Apployment

I. Introduction

The pandemic accelerated the shift to online platforms for work and business transactions. This digitization of work and commerce continues to change how workers interact with their firms, third parties, and other workers.

The innovations that facilitated remote work during the pandemic no doubt were good for many of the workers fortunate enough to have access to online options. Among other things, they allowed millions of enterprises to continue operating while protecting worker health and sometimes facilitating family care without leave. Even in the pandemic’s downslope, workers can take advantage of these developments and press for flexibility that was previously unavailable. Many see these arrangements as a permanent and potentially worker-friendly feature of the labor services landscape.^[1]

But over the longer term, commerce through web-connected business models also has harmed workers. Although such technological innovations raise a range of workplace-related concerns,^[2] a key one is that they can expand and perfect what David Weil has labeled “fissuring”^[3] and I have called “disaggregation.”^[4] Firms can now utilize web-based platforms and other technology to alter how they engage with workers and third parties so that the relationship between firm and worker looks less like traditional employment—i.e., more remote or indirect, and with arguably less-exacting firm control—and more like something else.

This has given rise to “gig work” and the “gig economy,”^[5] and to widespread criticism because many gig economy firms seek to classify workers engaged through their platforms as independent contractors rather than employees. Such nonemployee status harms workers by, among other things, excluding them from the protections and benefits of labor and employment law.^[6] The battles about how to treat drivers for Uber and other rideshare companies are the most prominent examples. The fact that these companies have spent hundreds of millions of dollars to beat back legal reforms in the United States, and elsewhere, that would treat their drivers as employees demonstrates that avoidance of employment status is a feature of their business strategy—not a bug.^[7]

Yet the impact of this phenomenon extends beyond—way beyond—Uber. Coverage limitations on employment law invite disaggregation (and its corresponding harms to worker welfare) across industries.^[8] That is because the outsourcing of work to avoid employment does more than shift legal responsibility for work-law mandates. It either eliminates worker employment status altogether or pushes employment to smaller, third-party firms that are, for a host of reasons, less socially and legally accountable; therefore, they are likely to compensate their workers less and violate their rights more.^[9] This allows the end-user firm to sidestep noncompliance costs while benefitting from labor at a price discounted by the lack of legal enforcement and lower compensation.^[10] In light of these incentives, enterprises throughout the economy are becoming more disaggregated, and this phenomenon now sweeps beyond traditionally outsourced tasks to new categories of work, including some previously considered core functions.^[11] Web-based platforms and other innovations will make this strategy easier and more effective by creating new ways for firms to ensure quality and efficiency without exercising the control ordinarily required to be held accountable as an employer or joint employer.^[12]

This Article predicts the widespread emergence of visible, high-value firms that, unlike Uber, will operate without anything approaching employer-like control over what formerly would have been considered essential functions in producing their goods and services. This is a model that avoids employment in favor of what I call “apployment.” Such apployment structures have already appeared in the broader sharing economy, and this Article argues they can and will spread across other sectors.

The tech industry and other commentators have prophesized near-employeeless firms (resulting from disaggregation, not automation).^[13] This is unsurprising because familiar examples of such large, employee-light enterprises already exist. Instead of Uber, think Airbnb: an online platform that connects customers with short-term rentals offered by independent hosts without the exercise of employer-like control over the hosts or the workers who manage the rentals, provide maintenance, or clean the units. The business is designed to promote quality, value, consistency, and customer satisfaction in other ways—that is, without exercising employer-like control over the manner and means of the underlying work.^[14] In this scenario—at least under current law—unlike rideshare drivers, none of these workers have a realistic chance of holding Airbnb accountable for workplace violations to which they might be subjected, despite the fact that Airbnb is the brand that sits atop and reaps enormous benefits from this enterprise.^[15]

This also distinguishes Airbnb from hotels and other traditional players in the hospitality business and gives Airbnb and similar companies a competitive advantage beyond how much customers might value home or apartment rentals over hotel rooms. While short-term rentals certainly existed prior to Airbnb, as did forms of disaggregation in the hospitality industry, Airbnb and other platform-based models now are able to meet customer expectations at a scale previously unknown and largely without employing workers or bearing the corresponding costs. Indeed, with 6,000 employees worldwide, Airbnb’s market capitalization is far greater than that of the world’s largest hotel chain, Marriott International, which—at the time of this publication—employs approximately 120,000 workers.^[16] One way hotel chains are responding to these market pressures is by engaging in further disaggregation through more franchising7F^[17] and, sure enough, launching their own short-term home rental services.^[18]

These incentives ensure that apployment strategies will be replicated elsewhere. From a labor cost and risk avoidance perspective, the ideal structure for any business is one in which the firm profits from the delivery of goods and services without even nominally employing any of the workers who contribute labor to the enterprise. Indeed, this is an often unspoken pillar of “asset-light” business strategies that have grown in prominence since the pandemic began.^[19] Thus, we should anticipate a world in which firms deriving their value from brand recognition, reputation, networking, and coordination will attempt to use web applications and other emergent technologies to remove themselves from controlling the production and distribution of underlying goods and services. This leaves these functions to smaller and less accountable firms or individuals. In other words, apployment will accelerate disaggregation and significantly widen its harmful effects.

Here, I offer three examples of how enterprise structures can achieve apployment. The first two—in the residential construction and athletic attire sectors—are in already substantially fissured industries, so further technology-facilitated disaggregation is easy to foresee. But to demonstrate the expansive potential reach of this model, I add a third that might be largely unexpected: the provision of legal education. In all three scenarios, the framing will rebut arguments that the end-user firm is somehow an employer or joint employer. This Article will show how Uber and other rideshare and delivery services can, and likely will, migrate in this direction as well. Ultimately, the Article argues that current law is wholly unequipped to respond to the proliferation of such structures and, therefore, a fundamental rethinking of how to protect worker welfare is necessary.

Part II of this Article surveys the current work-law landscape and discusses why, despite employment law’s other shortcomings, workers falling outside of the scope of employment are harmed. Part III discusses both traditional disaggregation strategies and the rise of apployment structures. In so doing, it offers examples of how firms operating in very different industries can achieve apployment. Part IV then outlines the current law on the scope of employment (both “employee” and “employer/joint employer”) and confronts the vexing question of how labor and employment law might respond to the apployment phenomenon. Building on the proposals of several other scholars, it offers some initial insights into the types of legal reforms necessary to further the policy objectives of current employment and labor laws, leaving to later scholarship fuller development of these strategies. Ultimately, safeguarding worker welfare will require dramatic change, including untethering work-law protections and responsibilities from their current control-based limitations.

II. The Stakes: Why Firms Seek to Avoid “Employing” Workers

Viewed from 30,000 feet, protections for American workers have grown tremendously over the last century. This began with Progressive Era reforms such as workers’ compensation, and since then have been expanded by New Deal labor and wage protections, antidiscrimination laws, employee benefit and safety regulations, and other common-law and statutory erosions of the at-will doctrine.^[20] Although there has been some retrenchment in recent years, overall the trend has continued into this century with the adoption of new or enhanced whistleblower, privacy, leave, wage, and other protections.^[21]

Yet closer to the ground, there is much to concern those interested in meaningful protection of employee rights and welfare. Scholars and employee advocates bemoan the substantive shortcomings in many of the aforementioned regimes, as well as the doctrinal, procedural, administrative, and socio-economic barriers to effective enforcement.^[22] And despite the good faith efforts of some states and federal administrations, the erosion of regulatory resources, the continued decline in private-sector unionism, judicial hostility in some quarters, and market forces have made matters worse.^[23]

As troubling as these inadequacies are, workers laboring outside of the practical reach of labor and employment law have virtually no protection at all, and they do not enjoy the other advantages of traditional employment, including relative stability, the potential for wage growth, access to employer-provided benefits not mandated by law, and corresponding wealth accumulation.^[24] Once exceptional, such workers are now everywhere, and their ranks are swelling. Gone are the days in which typical American workers could expect to be employed by the visible—and hence stable, and legally and socially accountable—end-user or lead firm for whom they performed services.^[25] Lower-waged workers and an ever-expanding number of others provide services for such firms while classified as independent contractors, or through third-party labor suppliers or other contracted arrangements. Thus, the number of large, integrated enterprises and corresponding employment relationships assumed in the structure of both traditional and recent labor and employment laws is shrinking.^[26]

Various forces, including globalization, competition, specialization, and technological innovation, have contributed to this transformation.^[27] But this change is not simply the result of exogenous disruptions to which labor and employment law have failed to respond; rather, the costs imposed by the law of the workplace that give rise to associated cost-reduction incentives have played a central role in firms’ fragmenting their enterprises.^[28] The hundreds of millions of dollars Uber and other rideshare companies are spending to avoid classifying their drivers as employees is but one prominent illustration of these stakes.

Why are the stakes so high? As an initial matter, the vast majority of federal and state work-law mandates impose obligations only on certain “employers” for certain “employees.”^[29] Thus, by avoiding employment, firms escape basic wage and hour obligations; eliminate the threat of unionization; evade antidiscrimination regulation, workers’ compensation, tax, benefit, and accommodation mandates; and reduce other employer-related liability risks and compliance costs.^[30] At the same time, beyond the benefits of control (which are discussed below), firms often have few countervailing incentives to engage workers as their employees.^[31]

But there is more. Outsourcing work does not simply shift labor costs to others; if that were so, disaggregation would not dramatically reduce costs for end-user firms. Rather, these costs can be reduced or avoided by shifting production to smaller firms or individuals.^[32]

One reason is that larger firms compensate workers better, on average, than smaller firms. Likewise, firms compensate their employees more, on average, than independent contractors.^[33] In addition, fissured work often shifts to those operating beyond the practical reach of our regulatory regime, not only across international borders but also domestically through fragmentation that takes advantage of the inapplicability and underenforcement of labor and employment mandates to smaller firms and individual workers.^[34] Avoidance can often be achieved through engaging workers as independent contractors or externalizing work through one or more layers of third-party providers who are either exempted from employment-law mandates or far less likely to be subject to public or private enforcement (again, because they tend to be smaller, less visible, and are more likely to have shorter life-spans and be undercapitalized).^[35] The disaggregation itself incentivizes third-party providers to violate labor and employment standards—both because of pressure from the more powerful end-user firms to control costs and competition between providers.^[36] This is why, as others have demonstrated, outsourcing allows an end-user firm to avoid costs while benefitting from labor discounted by lower wages, the unlikelihood of enforcement, and incentives to cut regulatory corners.^[37] These effects are then multiplied by second-level outsourcing by companies to whom the end-firm outsourced, and again to the next layer of firms, and so on.^[38] For this reason, it is disaggregation all the way down.

Such fissuring reduces the costs and risks of noncompliance with work-law mandates in two other ways. The first is the burden of establishing employee or employer/joint employer status, which either falls formally on the worker or enforcement agency seeking protection or relief, or, if not, compels them to present evidence in response to status defenses. As detailed in Part IV below, demonstrating employment status ordinarily requires establishing entity control over the details or manner and means of the work. This is true for demonstrating both that a worker is an “employee” rather than an independent contractor and that an entity is accountable to the worker as an “employer” or “joint employer.”

There are some limited but important exceptions to this control-centered approach, among them the ABC test for determining employee status, which, as discussed below, has been adopted in some states.^[39] But, in most circumstances, control remains the touchstone, and employees seeking protection usually bear a significant burden proving it.^[40] Indeed, because establishing control is heavily fact intensive, the cost of enforcement is increased whenever the firm has a colorable argument that the worker is an independent contractor or that the firm is not the employer or joint employer.^[41] In other words, the existence of an employment relationship is in effect another element or hurdle in a work-law claim, and one that can deter enforcement because it can be expensive to litigate.

Second, in triangular or multi-layered enterprise structures, the avoidance of employment status creates an affirmative incentive for end-user firms to eschew engaging in the type of oversight or supervision that might indicate employer-like control. Thus, the visible and well-capitalized firms most likely to possess the self-regulatory resources and expertise to reduce or correct work-law violations often steer clear of doing so in the disaggregated portions of their enterprise, increasing the likelihood of such violations.

How and what firms outsource or attempt to outsource has changed over time. Incentives to disaggregate have existed for a long time. Supply chains in certain industries were a concern even at the time of the New Deal.^[42] More recently, because control over tasks performed by lower-waged workers is often unnecessary (i.e., the transaction costs of assuring such tasks meet timeliness and quality requirements are low^[43]), intervening generations of outsourcing include jettisoning work requiring fewer skills that are ancillary to a firm’s core functions. These include component part manufacturing, janitorial work, maintenance and cleaning functions, and delivery services.^[44] Indeed, fewer high-profile, high-value firms employ workers performing these kinds of tasks.^[45] This form of outsourcing has expanded to more skilled jobs on the periphery of companies’ core business. For some time now, publishing companies have contracted out copy-editing and graphic design work; law firms have shed document management and review, and many businesses have brought in vendors to provide human resources, record keeping, IT, data management, and other forms of administrative infrastructure.^[46]

Yet, disaggregation strategies extend beyond such non-core functions. Traditionally, firms would strictly control work on their primary products (finished goods and principal services) to ensure quality and efficiency, as well as to protect trade secrets, confidential information, reputation, good will, and other interests. But through a mix of approaches and technological innovations, many firms now seek to outsource aspects of core functions, sweeping in both skilled and less-skilled work in certain sectors.^[47] This is manifest in the gig economy: Uber and other rideshare companies attempt to outsource their driving. Yet this phenomenon is present elsewhere too: delivery companies also outsource their driving; hotel and restaurant chains outsource more and more of their hotels and restaurants through franchising; recycling centers outsource sorting the recyclables; airlines outsource their regional routes; and name-brand manufacturers outsource their manufacturing and distribution.^[48]

In light of all of this, fissuring strategies have continued to multiply, resulting in enterprises becoming further disaggregated. Over the longer term, this means that many of the most stable, visible, socially accountable, and otherwise easily regulated employers are employing a shrinking percentage of their workforce.^[49] Correspondingly, as is well-documented in the literature, work-law violations have become widespread in recent years, and other matters affecting worker welfare—including job stability and employer-provided benefits—have declined.^[50] This overall trend has had a disparate impact on historically underrepresented and vulnerable groups,^[51] contributed to growing inequality,^[52] and externalized costs once born by employers to society at large.^[53]

Circumstances may have taken a turn for the better for certain workers since the late stages of the pandemic, given the economic growth and corresponding demand for labor. Yet there is no guarantee such improvements for workers will persist considering market fluctuations and longer-term trends. The pandemic has accelerated the digitization of work and commerce,^[54] which, as discussed in the next Part, will smooth the path to further disaggregation.

