From JDSupra, Richard Reibstein discusses cases in which there were hung juries on the question of whether ride share drivers are employees or independent contractors and in general, how the status of ride share drivers is unclear. Richard writes:
Lawyers representing ride share drivers have argued for years that their clients are being misclassified as independent contractors under federal and state laws. They have attained little success, however, obtaining definitive rulings in their favor, particularly in states that have adopted a multi-factor test for independent contractor status, like the federal standard under the Fair Labor Standards Act (FLSA). Two consecutive hung juries in a Pennsylvania federal district court confirm that the classification status of ride share drivers is unclear. These events serve as a rejoinder to worker advocacy groups that have repeatedly asserted that ride share companies misclassify drivers. While their arguments have led to rulings in favor of employee status in the two states with strict ABC type wage laws (California and Massachusetts), the recent hung jury results in Pennsylvania confirm that independent contractor status of ride share drivers is at best murky in state and under federal law. Nonetheless, ride share and other gig economy companies can tilt the scales in their favor. Many businesses have resorted to a process such as IC Diagnostics (TM) to enhance the structure, documentation, and implementation of IC relationships in a customized and sustainable manner, maximizing compliance with IC laws and minimizing exposure from IC misclassification claims.
In the Courts (6 cases)
RIDE-SHARE JURY TRIAL ON IC MISCLASSIFICATION AGAIN RESULTS IN HUNG JURY. Jurors have failed once again to reach a unanimous verdict in a trial where ride share drivers claim they were misclassified as independent contractors and not employees under federal and Pennsylvania state law. In 2016, three Uber Black limousine drivers initiated individual and class and collective action claims against Uber for alleged violations of the FLSA’s minimum wage and overtime requirements, the Pennsylvania Minimum Wage Act, and the Pennsylvania Wage Payment and Collection Law due to Uber’s classification of the Uber Black drivers as independent contractors. Each of the named plaintiffs owned and operated independent transportation companies and had entered into a Technology Services Agreement with Uber. After years of litigation as described more fully in our blog posts of April 12, 2018 and May 11, 2020, the case first went to trial in March 2024, but resulted in a deadlocked jury, requiring a second trial, which last month likewise ended in a hung jury. The jurors’ split verdict reportedly indicated that they leaned toward finding one of the named plaintiff drivers an employee because he did not have any special skills, a factor included in the applicable state and federal tests for worker status, yet favored independent contractor status for that driver when considering the factor that relates to the method by which he was paid for his services. For another of the named plaintiff drivers, the jurors reportedly could not agree on any of the factors under the federal law but were somewhat in favor of independent contractor status regarding the method of payment factor under state law. Razak v. Uber Technologies Inc., No. 2:16-cv-00573 (E.D. Pa. June 17, 2024).
