The latest update in what is turning into an extended legal battle in the California court system is that the drivers suing rideshare company Uber have been authorized to proceed as a class. While the war is far from over, the latest ruling in this case has been a ‘win’ for the plaintiff drivers in their quest to be properly recognized by their employer. This ruling could be significant for drivers of other rideshare companies as the case winds its way through the court. Even though this particular case is specifically related to Uber, employers and their attorneys across the state should take note of the rulings in this case as they are issued.
Being able to certify a class of potentially harmed individuals rather than pursue individual lawsuits for each affected driver allows the plaintiffs to obtain greater relief and affect change across a greater population. This is because class actions can cause a company to change policies that affect their workforce as a whole in order to avoid potential liability from future lawsuits on the same issue. Even if the drivers are not ultimately successful in their bid against Uber, the threat of a class could cause the company to make changes that they otherwise would not have. The decision to allow a class action may also chip away at the company’s insistence that the current state of the law regarding their employees is limited only to the one driver who brought a case at the administrative level.
Independence or Bust?
Americans tend to take pride in having a strong sense of independence, especially given how our country was founded. This independent spirit has for many years bled into the employment realm as individuals seek new and improved ways of making a living to support their American dream. Unfortunately for many employers, however, this increase in available flexibility can blur the line between independent contractor and employee and can land an otherwise careful employer in fierce litigation.
A silver lining for employers watching the case as it moves through federal court is that they may be able to learn how the California courts are going to analyze the relationship between an employer and a worker in order to determine whether he or she is properly classified. The previous decision at the administrative level provides much for discussion, but little in the way of legal precedent on which employers and workers can rely.
The advantages to an employer of hiring independent contractors are clear. These workers can require less oversight and resources as they are expected to provide some level of these themselves. Further, employers are not obligated to pay the same level of taxes, or provide the same level of insurance coverage for independent contractors as they must for full time employees. Misclassifying an employee as an independent contractor, however, can create expensive legal headaches for employers who are not careful when making this decision. The federal Equal Employment Opportunity Commission has provided guidelines that employers can use to help them with this classification determination. It is part of a good overall business strategy to have properly classified employees and should not be pushed aside until someone files a complaint.
If your business is hiring and has questions about worker classification, call the law office of Garcia & Gurney. Our professionals can provide guidance in this as well as other areas of employment law to help your company grow responsibly and legally.