Two Lyft drivers, one in Massachusetts and one in California, have recently filed another pair of proposed class-action lawsuits.
Like previous similar cases, the plaintiffs here accuse the ride-hailing company of inadequately paying them, and misclassifying them as contractors, rather than employees.
By classifying the bulk of its workforce as contractors, Lyft and other companies like it, are almost certainly saving millions of dollars per year in costs that they would otherwise have to pay, including drivers’ health, retirement, unemployment, or other benefits that typically come with full-time employment.
The Massachusetts case, Wickberg v. Lyft, was brought earlier this month by a Boston-based attorney, Shannon Liss-Riordan, who has made a name for herself bringing similar labor lawsuits against gig economy startups in recent years.
She lost a key lawsuit, O’Connor v. Uber, at the 9th US Circuit Court of Appeals in late September 2018. In that case, the appellate court found that because Uber drivers had agreed that all disputes would be handled by private arbitration rather than public litigation, the judges didn’t have to even reach the contractor versus employee question.
But what’s different in Wickberg is that this driver explicitly opted out of this arbitration clause of his work agreement, and so Liss-Riordan is arguing that “he can represent a class of Lyft drivers in court (regardless of whether they have individually ‘opted out’ of Lyft’s arbitration clause.)”
Meanwhile, across the country, plaintiff’s lawyers in Whitson v. Lyft, make a very similar argument on behalf of a driver who had also opted out.
Crucially, the California plaintiff, Nathaniel Whitson, who filed his case on October 26 in federal court in San Francisco, may have a stronger chance due to a recent California Supreme Court ruling in a case known as Dynamex.
There, the Golden State’s highest court came up with a three-part test to determine whether someone is in fact and employee, or a contractor.
(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, the worker should be considered an employee and the hiring business an employer under the suffer or permit to work standard in wage orders.
Because of this precedent, Veena Dubal, a law professor at the University of California, Hastings, told Ars that Whitson, as a case, “seems strong,” but suggested that the pair of cases have a long way to go.
“Both cases include lead plaintiffs who have opted out of the mandatory arbitration agreement,” she emailed. “The hope is to form a large class of drivers who have opted out of the arbitration agreement. If the class is large enough in either case and the plaintiffs win, then it might impact Lyft’s business model.”
Lyft did not respond to Ars’ request for comment.