III. The Rise of Apployment and the Fall of Work Law

Considering the foregoing stakes and the limits of employment status, enterprise disaggregation will continue. However, I predict many visible, high-value firms will utilize the web and other innovations to push this strategy to the extreme by utilizing app-based or comparable structures to allow them to operate without any employer-like control over what formerly would have been considered core functions. Put another way, this intersection of incentives and available technology means that, when it comes to fissuring, you ain’t seen nothing yet.

A generation of “employeeless employers” is already prominent in the sharing economy. Again, I am not talking about Uber and other rideshare companies. As I will take up again in Part IV, these are models in which firms exercise enough control over their workers (in this case drivers) that they can be (and currently are being) swept within the definition of employment with limited extensions of traditional control-based doctrines.^[55] When applicable, such workers are also employees—rather than independent contractors—under the ABC and similar tests.^[56] Closer to the mark might be entities like TaskRabbit, Handy, Thumbtack, and Mechanical Turk, which are well-known examples of online platforms that connect individual workers with potential customers without the exercise of the financial and other aspects of employer-like control wielded by rideshare companies.^[57] Still, given the first-person interface between these platform companies and the workers, one can imagine lawmakers modestly extending employer status so as to sweep them in, perhaps under an approach that presumes employment, such as the ABC test or otherwise.^[58]

Rather, I am referring to a “safer” course for avoiding work-law accountability: structuring the enterprise with multiple components and layers of independent entities, ownership, and workers who are not subject to anything approaching what we think of as employer-like control. Again, Airbnb is one example. Airbnb deploys many techniques for influencing underlying hosts, including a mix of algorithms, guidance, the ability to remove hosts, and other mechanisms for deterring brand-harming activities.^[59] But, it does not exercise traditional employer-like control of underlying rental property owners’ operations, or the details or means of the work performed by those managing, maintaining, and cleaning the properties.^[60] Neither do its direct competitors such as Vrbo, or other more diversified travel industry platforms that match customers to providers, such as Booking.com and Expedia.com.^[61] And similar platform enterprises have emerged elsewhere, such as Turo (car rentals) and Neighbor.com (storage spaces).^[62]

Parallel phenomena also can be seen in various forms in key internet enterprises. Indeed, consumers are habituated to this structure because this type of platform-hosted access to particular businesses or services reflects the way all of us already interact and interface on the web. At the highest level, consider the business model for—and how and why consumers use—mobile devices. Apple and Google (Alphabet) provide the platform and network, and they regulate aspects of the applications sold for use or otherwise hosted on their devices.^[63] However, they exercise virtually no control of the underlying work performed by the vast array of other companies (large and small) who develop and do business through these applications. In this context, the product or service is produced by work well outside of the nodal firm’s direct control; they “merely” provide the customer connection or hosting network. As discussed in the next Part, no extension of current doctrine on the scope of employment or joint employment would reach from the workers performing services for the underlying providers to these giants,^[64] despite the fact that these apps are at the very core of Apple’s and Google’s mobile device business model and produce tens of billions of dollars in revenue for them.^[65] Apple and Google have effectively avoided employing the vast majority of the workers who contribute content—mobile apps—central to the utility, brand, and value of their platforms. Apployment abounds.

Now, one might find it hard to imagine holding Airbnb or Booking.com accountable as an employer or joint employer for work-law violations committed by the hosts/property owners who rent units through them. And it is even more unfathomable to extend such accountability to Apple or Google for companies that provide apps through their platforms. But, in one sense, this is my point: when other companies in other industries can replicate a similar platform-based structure or develop other structures that operate in a similar fashion, they too will be beyond our current conception of the reach of employment obligations for any underlying work. The firm-level incentives described above, combined with technological and organizational advances that offer efficient alternatives to exercising control, assure that this model will spread beyond what we currently think of as technology or internet companies.

Thus, we should anticipate and prepare for a world in which more firms that derive value from brand recognition, reputation, networking, and coordination will attempt to remove themselves entirely from traditionally controlling the production and distribution of underlying goods and services. These functions–and therefore more and more workers– will be left to smaller, less visible, and less accountable firms and proprietors.^[66] They will, in other words, remake themselves to operate more like Airbnb, Booking.com, and other web-based companies.

The best way to demonstrate what this world will look like is through examples. Here, this Article offers three hypothetical enterprises in different industries structured to achieve apployment. The first two are in already substantially disaggregated industries; thus, technology-facilitated disaggregation is easy to foresee. The third is in a field that has yet to experience much disaggregation: the provision of legal education. In all three scenarios, the framing is a rebuttal to arguments that the end-user firm is somehow an employer or joint employer.

Turning to the first example, consider how a high-value, nationally recognized firm in the residential construction industry—Design Right Homes, Inc. (DRH)—might organize its enterprise to achieve apployment. DRH might respond to claims that it employs workers in home construction and development as follows:

DRH is not a home builder, construction company, developer, or general contractor. We do not own or subdivide land, build homes, or hire contractors to build them for us. Rather, we are fee-based residential home consultants. When families looking to build a home hire our firm, we offer them, for a fee, exclusive, top-to-bottom assistance in the selection of property sites and home models, and in their selection and coordination of general and subcontracting entities from our exclusive online portfolio of certified builders and craftspeople. We exercise no control over the design, building, or contracting processes. Indeed, we ensure quality and timeliness not by overseeing any of the construction work itself, but by collecting customer ratings and feedback and contracting with independent inspecting firms to evaluate finished product quality and customer service. These metrics allow us to select the best providers to include in our exclusive online portfolio and then condition continued inclusion (on an at-will basis) on the satisfaction of our clientele. DRH receives a fixed percentage-based commission for providing services purchased by our customers. Information on local licensing requirements, resources such as inspectors and local real estate attorneys, and details on prior clients’ designs, experiences, and satisfaction are also provided through our portal. Our profits are derived from our fees and commissions, which depend on the strength of our brand and the underlying competition among builders and contractors who want to remain in our portfolio.

If DRH’s description is accurate, it would not employ workers engaged by underlying entities in the subdividing of property or in the design, construction, or inspection of the homes. Therefore, it would be free from legal liability for all work-law mandates and violations occurring in these parts of the enterprise. At the same time, given the value of its brand (maintained by its ability to ensure quality without controlling the underlying work) and its ability to create competition within its supply chain, DRH can take a sizeable share of the revenue through fees and commissions. DRH’s “asset-light” structure allows it to operate efficiently in a competitive market, undercutting the price charged by competitors burdened by more traditional cost structures.^[67] Its competitors, therefore, will have powerful incentives to convert to apployment as well.

Next, imagine that Ekin Athletics, Inc. is a globally recognized brand in the athletic attire industry that has adopted a different kind of apployment strategy. Ekin might respond to claims that it employs manufacturing, design, distribution, delivery, retail, sales, and other workers in its enterprise as follows:

Ekin Athletics is not an athletic attire maker or seller. We do not manufacture, distribute, or sell athletic clothing, shoes, or other gear, nor do we have any control over manufacturing, delivery, or sales processes. We also do not design these products, nor do we set prices. Rather, we contract with independent firms to inspect athletic attire produced by others and utilize sophisticated survey and analytics techniques to track consumer preferences and satisfaction to determine which products meet our standards of quality, style, and appeal. We then select the best among many competing choices within each category or subcategory of attire to grant a license under our Ekin trademark. We ensure ongoing quality not by controlling design, production, or distribution work, but by building at-will clauses into our licensing agreements, which give us the flexibility to move immediately to another manufacturer or distributor if a current licensee does not live up to our high standards or customer expectations.^[68] Our marketing firms heavily advertise the Ekin brand across all media, but we make no sales and have no sales or distribution relationships with retailers. We simply maintain web-based dashboards with links to information on our licensed products and to the online and brick-and-mortar retailers who sell them. Given the strength of our brand, these retailers seek out and negotiate directly with the manufacturers and distributors of Ekin-licensed products, and, for a fee, advertise our products on their own. Our profits are derived exclusively from the fees we collect from licensees and retailers.

Similar to DRH, Ekin would employ no one in its supply chain—from design and manufacturing of the clothing, shoes, and other gear; to quality inspection, distribution, and shipping; to ultimate retail sales.^[69] Thus, Ekin too would be free from responsibility for any and all work-law mandates and violations and could demand a sizeable share of the revenue through its fees, given its ability to maintain and enhance the strength of its brand without employer-like control. Its competitors likewise would be pressed to follow suit because of Ekin’s cost advantages.

Shifting to a sector unaccustomed to disaggregation, this model can be adapted to the provision of educational services as well. Imagine a new venture serving the New York metropolitan area offering services to those seeking to become lawyers—Yankee Affordable Legal Instruction, Inc. (YALI). For purposes of this exercise, assume too that YALI has convinced the American Bar Association (ABA) and state regulators to allow it to operate, at least provisionally, without meeting typical accreditation standards, provided that its network delivers on its promise to provide access to flexible and affordable legal education while maintaining strong student outcomes. If an enforcement agency or private litigant argues that YALI is an employer of any of the workers within its educational enterprise, here is its response, which, because it is more novel than the other examples, requires more detail:

YALI is not a law school. It is a legal education services consolidator. YALI employs neither instructors nor traditional law school administrators; it teaches no clients (that is, no students) directly; and it has no law school building or other such physical plant. Our model is driven by educational client choice, data-backed independent oversight, and pedagogical science.

For a fee, clients gain access to YALI’s web-hosted stable of legal education services, which match or exceed the services provided by traditional law schools at a lower price. Through the portal provided in our app, clients choose from the services provided by independent vendors: curricular support, classes and instructors, career counseling, financial aid counseling, library and online research resources, experiential educational opportunities, journal and moot court opportunities, counseling services, and bar preparation resources. The YALI online dashboard provides the tools and applications clients will need to navigate their way through their legal education and links to all the service providers they may wish to select based on their educational needs, price, convenience, and student ratings and reviews. YALI does not control or compensate these providers, and each provider sets its own price. Each provider simply pays a small percentage of their revenue to YALI for their inclusion in the portal. The overall cost of this education is far lower than that of a traditional law school because of price competition among YALI’s providers, a la carte selection of services, and the absence of other direct and overhead costs.

Clients wanting curricular support or guidance can purchase the services of one of several independent legal education counseling companies. YALI does not control clients’ curricular choices—its website and the counseling companies provide them with information on course requirements for bar admission, subjects likely covered on the bar exam, prerequisites for other courses, and classes within self-created concentration areas.

With the foregoing guidance, clients choose classes through the website. They select the instructor of their choice from our portfolio of legal experts vetted by an independent educational consultant, based on price, location, and platform (in-person, online, or hybrid; synchronous or asynchronous). The instructors, or the independent company for which they work, set their own per-credit rates, and choose where and when to hold classes. Each instructor pays for the space, although YALI maintains a listing of recommended educational and other institutions that rent out educational facilities. Full and part-time clients (and particularly nontraditional clients) enjoy the flexibility—they almost always have more than one instructor to choose from at different price points and a choice of locations in the New York metro area. They also have access to detailed student evaluations. Each instructor pays a percentage of their gross per-credit revenue to YALI.

YALI does not supervise the classroom experience. It ensures quality principally through focusing on outcomes. It retains an independent vendor that collects and analyzes data on client outcomes, including attained skills and knowledge, bar subject proficiency, and survey feedback. Results of these analyses are available through the portal, and instructors who fail to meet expected outcomes lose eligibility to offer courses through YALI’s network. Another consultant offers training for new instructors on pedagogical best practices, as well as provides sample course objectives, curricula, and formative and summative assessment tools. An independent agency conducts a yearly audit of courses and course offerings. Motivated by these expectations, many instructors adopt innovative teaching and assessment techniques consistent with the pedagogical literature.

Clients also select among third-party vendors licensed by YALI to provide the following services at a discount: professional legal recruiters providing job and career assistance, financial aid experts, local university libraries, online legal databases, counseling services, and bar preparation services. YALI retains an independently owned experiential learning consultant that establishes and oversees externships and pro bono and other experiential learning opportunities with local nonprofits and government agencies, and contracts with a legal publisher to host and publish legal journals. YALI also retains an auditing and reporting firm that ensures its outcomes and educational resources satisfy applicable regulatory standards. Upon receiving all the necessary credits to sit for the bar, YALI clients receive a certification of completion, as well as individual certifications of satisfactory completion by each of the underlying providers of educational content.

In each of these scenarios (i.e., DRH, Ekin, and YALI), the visible, branded end-user firm has removed itself entirely from employing the workers who directly produce and provide the goods or services to its customers. This is achieved by emulating the structures of existing platform companies and utilizing other technologies and techniques to ensure quality/desired outcomes and customer satisfaction. In so doing, these end-user firms, like other platform-based enterprises, can reap the benefits of disaggregation and, ultimately, undercut competitors clinging to more traditional structures.

These examples also provide insights into how extant gig economy firms, such as ridesharing companies might, through further technological innovations, restructure their enterprises to avoid the risk of being deemed employers. A company with a strong brand, like Uber or Lyft, can forgo direct interaction with and control of drivers by continuing to interface directly with customers but outsourcing driving to local or regional rideshare companies. It could, for example, allow a customer who requests a ride or delivery via its app to view (almost instantaneously) multiple driver options from multiple, competing rideshare companies, allowing the customer to choose the driver based on price, company, car, customer reviews, and timing and proximity considerations. The branded end-user company would exercise no control over the rideshare company or the driver; it simply would provide the template containing the links or buttons and would transfer the agreed-upon customer payment while withholding a fee or a percentage of the transaction. Utilizing this structure, it would effectively have converted its model to something akin to Airbnb’s—eliminating employment relationships with drivers (even under broader definitions) by adding an intervening layer or layers of third-party entities, charging a fee rather than setting prices, and jettisoning other aspects of control over the work itself to the smaller independent entities.

Although I predict that many more enterprises will migrate in this direction, I do not want to overstate how quickly or broadly apployment will sweep across the landscape. Large enterprises in sectors that depend on the presence of workers at physical locations continue to employ many thousands of workers. For example, big box brick-and-mortar retailers—including Walmart, Kroger, Home Depot, and Target—remain among the largest private sector employers in the world.^[70] However, even they engage in their own form of employment law-related cost avoidance in the United States by employing vast numbers of their workers part-time and at high turnover rates, thereby reducing benefit obligations, etc., and by utilizing traditional outsourcing of some tasks such as cleaning, deliveries, etc.^[71] Of course, whether brick-and-mortar retailers will survive the rise of online retail and deliveries remains to be seen.

