DoorDash, Uber Eats Sued for Misclassifying Workers

Roy Maurer By Roy Maurer June 26, 2020
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DoorDash delivery

​Two popular on-demand food delivery services have been sued in California for allegedly misclassifying delivery workers as independent contractors, in violation of state law.

The city of San Francisco filed a misclassification lawsuit against DoorDash on June 16, while an Uber Eats driver claimed in a class-action lawsuit filed June 18 that Uber Technologies Inc. misclassified him as an independent contractor, denying him certain job protections.

The state of California is already suing ride-hailing services Uber and Lyft for allegedly misclassifying drivers.

We've rounded up the latest news on this topic from SHRM Online and other trusted outlets.

More Lawsuits to Come

San Francisco District Attorney Chesa Boudin said more such litigation is forthcoming.

He added that as a result of large companies avoiding labor laws, "it puts law-abiding companies that actually treat their employees as employees and follow the law in a disadvantaged position, where they have to compete with employers like DoorDash who gain unfair competitive advantages by illegally misclassifying workers; cheating their employees and cheating the state."

The complaint against DoorDash seeks civil penalties and restitution for workers in the form of an injunction requiring the company to properly classify its delivery workers as employees.

(San Francisco Examiner)

The 'ABC Test'

Effective Jan. 1, AB 5 codified a 2018 California Supreme Court decision which created a three-pronged test, called the "ABC test," to determine whether a worker should be classified as an employee or independent contractor.

The decision expanded the definition of "employee" and placed the burden on companies to prove that independent contractors are properly classified. Though this decision only applied to wage orders, AB 5 extended the ABC test to all provisions of the California Labor Code and Unemployment Insurance Code unless another definition of "employee" is provided.

(SHRM Online)

Coronavirus Fuels AB 5 Debate

Coronavirus concerns have raised questions about California's strict independent-contractor test and whether it should be amended. Although gig workers and other independent contractors have access to some federal emergency relief, they generally aren't entitled to unemployment compensation. Even before COVID‑19 hit, legislators, union leaders, business groups and other key stakeholders were discussing potential amendments to AB 5.

(SHRM Online)

Federal and State Law Differ

Classifying workers as independent contractors or employees was already a contentious issue in the workplace before the rise of the gig economy, and developments over the last few years have only muddied the waters more. Although California doubled down on the state's more-restrictive standard, a federal opinion letter made it easier for employers to classify a worker as an independent contractor under the Fair Labor Standards Act.

(SHRM Online)

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