Thursday, September 24, 2015

As Three More New Economy Companies Are Sued For Employee Misclassification, Uber Thinks It Has the Golden Ticket

First up, yesterday's Los Angeles Times:

GrubHub, DoorDash and Caviar face lawsuits over worker misclassification
On--demand food delivery services GrubHub, DoorDash and Caviar were slapped with lawsuits Wednesday alleging that they misclassified their delivery drivers as independent contractors. 
The complaints were filed in San Francisco Superior Court on behalf of the delivery drivers by Boston attorney Shannon Liss-Riordan, who is also representing plaintiffs in similar lawsuits against on-demand transportation companies Uber and Lyft. A federal judge in San Francisco certified the lawsuit against Uber for class action last month. 
The complaints filed against GrubHub and DoorDash are both class actions, while the Caviar complaint is a demand for arbitration on behalf of a San Francisco driver. 
Neither DoorDash nor Caviar immediately responded to requests for comment. A GrubHub spokesperson said the company does not discuss pending litigation. 
According to one of the complaints, GrubHub treated its delivery drivers as employees but failed to provide any of the benefits -- such as expense reimbursements for gas, parking and phone data, meeting minimum wage requirements, and paying drivers for overtime....MORE
Meanwhile Bloomberg doesn't say it but Uber has taken a cue from the securities industry (Shearson v. McMahon, 1987):

Uber’s Plan to Keep Driver Complaints Out of Court
Uber says its drivers should enjoy the freedom that comes with setting their own hours, as long as that freedom ends at the courthouse steps. As its California drivers battle to be treated as employees with benefits—rather than independent contractors—the world’s most valuable startup is arguing they can’t go to trial. According to the contracts most drivers signed, Uber says, disputes have to go through private arbitration. 
The company’s position has taken on greater importance since a Sept. 1 decision by U.S. District Court Judge Edward Chen in San Francisco. Chen granted class-action status to a lawsuit brought by two Uber drivers seeking reclassification as employees. That means thousands more of the company’s 160,000 drivers in California could join the suit. The drivers are seeking reimbursement for expenses and tips, which would open the door to a minimum wage, meal breaks, workers’ compensation, and unionization. On Sept. 15, Uber asked the U.S. Court of Appeals for the Ninth Circuit in San Francisco to take up “the leading case raising urgent questions about the classification of sharing-economy workers” and reverse Chen’s decision. 
In its appeal, Uber continues to argue its drivers aren’t a class because they don’t have set hours or other commitments. It’s also urging the appellate court to overturn Chen’s ruling in a related case last June, which invalidated the arbitration agreements barring drivers from joining class actions. Uber spokeswoman Jessica Santillo declined to comment on arbitration. 
Daily hearing fee for arbitration firm JAMS: $7,000 
The fine print in Uber’s driver contract includes a clause requiring the driver to take disputes to an arbitrator. If the two parties can’t agree on an arbitrator, the mediation service JAMS is supposed to play that part. According to the contract language, Uber and the driver would split the costs of arbitration. JAMS charges a hearing fee of $7,000 per day and a $5,000 retainer fee to start the process. 
JAMS spokeswoman Victoria Walsh says her firm hasn’t handled any cases for Uber. In his June decision, Chen ruled that the arbitration agreements are so unfair they’re unenforceable. On Sept. 21, state Judge Ernest Goldsmith came to the same conclusion in a similar case in San Francisco Superior Court....MORE