Moreover, various constraints will limit or slow this transition to apployment elsewhere. One is simply the stickiness of corporate structures and practices. While it is often easy for entities to outsource various noncore aspects of their operations, it may be more difficult, as a practical matter, to spin off nearly all functions, even if technological and other means are available. Price competition ultimately might demand this, but it will not be immediate or complete, particularly in sectors in which entry of new players is difficult. Another constraint might be the fear of losing closely guarded intellectual property or information, particularly for businesses whose value largely derives from those assets. However, considering the benefits of disaggregation, innovations in technology, contracting, and information management strategies may smooth the path to apployment after some initial resistance.

In addition, there may be other regulatory barriers to these approaches—that is, barriers outside of labor and employment law. For example, a prospective educational service provider like YALI would likely—despite the assumptions built into the scenario—encounter initial resistance by accreditation agencies and other educational authorities. Still, whether such regulatory resistance can persist in the face of consumer and social demand—here by prospective students and others pressing for affordable and accessible legal education—is an open question. We already see this dynamic playing out in the sharing economy, as ridesharing companies and booking/short-term rental services have had mixed but notable success in overcoming prior regulatory constraints on taxi services and short-term rentals.^[72] Once these cheaper, flexible alternatives are available and consumer demand takes hold, it will be difficult for regulators to hold the line or turn back the clock.^[73]

Along the way, there are also likely to be some exceptions to the push towards disaggregation and apployment, at least in the short term, due to the nature of branding or other market particulars or advantages. Starbucks has defied the prevailing trend toward franchising in the restaurant sector; its leadership declared early that the company will not franchise because its success depends on retaining “fanatical” control of its stores.^[74] Amazon is the outlier among internet and technology giants, currently employing over 1.5 million workers—about ten times that of Alphabet (Google) and Apple, and twenty times that of Meta.^[75] Amazon has done so, in part, because its model demands extreme efficiency in moving a vast array of products point-to-point within its distribution system to meet customer expectations regarding fast (often one-day) delivery.^[76] Therefore, it has continued to employ huge numbers of workers and exercise exacting, technology-driven control over its fulfillment centers, warehouses, and other operations.^[77]

Yet even Starbucks now licenses many locations (stores, kiosks, etc.) to third-party retailers and others,^[78] and Amazon already outsources the final step—home deliveries—to small, independently owned delivery “partners.”^[79] Going forward, new technologies will facilitate and incentivize further disaggregation. For example, if technological advances allow Amazon to cease such exacting control, perhaps through a digitally connected network of independent warehouses and transportation companies constantly competing for its business and subject to algorithmic evaluation, we should anticipate outsourcing elsewhere within the enterprise. Further, for companies like Starbucks and Amazon, the acute public and regulatory attention that their employee welfare receives enhances the appeal of disaggregation.^[80] The point is that given the constant pressure of price competition and thirst for greater returns, even enterprises stubbornly resisting outsourcing aspects of their operations today may not do so tomorrow once innovations assure brand maintenance and quality despite relinquishing control.

IV. Apployment and Worker Rights

A. Expansion of “Employee” and “Employer” Status Won’t Get Us There

As mentioned previously, control over the work dominates the current approach to determining employment status. A brief survey of this landscape reveals that current and even proposed expansions of these concepts are insufficient to prevent avoidance through apployment.

Nearly all federal and state statutory protections for workers protect only “employees” and impose duties only on “employers.”^[81] Yet, in virtually all of these statutes, Congress and state legislatures fail to offer a meaningful definition of these terms, often providing only the unhelpful and circular statement that an ‘‘employee’’ is ‘‘an individual employed by an employer.’’^[82] In determining the meaning of ‘‘employee’’ and ‘‘employer’’ in these regimes, courts and regulatory agencies often conclude that these statutes incorporated what was formerly known as the “master-servant relationship as understood by common-law agency doctrine.”^[83] This doctrine, which originates in the Second Restatement of Agency and is designed to determine the scope of respondeat superior liability in tort, provides that a principal (firm) is strictly liable for the torts of its employees committed within the scope of employment, but not, as a general matter, accountable for torts committed by independent contractors.^[84] Whether an employment relationship exists under this doctrine hinges on the level of control the firm exercises over the worker: a worker is an employee if the firm exercises or has a right to exercise control over the manner or details of the work.^[85] It is for this reason that in most jurisdictions and for most purposes, the exercise of control is central to determining whether an employment relationship exists.^[86]

Different variations of the control-based approach have produced widespread litigation and debate. Under what is sometimes characterized as the “traditional common-law” approach to determining control, many courts and regulatory bodies apply multi-factored balancing tests that track the factors set forth in the Restatement.^[87] In other circumstances, courts and agencies have adopted the so-called “economic reality” test to serve the remedial purpose of the particular statute—often including wage and hour and workers’ compensation laws—by expanding the common-law definition of employment through, among other things, considering worker dependence on the firm.^[88] Elsewhere, there are further variations. For example, in the context of defining employees under the National Labor Relations Act, the Trump-appointed National Labor Relations Board (NLRB) and the D.C. Circuit have sought to focus the control inquiry on factors suggesting worker entrepreneurial opportunity for gain or loss, an approach many argue narrows the scope of who constitutes an employee.^[89]

The litigation over the applicability of this range of approaches suggests they matter, although the extent to which their different articulations affect outcomes (more than who the judicial or regulatory decision-makers happen to be) is an open question.^[90] Regardless, what is most important is that they all focus in one way or another on the level of firm control over the worker and the work itself. This means that, to side-step employment status, firms directly engaging individual workers attempt to avoid exercising as much control over the work as they otherwise would. Sometimes this is not difficult: firms do not need to exercise much control over certain types of work.

But the challenge for many firms seeking to ensure independent contractor rather than employee status is that they often try to have it both ways—take advantage of the benefits of nonemployment while exerting various forms of control when necessary to ensure quality, timeliness, etc. Indeed, this kind of outsourcing produces many of the headline disputes over employment status, including the Microsoft suits in the late 1990s^[91] and, more recently, the widespread litigation over wage, hour, and labor-law violations by FedEx, SuperShuttle, and other delivery services, which sought to classify their drivers as independent contractors.^[92] Indeed, such mixed incentives are apparent in the cartwheels these delivery companies perform in their contractual relationships with their drivers, in which they provide various freedoms and opportunities for gain or loss while reserving powers and making demands to ensure their delivery networks meet customer expectations.^[93]

The controversy swirling around the employment status of Uber, Lyft, and other rideshare drivers is but the latest example of this phenomenon. Although these gig economy enterprises are the result of technological innovations that change the interaction between firm, worker, and customer, this type of attempted outsourcing and the corresponding legal issues are like those in the foregoing disputes. Uber, for example, exercises significant control over financial and other aspects of the driver/customer interaction while allowing drivers flexibility in terms of when they work, the vehicle they drive, and other matters. The question, as in the prior circumstances, is not whether Uber exercises control, but whether the nature and extent of the control creates an employer-employee relationship. Courts, regulators, and commentators have reached different conclusions on this issue.^[94] Yet, it is worth noting that policy makers who want to ensure employment-law protections cover these workers need not abandon control as a touchstone for determining employment status; they simply need to adjust (modestly) how they frame or apply control-based analyses.^[95]

Legal reforms broadening the scope of employment have emerged in some corners of the law. State legislatures on occasion have extended specific employment regulations or protections to nonemployees.^[96] Also, in its COVID relief packages, Congress extended benefits—in particular, unemployment compensation and paid sick leave—to independent contractors.^[97]

But the most important development has been some states adopting the “ABC test” for determining employment status.^[98] The ABC test sweeps more broadly than the control-based approaches in two respects. First, it places the burden on firms to demonstrate that their workers are independent contractors.1^[99] Second, to meet this burden, it requires the hiring entity to establish each of the test’s three factors:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact, (B) that the worker performs work that is outside the usual course of the hiring entity’s business, and (C) that the worker is customarily engaged in an independently established trade, occupation, or business [of the same nature as the work performed].^[100]

In Dynamex Operations West, Inc. v. Superior Court, yet another case involving delivery drivers, the California Supreme Court held that the ABC test is applicable to wage orders under California law.^[101] In 2020, California Assembly Bill 5 (AB5) largely codified the Dynamex ABC test for independent contractor classifications, although it contained a significant number of exceptions.^[102] It also expanded the reach of that test to all wage and hour Labor Code violations as well as unemployment insurance and workers’ compensation.^[103]

Given its unambiguous breadth, including the “usual course” requirement set forth in step B, the ABC test pretty clearly makes drivers for rideshare companies employees.^[104] For this reason, these companies invested $200 million to support the ballot initiative known as Proposition 22 to ensure app-based drivers were excluded from AB5 and considered independent contractors.^[105] This campaign was successful, and Proposition 22 passed by a wide margin.^[106] Constitutional challenges to Proposition 22 are still proceeding through the California courts.^[107]

Along with these developments in California, app-based companies have continued their efforts to ensure their drivers are considered independent contractors in other states, with mixed success.^[108] Moreover, even in jurisdictions that have adopted the ABC test, it usually applies only to certain types of wage and unemployment compensation regulation.^[109] It also does not govern in any federal labor and employment-law regimes, despite the fact that the Biden Administration has made clear its opposition to Proposition 22.^[110] The action at the federal level and in many other places therefore continues to center on whether the control-based tests should be construed broadly to sweep delivery and rideshare drivers into employment status.^[111]

Yet, as the employee/independent contractor classification battles rage, remember that this is only one type of disaggregation strategy. The second, and, as emphasized in Part III above, potentially more fail-safe method of avoiding employment is outsourcing work to third-party entities that hire the workers. Again, because only an “employer” is responsible for complying with employment-law obligations, a person or entity that benefits from labor services but is not an employer is not responsible. Assuming a worker is an employee (i.e., not an independent contractor) of at least one entity among two or more entities who benefit from the worker’s labor, the inquiry becomes whether one or more additional entities is a “joint employer.” If so, the jointly employing entity is treated as another employer.

The articulation and application of the test for joint employer status varies among different employment-law regimes.^[112] But, as with the employee/independent contractor distinction, the test tends to be fact intensive and multi-factored, with the touchstone being the level of control the entity exercises over the manner and means of the work.^[113] Indeed, at both the state and federal levels, the factors deployed for determining joint employment status closely mirror the factors for determining employee status under the common-law control test, with variations in scope similar to those observed in the determination of employee status.^[114] There is much ongoing debate and litigation over the nature of the control necessary for a firm to be determined a joint employer. For example, two interrelated issues that have become highly politicized in the federal labor law context are the extent to which a putative joint employer must determine or co-determine work conditions or simply possess the right to determine these conditions, and whether the exercise of control over the work needs to be direct or immediate rather than indirect.^[115]

Thus, firms that seek to have it both ways—outsourcing work to an independent entity but retaining significant control to preserve quality, timeliness, etc.—are the ones that risk being found to be joint employers. We see end-user firms engaged in a carefully choreographed dance regarding the nature and extent of the control they exercise to avoid such a finding. We also see campaigns to pressure courts and regulators to adopt more limited definitions of joint employer status.

One area in which such status is hotly contested is franchising. Franchisors have historically had powerful incentives to tightly control many aspects of franchisees’ activities; they need to protect their brands.^[116] For this reason, franchise agreements are often demanding in terms of conformity to franchise specifications, but franchisors are careful to exercise oversight in ways that, superficially at least, avoid the appearance of active or direct control over the franchisees’ employees. And they usually are successful. Indeed, even in California, which most broadly defines joint employment, the courts have refused to extend joint employer status to franchisors who maintain quality control standards but do not exercise day-to-day control over wages and other working conditions.^[117] This explains why the NLRB’s attempt to hold McDonald’s (which has an incredibly demanding franchise agreement) accountable as a joint employer has created such controversy.^[118]

Yet, to date, lawmakers have not extended the joint employment doctrine further than this—that is, beyond somewhat stretching the concept of control. Although there are narrowly drawn exceptions in specific jurisdictions or contexts,^[119] there has not been a wider movement towards an ABC-like test or other non-control-based approach to joint employment. Indeed, even states that apply the ABC test for determining whether a worker is an employee or independent contractor have not been receptive to extending joint employment in an analogous way.^[120] And I am not aware of court or regulatory decisions holding a platform- or app-based company liable for work-law violations by independently owned companies that sell their products or services through the platform.^[121]

In seeking to address fissuring in the gig or sharing economy, scholars and advocates have tended to focus on expanding the definition of employee rather than employer or joint employer.^[122] This is at least partially attributable to the puzzle that expanding employment-related obligations creates: the lack of another limiting principle (besides control over the work/workers) for extending employer status through one or more layers of independently owned entities within a commercial enterprise or chain.

It is for these reasons that outsourcing through a third-party entity is often a “safer” option than seeking to retain workers directly while classifying them as independent contractors, at least in circumstances in which the outsourcing end-user firm meticulously avoids exercising more direct or exacting control over the manner and means of the work performed by employees of other firms.^[123] And additional layers of entities provide even greater protections, and, as others have demonstrated, greater cost savings.^[124]

This is true even though platform-based businesses like Airbnb establish, protect, and increase the value of their brand by using a variety of techniques to exert significant influence over the atomistic, independent operators providing services through their platforms. For example, Professor Deepa Das Acevedo has offered an illuminating dive into the “invisible” oversight platform-based enterprises, including Airbnb, exercise through, among other things, reputational feedback systems such as ratings, vetting, termination, and tracking of various kinds.^[125] She then contends that firms like Airbnb are, in various respects, comparable to more traditional franchisors or other end-user firms utilizing contracted arrangements, and deploy some of the same rhetoric to press against legal responsibility.^[126] This means that platform economy innovations, rather than fundamentally disrupting the landscape, are simply the newest variation on fissuring strategies that curate the brand while garnering the benefits of avoiding employment.^[127]

Still, persuading courts and regulators to extend joint employment status to platform companies under the current conception of the doctrine remains unrealistic. As discussed above, joint employment claims against traditional franchisors typically fail.^[128] They do so, in part, because there is significant resistance to extending joint employer liability to franchisors who deploy even exacting measures, as long as those measures are aimed at maintaining quality control rather than regulating the terms of the underlying work.^[129] And, if such reluctance is overcome (say, by a more aggressive approach by NLRB or another agency), platforms like Airbnb are distinguishable because they do not promote quality or conformity through the detailed mandates, specifications, and on-the-ground monitoring that franchisors often utilize to dictate franchisee conduct and work conditions.^[130] They do so instead through a mix of suggesting, nudging, and incentivizing providers to conform to certain norms in terms of what they offer.^[131] Put another way, these platform companies simply do not exercise the types of control—direct or indirect, reserved or actual—of the underlying work that traditional franchisors do.^[132]

Moreover, even if the concept of control underpinning joint employer status were stretched to sweep in firms that engage in such invisible oversight of their providers, companies like Airbnb would morph again to avoid that status. For example, although there may be some downsides to doing so, Airbnb would recalibrate, pulling back or altering some of its levers to migrate towards platforms like Booking.com or Expedia.com, which provide access to short-term rentals but exercise less direct influence over hosts/owners. In this way, the malleability of apployment structures creates the perfect whac-a-mole problem.

