The lawyer who sued Uber and Lyft for not classifying contract workers as employees is now representing workers against four more on-demand companies: delivery services Postmates and Instacart, laundry service Washio, shipping company Shyp.
“I hope companies realise this isn’t something to fool around with,” Liss-Riordan said. “They’re violating labour laws.”
Workers from Postmates, Shyp, and Washio sued their employers this week, arguing that they should be classified as employees and not independent contractors. Their lead attorney, Shannon Liss-Riordan, filed all three cases on June 29.
In addition, while there’s already a case against Instacart in California, Liss-Riordan has filed a different class-action case against Instacart on June 30, but limited to Massachusetts.
Liss-Riordan is already fighting to reclassify Uber and Lyft drivers in two cases that will go to a jury trial in August. She’s also filed lawsuits against cleaning service Homejoy, food delivery startup Caviar, and a different case against Postmates on behalf of its couriers.
The Shyp, Instacart, and Postmates customer service cases were filed as “class action arbitration demands” in arbitration courts because of their contracts, Liss-Riordan said.
Postmates did not return a request for comment. Washio and Instacart had no comment, and Shyp was still reviewing the claim. (We’ll update this post as we hear back.)
The lawsuits strike at the core of the so-called “1099 economy”
The difference between the 1099 workers and W-2 employees, according to the IRS, is that for common-law employees, employers “must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid.” The same is not necessarily true for an independent contractor.
In addition, benefits are often extended to employees but not independent contractors, and employers have the right to control how a worker behaves — how to dress, for example, or specific customer interaction protocol — when they’re an employee and not an independent contractor.
Each of these new filings alleges different ways each company is controlling their workers, which may indicate that they are employees under law.
- Washio hires drivers, or “ninjas,” to deliver laundry as part of its on-demand laundry and dry cleaning service. According to the court filing, the company makes Washio drivers agree to an exclusivity arrangement, where they agree not to provide service for similar businesses. They’re also paid a fee for each pick-up and delivery, the complaint alleges.
- Shyp‘s couriers operate in a similar way to Washio’s, although its “Heroes” get paid hourly to pick-up packages. They’re instructed to “always bubblewrap fragile items” and claim to receive warnings for rejecting too many pick-ups, the arbitration demand alleges.
- In the newest claim against Postmates, pay for its customer service reps is the issue. According to the arbitration demand, the representatives make 35 cents for each delivery they facilitate. If a store doesn’t pick up the phone, the representative has to call back four times in two minutes before doing a search to see if the business is closed, the claim alleges. One plaintiff estimated in the arbitration demand that she worked 30 hours in April 2015, but only made $US45.85 for 131 calls.
“I’ve been amazed to see how far companies are stretching it. So many companies just seem to watched what Uber did and think it’s OK,” Liss-Riordan said. “It’s like they just sort of assumed they don’t have to worry about it. I just find it unbelievable.”
The issue is starting to gain steam after the California Labour Commission ruled last month that an Uber driver, who filed a suit against the company for misclassifying her as an independent contractor, was actually an employee.
Shyp, the package shipping service, announced Wednesday that it would be reclassifying all of its couriers as employees. The change is effective immediately as it rolls out to new cities like Chicago. For existing workers, employee status will begin January 1, 2016, according to Fast Company. A company spokesperson said the decision has had nothing to do with the arbitration demand.
Instacart announced in June that it would also transition some of its shoppers to W2-employees in select markets.
Liss-Riordan called the moves to reclassify contractors as employees “a step in the right direction.” Should her cases win in court, Liss-Riordan said the companies would only be responsible for back pay up until the date they are switched over to employee status. Companies that do switch can “limit their exposure moving forward,” she said.
“FedEx battled me for 10 years,” Liss-Riordan said. “I’m ready to hang in there and fight for for however long they want to fight.”
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