Legal Investigation: Were Postmates Drivers Denied Minimum Wage and Overtime?

Attorneys working with ClassAction.org want to hear from Postmates drivers who worked more than 40 hours in any week during the past three years and live in Massachusetts, Illinois, New York, Oregon or Washington.

It’s been alleged that Postmates has misclassified drivers as independent contractors instead of employees and illegally deprived them of certain employment benefits, such as minimum and overtime wages, that are protected by state wage and hour laws.

If you’ve worked for Postmates as an independent contractor in Massachusetts, Illinois, New York, Oregon or Washington, you can now join others taking action against the company and potentially recover back pay and more. Those who sign up may be eligible for a claim worth $2,000 or more.

What Am I Signing Up For?

You’re signing up to participate in what’s known as mass arbitration, a type of legal proceeding that’s different from a class action lawsuit yet still allows a group of people to essentially join together to take action against a company they claim has done them wrong.

Postmates has been no stranger to class action lawsuits, but the company has argued in court that its drivers agreed as part of their contracts that they would resolve any disputes through arbitration, which is a method of alternative dispute resolution that takes place outside of court before a neutral arbitrator instead of a judge or jury. Because drivers, in Postmates’ view, agreed to waive their right to file a class action lawsuit, the attorneys working with ClassAction.org have decided to pursue mass arbitration, an explanation of which can be found on our blog:

…[M]ass arbitration occurs when hundreds or thousands of consumers file individual arbitration claims against the same company over the same issue at the same time. The aim of a mass arbitration proceeding is to grant relief on a large scale (similar to a class action lawsuit) for those who sign up.”

The idea is that the more people who join the action, the better chance drivers will have of recovering compensation for allegedly unpaid wages.

Independent Contractor vs. Employee: What’s the Difference?

The classification of “independent contractor” is typically applied to people who are engaged in an independent trade or business through which they provide services to the public. Independent contractors are considered “self-employed” and generally have the freedom to decide how to perform their work.

Employees, on the other hand, are subject to the control of their employers and have much less independence when it comes to carrying out their duties. Thus, one of the biggest factors used to determine whether a worker should be classified as a bona fide employee or an independent contractor is the level of control the company maintains over the worker’s job. In general, the more control the company has over how the work is performed, the less likely the worker is truly an independent contractor.

Importantly, independent contractors are generally considered exempt from certain protections provided to employees under state and federal labor laws, such as minimum wage, overtime and reimbursement of business expenses. Many companies – especially in the gig economy – have been accused of misclassifying their workers as independent contractors in an attempt to avoid their legal obligation to pay proper wages.

Lawsuits Claim Postmates Misclassifies Drivers as Contractors

Postmates has already been hit with several lawsuits alleging the food delivery company misclassifies its drivers as independent contractors instead of employees.

According to the lawsuits, the level of control Postmates exercises over how drivers perform their jobs – including by dictating how much they charge customers, which customers they deliver to, the delivery timeframes and other details – suggests that the workers are bona fide employees entitled to proper minimum and overtime wages.

It has also been argued that Postmates drivers perform services within the company’s “usual course of business” as a delivery service and are not engaged in their own delivery business, which are two other factors that are considered in some states when determining whether a worker is an employee or independent contractor.

The lawsuits claim Postmates drivers have been illegally deprived of employment benefits – including the full minimum wage, time-and-a-half overtime wages and reimbursement of business expenses such as gas, vehicle maintenance and insurance – as a result of their alleged misclassification.

How Much Could I Get from the Mass Arbitration?

There are no guarantees, but it’s estimated that those who sign up could be entitled to a claim worth $2,000 or more.

How Much Does It Cost?

It costs nothing to sign up, and the attorneys will only be paid if they recover money on your behalf. Their payment will come as a percentage of your award. If they don’t win your claim, you don’t pay.

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