In total then, the law governing “employee” and “employer” status is patchwork but remains principally framed or delimited by the level of control a firm exercises over workers. Certainly, the ABC test has extended the reach of employee status beyond stricter control-based approaches.^[133] One can envision other, somewhat broader articulations of employee status that would sweep in workers retained directly by the firm benefiting from the work. But these broader approaches to defining “employee,” in addition to being limited to certain states and certain aspects of work law, do not extend beyond first-party or direct relationships between workers and the firms that engage them. On the contrary, under even the broadest articulations of joint employer status, some level of control over the manner and means of the work itself is needed to pierce the veil of protection that outsourcing the work to separate entities provides.^[134] Again, policymakers have extended accountability for some workplace violations to entities not exercising this kind of control in specific industries or circumstances,^[135] but, to date, we simply have not seen acceptance of a more broad-based, alternative conception of joint employment.^[136]

As a result, the principal battles over employment status, both in the gig economy and elsewhere, are contained within an important but limited universe that includes (1) (mis)classification of workers directly retained by a firm; and (2) circumstances in which an end-user firm pushes work out to a separate entity but seeks to have it both ways by retaining at least some control of the manner and means of the underlying work. End-user firms are largely safe from work-law accountability for work performed outside of this universe. This includes existing platform companies (such as Airbnb) and my three hypothetical firms—DRH, Ekin, and YALI—which powerfully influence providers within their enterprises in a variety of ways, but not by exercising anything approaching the kind of control courts and regulators have been willing to recognize, to date, as sufficient for the extension of joint employer status. This, combined with technological innovations that will make such arrangements more feasible, ensure that more enterprises will press in this direction—towards apployment.

B. Apployment and Protecting Worker Rights

As other scholars have demonstrated, enterprise disaggregation abounds because it allows visible, legally and socially accountable end-user firms to escape the costs and risks of employment.^[137] This phenomenon harms workers and undercuts the policy objectives of employment and labor regulation in numerous ways.

This Article seeks to contribute to the literature by demonstrating that the incentives driving disaggregation, combined with emerging technology, will press more and more end-user firms across disparate sectors to utilize what I describe as apployment structures, producing even more fail-safe protection from the extension of work-law obligations. This already has happened in various corners of the sharing economy. Given the powerful incentives and the emergent, technology-driven ability of companies to restructure as control-free enterprises, it will spread to other sectors.

In light of this descriptive and predictive account, the vexing question is how the law should respond. Although I leave full development of proposed reforms to a later article, this Article offers some clear takeaways and highlights some helpful observations and approaches offered by other scholars.

To begin, the incentives driving apployment could be reduced by ratcheting up enforcement of existing labor and employment laws—that is, enforcement against the millions of smaller, often invisible “employers” in disaggregated enterprises, thereby reducing noncompliance and the premium end-user firms reap from such structuring. However, while increased public enforcement and smoothing the path to private enforcement is needed, this alone is unlikely to solve or even substantially reduce the problem. For one thing, this would require scaling up resources for public enforcement—which have been inadequate at both the federal and state levels for decades^[138]—by orders of magnitude, probably along with unwinding layers of barriers to private enforcement. In addition, scope limitations, including the limits on who is an “employee” under current law and coverage floors (employer size, etc.), would still provide escape hatches. And all these challenges will get worse as innovations in apployment facilitate more disaggregation and increase the number of atomistic players. In sum, enhancing enforcement is probably necessary but insufficient to address new strategies.

Furthermore, reform proposals that merely seek to lower or alter the bar in terms of the control necessary to sweep today’s gig economy workers into employment or modestly extend joint employment will fall short as more enterprises deploy control-relinquishing apployment strategies.^[139] For similar reasons, the more expansive reach of the ABC test, while critical today because it is sufficiently broad to sweep in a sizable share of gig and other first-party work, will fall short tomorrow as companies adopt structures that alter relationships between firm, worker, and customer in such a way that even this test’s breadth will be insufficient. This is true because the ABC test, at least as currently articulated, does not pierce through one or more layers of independent entities (joint employment still hinges on control), and because even the most expansive parts of the test are unlikely to reach the underlying workers.

Thus, as apployment spreads, a truly fundamental rethinking of how to achieve the policy goals currently tied to employment status is needed. Observing the current landscape, scholars and advocates have offered approaches that, in combination, would get us part of the way there. The first is to achieve some of these policy goals in other ways; that is, without reliance on or relation to employment. This is, for instance, what Professor Orly Lobel has described as the “delinking” of the provision of “safety net” benefits from employment, and what Professor Cynthia Estlund has characterized as “reduc[ing] the legal tax on employment” by removing entitlements “not productively linked to employment” from firms’ balance sheets.^[140] Common examples are government rather than employer provision of health insurance and paid medical and family leave.^[141] It might also sweep in other benefits that might address worker needs ranging from retirement accounts and benefits to unemployment and disability insurance.^[142] Again, the COVID-relief statutes temporarily offered nibbles in this direction with the inclusion of contractors—and specifically gig workers—in unemployment benefits coverage and paid sick leave.^[143]

Beyond such delinking, other fundamental changes are needed to further other regulatory ends labor and employment laws seek to serve, including basic worker protections such as wage and hour mandates, prohibitions on workplace discrimination and various forms of retaliation, workplace safety regulations, and guaranteeing worker rights to collective action and voice. Thus, a second reform is the abandonment of the traditional control-based approach to defining who is a covered employee. Put another way, as a default matter, these protections should be afforded to any worker providing “labor services,” regardless of how much control the purchaser or beneficiary of those services exercises over the worker.^[144] At the same time, to avoid apployment structures’ migration towards utilizing more atomistic players, coverage requirements based on the number of employees should be eliminated or greatly reduced whenever possible. As a result, with few exceptions, employment and labor law-related duties should apply at least to any “first party” firm that retains, contracts with, or engages the worker, regardless of the level of control, as well as any person or firm who controls the retaining party (i.e., one who would be a joint employer under the broadest current extensions of the doctrine).

Such a regime would expand coverage even more broadly than the ABC test, sweeping into protection all nonexempt^[145] workers, including delivery drivers and gig economy workers such as rideshare drivers and workers engaged through websites (like TaskRabbit and other examples mentioned above). Any individual workers retained directly by DRH or YALI in the scenarios discussed above likewise would be covered. This move would eliminate the avoidance strategy of (mis)classifying workers as independent contractors, as well as the additional enforcement hurdle that plaintiff workers and regulators face in having to establish employee status. Although perhaps articulated somewhat differently, this expansion is consistent with proposals offered by other scholars seeking to address the plight of contingent workers.^[146]

As radical as it might sound, this shift away from excluding nonemployees from protection still would not be enough to address all the problematic effects of apployment. For example, while elimination of the control-based limitations on employee status might ensure that those who work for an Airbnb host would be able to hold the host liable for violations of basic work-law protections, it would not extend beyond that first-person/joint employer level.^[147] Nor would accountability reach DRH, Ekin, or YALI for activities within their enterprise that have been pushed out to the entities (or layers of entities) over which they do not exercise employer-like control.^[148] And, as the discussion above indicates, brand-driven gig economy companies that now rely on first-party relationships with workers—such as ride-share platforms—can alter their structure to remove themselves from any such first-party relationship, again extending the game of coverage whac-a-mole.^[149] The remaining, most challenging question then is whether and how to extend accountability beyond these first-party and controlling actors.

There already are some narrowly drawn extensions of accountability beyond controlling entities at the state level,^[150] and the federal “‘hot goods’ provision” available to address wage violations in remote corners of supply chains offers a conceptual model for extending legal responsibility.^[151] But, given that these approaches are either too limited in scope or too lacking in genuine bite to address labor and employment law’s inefficacy in the face of apployment structures, far more sweeping reform (in conception and applicability) is needed.

Scholars have already offered some broader possibilities. For example, Professors Estlund and Brishen Rogers have argued for extending accountability for basic workplace violations to end-user firms when they negligently fail to prevent underlying violations.^[152] Professor Guy Davidov has gone somewhat further, arguing that lead companies should be presumptively liable “based on implicit brand representations [that suggest] the power to prevent [violations].”^[153] With regard to the manufacturing of products, Professor Aditi Bagchi has advocated for a “production liability” regime that extends legal responsibility for dangerous working conditions through the supply chain to lead manufacturers and retailers.^[154] I previously have made the case for extending vicarious liability for wage and hour violations on a pro rata basis from the hiring party to others downstream in the commercial enterprise.^[155]

Still, a further delineation of both the underlying theory and the scope and boundaries of an extended accountability framework is necessary. The challenges are significant. Among other things, apployment structures are varied and highly manipulable. They can, for example, be retooled to make a showing of end-user negligence difficult or to avoid a status or interface to which accountability might be pinned—e.g., responsibility tied to engagement through a “digital platform” might not reach Ekin. Each type of work regulation also might offer its own puzzles in terms of the appropriate allocation of rights and responsibilities, and some, such as the protection of collective rights, will present unique complexities. Moreover, such reforms will inevitably create other line-drawing difficulties and unintended consequences. And the reasons why the social benefits (fewer work-law violations, avoidance of the race to the bottom in terms of worker welfare, the efficient allocation of compliance risks) will outweigh the potential costs of such extensions of legal responsibility will need to be more fully explained. Again, while the direction of needed reform is apparent, I leave these matters to greater development in future scholarship.

V. Conclusion

Enterprise disaggregation (fissuring) and the plight of gig economy workers have received significant attention. And some progress has been made as scholars have proposed and policymakers have adopted approaches that have expanded employment and extended accountability for workplace legal violations. But we have not experienced the worst effects of this phenomenon. Through extant and hypothetical examples, this Article demonstrates why apployment is here, raising challenges to worker protections beyond those posed by Uber and other similar gig economy enterprises. As we see apployment structures spread across the economy, more and more visible, high-value firms will operate almost entirely without employer-like control over most of their core activities in producing goods and services. Current law is ill-equipped to respond to the proliferation of such enterprises. Building on the work of other scholars, I have offered an initial framework for a fundamental rethinking of how to protect worker welfare in this new environment. Ultimately, to protect worker rights and welfare, we will need to shed our traditional control-based conception of employment.

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1. See, e.g., Michele A. Travis, A Post-Pandemic Antidiscrimination Approach to Workplace Flexibility, 64 Wash. U. J.L. & Pol’y 203, 226–29 (2021) (discussing how work arrangements developed during the pandemic may facilitate more flexible and accessible work arrangements). However, this is in stark contrast to the large group of frontline “essential” workers—disproportionately low-wage, sometimes platform-based—who continued to work in person and became sick, died, or otherwise suffered tremendously during the pandemic. See Miriam A. Cherry, Employee Status for “Essential Workers”: The Case for Gig Worker Parity, 55 Loyola L.A. L. Rev. 683, 685–89, 715, 720, 727, 735 (2022) (detailing the terrible conditions many essential workers encountered during the pandemic and calling for reforms).

2. See e.g., Russell W. Jacobs, Privacy Norms and the Covid-19 Pandemic, 21 Wake Forest J. Bus. & Intell. Prop. L. 272, 284–86, 296, 300, 315 (2021) (warning that privacy intrusions emerging during the pandemic may remain after the exigency has passed); Tiffany C. Li, Post-Pandemic Privacy Law, 70 Am. U. L. Rev. 1681, 1705–09 (2021) (discussing the “wave of new technological developments” and “intrusion[s] on privacy” that emerged during the pandemic); Isaac Mamaysky, The Future of Work: Exploring the Post-Pandemic Workplace from an Employment Law and Human Resources Perspective, 21 U.C. Davis Bus. L.J. 257, 278 (2021) (discussing possible disparate impact concerns with remote work policies); Jodi Kantor & Arya Sundaram, The Rise of the Worker Productivity Score, N.Y. Times (Aug. 14, 2022), https://www.nytimes.com/interactive/2022/08/14/business/worker-productivity-tracking.html [https://perma.cc/76LC-N3JR]; see also Charlotte S. Alexander & Elizabeth Tippett, The Hacking of Employment Law, 82 Mo. L. Rev. 973, 983–92 (2017) (discussing how employers can utilize sophisticated software to exploit outdated regulations and take advantage of information asymmetries to further noncompliance with or avoidance of work law mandates).

3. David Weil, The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It 10 (2014); Tanya Goldman & David Weil, Who’s Responsible Here? Establishing Legal Responsibility in the Fissured Workplace, 42 Berkeley J. Emp. & Lab. L. 55, 66 (2021).

4. Timothy P. Glynn, Taking the Employer Out of Employment Law? Accountability for Wage and Hour Violations in an Age of Enterprise Disaggregation, 15 Emp. Rts. & Emp. Pol’y J. 201, 203 (2011).

5. Commentators have referred to gig work or the gig economy in a variety of ways, including terms such as “app-,” “on-demand-,” and "platform-"based work, as well as the “sharing economy.” See, e.g., Samantha J. Prince, The Shoe Is About to Drop for the Platform Economy: Understanding the Current Worker Classification Landscape in Preparation for a Changed World, 52 U. Memphis L. Rev. 627, 641 & n.37, 693 & n.266 (2022). Although these other terms can be used to capture different sets of workers, the core idea is that work is performed through a firm-owned platform where customers engage and interact with workers or providers of various services. See id. at 641 & n.38; see also Veena Dubal, The New Racial Wage Code, 15 Harv. L. & Pol’y Rev. 511, 514 n.13 (2021).

6. For a comprehensive overview of the classification of gig economy workers, the relevant legal tests for determining employee/independent contractor status, and legions of scholarly critiques and proposals for reform, see Prince, supra note 5, at 647–99; see also infra note 94 and accompanying text. The various ways in which fissuring harms workers are discussed in detail in Part II, infra.

