Shannon Liss-Riordan Explains Worker Misclassification Lawsuits Against Three On-Demand Companies

In a previous report, LBN described lawsuits filed by Shannon Liss-Riordan against GrubHub, DoorDash, and Caviar alleging misclassification of their employees as independent contractors. In this report, Liss-Riordan explains what the lawsuits are al about and why she thinks they will succeed.

Liss-Riordan, who also represents the plaintiffs in similar lawsuits against Uber and Lyft, believes that all of these on-demand companies are following similar patterns and copying from one another in their business models, at least as far as their workforce is concerned. Uber’s great success has inspired others to try out the same arrangement with their workers.

Shannon Liss-Riordan

Shannon Liss-Riordan

Liss-Riordan explains that the courts look at a number of factors in trying to determine whether a worker is an employee or an independent contractor. The “most significant variable [is] how much control the company has over the worker.” And Liss-Riordan says that the companies exercise a lot of control, even though they claim they are only matching up service requests with service providers. But, in fact, the companies all have rules, standards, and policies that govern what the workers do. And that makes the workers into employees. They’re doing what they think the company wants “if they want to keep their jobs.”

Liss-Riordan points out that the standards of what constitutes an employee have been around for a long time. There are new companies trying to “move the needle” and relax the rules. They can save on their labor costs if their workers are not employees. Liss-Riordan doesn’t think these on-demand misclassification cases will change the law.

If the companies treat their workers as employees, they will have to pay costs associated with meeting minimum wages, paying overtime (when applicable), and providing unemployment benefits and workers’ compensation. Liss-Riordan would like to see these companies just make the decision to classify their workers as employees and absorbing any additional costs by “changing the revenue structure.” This would also make it easier for workers to determine what their real compensation would be.

Shannon Liss-Riordan is a principal in Lichten & Liss-Riordan, P.C. Her practice concentrates on class action litigation involving failure to pay wages, overtime, gratuities, minimum wage, and misclassification of employees as independent contractors. She represents employees throughout Massachusetts and nationally. She is the lawyer for the plaintiffs in the class actions against Uber and Lyft in California. The Legal Broadcast Network is a featured network of Sequence Media Group.