Two Contractor Misclassification Class Actions Filed by Lyft and Postmates Workers

Gig economy workers have filed two contractor misclassification class action lawsuits, alleging that Lyft and Postmates misclassify drivers and couriers as independent contractors.

Two contractor misclassification class actions have been filed separately against Lyft Inc. and Postmates Inc., alleging that the two companies wrongfully classify their drivers and couriers as independent contractors.

The Postmates class action is led by plaintiff Dora L. and the Lyft class action is led by plaintiff Matthew T. The plaintiffs in the cases argue that Lyft and Postmates gig economy workers should be classified as employees based on a new test adopted by the the state’s high court last month.

In the decision, made in Dynamex Operations West Inc. v. The Superior Court of Los Angeles, the court upheld a class certification for a group of drivers who filed a wage and hour class action lawsuit over contractor misclassification. In the Dynamex ruling, the California Supreme Court overturned a multifactor classification test that has been used in the state for almost 30 years after it was adopted in 1989.

In its place, the state has adopted the “ABC test” for classification which, for state wage orders, presumes workers are employees as opposed to independent contractors. The new test considers several secondary factors to avoid contractor misclassification and places the burden on employers such as Lyft and Postmates to prove their workers are not employees.

To prove that a company has not committed contractor misclassification, they must show that a worker is free from its control and direction while working, performs work outside the company’s main line of business, and is engaged in an independently established trade, occupation, or business. These requirements, called elements A, B, and C, must all be met in order for a worker to be classified as an independent contractor for wage order purposes.

The contractor misclassification class actions argue that Lyft and Postmates engage in unfair business practices by failing to pay minimum wage or reimburse workers for business expenses. Lyft faces additional allegations that the company fails to pay overtime.

Although the plaintiffs in the case are hopeful that the Dynamex decision will give them the legal high ground, some attorneys have said that California Labor Code protections which are not included in wage orders remain in limbo. This would include protections for reimbursement of business expenses.

An attorney for the plaintiffs, has said that this is not applicable, as California’s transportation wage order requires employers to pay for “tools and equipment” workers require to do their job.

“In our [contractor misclassification] cases, we have been requesting that the drivers be reimbursed at the IRS mileage rate for the use of their vehicles, which would be required under the wage order,” the plaitniffs’ attorney said in a statement to Law360.

The Postmates Contractor Misclassification Class Action Lawsuit is Case No. 18-566394 in the Superior Court of the State of California for the County of San Francisco. The Lyft Contractor Misclassification Class Action Lawsuit is Case No. 18-566392 in the Superior Court of the State of California for the County of San Francisco.

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If you work as an independent contractor in California for a gig economy company, you may be entitled to employee rights.

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