7. See, e.g., Robert Sprague, Are Airbnb Hosts Employees Misclassified as Independent Contractors?, 59 U. Louisville L. Rev. 63, 72–73 (2020); see also Uber Techs., Inc., Registration Statement, Amendment 1 (Form S-1), at 35 (Apr. 26, 2019) (stating that reclassification of drivers as employees would “require [a] fundamental[] change [in Uber’s] business model”). I am not saying that rideshare companies could not succeed without the ability to classify their drivers as independent contractors. They certainly could: the innovation—the app-based connecting of drivers to customers and smoothing other aspects of the transaction—has obvious value. In my view, no persuasive case has been made that these innovative companies could not determine how to maintain this model while complying with labor and employment law mandates. Rather, I am saying that a key part of the strategy of rideshare and delivery companies is to capture the market and profit from pricing discounted by the avoidance of employment-related costs.

8. Weil, supra note 3, at 4; David Weil, Understanding the Present and Future of Work in the Fissured Workplace Context, Russell Sage Found. J. Soc. Sci., Dec. 2019, at 148–50 (discussing the fissuring phenomenon and its impact on workers across industries and types of work).

9. See, e.g., Weil, supra note 3, at 16–18, 90–91, 131–32, 137–43, 224–26 (reviewing studies and examples of the impact of fissuring on compensation levels and the frequency of labor and employment-law violations); Weil, supra note 8, at 157–58 (“[S]tudies that compare wages earned by workers in branded companies find that those workers earn, on average, more than workers who work in similar, nonbranded companies in the same sector.”).

10. David Weil and others have demonstrated this convincingly. See Weil, supra note 3, at 132, 137, 140, 142–43, 157–58 (discussing the compensation and compliance effects of fissuring); see also id. at 180 (“[T]he consequences of the fissured workplace are profound. Wage determination changes dramatically, often to the detriment of workers whose work has been shifted outward. Blurring lines of responsibility increase the risks for bad health and safety outcomes. And the pressure to cut corners and not comply with basic labor standards intensifies.”). See generally discussion infra notes 30–38 and accompanying text.

11. See, e.g., Weil, supra note 3, at 8 (“But focusing on the core also has come to mean shifting activities once considered central to operations to other organizations in order to convert employer-employee relationships into arm’s-length market transactions.”); Weil, supra note 8, at 148–52, 160.

12. Cf. Weil, supra note 8, at 148–49 (discussing “highly calibrated incentive systems created by platform algorithms” and how these and other techniques eliminate the need to treat workers as employees with the obligations that relationship entails). Of course, other scholars have focused on how technology has enabled more control of workers. See supra note 2; see also Matthew T. Bodie, The Law of Employee Data: Privacy, Property, Governance, 97 Ind. L.J. 707, 712–16 (2022) (discussing the wide range of data employers collect on employees through various techniques). While the utilization of technology to exercise exacting control over work and even employees’ lives raises its own set of concerns, my focus is on the opposite: how technology can be utilized to further enterprise aims without the exercise of traditional employer-like control over the work.

13. See, e.g., Renee Morad, This CEO Predicts We’ll See a $1 Billion Company with Only One Employee by 2025, Forbes (Jan. 31, 2018, 11:35 PM), https://www.forbes.com/sites/reneemorad/2018/01/31/this-ceo-predicts-well-see-a-1-billion-company-with-only-one-employee-by-2025/?sh=300395024c4f [https://perma.cc/S4T7-9ZBL]. For a comparison of fissuring and job displacement due to automation and the incentives to avoid employment that drive both, see generally Cynthia Estlund, What Should We Do After Work? Automation and Employment Law, 128 Yale L.J. 254 (2018).

14. See Sprague, supra note 7, at 83–85.

15. Professor Robert Sprague has argued that Airbnb hosts might be employees of Airbnb under the ABC test. See id. at 83–88. Although this possibility—which focuses on the non-control-based prongs of the test because Uber-like control over hosts is missing—is an intriguing one, as I discuss in Part IV below, I view this outcome as unlikely. See infra note 121 and accompanying text.

    Professor Deepa Das Acevedo has shown that Airbnb and other platform companies use various techniques to wield “invisible authority,” which she suggests is comparable to that exercised by franchisors over franchisees. See generally Deepa Das Acevedo, Invisible Bosses for Invisible Workers, or Why the Sharing Economy is Actually Minimally Disruptive, 2017 U. Chi. Legal F. 35 (2017). As I discuss in Part IV, infra, Professor Acevedo’s compelling account is helpful in thinking about the trajectory of fissuring. Still, she does not claim—and I doubt—that courts and policymakers would extend control-based joint employer doctrines far enough to sweep in platforms like Airbnb. Moreover, if they were to do so, we ought to anticipate apployment structures morphing to avoid any such extensions.

16. Airbnb, Inc., Annual Report (Form 10-K) 6 (Feb. 25, 2022); Marriott Int’l, Inc., Annual Report (Form 10-K) 9 (Feb. 15, 2022) . As of October 7, 2023, Airbnb’s market capitalization was about $82 billion; Marriott’s was $58 billion. Quotes Airbnb, CNBC (Oct. 7, 2023), https://www.cnbc.com/quotes/ABNB [https://perma.cc/5WVC-DJUB]; Quotes Marriott Int’l Inc., CNBC (Oct. 7, 2023), https://www.cnbc.com/quotes/MAR [https://perma.cc/8UQT-XBUG].

17. The hotel industry is already heavily franchised. See Weil, supra note 3, at 144–46. Marriott, for example, has over 5,000 franchised properties employing more than 200,000 workers. Marriott Int’l, Inc., supra note 16, at 9, 25. But these chains are pushing even more in this direction. See, e.g., Kwanglim Seo, Asset-Light Business Model: Strategies for Hotels During the Pandemic, Bos. Hosp. Rev., https://www.bu.edu/bhr/2021/05/31/asset-light-business-model-strategies-for-hotels-during-the-pandemic/ [https://perma.cc/3RZX-LRRJ] (last visited July 19, 2023).

18. See, e.g., Homes & Villas, Marriott, https://homes-and-villas.marriott.com [https://perma.cc/B2UE-53VQ] (last visited Sept. 16, 2023).

19. See, e.g., Giri Varadarajan et al., How Asset-Light Strategies and Models can Boost Business Growth, EY (Mar. 26, 2021), https://www.ey.com/en_us/strategy-transactions/how-asset-light-strategies-and-models-can-boost-business-growth [https://perma.cc/BDC4-VCEV]; see also Seo, supra note 17.

20. See, e.g., Timothy P. Glynn et al., Employment Law: Private Ordering and Its Limitations, xxv, xxvi–xviii, xxxii–xxxiii (5th ed. 2023).

21. See id. at xxvi–xxix, xxxiii, 268–69.

22. For a survey of the literature on the various ways in which labor employment-law doctrine and its enforcement have failed to protect workers adequately, see Michael M. Oswalt, Short Strikes, 95 Chi.-Kent L. Rev. 67, 82–85 (2020) (discussing the substantive and enforcement shortcomings of labor and employment law and surveying recent scholarship); Timothy P. Glynn, Taking Self-Regulation Seriously: High-Ranking Officer Sanctions for Work-Law Violations, 32 Berkeley J. Emp. & Lab. L. 279, 286–97, 301–02 (2011) (surveying the literature and detailing doctrinal and other forces that have led to underenforcement of labor and employment law); Cynthia Estlund, Who Mops the Floors at the Fortune 500? Corporate Self-Regulation and the Low-Wage Workplace, 12 Lewis & Clark L. Rev. 671, 682 (2008) (“There is a widespread conviction that traditional command-and-control regulation is losing its grip in our technologically supercharged global economy, and cannot keep up with the increasingly fragmented, fluid, and footloose organizations and networks through which goods and services are produced and distributed.”).

23. See, e.g., Oswalt, supra note 22, at 82–85.

24. See, e.g., Weil, supra note 8, at 153–55, 158–59; Goldman & Weil, supra note 3, at 67–68. For a discussion of the impact of access to retirement benefits on wealth inequality, see, e.g., Samantha J. Prince, Megacompany Employee Churn Meets 401(k) Vesting Schedules: A Sabotage on Workers’ Retirement Wealth, 41 Yale L. & Pol’y Rev., no. 1, 2022, at 36, 38.

25. See, e.g., Weil, supra note 3, at 2–3 (“In an earlier era, Marriott, Time Warner, Bank of America, Walmart, and Hershey, as well as other large employers that produced well-known products and services, would likely have directly employed the workers in the above vignettes. Not so now. As major companies have consciously invested in building brands and devoted customers as the cornerstone of their business strategy, they have also shed their role as the direct employer of the people responsible for providing those products and services.”).

26. See, e.g., Weil, supra note 8, at 148, 151–52 (acknowledging that the scale of fissured work is hard to quantify, but discussing the prominence of highly fissured industries and arguing, as a result, that close to 20% of workers are engaged in fissured work and that this percentage is likely to grow dramatically); see also id. at 160 (discussing the spread of this phenomenon to professional workers); Estlund, supra note 13, at 283–85 (discussing this spread and the decline of large, integrated firms).

27. And, of course, not all outsourcing is problematic; there are legitimate reasons for enterprises to outsource or use more flexible arrangements for some inputs, with efficiency-enhancing benefits for customers and society. See, e.g., Weil, supra note 3, at 15, 24, 288.

28. See Estlund, supra note 13, at 287, 291.

29. See, e.g., Fedex Home Delivery v. Nat’l Lab. Rel. Bd., 563 F.3d 492, 495–96 (D.C. Cir. 2009); Goldman & Weil, supra note 3, at 70–71. These include federal labor, wage, hour, and benefit protections, see, e.g., National Labor Relations Act, 29 U.S.C. §§ 151, 152(2)–(3); National Labor Relations Act § 158(b)(4)(i); Employee Retirement and Income Security Act, 29 U.S.C. § 1002(5)–(6) (ERISA); Fair Labor Standards Act of 1938, 29 U.S.C. § 203(d)–(e); Family and Medical Leave Act of 1993, 29 U.S.C. § 2611(2)–(4), as well as most federal prohibitions on status discrimination. See, e.g., Age Discrimination in Employment Act of 1967, 29 U.S.C. § 630(b), (f); Civil Rights Act of 1964, Title VII, 42 U.S.C. § 2000e(b), (f); Americans with Disabilities Act of 1990, 42 U.S.C. § 12111(4)–(5). They also include state employment-law regimes, including workers’ compensation laws, and state wage and antidiscrimination protections. See, e.g., Weil, supra note 8, at 159. There are exceptions, including 42 U.S.C. § 1981, and a limited number of other extensions of responsibility and benefits beyond “employment,” which are discussed in Part IV below.

30. See, e.g., Glynn, supra note 4, at 210.

31. See, e.g., Weil, supra note 8, at 159 (stating that many fundamental workplace protections and benefits emanate from employment); Craig Becker, Labor Law Outside the Employment Relation, 74 Tex. L. Rev. 1527, 1527 (1996) (stating that the law “decisively promotes” subcontracting).

32. See, e.g., Goldman & Weil, supra note 3, at 66–68; Estlund, supra note 13, at 284–85.

33. Weil, supra note 3, at 77–78, 87–88, 90–91 (discussing how various forms of outsourcing and subcontracting across industries increases violations of labor and employment-law standards); see also Weil, supra note 8, at 154 & n.6, 155 & nn.10–11 (discussing the studies showing these discrepancies and various likely causes); Goldman & Weil, supra note 3, at 67–69 (same).

34. See, e.g., Weil, supra note 3, at 115–17; David Weil, Public Enforcement/Private Monitoring: Evaluating a New Approach to Regulating the Minimum Wage, 58 Indus. & Lab. Rels. Rev. 238, 239–41 (2005); see also Brishen Rogers, Toward Third-Party Liability for Wage Theft, 31 Berkeley J. Emp. & Lab. L. 1, 19–20, 46–47 (2010) (discussing barriers to enforcement in disaggregated enterprises); cf. Becker, supra note 31, at 1532, 1535 (discussing changes in supply practices).

35. See, e.g., Weil, supra note 3, at 104, 110, 117, 141; Rogers, supra note 34, at 19–20; Estlund, supra note 22, at 686–87. Smaller firms may be excluded from statutory mandates and can opt to engage in practices that produce labor-cost savings—such as not providing health and other benefits—without suffering the tax penalty or other consequences larger firms would face. Cf. id. at 686. Even when such firms are subject to the same regulatory requirements as larger firms, detection of violations is more difficult because smaller firms are less visible and enter and exit frequently; the layering and shifting of inter-firm relationships stretches enforcement resources; and fragmentation makes it harder for unions and other organizations to challenge violators. See, e.g., id. at 682, 687–88. Moreover, smaller operators are more likely to be judgment-proof, see Glynn, supra note 4, at 204 & n.15, and difficulty finding a solvent target substantially reduces incentives for private and public enforcement, see Rogers, supra note 34, at 20–21.

36. See, e.g., Goldman & Weil, supra note 3, at 66 (“Fissured workplace business models incentivize violations of our fundamental labor and employment standards. Because each level of a fissured workplace structure requires a financial return, the more layers of sub-contracting between the lead firm and the work, the slimmer are the remaining profit margins. At the same time, with additional layers of sub-contracting, labor typically represents a larger share of overall costs—and one of the only costs in direct control for those entities. Thus, companies have even greater incentives to cut corners with workers paying the price.”).

37. For a reference to this literature, see Weil, supra note 3, at 131; Goldman & Weil, supra note 3, at 66; Glynn, supra note 4, at 209–10.

38. See Goldman & Weil, supra note 3, at 66 (“Like a fissure in a once-solid rock that deepens and spreads, once core activities such as janitorial services, housekeeping, or package delivery are shifted, secondary businesses also begin to outsource their own responsibilities to other businesses, further entrenching this model.”).

39. See infra notes 98–99, 109 and accompanying text.

40. See, e.g., Diane M. Ring, Silos and First Movers in the Sharing Economy Debates, 13 L. & Ethics Hum. Rts. 61, 65–66 (2019) (“Historically, worker classification has been a messy task, which is not surprising given that the answer turns on the application of a multi-factor test . . . . [T]he advent of the sharing economy introduced a new level of ambiguity into the classification and treatment of workers.”).

