Uber Faces Misclassification Claims in New Jersey and Around the Country

Ridesharing companies like Uber are relative newcomers to the marketplace, but they have already had an enormous economic and legal impact. In numerous employment law claims, drivers are alleging that they are misclassified as independent contractors rather than employees. The last year has seen several important court decisions and settlements that offer good news for ridesharing drivers. Courts have ruled in plaintiffs’ favor in cases from California to Massachusetts, and putative class actions are currently pending in New Jersey and New York

Many of the lawsuits against Uber, generally considered the leading ridesharing company, assert claims under the federal Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., which governs minimum wage and overtime pay for many employers. Employees are entitled to payment of a minimum wage of $7.25 per hour, and non-exempt employees must be paid time-and-a-half for hours worked in excess of 40 per calendar week. Employers might violate the FLSA simply by failing to pay overtime, or they may do so less obviously, such as by imposing obligations on employees outside the time that they are “clocked in.” This can result in uncompensated overtime, or an hourly rate of pay that, when calculated for the amount of time actually worked, is less than minimum wage.

Drivers for Uber are challenging their status as independent contractors in lawsuits and administrative complaints around the country. A key distinction between an employee, who is entitled to the protection of statutes like FLSA, and an independent contractor is the degree of control the employer has over the person’s work. Just over one year ago, the California Labor Commissioner ruled that an Uber driver is an employee in Berwick v. Uber Technologies, Inc., No. 11-46739, order (Cal. Lab. Comm, Jun. 3, 2015).

Plaintiffs in another California lawsuit had a major victory later last year, when a federal judge certified them as a class. O’Connor, et al. v. Uber Technologies, Inc., et al., No. 4:13-cv-03826, order (N.D. Cal., Sep. 1, 2015). The plaintiffs alleged that the company failed to reimburse them for expenses, violating state labor law. In April 2016, the parties sought the court’s approval of a settlement that, while not changing the drivers’ status as independent contractors, should total about $100 million.

A driver in New Jersey filed suit against Uber in state court for alleged violations of the New Jersey Wage and Hour Law and the New Jersey Wage Payment Law, although the defendants removed the case to federal court. Singh v. Uber Technologies, Inc., No. L-001464-16, complaint (N.J. Super. Ct., Monmouth Co., Apr. 22, 2016), removed to No. 3:16-cv-03044, am. complaint (D.N.J., Jul. 5, 2016). The lawsuit asserts claims for “constructive deductions,” meaning unreimbursed expenses; failure to pay overtime; and failure to pay wages earned.

A similar lawsuit filed in New York asserts claims under multiple statutes. N.Y. Taxi Workers Alliance, et al. v. Uber Technologies, Inc., et al., No. 1:16-cv-04098, complaint (S.D.N.Y., Jun. 2, 2016). The suit includes minimum wage and overtime claims under FLSA and the New York State Minimum Wage Act, N.Y. Lab. L. § 650 et seq.; recovery of equipment costs, 29 C.F.R. § 531.35; unlawful deductions, N.Y. Lab. L. § 193; and common law claims for breach of contract and promissory estoppel.

If you need to speak to an attorney about an employee misclassification matter in New Jersey or New York, contact the Resnick Law Group online, at 973-781-1204, or at (646) 867-7997.

More Blog Posts:

Proposed New York City Legislation Would Protect Independent Contractors from Wage Theft, The New Jersey Employment Law Firm Blog, January 21, 2016

Unpaid Intern Sues Celebrity Twins Under State Wage and Hour Laws, The New Jersey Employment Law Firm Blog, September 25, 2015

Lawsuits, Pending Legislation, Address Question of Whether NFL Cheerleaders Are Employees or Independent Contractors, The New Jersey Employment Law Firm Blog, June 4, 2015

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