Legal Challenges to Regulations

Regulation Step Number Reference Table

Fictional Regulations

Fictional Role of OAG

Powerpoint

Fact Pattern

TaskRabbitLLC was founded in January 2015 as a home services network company. it operates a website and mobile app that allows consumers to submit a work request, which is routed to the closest "Tasker" with that skill set.Ms. Piggy, a Tasker, provides cleaning services through theTaskRabbitwebsite. 

Statute

Senate Bill 545, formally codified at 43 P.S. §§ 1550-1555, is known as the "Shared Economy Regulatory Act". Section 1554 states, in relative part:

Authority. - The Department [of Labor and Industry] may adopt, promulgate, amend, and rescind any rules, regulations, and policies necessary to implement and effectuate the provisions of this act.

Regulation

In accordance with the authority delegated to the Department by the legislature, the Department promulgated some regulations, which include the following language. The regulations have been published, and are effective immediately.

§8.20. Consumer Safety.

(a)   The Bureau [of Sharing] shall establish such rules and policies as are necessary for the protection of consumers under the Act.

(b)   The Bureau shall have the authority to suspend or revoke the license of any entity or individual under the Act for violation of any consumer safety rule or policy established by the Bureau.

(c)   All entities or individuals licensed under the Act shall complete the Safety Training and Management Program ("STAMP") within ninety days of licensure by the Bureau.

(d)   Due to the rapidly evolving nature of the sharing economy, the Bureau shall have the authority to determine and establish the requirements of the STAMP program through publication of a policy statement. At minimum, the STAMP program shall consist of these components:

1.Training for Licensed Shared Economy Service Providers in responsible customer service practices;

2.Training for Licensed Shared Economy Service Companies in proper practices for employee monitoring and complaint response;

3.Successful criminal history clearance from a Commonwealth Police Agency for all licensed individuals or officers of corporate licensees.

(e)   Any policy statement may incorporate standards from the National Consumers' League.

Policy Statement -Promulgated March 1, 2016; Effective May 1, 2016

In accordance with the authority delegated to the Department by the legislature, and the authority contained in the regulations, the Bureau issued a STAMP Policy Statement establishing the contents of the program and requirements to maintain licensure.

The policy statement also incorporates the standards set forth in the 2015 National Consumers' League Guidance on Regulation in the Barter Economy. The Bureau determined that "responsible customer service practices" vary from business model to business model, but it will rely on the NCL standards, as they may be amended, and forTaskRabbit, require:

  • Bonding or insurance for personal injury and theft
  • Conduct criminal background checks and child abuse clearances of all Taskers
  • Conduct Tuberculosis (TB) and drug screenings on all Taskers
  • Ensure that all Taskers are compliant with the specific Bureau requirements applicable to their specific home services
  • Any relevant website must be accessible to the visually impaired through appropriate software
  • Maintain documentation to show direct that Taskers have required skills, criminal background checks, child abuse clearances, and required TB screening

Ms. Piggyand other Taskers seeking individual licensure to provide in-home cleaning services through a sharing network must:

  • Possess basic knowledge regarding the safe use and disposal of cleaning chemicals
  • Possess a current CPR Certification
  • Carry an epipen at all times when customer contact might reasonably be expected, and know  how to use it
  • Fluency in American Sign Language (ASL)

Shortly after the Bureau issued the policy statement, the National Consumers' League issued its 2016 Guidance on Regulation in the Barter Economy.

TaskRabbitfiled an original action in the Commonwealth Court challenging the validity of the policy statement and regulations.TaskRabbithas not yet sought a license from the Bureau, and none of its Taskers have yet secured a license. After discovery, the Department filed for Summary Relief.

Ms. Piggyapplied to the Bureau for a license, but was denied by the ALJ. The ALJ determined that Ms. Piggy failed to demonstrate compliance with the following requirements:  (1) lack of fluency in ASL, and (2) lack of an epipen pen.  Ms. Piggy is certified in CPR, passed the basic knowledge test, and passed the background checks. In the ALJ proceeding, Ms. Piggy challenged the validity of the policy statement, but did not challenge the validity of the regulations. Ms. Piggy appealed the ALJ's decision to the Secretary of the Department of Labor and Industry, who affirmed the decision. Ms. Piggy appealed to the Commonwealth Court.

The Commonwealth Court scheduled oral argument in both cases.