41. And it is fairly easy to make such a claim colorable. In her 2016 study of firm classification of workers for tax purposes, Professor Eleanor Wilking found that considering factors suggesting firm control, workers classified as employees were indistinguishable from workers classified as independent contractors and that, since 2001, employees and contractors have converged on these measures. See Eleanor Wilking, Independent Contractors in Law and in Fact: Evidence from U.S. Tax Returns, 117 Nw. U. L. Rev. 731, 738, 798, 817 (2022). Other studies have shed light on judicial decision-making regarding this distinction, suggesting what might drive the status determination. For example, Professors Charlotte Alexander and Mohammad Javad Feizollahi found that courts are more likely to find a worker is an independent contractor if the firm has gotten the worker to agree to that status in a written contract (despite the law’s insistence that party intent is not dispositive). Charlotte S. Alexander & Mohammad Javad Feizollahi, Decisional Shortcuts and Selection Effects: An Empirical Study of Ten Years of U.S. District Courts’ Employee Misclassification Decisions, U.S. Dep’t of Lab. 26–27 (2017), https://www.dol.gov/sites/dolgov/files/OASP/evaluation/pdf/LRE_Alexander-DecisionalShortcutsandSelectionEffects_December2020.pdf [https://perma.cc/DJ45-3LD3]; see also Charlotte S. Alexander, Misclassification and Antidiscrimination: An Empirical Analysis, 101 Minn. L. Rev. 907, 954–55 (2017).

42. See, e.g., Kati L. Griffith, The Fair Labor Standards Act at 80: Everything Old Is New Again, 104 Cornell L. Rev. 557, 568, 574 (2019).

43. See Glynn, supra note 4, at 209.

44. See, e.g., Goldman & Weil, supra note 3, at 65–66; Estlund, supra note 22, at 673.

45. See Goldman & Weil, supra note 3, at 65–66; Estlund, supra note 22, at 673.

46. Cf. Goldman & Weil, supra note 3, at 65–66 (“Firms typically started outsourcing activities like payroll, publications, accounting, and human resources, but over time this trend has spread to activities like janitorial work, facilities maintenance, and security. In many cases, this practice has gone even deeper, with firms outsourcing employment activities that are central to the company’s work like housekeeping in hotels, cooking in restaurants, loading and unloading in retail distribution centers, and even basic legal research in law firms.”).

47. See id.; see also Weil, supra note 3, at 60–63 (discussing the various ways in which branded firms ensure quality, etc., in a fissured enterprise and the declining costs to doing so).

48. For a detailed discussion of the breadth of disaggregation across both type of core and noncore functions and type of outsourcing (including franchising), see generally Weil, supra note 3, at 93–178.

49. See supra note 26 and accompanying text.

50. See Goldman & Weil, supra note 3, at 67–68; Estlund, supra note 13, at 285 (“Platform-based work is one small but salient aspect of the larger practice of outsourcing work to individual independent contractors without any of the responsibilities and burdens that attend the employment relationship. Those responsibilities and burdens, and the corresponding workers’ rights and entitlements, are not merely passed down the line to less visible, profitable, and capable employers; they are vaporized.”); see also Prince, supra note 24 at 10 (discussing how high worker turnover rates generally harm workers in terms of retirement savings and wealth accumulation).

51. See, e.g., Goldman & Weil, supra note 3, at 68 (“The negative effects of a fissured workplace significantly impact workers earning low wages, people of color, immigrants, and undocumented workers . . . . Women, people of color, and immigrants often work in low-wage and fissured sectors, further compounding historic and systemic inequities built into the National Labor Relations Act (NLRA) and the FLSA through occupation- and industry-specific carve-outs that disproportionately exempt such workers from basic labor protections.”); Alexander & Feizollahi, supra note 41, at 910 (“[W]omen and/or people of color are overrepresented in seven of the eight occupations at highest risk for misclassification, suggesting that misclassification may be removing Title VII protection from workers who most need antidiscrimination rights.”). See generally Dubal, supra note 5, at 526–46 (offering a detailed account of the disparate racial impact of the gig economy and its remaking of racialized economic hierarchies).

52. See, e.g., Goldman & Weil, supra note 3, at 67–68 (discussing how fissuring has led to significant wage inequality); Weil, supra note 8, at 155–58 (same).

53. See, e.g., Goldman & Weil, supra note 3, at 68–69.

54. See, e.g., Florence Jaumotte et al., How Pandemic Accelerated Digital Transformation in Advanced Economies, IMF Blog (Mar. 21, 2023), https://www.imf.org/en/Blogs/Articles/2023/03/21/how-pandemic-accelerated-digital-transformation-in-advanced-economies [https://perma.cc/AZ32-E3A3].

55. See discussion infra notes 101–11 and accompanying text.

56. See, e.g., Prince, supra note 5, at 681–82.

57. Cf. Joseph W. McHugh, Note, Looking Through the (Mis)Classifieds: Why TaskRabbit Is Better Suited than Uber and Lyft to Succeed Against a Worker Misclassification Claim, 66 Clev. St. L. Rev. 649, 651–52, 664–65 (2018) (identifying distinctions between TaskRabbit’s “marketplace” business model and that of Uber and Lyft, which make a finding of independent contractor status far more likely).

58. See generally Brishen Rogers, Employment Rights in the Platform Economy: Getting Back to Basics, 10 Harv. L. & Pol’y Rev. 479 (2016) (making the case for extending employer status to such platforms for workers directly engaged through them).

59. See Das Acevedo, supra note 15, at 39–43, 46–47.

60. Sprague, supra note 7, at 84–85 (concluding that Airbnb does not exercise employer-like control over its hosts). I discuss the unlikelihood of holding Airbnb accountable as a joint employer in Part IV. See infra notes 121–30 and accompanying text.

61. See Miguel Alexander Centeno, How Does VRBO Work?, $hared Econ. Tax (May 28, 2021), https://sharedeconomycpa.com/blog/vrbo/ [https://perma.cc/W996-HJR5]; Vincent Breslin, The Ultimate Beginner’s Guide to Hosting on Booking.com, Medium: Uplisting (Nov. 22, 2017), https://medium.com/uplisting/the-ultimate-guide-to-hosting-on-booking-com-4ce8cc2c8121 [https://perma.cc/6LJ3-SQ8N]; Tyler Cain, Perfecting Private Accommodations: Airbnb vs. Expedia, TopTal: Fin., https://www.toptal.com/finance/market-research-analysts/airbnb-vs-expedia [https://perma.cc/2AE2-GKCK] (last visited Aug. 20, 2023).

62. Turo, https://turo.com [https://perma.cc/28CV-QYFG] (last visited Aug. 13, 2023) (describing itself as the “world’s largest car sharing marketplace”); Neighbor, https://www.neighbor.com [https://perma.cc/ZD3E-S75N] (last visited Aug. 13, 2023) (connecting customers with “neighbors” who offer storage spaces).

63. Agreements and Guidelines for Apple Developers, Apple Dev., https://developer.apple.com/support/terms/ [https://perma.cc/BV6R-KUXE] (last visited Aug. 13, 2023) (providing Apple’s various guidelines and agreements for developers seeking to offer their apps through its platform); Google Play Terms of Service, Google Play (Mar. 15, 2023), https://play.google.com/about/play-terms [https://perma.cc/U5QF-DH87] (same for Google/Google Play).

64. See infra notes 128–32 and accompanying text.

65. For example, Apple charges 15%–30% fees from developers of apps in its app store, resulting in tens of billions of net revenue annually. See, e.g., Kif Leswing, Apple Implies It Generated Record Revenue from the App Store During 2021, CNBC, https://www.cnbc.com/2022/01/10/apple-implies-it-generated-record-revenue-from-app-store-during-2021-.html [https://perma.cc/6B4P-4ZM3] (last updated Jan. 10, 2022, 1:04 PM).

66. To illustrate this, consider how, as Airbnb and other platform companies take a greater share of the short-term accommodations market, more and more workers performing maintenance, cleaning, and other functions will shift from working for larger enterprises (hotels or their franchisees, etc.) to smaller players—hosts. My claim is that this kind of disaggregation will spread to other sectors.

67. See, e.g., supra notes 32–38 and accompanying text (describing how disaggregation reduces costs).

68. To ensure discipline, flexibility, and competition in this structure, there might be dozens of potential manufacturers, distributors, and retailers, as well as multiple inspection and consumer tracking entities.

69. Again, this is not so far removed from the enterprise structures currently deployed by branded apparel companies. Take, for example, how Nike defines its business and what this implies about its enterprise structure. See, e.g., Nike, Inc., Annual Report (Form 10-K) 1 (July 20, 2021) (“Our principal business activity is the design, development and worldwide marketing and selling of athletic footwear, apparel, equipment, accessories and services. NIKE is the largest seller of athletic footwear and apparel in the world. We sell our products directly to consumers through NIKE-owned retail stores and digital platforms (which we refer to collectively as our ‘NIKE Direct’ operations) and to retail accounts and a mix of independent distributors, licensees and sales representatives in virtually all countries around the world. We also offer interactive consumer services and experiences through our digital platforms. Virtually all of our products are manufactured by independent contractors.”).

70. See Companies Ranked by Number of Employees, CompaniesMarketcap, https://companiesmarketcap.com/largest-companies-by-number-of-employees/ [https://perma.cc/3DP9-C4YU] (last visited Oct. 7, 2023) (discussing how these four are ranked in the top twenty publicly traded employers).

71. See, e.g., Steven Greenhouse, A Part-Time Life, as Hours Shrink and Shift, N.Y. Times (Oct. 27, 2012), https://www.nytimes.com/2012/10/28/business/a-part-time-life-as-hours-shrink-and-shift-for-american-workers.html [https://perma.cc/Y2SZ-ZWXA] (discussing the massive shift to part-time work in the retail sector and its consequences for workers); see also Prince, supra note 24, at 29 (discussing the turnover rate at Amazon and Home Depot).

72. See Prince, supra note 5, at 647–61 (discussing the varying approaches across countries and US states to defining employment and regulating rideshare companies); Neil Irwin, For Start-ups Looking to Disrupt Regulated Industries, the New Strategy Is: Ask Forgiveness, Not Permission, N.Y Times (Apr. 22, 2014), https://www.nytimes.com/2014/04/23/upshot/for-start-ups-looking-to-disrupt-regulated-industries-the-new-strategy-is-ask-forgiveness-not-permission.html [https://perma.cc/Q4LL-JV7A] (discussing the strategy of various gig economy companies of operating before legal approval of the model and then seeking such approval); Noam Scheiber, Uber and Lyft Ramp Up Legislative Efforts to Shield Business Model, N.Y. Times, https://www.nytimes.com/2021/06/09/business/economy/uber-lyft-gig-workers-new-york.html?action=click&module=In Other News&pgtype=Homepage [https://perma.cc/JJ3X-RZ43] (last updated Oct. 21, 2021) (discussing these firms’ efforts to press for favorable legislation in markets in which they already operate).

73. See, e.g., Irwin, supra note 72 (“Rather than begin a lobbying campaign to try to clarify how they might legally operate, the companies’ approach has been to descend on a market, open up shop, build a client base and then dare regulators to stop it. When regulators step in, as they inevitably do, the companies hope to already have thousands of happy customers ready to raise a stink about having a beloved product taken away.”).

74. Kate Taylor, Why Starbucks Doesn’t Franchise, Bus. Insider (Sept. 28, 2016, 2:02 PM), https://www.businessinsider.com/why-starbucks-doesnt-franchise-2016-9 [https://perma.cc/9AFJ-YEG8] (quoting Howard Schultz, Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time (1997)).

75. See Top Publicly Traded Tech Companies by Number of Employees, CompaniesMarketcap, https://companiesmarketcap.com/tech/largest-tech-companies-by-number-of-employees/ [https://perma.cc/6958-T6GK] (last visited Aug. 13, 2023).

76. See, e.g., Jodi Kantor et al., The Amazon Customers Don’t See, N.Y. Times (June 15, 2021), https://www.nytimes.com/interactive/2021/06/15/us/amazon-workers.html [https://perma.cc/6R4U-79J2].

77. See, e.g., id. (discussing the work conditions for Amazon employees and Amazon’s human resources systems during the pandemic); see also Prince, supra note 24, at 31–33 (discussing these working conditions, how Amazon intentionally deploys them to churn workers, and the harms these practices inflict).

78. Although their sales and net revenues are lower, almost half of Starbucks locations worldwide are licensed and about 40% in North America are. Most licensees are retailers. See Starbucks Corp., Annual Report (Form 10-K) 6–8 (Nov. 18, 2022).

79. According to Amazon, as of August 2022, it had contracted with 3,000 Delivery Service Partners employing over 275,000 drivers worldwide. See How Amazon’s DSP Program Has Created $26 Billion in Revenue for Owners, Amazon (Aug. 19, 2022), https://www.aboutamazon.com/news/transportation/how-amazons-dsp-program-has-created-26-billion-in-revenue-for-owners [https://perma.cc/PZS7-DG9D]. It is worth noting that Amazon launched the DSP program in 2018 to shift its deliveries from UPS and the U.S. Post Office to small, independently owned delivery businesses. See Katie Tarasov, Amazon Drivers Describe Pressures and Pitfalls of Delivering for a DSP, CNBC (June 21, 2021), https://www.cnbc.com/video/2021/06/21/amazon-drivers-describe-pressures-and-pitfalls-of-delivering-for-a-dsp.html [https://perma.cc/WD4T-YSFW].

    Thus, this was not simply outsourcing, but rather fissuring through the shifting of work from large third-party service providers to atomistic ones. This parallels the short-term rental phenomenon. As Airbnb and similar firms have captured more of the market from traditional hotel chains and their franchisees, the provision of travel accommodations—as well as the management, maintenance, and cleaning work that underlie it—has shifted to more atomistic, less visible providers (i.e., hosts). See supra notes 14–18 and accompanying text.

80. For example, work conditions and union organizing efforts at Amazon and Starbucks are constantly in the news. See, e.g., Kantor et al., supra note 76; Max Zahn, Amazon and Starbucks Workers Led a Union Resurgence in 2022. Will It Last?, ABC News (Dec. 22, 2022, 6:30 AM), https://abcnews.go.com/Business/amazon-starbucks-workers-led-union-resurgence-2022/story?id=95090198 [https://perma.cc/WQ83-KE3Y].

81. See supra note 29 and accompanying text.

82. See, e.g., 42 U.S.C. § 2000e(f) (Title VII).

83. See, e.g., Nationwide Mut. Ins. v. Darden, 503 U.S. 318, 322–23 (1992) (ERISA); Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 739–40 (1989) (Copyright Act); The Atlanta Opera, Inc., 372 N.L.R.B. 11, 21 (2023) (returning to the common-law control test). See generally Glynn et al., supra note 20, at 3–36 (discussing the widespread influence and prevalence—as well as criticism—of the use of § 220 of the Second Restatement of Agency in distinguishing between employees and independent contractors).

