Rideshare companies in California have now been ordered by an appeals court to reclassify their drivers as employees, threatening to upend the very foundation of the gig economy business model that offers flexibility and freedom to workers and businesses alike. Yesterday’s ruling by the California Court of Appeal upholds the injunction granted several months ago by a state court judge in San Francisco against the two biggest ridesharing companies in the country. But once again…
The Department of Labor has turned down Congressional calls to extend the time period to receive public comments about the proposed independent contractor rule that would make it easier for gig economy businesses and other hiring entities to avoid federal misclassification claims. Yesterday’s announcement means that the agency remains on track to close the comment period on October 26, with a final rule to be released soon thereafter.…
Just a few hours before they were subject to a court order forcing them to transform all of their drivers from independent contractors to employees, a California appeals court spared the nation’s two largest rideshare companies from having to immediately overhaul their fundamental business models. The court blocked a San Francisco judge’s order from taking effect while it heard the companies’ appeal, handing the gig economy giants a much-needed reprieve. But it comes at a…
Gig economy companies received bad news yesterday when yet another federal appeals court ruled that delivery drivers – even independent contractors – can escape otherwise valid arbitration agreements. This is now the third federal appeals court to conclude that the “transportation worker” exemption in the Federal Arbitration Act should be read broadly enough to exempt typical gig economy workers, setting up a split in the circuits that has businesses operating across the country scratching their…
Last week’s successful effort by California’s Attorney General to obtain an injunction forcing two ride-sharing giants to reclassify their drivers as employees may be the beginning of a trend that threatens to create a new normal for gig economy companies. Days later, the local district attorney in San Francisco filed a similar request in court seeking to force DoorDash’s independent contractors to be classified as employees. What does this August 12 move signal? Essentially, if…
A report by Ben Penn in Thursday’s Bloomberg Law casts serious doubt about whether the Department of Labor will proceed with a misclassification rule before the end of this presidential term. We reported last month that the July 1 regulatory notice issued by the DOL announcing an impending regulation for determining independent contractor status under federal wage and hour law was good news for gig economy companies. Such a rule would almost certainly provide a…
In an op-ed appearing in today’s N.Y. Times, Uber CEO Dara Khosrowshahi echoes what we have been saying on this blog for quite some time – that it is time for federal and state lawmakers to tear down the existing regulatory structure forcing companies to select one of two binary choices for their workers, labeling them as either employees or contractors. He advocates for a “third way,” which would permit workers to retain the flexibility…
A California state court judge just handed a potentially groundbreaking loss to gig economy companies across the state by granting an injunction forcing the two biggest ride-sharing drivers in the nation to classify their drivers as employees. A silver lining in the August 10 decision by San Francisco Superior Court Judge Ethan Schulman allows the companies 10 days before the injunction takes effect, permitting them time to appeal the ruling and perhaps to convince a…
A federal appeals court just handed Grubhub – and gig economy companies in general – a pivotal victory by narrowly interpreting an exception allowing certain transportation workers (including independent contractors) to escape arbitration agreements. The 7th Circuit Court of Appeals joined a Massachusetts federal court by ruling that gig workers cannot avoid arbitration provisions by claiming they are exempt transportation workers. But what makes this ruling the most significant yet is not just simply because…