In addition, the FTC should use its statutory powers to rein in mistreatment of workers in the so-called “gig economy” and other “fissured” workplaces, where employers disclaim employment responsibilities for workers they control. Since the late 1970s, corporations have exploited revised judicial interpretations of the Sherman Antitrust Act to replace formal employment relationships with restrictive contracts known as “vertical restraints” that they impose on nominally “independent” contractors.
These contracts, which dictate matters such as what prices workers and proprietors can charge, what customers they can serve, what products and services they must offer, and more, allow companies like Subway, Uber, and Amazon to gain employment-like control over sandwich shop workers, taxi drivers, and delivery workers—while denying those workers their rights as employees, including minimum wages, overtime, and the freedom to unionize.
While the FTC has issued a policy statement on the app-based gig economy, which nodded at the issue of misclassification and fissuring through restrictive contracts, it largely declined to directly regulate those contracts. Instead, the agency emphasized greater disclosure of costs, pay, and algorithmic decision-making processes. But workers who are more informed about the terms of their exploitation are still exploited. Moreover, the extent of fissured workplaces goes far beyond the app-based gig economy. Although the FTC in March put out a request for information to learn about the use of restrictive contracts to control and abuse independent workers and business owners in other sectors, like the franchising industry, it has thus far neither initiated rulemakings nor brought enforcement actions.