84. See Restatement (Second) of Agency §§ 219–20 (Am. L. Inst. 1958). A “master” or employer is “a principal who employs an agent to perform service in his affairs and who controls or has the right to control the physical conduct of the other in the performance of the service.” Id. § 2(1). A servant or employee is “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Id. § 2(2). In contrast, an independent contractor is one “who contracts with another to do something for him but who is not controlled by the other nor subject to the other’s right to control with respect to his physical conduct in the performance of the undertaking.” Id. § 2(3).

85. Section 220(2) of the Restatement goes on to provide a more detailed definition of “servant,” containing a nonexclusive list of factors for determining servant/employee status:

    (a) the extent of control which, by the agreement, the master may exercise over the details of the work; (b) whether or not the one employed is engaged in a distinct occupation or business; (c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; (d) the skill required in the particular occupation; (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; (f) the length of time for which the person is employed; (g) the method of payment, whether by the time or by the job; (h) whether or not the work is a part of the regular business of the employer; (i) whether or not the parties believe they are creating the relation of master and servant; and (j) whether the principal is or is not in business.

    Id. § 220(2).

    The Restatement (Third) of Agency contains a similar definition, although the wording varies slightly, including the abandonment of “servant” in favor of “employee.” See Restatement (Third) of Agency § 7.07(3)(a) (Am. L. Inst. 2006) (stating “an employee is an agent whose principal controls or has the right to control the manner and means of the agent’s performance of work”).

86. Regulatory definitions of ‘‘employment’’ in employment and other areas, such as tax and copyright law, likewise offer variations of this common-law definition. See Rev. Rul. 87-41, 1987-1 C.B. 296, 298 (tax); Cmty. for Creative Non-Violence, 490 U.S. at 738–39 (Copyright Act); Glynn et al., supra note 20, at 4–7, 43.

87. See Glynn et al., supra note 20, at 5–7.

88. See, e.g., Bartels v. Birmingham, 332 U.S. 126, 130 (1947). It originates from the Supreme Court’s recognition that Congress intended the FLSA’s definition of “employ” (as to “suffer or permit to work”) to “stretch[] the meaning of ‘employee’ to cover some parties who might not qualify as such under a strict application of traditional agency law principles.” Nationwide Mut. Ins. v. Darden, 503 U.S. 318, 326 (1992); see also Employee or Independent Contractor Classification Under the Fair Labor Standards Act, 87 Fed. Reg. 66218, 62220–23 (proposed Oct. 13, 2022) (to be codified at 29 C.F.R. pts. 780, 788, 795) (re-adopting the economic reality test for purposes of classifying workers under the FLSA, contrary to the approach taken under a rule adopted by the division under the Trump Administration and discussing the history of the doctrine). However, the economic realities test is similar to the common-law test both in structure (a multifactored inquiry) and substance (a focus on control). See Restatement of Employment Law § 1.01 (Am. L. Inst. 2015).

89. See FedEx Home Delivery v. Nat’l Lab. Rel. Bd., 563 F.3d 492, 497, 504 (D.C. Cir. 2009) (adopting the entrepreneurial opportunity approach); FedEx Home Delivery v. Nat’l Lab. Rel. Bd., 849 F.3d 1123, 1126, 1128 (D.C. Cir. 2017) (reaffirming this approach); SuperShuttle DFW, Inc., 367 N.L.R.B. 2, 11–12 (2019) (adopting this approach and overturning prior NLRB precedent). The Biden Board recently overturned SuperShuttle DFW, returning to its prior adherence to the multi-factored common-law approach. See Atlanta Opera, Inc., 372 N.L.R.B. 11, 21 (2023).

    The new Restatement (Third) of Employment Law also focuses the control inquiry on entrepreneurialism. It provides that an employment relationship exists whenever a worker “acts, at least in part, to serve the interests of the employer;” the employer consents to receive the services of the worker; and the worker is not rendering services as an independent business, meaning that the worker does not exercise entrepreneurial control over the manner and means of the work. See Restatement (Third) of Employment Law § 1.01 (Am. L. Inst. 2015). The test, however, requires the actual (as opposed to mere potential) exertion of control and is framed in the negative—namely, that workers are employees unless they exert entrepreneurial control. Id. No state has adopted this approach yet. Id. (May 2023 update) (listing six federal and state court decisions citing this section, none of which reflect an adoption of this approach by the jurisdiction).

90. See, e.g., Restatement (Third) of Employment Law, § 1.01 cmts. d–f (suggesting that courts that have relied on the common-law and economic realities approaches have tended to utilize the same factors and reach the same results); Alexander & Feizollahi, supra note 41, at 6 (“[J]udges and scholars, including the authors of the Restatement (Third) of Employment Law, have expressed doubt about whether there is actually any difference in practice among the tests for employee status.”); Sprague, supra note 7, at 70–71 (discussing criticisms of the indeterminacy of these various overlapping approaches). Some courts have even denied any substantive difference between the traditional and economic realities tests. See, e.g., Murray v. Principal Fin. Grp., Inc., 613 F.3d 943, 945 (9th Cir. 2010) (concluding that ‘‘there is no functional difference’’ between the common-law control and economic realities tests and a so-called hybrid of the two). And there is even doubt whether the hotly contested entrepreneurialism approach has led to fewer workers being deemed employees for federal labor law purposes. Robert Iafolla, Employees Almost Always Win with Trump NLRB Test Set for Change, Bloomberg L. (Feb. 22, 2022, 4:30 AM), https://news.bloomberglaw.com/daily-labor-report/employees-almost-always-win-with-trump-nlrb-test-set-for-change [https://perma.cc/4DPM-CST2] Moreover, it may be that, given the structure and indeterminacy of the tests, the judicial or regulatory decision maker may be more critical to the outcome than the variant.

91. See, e.g., Vizcaino v. Microsoft Corp., 120 F.3d 1006, 1009–15 (9th Cir. 1997).

92. See, e.g., supra note 89; Glynn, et al., supra note 20, at 33–34.

93. For example, note the detailed contractual provisions allocating rights between FedEx and its drivers to which the D.C. Circuit majority and dissenting opinions devoted significant analysis in the 2009 FedEx decision. See FedEx Home Delivery, 563 F.3d at 498–502; Id. at 510–16 (Garland, J., dissenting).

94. See generally Prince, supra note 5, at 662–78. The calls for modification or abandonment of the common-law definition and variants due to the ride-sharing phenomenon are legion. See id. (discussing scholarly critiques and calls for reform); see also Glynn et al., supra note 20, at 21–22; Orly Lobel, The Gig Economy & the Future of Employment and Labor Law, 51 U.S.F. L. Rev. 51, 58–71 (2017); cf. Benjamin Means & Joseph A. Seiner, Navigating the Uber Economy, 49 U.C. Davis L. Rev. 1511, 1515 (2016) (suggesting a focus on “[h]ow much flexibility do individuals have in determining the time, place, price, manner, and frequency of the work they perform”); Seth D. Harris & Alan B. Krueger, A Proposal for Modernizing Labor Laws for Twenty-First-Century Work: The “Independent Worker”, Hamilton Project (2015), https://www.hamiltonproject.org/assets/files/modernizing_labor_laws_for_twenty_first_century_work_krueger_harris.pdf [https://perma.cc/5UL8-6BUJ] (proposing a category of independent workers). See generally Miriam A. Cherry & Ana Santos Rutschman, Gig Workers as Essential Workers: How to Correct the Gig Economy Beyond the COVID-19 Pandemic, 35 ABA J. Lab. & Emp. L. 11 (2020); Keith Cunningham-Parmeter, Gig-Dependence: Finding the Real Independent Contractors of Platform Work, 39 N. Ill. U. L. Rev. 379 (2019); Naomi B. Sunshine, Employees as Price-Takers, 22 Lewis & Clark L. Rev. 105 (2018); E. Gary Spitko, A Structural-Purposive Interpretation of “Employment” in the Platform Economy, 70 Fla. L. Rev. 409 (2018); Richard R. Carlson, Employment by Design: Employees, Independent Contractors and the Theory of the Firm, 71 Ark. L. Rev. 127 (2018); Deepa Das Acevedo, Unbundling Freedom in the Sharing Economy, 91 S. Cal. L. Rev. 793 (2018). For a discussion of how the role of scheduling flexibility may create misperceptions about worker employment status, see generally Charlotte S. Alexander, Employees, Independent Contractors, and the Flexibility False Choice, 44 Berkeley J. Emp. & Lab. L. (forthcoming 2023).

95. For example, the recent worker classification rule proposed by the Biden Administration’s Department of Labor, which reinstates an economic reality test for determining worker status, Employee or Independent Contractor Classification Under the Fair Labor Standards Act, 87 Fed. Reg. 66218, at 62225–26 (Oct. 13, 2022) (to be codified at 29 C.F.R. pts. 780, 788, 795), is widely viewed as broad enough to sweep in Uber and other gig economy and delivery workers. See, e.g., Rebecca Rainey, Labor Department Moves to Change Worker Classification Rule (3), Bloomberg L., https://news.bloomberglaw.com/daily-labor-report/biden-administration-issues-proposed-independent-contractor-redo [https://perma.cc/8NUT-CT46] (last updated Oct. 11, 2022, 11:34 AM) (discussing reactions to the proposed rule, the tumbling of Uber and Lyft shares, and the anticipated legal battle over the final rule).

96. See, e.g., Glynn, supra note 4, at 221–22 (discussing examples in a few states of such extensions in the garment, farm labor, construction, and janitorial sectors, as well as with regard to labor services); Cal. Lab. Code § 2810(a) (West 2022) (so-called “brother’s keeper” law); Cal. Lab. Code § 2810.3 (West 2020) (extending responsibility for wage and workers’ compensation to client firms that use labor contractors for temporary workers); N.Y. Exec. Law § 296-d (McKinney 2019) (extending antidiscrimination protections to independent contractors).

97. See Coronavirus Aid, Relief, and Economic Security Act (CARES Act), 15 U.S.C. § 9021(a)(3)(A)(ii)(II); Families First Coronavirus Response Act (FFCRA), Pub. L. No. 116-127, § 7002(a)–(b), 134 Stat. 178, 212 (2020); Sprague, supra note 7, at 87.

98. According to an April 2021 Congressional Research Service report, “[a]t least [twenty] states and the District of Columbia have adopted a [version of the ABC test]” to apply in some way to their employment and labor laws. See Jon O. Shimabukuro, Cong. Rsch. Serv., R46765, Worker Classification: Employee Status Under the National Labor Relations Act, the Fair labor Standards Act, and the ABC Test 9–27 (2021). Some of the states have adopted the ABC test only for the purpose of the state’s unemployment compensation laws. Id. at 14–27. Others, including California, Connecticut, Massachusetts, Nebraska, and New Jersey, apply the test in other contexts, including in determining employment status for wage and hour regulation purposes. See id.

99. See, e.g., Dynamex Operations W., Inc. v. Superior (Stern), 416 P.3d 1, 40 (Cal. 2018).

100. Id.

101. See id.

102. See Samantha J. Prince, The AB5 Experiment—Should States Adopt California’s Worker Classification Law?, 11 Am. U. Bus. L. Rev. 43, 57, 94–96 (2022) (listing 109 exceptions to AB5).

103. See Cal. Lab. Code § 2775 (West 2020) (repealing and replacing § 2750.3, which codified the original AB5, mostly to incorporate a number of exemptions/exclusions).

104. See, e.g., Prince, supra note 5, at 681–82.

105. Unions and Gig Drivers Sue to Overturn California’s Proposition 22, CBS News, https://www.cbsnews.com/news/unions-and-gig-drivers-sue-to-overturn-californias-proposition-22/ [https://perma.cc/K2RK-HFMY] (last updated Jan. 12, 2021, 4:26 PM).

106. Kate Conger, Uber and Lyft Drivers in California Will Remain Contractors, N.Y. Times, https://www.nytimes.com/2020/11/04/technology/california-uber-lyft-prop-22.html [https://perma.cc/X6LA-B4ZK] (Nov. 7, 2020). As a result, these app-based companies became excluded from the law. Id. Proposition 22 was codified as the “Protect App-Based Drivers and Services Act” in November 2020 and became effective in December 2020. Cal. Bus. & Prof. Code §§ 7448–7467 (West 2020). The Act’s exemption for app-based drivers applies to drivers engaged by a “[D]elivery network company,” which is defined as “a business entity that maintains an online-enabled application or platform used to facilitate delivery services within the State of California on an on-demand basis, and maintains a record of the amount of engaged time and engaged miles accumulated by DNC couriers.” Id. § 7463(f).

107. See Suhauna Hussain, Prop. 22: California Gig Companies, Workers Get Their Day in Appeals Court, L.A. Times, https://www.latimes.com/business/story/2022-12-13/california-prop-22-appeals-court-hearing-weighs-gig-workers-fate [https://perma.cc/JXG9-PEZR] (Dec. 13, 2022, 6:34 PM). A divided California appellate court panel upheld the constitutionality of most of Proposition 22, overturning the decision below. Castellanos v. State, 305 Cal. Rptr. 3d 717, 753 (Cal. Ct. App. 2023). The legal battle is not over, however, because the California Supreme Court recently granted review. Castellanos v. State, 530 P.3d 1129, 1129 (Cal. 2023) (granting certiorari).

108. Scheiber, supra note 72. A number of states have adopted laws codifying independent contractor status for workers providing services through app-based platforms based on a number of conditions, including a contract specifying this status. See Prince, supra note 5, at 692–99. In New York, draft legislation would classify “gig workers to be ‘network workers,’” meaning they would be treated in essence as independent contractors in exchange for some employee-like protections and the ability to unionize. Scheiber, supra note 72. However, it has yet to pass, and it faces opposition from groups representing delivery workers and unions. Jimmy Vielkind, Labor Groups Divided over Proposal to Let App Workers Unionize in New York, Wall St. J., https://www.wsj.com/articles/labor-groups-divided-over-proposal-to-let-app-workers-unionize-in-new-york-11622059832 [https://perma.cc/YA7X-PEH8] (last updated May 26, 2021, 8:40 PM). In addition, in 2022, the Massachusetts Supreme Judicial Court rejected the Attorney General’s certification of ballot measures like Proposition 22. Koussa v. Att’y Gen., 188 N.E.3d 510, 513–23 (Mass. 2022).

109. Anna Deknatel & Lauren Hoff-Downing, ABC on the Books and in the Courts: An Analysis of Recent Independent Contractor and Misclassification Statutes, 18 U. Pa. J.L. & Soc. Change 53, 65–73 (2015).

