Among the legal developments we report on below from October is a decision by a federal district court in California certifying a lawsuit for independent contractor misclassification as a collective action under the federal wage and hour law, allowing similarly situated individuals to join the lawsuit seeking unpaid overtime. What was most significant about the decision is that the certification was based on little more than threadbare allegations and conclusory declarations. Unlike the more rigorous standard for class action certification under Rule 23 of the Federal Rules of Civil Procedure governing class actions, federal court judges have traditionally been given wide latitude in deciding whether to grant collective action certification for alleged violations under the federal Fair Labor Standards Act. Few judges, however, have applied a more lenient standard than the one applied by the court in the first case summarized below, where it granted collective certification based on plaintiff’s declaration that she and other prospective members of the collective action “often worked more than 40 hours a week,” despite documentary evidence to the contrary. How can a business avoid the costs of defending against these types of claims that can turn into collective actions so easily? The answer is to elevate compliance with state and federal IC laws, minimizing the odds of being sued. Savvy companies have done so using a process such as IC Diagnostics (TM), which restructures, re-documents, and/or re-implements their IC relationships in a manner than maximizes IC compliance in a customized and sustainable manner consistent with their business models.
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Non-Partisan Study Shows Overwhelming Majority of Gig Workers “See Themselves as Independent Contractors”: December 2021 News Update
Perhaps the most significant development involving independent contractor compliance and misclassification issues in December 2021 received relatively scant attention: a detailed empirical study based on survey results of a cross-section of Americans entitled “The State of Gig Work in 2021.” The study was undertaken by Pew Research Center, a non-partisan think tank. One of its most important conclusions involves the self-perception of gig workers: “65% see themselves as independent contractors, while 28% view themselves as employees.” Another key conclusion is that almost twice as many Americans support maintaining the status quo in government regulation of companies using gig economy workers. These and other results of the study are likely to influence federal and state legislators who may consider changing existing laws governing independent contractors. The study confirms that an overwhelming percentage of freelancers and other gig workers want legislators and government agencies to take a hands-off approach and leave existing independent contractor laws intact. These and other conclusions of the study are discussed in more depth below.…
Courts Unlikely to Accept a New NLRB Independent Contractor Test
Earlier this week, the National Labor Relations Board issued an Order inviting the public to file briefs in a case involving the independent contractor status of workers providing makeup and hairstyle services to the Atlanta Opera. This highly unusual move by the NLRB was issued in connection with an organizing…
Is the U.S. Supreme Court About to Dive Into the Independent Contractor Misclassification Field? November 2021 IC Law Update
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.…
Déjà Vu in the Independent Contractor Misclassification Arena: August 2021 News Update
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? …
Ride-Sharing Industry Prevails, While Trucking Industry has More Legal Work to do: April 2021 News Update
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 Independent Contractor Misclassification and Compliance Law News Update
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.…
November and December 2019 Independent Contractor Misclassification and Compliance Law News Update
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 misclassification claim. As we pointed out in our blog post analyzing the U.S. Supreme Court’s decision…
The Past Decade of Independent Contractor Misclassification and Compliance Law
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 summarize below over 250 comprehensive blog posts published over the past ten years dealing…
April and May 2019 Independent Contractor Misclassification and Compliance News Update
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 combined in this blog post.
Two of the most impactful cases involved Amazon and Jan-Pro, a nationwide commercial cleaning franchisor.…