Bob Egelko, San Francisco Chronicle Staff Writer, Wednesday, January 9, 2008

Taxi drivers working for Oakland's Friendly Cab Co. have the right to unionize, a federal appeals court ruled Tuesday, more than five years after the cabbies first tried to form a union.

The drivers are employees rather than independent contractors, and therefore are covered by collective bargaining rules under federal law, said the Ninth U.S. Circuit Court of Appeals in San Francisco. Although drivers lease their taxis from Friendly Cab and keep all fares and tips, the court said the company acts as an employer in controlling most aspects of their work.

The company's 90 to 100 drivers have been seeking union representation since 2002, when a National Labor Relations Board hearing officer ordered a union election and the company appealed, said Caren Sencer, attorney for the East Bay Taxi Drivers Association, a Teamsters affiliate.

"When it takes over five years and a federal court to let an employer know you have the right to organize, something has to change," Sencer said.

She said the case illustrates the need for a proposed law, stalled in Congress, that would require an employer to recognize a union if a majority of the employees signed cards endorsing one.

The measure would speed up the representation process, which often takes years. Business groups say the legislation, sponsored in the House by Rep. George Miller, D-Martinez, and in the Senate by Democrat Edward Kennedy of Massachusetts, would give unions too much power and would violate workers' right to vote on whether they want a union.

Sencer said the ruling also means California labor officials should succeed in their efforts to require Friendly Cab to treat the drivers as employees under state law, allowing the drivers to get unemployment benefits and workers' compensation.

A lawyer for the company was unavailable for comment.

Unions trying to organize taxi drivers have had mixed results before the federal labor board and in court, chiefly because of disputes over whether the drivers are employees or contractors.

Friendly Cab charges drivers between $450 and $600 a week for the right to use the taxis, choose their own work hours and keep the fares. The appeals court said that such lease arrangements usually mean drivers are independent contractors, but that in Friendly's case, the company exercises extensive control over its drivers.

Most important, the court said, the company prohibits drivers from using the cabs for their own businesses. They cannot solicit customers for themselves, hand out private business cards to their passengers or take calls for service on personal cell phones.

"These limitations do not allow Friendly's drivers the entrepreneurial freedom to develop their own business enterprises like true independent contractors," Judge Consuelo Callahan said in the 3-0 ruling.