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The highlights of independent contractor legal developments in November 2021 focus on interstate transportation workers.  Questions addressed by the courts last month included whether ride-sharing workers classified as independent contractors are considered interstate transportation workers and therefore exempted from the arbitration provisions of the Federal Arbitration Act, and whether the strict test in California for IC status, when applied to interstate truck drivers, is preempted by the federal law deregulating the airline and transportation industry.

The first three cases reported below regarding legal developments in August 2021 have four common denominators: the defendants are all large gig economy companies; plaintiffs’ class action counsel is the same; the lawsuits are all situated in New York; and all four are already on their way to arbitration or are highly likely to end up there shortly.  Lyft, Uber, and Instacart have been the subject of independent contractor misclassification lawsuits around the country by many law firms, but the law firm with the most class action cases against those companies is Lichten & Liss-Riordan. When faced with one of these types of cases, it seems as though we are in a déjà vu environment:  the company’s counsel typically argue that, where there is an arbitration clause with a class action waiver, the Federal Arbitration Act commands a court to compel arbitration of the claims on an individual basis. Then, in cases involving workers who drive vehicles, plaintiffs’ lawyers, including the law firm in the first three cases below, invariably argue that the FAA is inapplicable because Section 1 of that statute has an arbitration exemption for interstate transportation workers.  Thus, many of these cases seem to present the same threshold issue: are the plaintiff and members of the proposed class covered by the arbitration exemption for interstate transportation workers? 

April 2021 was a meaningful month for two industries that are hardly strangers to lawsuits involving the status of workers as independent contractors.  A federal district court in the District of Columbia issued an extremely favorable decision for Lyft, holding that a driver and members of a class action are not covered by the interstate transportation worker exemption from arbitration under the Federal Arbitration Act, even though drivers in a locality such as D.C. often drive in interstate commerce.  The court concluded that the arbitration exemption in the FAA must be determined by reference to all of a company’s drivers nationally, not locally, and found that crossing state lines is not commonplace among Lyft drivers in most locations where Lyft operates.  Meanwhile, in an appellate decision by a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit, two of the three panel judges determined that a federal transportation law with a strong preemption clause does not preempt the California ABC test. The dissenting judge disagreed, finding that the ABC test is precisely the type of state law that the federal transportation law was designed to preempt.  Because one judge dissented, the full Ninth Circuit is likely to consider the panel decision.  If the full appellate court affirms, the Supreme Court may well grant cert and determine this issue because the Ninth Circuit decision is directly at odds with a First Circuit ruling involving an identical Massachusetts law. 

May 2020 was not a busy month for the filing of new independent contractor misclassification lawsuits, as some courts were closed for new filings and many lawyers were working remotely. But five cases came to our attention that provide meaningful lessons for companies seeking to comply with laws impacting independent contractors or defending against class or collective actions brought under such laws.

Our combined news update provides guidance for companies that utilize independent contractors on what not to do.  The first lesson involves a company’s waiver of its best argument for compelling arbitration of an IC...

Ten years ago, when we began a legal blog dedicated to independent contractor compliance and misclassification, the landscape of the law involving ICs was quite different than today – although a great deal remains unchanged.  We...

The past two months were two of the busiest ever in terms of judicial decisions involving claims of independent contractor misclassification, administrative and regulatory initiatives, and legislative developments.  They are...

For the past 18 months, insurance companies have been holding their collective breath to see if an appellate court would affirm or reverse an Ohio federal district court decision concluding that thousands of current and former...

Earlier today, the National Labor Relations Board issued a decision overturning a union-friendly test for independent contractor status that had been adopted by the Board during the Obama Administration. In its decision in...