act, 43 P.S. § 753(I)(2)(B), contains the appropriate test and determined that the claimant was not self-employed per the meaning of the Act. The 5-2 decision sets the stage for app-based gig workers to seek unemployment benefits, and can be viewed as a part of a larger movement to secure employment-related protections such as minimum wage, unemployment insurance, and overtime pay for workers in the gig economy.

Notably, § 753(I)(2)(B) contains a presumption of employment, which remains until it can be shown that the individual in question is not subject to control and is customarily engaged in an independently established trade, occupation, profession or business. The Court examined these factors and the claimant’s relationship with Uber to determine whether the claimant was self-employed. Since the issue is one of statutory interpretation, the Court noted its review of the factors is non-deferential and re-affirmed that a determination regarding self-employment is a question of law to be determined on the unique set of facts of each case.

This decision shows that the courts are beginning to recognize the importance of this nuanced issue. It is unclear how the Court’s ruling in this case will affect vicarious liability and insurance coverage matters. The Court’s decision is one of statutory interpretation – it did not make a finding on the common-law master-servant test used to determine vicarious liability for actions of a driver.

A full analysis and discussion of this new opinion can be found here.