Tag Archives: wage hour defense

It is no secret that independent contractor misclassification claims are being filed against employers with a great deal of frequency, often as class actions and often in California.  Many of those lawsuits have been filed against gig economy companies.  But, of course, they are not the only companies facing such claims.

As a result, many companies that classify workers as independent contractors are asking a basic question, “Are those workers properly classified?”

Be careful what you ask for.

We have used that expression frequently when writing about recent federal court orders requiring DoorDash and Postmates to conduct thousands of individual arbitrations in California pursuant to the terms of their arbitration agreements with their drivers.

Thousands of individual arbitrations for which DoorDash and Postmates would have to pay many millions of dollars in arbitration fees alone.

Recently, we wrote here about a federal court order requiring DoorDash to conduct more than 5,000 individual arbitrations under the terms of its mandatory arbitration agreements, with each arbitration to address claims that it had misclassified its drivers as independent contractors.

The order would fall in the category of “Be Careful What You Wish For.”  In seeking to avoid class or collective actions by having employees sign arbitration agreements with class action waivers, employers face the possibility of hundreds or thousands of individual arbitration for which they likely will have to foot the bill.

With the March 16, 2020 effective date of the new rule interpreting joint employer status under the Fair Labor Standards Act (“FLSA”) almost upon us, employers should brush up on the updated guidance and review their relationships with workers to ensure compliance.  Otherwise, they may face the expensive possibility of being held jointly and severally liable under the FLSA for all of the hours the individuals worked in the workweek, including hours worked for a different company.