Is UFCW’s Mysterious “Agreement” With Uber Lawful?

Written by David Doorey, York University

News dropped this morning of a mysterious “agreement” reached between Uber Canada and the UFCW. I say “mysterious”  because as far as I can tell the agreement has not been made public.  Hopefully the agreement will soon be posted somewhere. You have to assume that it will come out eventually, so there is no good reason to keep it secret.  The UFCW has provided some detail on its website.

Here’s what we know. The two parties have “hammered out a historic national agreement” that provides a right of some sort for UFCW “to provide representation if requested by drivers facing account deactivation or other account dispute issues” including representation in the arbitration proceeding already found in Uber’s standard form contract.  Keep in mind that the Ontario Court of Appeal has already ruled in Heller v. Uber that any attempt to block an Uber driver from filing a complaint with the OLRB alleging breach of the Employment Standards Act and instead forcing employees to a “third-party dispute resolution” constitutes an unlawful contracting out of the ESA.  Therefore, I assume (hope!) that the UFCW has not entered into an agreement that legitimizes forced arbitration in regards to statutory claims.

Also, it is worth noting that Uber’s agreement to accept a union as the representative of its drivers in disciplinary and dismissal litigation suggests it is basically giving up on the argument that it doesn’t employ the drivers.  The fact that there is essentially a grievance arbitration system in place in which drivers are represented by their union is more strong evidence that the drivers are not true independent entrepreneurs, which is the ridiculous position that Uber takes in litigation.

Under the agreement, a driver can choose to have UFCW represent them in the proceeding free of charge.  This doesn’t seem like a very economical model for UFCW, so one has to assume that the goal is eventually to recoup these costs somehow–future union dues?–unless Uber actually gave UFCW money to help offset the cost of potentially representing thousands of workers in litigation.  If Uber did give money to UFCW, then we would need to be concerned about laws that prohibit employers from providing financial support to unions (see e.g. s. 70 of the OLRA).  This is why it would be good to see the actual terms of the agreement.

UFCW has also agreed to “press provincial government to enact reforms that provide new benefits and preserve worker choice on when, where, and if to work“.  Interesting. This sounds on its face like UFCW is agreeing to help Uber push its controversial “Flexible Work+” model that has been attacked vigorously by labour activists.  However, in earlier announcements, the UFCW was very critical of Uber and this approach.  Here’s Paul Meinema, President of UFCW earlier this year:

“Uber is dodging the fact that they are the employer and its workers are employees who are entitled to the full protection and rights under current labour laws.”

Again, since we haven’t seen the agreement, we don’t know what UFCW has agreed to regarding this promise to help press provincial governments to reform the law.  Disclosing the agreement would go a long way to removing the reasonable suspicions that many will have about the UFCW’s motives and intentions.

What is a Neutrality/Representation Agreement?

A number of interesting legal questions arise from these sorts of agreements.  The agreement is a form of “neutrality agreement” in the broad sense of the word, which is an agreement between an employer and a union that provides certain benefits or rights to a union in exchange for some consideration to the employer.  This is not a classic neutrality agreement in the sense that it does not explicitly set rules regarding union organizing and recognition, however it does fit the general mold of a private representation agreement.

A neutrality/representation agreement is not a collective agreement since the union has not been legally recognized as the exclusive bargaining agent for the employees.  Rather, a neutrality agreement predates union certification or voluntary recognition and determines certain “rules of the game” that will govern the parties outside of formal collective bargaining and prior to any formal union certification or voluntary recognition agreement.

I have written about neutrality agreements in the past.  Some 15 years ago, I argued in a paper that neutrality agreements would become more common in Canada as private sector union density continued its decline (see here: “Neutrality Agreements: Bargaining for Representation Rights in the Shadow of the State“).  Here is a shorter Q&A style summary of the legal issues that can arise under Canadian law in relation to neutrality agreements that I wrote around the time that Unifor entered into its controversial neutrality agreement (Framework for Fairness) with Magna. In those papers, I go into much more detail about the legal issues related to these sorts of agreements. Here I will just flag a few potential issues.  Big asterisk here that I have not seen the agreement, so we are dealing with hypotheticals.

Potential Legal Issues That Arise Under Representation/Neutrality Agreements

Firstly, in Canada, there is nothing unlawful per se about an employer entering into an agreement with a union outside of labour relations legislation that provides the union with certain access and rights to represent employees.  Labour laws provide that a “collective agreement” entered into by a union that had the support of the employer is not a collective agreement (see s. 53 of the OLRA).  More on this law later, but for now note that the Uber/UFCW agreement does not purport to be a “collective agreement”.

Moreover, there is nothing unlawful per se about an employer agreeing that an employee may have representation by a third-party representative in a work-related dispute if the employee wants that.  For example, an employer could agree to cooperate with a members-only form of union representation, agreeing to permit employees who are members of a union to have representation by that union in a proceeding of some sort. I don’t see any reason why the law should prohibit this sort of cooperation.

