Federal Court Signals that Lyft Drivers Should Be Considered Employees

In September 2019, several drivers of the popular ridesharing application, Lyft, Inc., brought suit against the company in the United States District Court for the District of Massachusetts, requesting that the Court declare that Lyft misclassified drivers as independent contractors under Massachusetts law.  If the drivers are classified as employees under Massachusetts law, then they are eligible for various legal protections and benefits, including minimum wage, overtime pay, expense reimbursement, and earned sick time.

Recently, the Plaintiffs filed an Emergency Motion for Preliminary Injunction, requesting that the Court immediately require Lyft to classify its Massachusetts drivers as employees, such that the they could access sick pay during the pendency of the COVID-19 pandemic.  They argued that, should they be unable to get sick pay, drivers would continue working, thereby increasing the risk that drivers or passengers could further spread the coronavirus causing COVID-19.

While the Court denied the Plaintiffs’ Emergency Motion, the Court importantly found that the drivers had a “substantial likelihood” of succeeding in the case and establishing that they should be legally considered employees under Massachusetts law.  Indeed, the Court held: “[t]he ‘realities’ of Lyft’s business are no more merely ‘connecting’ riders and drivers than a grocery store’s business is merely connecting shoppers and food producers or a car repair shop’s business is merely connecting car owners and mechanics.”

Massachusetts is one of numerous states which has adopted the “ABC Test” for determining whether a worker is an employee or independent contractor.  The ABC Test provides that a worker shall be legally considered an employee unless:

(A) the individual is free from control and direction in connection with the

performance of the service, both under his contract for the performance of service

and in fact (“Absence of control”); and

(B) the service is performed outside the usual course of the business of the

Employer (“Business of the worker”); and,

(C) the individual is customarily engaged in an independently established trade,

occupation, profession or business of the same nature as that involved in the

service performed (“Customarily engaged in an independently established trade”).

Importantly, an employer bears the burden of proof in demonstrating that each of the above elements are established and that workers are truly independent contractors.

While not the ultimate victory for Lyft drivers, the Court’s ruling is a step in the right direction.  The Court’s determination that drivers are likely to succeed in establishing that they are employees of Lyft is nonetheless a major development.  The Court’s thorough analysis could have an immediate impact on the ridesharing economy throughout the country, particularly in those states that have adopted the ABC Test.

The legal team at SFMS has substantial experience litigating employment matters. If you have any questions regarding this subject or this posting, please contact John Roberts (jroberts@sfmslaw.com) or Alec Berin (aberin@sfmslaw.com). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP, is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. SFMS is an active member of Integrated Advisory Group (www.iag.global), which provides our firm with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

Author: Michael Ols

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