Is It Becoming Easy To Certify Collective Action Lawsuits Alleging Independent Contractor Misclassification? 

From JDSupra, Richard Reibstein discusses a recent case in which a federal court in California certified a class action lawsuit with only an assertion that the misclassified workers had been harmed. Richard writes:

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…

COLLECTIVE ACTION CERTIFICATION GRANTED TO “PAPA PALS” WITHOUT A SHOWING THAT ANY WERE DENIED OVERTIME PAY OR MINIMUM WAGES.  A federal district court in California has granted conditional collective certification of claims brought under the federal Fair Labor Standards Act for minimum wage and overtime violations arising from the alleged misclassification of elder assistants who provide daily living tasks and companionship to seniors. The defendant in the lawsuit, Papa, Inc., operates a mobile phone app that allows seniors and their families to obtain services of “Papa Pals” to provide assistance with a variety of chores and companionship services. According to the collective action complaint, the company allegedly misclassified the Pals as independent contractors by conducting background checks before allowing them to connect with customers, providing them with training and strict policies, setting their pay structure, tracking their location and productivity, and retaining the right to terminate a Pal with no cause at all or for violating one or more of the rules that Papa imposed by contract. The company contends that the Pals are independent contractors who use the app as little or as much as they choose, and who operate primarily at the direction of the seniors or their families, free from the direct supervision of the company.

Although the company argued that the certification motion should be denied because the Plaintiff Pal and her co-declarant failed to establish that they suffered any failures to receive overtime or minimum wages because they worked so few hours, the court rejected the argument finding that they related to the merits of the claims and were not appropriate to consider “at this juncture.” Instead, the court concluded that the Pal “made an adequate showing that all Pals are treated as independent contractors, and therefore have the potential of not receiving the overtime and minimum wages to which they would be entitled if they in fact should be legally classified as employees.”  Pardo v. Papa Inc., No. 3:21-cv-06326 (N.D. Cal. Oct. 5, 2022).  This type of ruling stands in stark contrast to the 2021 Fifth Circuit decision we reported on in Swales v. KLLM Transport Services, LLC, which requires that  “a district court … rigorously scrutinize the realm ‎of ‘similarly situated’ workers, and must do so from the outset of the case, not after a lenient, ‎step-one ‘conditional certification.’”

Source: Is It Becoming Easy To Certify Collective Action Lawsuits Alleging Independent Contractor Misclassification? October 2022 IC Legal News Update | Locke Lord LLP – JDSupra

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