110. See Shimabukuro, supra note 98 at 2, 6–9. President Biden publicly disapproved of Proposition 22’s enactment and voiced a mission to “put a stop to employers intentionally misclassifying their employees as independent contractors.” Lauren Feiner, Gig Companies Prepare to Bring Their Fight for Independent Work Nationwide Under a More Skeptical Biden Administration, CNBC, https://www.cnbc.com/2021/02/27/uber-doordash-vs-gig-workers.html [https://perma.cc/9XCR-SWPB] (last updated Mar. 15, 2021).

111. Again, the Biden DOL Wage and Hour Division is proposing a return to an economic reality approach to determining employee status under the FLSA, which many interpret as broad enough to sweep in rideshare drivers and many other gig workers. See discussion supra note 95 and accompanying text. And the Biden NLRB has signaled a turn in this direction. See id. The Protecting the Right to Organize Act of 2021 (the PRO Act), which would have adopted the ABC test for NLRA purposes, passed the House, H.R. 842, 117th Cong. § 101(b) (2021), but never passed the Senate.

112. See Jeffrey M. Hirsch, Joint Employment in the United States, Italian Lab. L. E-J., July 2020, at 55–69, for a thorough survey of the treatment of joint employment in the United States.

113. See id. at 61–68.

114. See id.

115. See id. at 63–68 (discussing the pendulum swing that Democratic and Republican administrations have made between the broader and narrower approaches for purposes of determining joint employment under the NLRA and FLSA). This was the issue in Browning Ferris Indus. of California, Inc., 362 N.L.R.B. 1599 (2015) (BFI), in which the National Labor Relations Board clarified—and some would argue expanded—its joint employer doctrine, and underlies the complaints of unfair labor practices brought during the Obama Administration against McDonald’s as a putative joint employer of employees of its franchisees. See McDonald’s USA, LLC, 362 N.L.R.B. 1347, 1347–49 (2015) (Miscimarra, Member, concurring in part and dissenting in part). After the Trump Board sought to unwind this standard, see Hirsch, supra note 112, at 65, the Biden Board proposed a new rule that would reinstate the BFI test. See Standard for Determining Joint-Employer Status, 87 Fed. Reg. 54641, 54642 (proposed Sept. 7, 2022) (to be codified at 29 C.F.R. pt. 103). The Wage and Hour Division of the Department of Labor has also rescinded the Trump-era rule narrowing joint employer status. See Rescission of Joint Employer Status Under the Fair Labor Standards Act Rule, 86 Fed. Reg. 40939, 40943 (proposed July 30, 2021) (to be codified at 29 C.F.R. pt. 791).

116. See generally Andrew Elmore & Kati L. Griffith, Franchisor Power As Employment Control, 109 Calif. L. Rev. 1317 (2021) (discussing how exacting franchisor control is in practice despite courts’ and regulators’ reluctance to hold franchisors accountable as joint employers).

117. See Hirsch, supra note 112, at 62 & n.45 (“Moreover, ‘control over wage, hours, and working conditions’ refers to day-to-day control over working conditions, as opposed to measures that impact work in order to maintain quality control.” (quoting Martinez v. Combs, 231 P.3d 259, 277–79 (Cal. 2010))); Salazar v. McDonald’s Corp., 944 F.3d 1024, 1029–30 (9th Cir. 2019) (applying California’s joint employer doctrine for wage and hour claims to hold that McDonald’s is not a joint employer because its otherwise exacting specifications and monitoring are related to quality control).

118. See supra note 115 and accompanying text; Salazar, 944 F.3d at 1027–28 (discussing the franchise agreement).

119. See discussion supra note 96 and accompanying text; Glynn, supra note 4, at 221–22.

120. See, e.g., Jinks v. Credico (USA) LLC., 177 N.E.3d 509, 520–21 (Mass. 2021) (rejecting plaintiffs’ arguments that under Massachusetts law the ABC test ought to be adopted in determining joint employment as well); Henderson v. Equilon Enters., LLC, 253 Cal. Rptr. 3d 738, 750 (Cal. Ct. App. 2019) (determining that the ABC test “does not fit analytically with and was not intended to apply to claims of joint employer liability”). See generally Marc Peralta, Comment, Identifying Joint Employment Is as Easy as ABC, 45 Seton Hall Legis. J. 261 (2021) (reviewing approaches to joint employment and acknowledging that even states that have adopted the ABC test for some purposes have not yet extended its framework to determining joint employment). Indeed, as discussed in note 117, supra, even California has not been willing to extend joint employment status to franchisors such as McDonald’s.

121. For example, to my knowledge, Airbnb has not been held liable for employment-law violations by its hosts. Professor Sprague has argued that Airbnb hosts themselves might be employees of Airbnb under the ABC test (or California’s version of it). See generally Sprague, supra note 7. Although this possibility is intriguing, I view this outcome as unlikely. Host properties are independently owned, managed, and maintained, often by entities serving as hosts for more than one dwelling (including small hotels, inns, and other businesses). Id. at 86–87; Standards for Hotels and Other Hospitality Businesses, Airbnb, https://www.airbnb.com/help/article/1526 [https://perma.cc/N9QJ-BG57] (last visited Sept. 21, 2023). In such circumstances, it is doubtful that courts would deem such businesses “employees.” For example, the Ninth Circuit recently upheld the district court’s finding that 7-Eleven met all three prongs of the ABC test regarding the owners/managers of the company’s franchised stores, emphasizing the importance of their independent store ownership in this determination. See Haitayan v. 7-Eleven, Inc., No. 21-56144, 2022 WL 175478805, at *1 (9th Cir. Dec. 9, 2022).

     Moreover, even if some portion of hosts (i.e., those who are natural persons or sole proprietors) could be deemed employees under the ABC test, that would not extend employment status to Airbnb for the workers or third-party entities they hire, such as property managers, maintenance workers, and cleaners. Indeed, even if it were otherwise possible, it might be challenging to convince a court to extend the second or third prong of the ABC test to these workers—that is, that they are part of Airbnb’s usual course of business or somehow not independently established businesses. Cf. Goldman & Weil, supra note 3, at 108 (“But it might be increasingly difficult to delineate work as ‘integral’ as companies distance themselves from workers while retaining control over their activity through other organizational mechanisms, including algorithmic management. For example, janitorial franchising has been challenged as a form of misclassification because individual franchisees’ pricing, customer contract and service relationships, and even ability to take on additional work are controlled by a master franchisor. In this setup, the master franchisor depends on unit franchisees to clean and profits directly from their performance, but asserts that it is not a cleaning company (and hence not an employer) and is instead in the business of franchising.” (citations omitted)). Instead, extending employment status to Airbnb requires a finding of joint employment, which, as discussed below, would not exist because of the lack of sufficient Airbnb control. See infra notes 128–36 and accompanying text.

122. As discussed in note 94, supra, and accompanying text, scholarly commentary and proposed reforms regarding the employment status of rideshare drivers are legion. By comparison, there is relatively little scholarship advocating expansion of joint employment beyond control, although, as discussed in Section IV.B., infra, some scholars have advocated for new and far broader conceptions of firm accountability for workplace obligations or violations.

123. See supra notes 112–20 and accompanying text (describing the core disputes and outer bounds of current joint employer doctrine).

124. See, e.g., Goldman & Weil, supra note 3, at 65–66 (discussing the effects of multiple layers of disaggregation).

125. See Acevedo, supra note 15, at 39–47.

126. See id. at 46–54.

127. See id. at 60.

128. See, e.g., Elmore & Griffith, supra note 116, at 1322.

129. See supra notes 117–18 and accompanying text; Hirsch, supra note 112, at 62 & n.45.

130. See, e.g., Elmore & Griffith, supra note 116, at 1346–71 (advocating for expanded joint liability over franchisors and detailing the level of direct and indirect control restaurant franchisors wield through contract terms, monitoring, training, and other measures over franchisee work conditions). Airbnb no doubt wields power over its hosts in various ways, but power without direct or indirect determination or co-determination of underlying work conditions is insufficient.

131. This distinguishes the oversight Airbnb exercises from that exercised by franchisors like McDonald’s and Domino’s. Cf. id. at 1350–55; Weil, supra note 3, at 12–14, 64–72 (discussing how franchisors and other traditional lead firms protect their brand and quality through exacting dictates and monitoring). It is true that violators or underperformers might be terminated, but this cannot be dispositive, because termination alone does not signify control over the manner and means, and even firms without employer-like control reserve the right to terminate goods and services providers for unsatisfactory outcomes.

132. Indeed, as Professor Sprague has detailed, Airbnb exercises far less control over its hosts than Uber or Lyft do over their drivers:

     While Airbnb does exert some control over its hosts—such as monitoring their performance through ratings and handling all billing, dispute resolution, and refunds—a comparison between Uber, Lyft, and Airbnb demonstrates that Airbnb’s exercise of control over its hosts is not nearly as extensive as that exercised over drivers by Uber and Lyft. While Airbnb does monitor host performance through ratings, it does not directly engage in selecting guests for hosts (and hosts for guests) the way Uber and Lyft select passengers for drivers (and drivers for passengers). In addition, Airbnb does not set the price of the service, as Uber and Lyft allegedly do. An argument could be made that Airbnb’s level of control is limited to what is necessary to achieve the result—a short-term rental satisfactory to both the host and the guest—versus the manner and means by which that result is achieved. If an examination of Airbnb’s classification of hosts as independent contractors were limited to the “traditional” control-based classifications tests, then Airbnb’s hosts would most likely be considered properly classified as independent contractors.

     Sprague, supra note 7, at 84–85 (citations omitted). While Professor Sprague offered this assessment in analyzing whether Airbnb hosts might be deemed employees under traditional control-based tests (or the first prong of the ABC test), the same holds for employer/joint employer status for Airbnb over the third-party services or workers hosts may retain to manage, maintain, or clean the units, since such status likewise hinges on a finding of sufficient control over the manner and means of the work.

133. See supra notes 98–100 and accompanying text.

134. See, e.g., Elmore & Griffith, supra note 116, at 1365–67 (arguing for an expanded approach to joint employer liability that would sweep in franchisors who exert indirect and reserved control—as well as other control—over franchisees).

135. See supra note 96 and accompanying text.

136. I am not saying policy makers could not do so. Indeed, because the contours of joint employment ordinarily are defined and crafted by regulatory agencies and courts, rather than by legislatures, one can imagine movement in this direction to address changing enterprise structures. See Sachin S. Pandya, What Taft-Hartley Did to Joint-Employer Doctrine, 25 Emp. Rts. & Emp. Pol’y J. 157, 184–89 (2021) (contesting the prevailing view that the Taft-Hartley Act ties the NLRB joint-employer doctrine to the common law of agency). Rather, what I am saying is that lawmakers have shown little inclination to do so except in narrow, discrete circumstances.

137. See supra Part II.

138. See supra note 22 and accompanying text.

139. See supra notes 123–27 and accompanying text.

140. Orly Lobel, We Are All Gig Workers Now: Online Platforms, Freelancers & the Battles over Employment Status & Rights During the Covid-19 Pandemic, 57 San Diego L. Rev. 919, 939 (2020); Estlund, supra note 13, at 262–63, 305–15 (emphasis omitted). Other scholars have suggested protecting employees in fissured and gig environments by utilizing other types of regulation. For example, in a forthcoming paper, Professor Jonathan Harris argues that consumer laws can be used to protect these workers in a variety of ways. See generally Jonathan F. Harris, Consumer Law as Work Law, 112 Calif. L. Rev. (forthcoming 2024).

141. See, e.g., Lobel, supra note 140, at 940; Estlund, supra note 13, at 305–10.

142. See, e.g., Estlund, supra note 13, at 277, 285–86, 315–16; see also Goldman & Weil, supra note 3, at 113–15 (proposing a regime in which such benefits are portable, funded by contributions from both workers and firms).

143. See supra note 97 and accompanying text.

144. This is consistent with the “concentric circle” framework Professors Goldman and Weil advocate to ensure fundamental work-related rights, see Goldman & Weil, supra note 3, at 88–101 (detailing how the “Inner Circle of protections” protects those fundamental rights), as well as Professor Roger’s proposal for platform liability for directly engaged workers, see Rogers, supra note 58, at 500–07.

145. This would eliminate the exclusion of workers because of a lack of employment status. Thus, in terms of coverage, the focus would not be on whether a worker is an “employee,” but rather on whether the worker meets other criteria for inclusion (such as whether the worker is exempt or nonexempt for purposes of wage and hour laws) and on which persons or firms should owe duties to that worker. There obviously would be pressure to expand exemptions, but, as a default matter, they should remain limited to those workers who truly do not need a particular protection.

146. See Goldman & Weil, supra note 3, at 88–101.

147. See discussion supra notes 120–24 and accompanying text.

148. See supra Part III.

149. See id.

150. See supra note 96 and accompanying text.

151. See 29 U.S.C. § 215(a)(1); Lisa Burden, DOL Uses FLSA’s “Hot Goods” Provision to Block Clothing Shipment, HR Dive (Apr. 27, 2018), https://www.hrdive.com/news/dol-uses-flsas-hot-goods-provision-to-block-clothing-shipment/522085/ [https://perma.cc/Y73D-GNRQ].

152. Rogers, supra note 34, at 46–47, 49–53 (proposing a negligence standard for joint employment); Estlund, supra note 13, at 304–05 (advocating extension employment to “lead firms [that] know[] or should know about [safety, wage, discrimination, and other violations]”); see also Steven A. Carvell & David Sherwyn, It Is Time for Something New: A 21st Century Joint-Employer Doctrine for 21st Century Franchising, 5 Am. U. Bus. L. Rev. 5, 35–36 (2015) (advocating for a reasonable care standard for franchisors); Michael C. Harper, Escaping the Allure of Joint Employment: Using Fault-Based Principles to Impose Liability for the Denial of Employee Statutory Rights, 36 ABA J. Lab & Emp. L. 225, 227–29, 235 (2022) (arguing for a fault-based approach to joint employer liability under the NLRA and Title VII).

153. Guy Davidov, Indirect Employment: Should Lead Companies Be Liable?, 37 Compar. Lab. L. & Pol’y J. 5, 35 (2015) (“In production/supply chains, as well as franchising, liability should be imposed on lead companies based on implicit brand representations, on the assumption that such companies also have the power to prevent the infringement of rights.”); see also Alan Hyde, Nonemployer Responsibility for Labor Conditions, in Who is an Employee and Who is the Employer?: Proceedings of the New York University 68th Annual Conference on Labor June 5–6, 2015, at 416–17 (Kati L. Griffith & Samuel Estreicher eds., 2016) (arguing that “anyone who benefits from labor has the responsibility to see that it is compensated”).

154. See generally Aditi Bagchi, Production Liability, 87 Fordham L. Rev. 2501 (2019).

155. See Glynn, supra note 4, at 227–28.