Nor is there anything legally problematic about UFCW agreeing to cooperate with an employer in pushing a certain legislative agenda.  If Uber and UFCW agree on what the law should look like, then they can jointly tell the government what they think.

What About UBER Giving the UFCW Certain Benefits Not Available to Other Unions?

Things get more complicated when we add other unions to the story, however.  UFCW is not the only union that represents or is seeking to represent Uber drivers.  For example, I think that the Canadian Union of Postal Workers and its unit Gig Workers United have also been trying to organize Uber drivers and couriers.  This adds a wrinkle because Canadian labour laws prohibit employers from participating in or interfering in the selection and administration of a union or from giving preference to a particular union (see e.g. section 70 of the OLRA).  This law is there to ensure that an employer does not get involved in urging its employees to select one union over another. It’s none of the employer’s business which union employees select.

Therefore, the question arises whether it is unlawful for Uber to enter into an agreement with UFCW that gives the UFCW special rights that are not equally available to CUPW (or any other union that is active now or in the future trying to represent Uber drivers)? What if an Uber driver is already a member of CUPW? Can Uber and UFCW really enter into a side agreement that provides that the driver can only be represented by UFCW and not CUPW in a rights dispute?

I would think that would be a problematic position for Uber and UFCW to take, and Uber would be smart to let a driver be represented by any representative it wants, including by another union, if that is what the driver requests.  Any attempt by Uber to give special preference to UFCW in representational rights will be looked at with great suspicion by Canadian labour boards I’d think.

The situation would be more concerning if it turns out that Uber has agreed to provide the UFCW with contact information for drivers, or has agreed to distribute an announcement of the agreement to Uber drivers over the App.  Those actions would amount to active support for UFCW in its effort to represent employees.

UPDATE:  Uber has in fact sent out a communication to drivers sharing “the good news” that they can be represented by UFCW.

In that case, CUPW or any other union that is organizing Uber drivers in Canada might want to demand that Uber also distribute an announcement promoting that union as well.  Uber is in dangerous unfair labour practice territory if it claims that it will only communicate with drivers about the UFCW and no other unions.  Uber would perhaps argue that it would provide other unions with the same benefits if they agree to the same consideration provided by UFCW, such as support for Uber’s legislative agenda.  But that could get messy. In the U.S., case law finds that the beneficial terms of a neutrality agreement must be made available to other unions that are also seeking to represent employees. Otherwise, the employer would be providing unlawful support to one union over other unions.

Another issue concerns what would happen if the UFCW used this access deal with Uber to build an organizing campaign and then eventually files an application for certification.  There would certainly be a strong argument that Uber had given “support” to the UFCW in its organizing campaign. There is OLRB case law finding that it is not unlawful per se for an employer to provide limited assistance to a union seeking to organize workers provided that the union is arms-length and independent of the employer and the assistance does not prevent employees from making an informed choice about whether to support the union. I have not done a cross-country tour of how other labour boards deal with the issue of employer support of the sort that the Uber/UFCW agreement might provide. However, a union that has had the “support” of an employer may not be certified by a labour board and any collective agreement that follows upon Uber’s assistance to the UFCW would be susceptible to a challenge under legislative rules (mentioned above) that provide that an agreement is “not a collective agreement” if the employer provided support to the union.

Therefore, insofar as UFCW hopes to one day have a formal collective bargaining relationship with Uber, this agreement creates some legal risks that Uber’s cooperation could void any future attempt to create a legally binding collective agreement.  However, it is also possible that a labour board might take a more purposive approach and permit the collective agreement to stand provided that a majority of employees voted for the UFCW in a certification vote and for the collective agreement in a ratification vote.  In other words, the two tests of employee support might be permitted to “cure” the employer’s limited assistance to the UFCW.  Again though, the situation is potentially more complicated if another union is also seeking to represent Uber employees.

Another intriguing question is whether UFCW has opened itself up to “duty of fair representation” complaints if its’ representation of a driver in a dispute runs off the rails.  Labour legislation requires unions to fairly represent any employee that it “is entitled to represent”. That language normally means entitled to represent because the union has been certified or voluntarily recognized as the employees’ exclusive representative.  Could the DFR apply to a union that is not certified but has entered into a “representative agreement” with the employer and the employee? If the statutory DFR does not apply, then does a driver have any other legal means to challenge the negligent handling of a dispute by a representative assigned by UFCW?  I will just leave that question hanging as something to think about.

Okay, that’s all I will say about this agreement for now. We will keep an eye on this development moving forward.  It’s certainly possible that this agreement between  UFCW and Uber could be helpful to drivers, but in the absence of more details, it is difficult to fully assess what is going on. More transparency about the details would help move the conversation along.

Are there other legal issues that arise that I have not discussed?

D. Doorey, “Is UFCW’s Mysterious Agreement with Uber Lawful?” Law of Work (January 27, 2022): https://lawofwork.ca/uberufcwdeal/