State attorneys general who have taken legal action against gig economy companies, like Uber and Lyft, have recovered hundreds of millions of dollars for alleged wage and hour violations. These actions are focused on the classification of drivers as independent contractors instead of employees. Notably, state attorneys general have been able to avoid arbitration hurdles that often impede workers' cases in federal courts.
Constangy Wage and Hour Compliance & Litigation practice group co-chair, James Coleman, discussed recent gig company litigation with Law360. On the issue of state AGs avoidance of arbitration in these cases, James says, "whether it's a New York or California or any other state agency, they're not a party to the arbitration agreement and, therefore, they can bring their enforcement actions as long as they're doing it within the confines of their particular state law."
While these actions may be considered a win for employees, the larger question of worker classification still looms large. "The basic concept here, that these folks are independent contractors and they pick and choose when they want to work, when they don't want to, the basic model is still out there," James says. Whether these actions will prompt gig companies to adjust their worker models, or whether federal agencies will weigh in on classification, is still unclear.
James Coleman is a partner and the co-chair of Constangy's Wage and Hour Compliance & Litigation practice group. Throughout his 40-year career, James has defended countless employers in wage and hour class and collective litigation and administrative proceedings, with particular focus on the restaurant and food service industry. He also has extensive experience counseling employers on numerous labor law issues, including wage and hour standards, child labor restrictions, occupational safety and health standards, and employment discrimination.
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