Thursday, March 19, 2015

An über-huge lawsuit for the employee/contractor distinction

Last week, two different California federal judges reached the same conclusion in two different lawsuits brought against two different ride-hailing companies, Uber and Lyft.

O’Connor v. Uber Technologies, Inc. and Cotter v. Lyft, Inc. are putative class actions alleging that the drivers of each company are employees, and not, as the companies claim, independent contractors. The distinction is monumental, since employees receive a wealth of legal protections, not the least of which is a guaranteed minimum wage and overtime for hours worked in a week over 40, while independent contractors serve with virtually no legal protections at all.

In each case, the judge concluded that the issue was too close to call on summary judgment, and punted the issue for a jury to decide. According to the judges, the drivers resemble contractors in some regards, such as their ability to choose their work hours and their passengers, and yet resemble employees in other regards, such as the degree of control the companies exercise over both the drivers’ interactions with customers and their tenure serving the company.

For more on the important issue of the employee/contractor distinction, and why you should err on the side of “employee” unless it is abundantly clear that the worker is an independent contractor, I recommend the following from the archives:

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