Lyft Misclassified Massachusetts Drivers as Independent Contractors, Class Action Alleges [UPDATE]
Last Updated on January 28, 2022
Cunningham v. Lyft, Inc. et al.
Filed: September 17, 2019 ◆§ 1:19-cv-11974
A lawsuit, the latest in a wave of class actions against rideshare companies, claims Lyft illegally misclassified Mass. drivers as independent contractors.
Case Updates
January 27, 2022 – Lawsuit Sent to Arbitration
The lawsuit detailed on this page has been sent to individual arbitration after an appeals court found that Lyft drivers do not qualify for an exemption under the Federal Arbitration Act (FAA).
In a November 5, 2021 ruling, the appeals panel reversed the lower court’s decision to deny Lyft’s motion to compel arbitration, an alternative form of dispute resolution that workers had agreed to when accepting Lyft’s terms of service.
The plaintiffs argued that Lyft drivers fall under an exemption from the FAA for “a class of workers engaged in foreign or interstate commerce” given they often drive passengers to the Logan Airport in Boston for international and interstate trips and sometimes cross state lines in the course of providing rides.
The appeals panel found, however, that Lyft drivers have no contract with airports or airlines and thus are not engaged in interstate travel just because they drive people to and from the airport.
“One would not reasonably say that plaintiffs are engaged in interstate trucking merely because they sometimes give truck drivers rides to and from their garages,” the panel wrote. “Similarly, we do not think that plaintiffs are engaged in interstate travel merely because they bring passengers to and from an airport.”
The panel further concluded that although some Lyft drivers occasionally cross state lines in the course of providing rides, some never do at all, and the ones who do only do so relatively rarely. According to the order, although the FAA exemption applies to seamen, railroad employees and others who are “engaged in foreign or interstate commerce,” Lyft drivers’ level of involvement in interstate commerce does not come close to that of seamen and railroad employees.
“Lyft is clearly primarily in the business of facilitating local, intrastate trips,” the panel concluded.
Lyft, Inc. is facing a proposed class action lawsuit in Massachusetts over its alleged misclassification of drivers as independent contractors. Seemingly spurred by changes in standards for independent contractor status, the suit is the latest in a long line of litigation against Lyft and competitor Uber over the classification of workers who contend they should be considered bona fide employees entitled to certain benefits and protections.
Massachusetts law requires an individual who performs services for a company be considered an employee unless the following conditions are met:
- “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 fact; and”
- “The service is performed outside the usual course of the business of the employer, and”
- “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.”
According to the complaint, Lyft drivers fail to meet these conditions and therefore should be considered employees. The case claims that the defendant exerts a significant amount of control over drivers in that it sets rates of pay, mandates that workers meet certain professional standards or face termination, and requires drivers to maintain certain acceptance and customer satisfaction ratings.
Furthermore, the suit claims that drivers are not engaged in an “independently established business or occupation” while working for Lyft since the defendant does not allow customers to request specific drivers. Finally, the lawsuit stresses that the work performed by Lyft drivers is done within the company’s usual course of business, and that such work is the very backbone of the defendant’s operations. From the case:
“Drivers perform a service in the usual course of Lyft’s business, since Lyft is a car service that provides transportation to its customers, and drivers such as plaintiff perform that transportation service. Lyft holds itself out as a transportation service, and generates its revenue primarily from customers paying for the very rides that its drivers perform. Without drivers to provide rides for Lyft’s customers, Lyft would not exist.”
Since Lyft considers its drivers independent contractors, the rideshare company does not provide these individuals with the benefits available to employees, according to the suit. Specifically, the complaint claims the defendant fails to pay minimum and overtime wages; the company also allegedly fails to provide insurance or reimbursement for business expenses such as gas and car maintenance costs. The case argues, however, that since Lyft drivers are in truth employees, the defendant should be required to provide the aforementioned benefits.
The suit seeks a declaratory judgment that Lyft drivers in Massachusetts be classified as employees, along with compensatory damages for all wages and expenses owed, as well as treble damages for all wage law violations.
Before commenting, please review our comment policy.