Gig economy businesses continue to face lawsuits demanding answers regarding whether or not workers should be classified as employees or independent contractors. Many gig economy companies rely on contract work for their business model. These companies have seen the most significant increase in misclassification lawsuits. As the number of misclassification lawsuits increased, so did the number of tactics businesses used to manage the employee lawsuits. These tactics have included PR campaigns, lobbyists, presenting legal arguments that they are not employers – just software programs, and more. The recent lawsuit filed against Getaround Inc. has resulted in a new tactic.
Getaround Inc. assists people hoping to rent their personal vehicles out online. But at the moment they may be best known in certain circles for employing an uncommon legal tactic to a common issue in today’s world. In a preemptive strike against a class action lawsuit, Getaround mailed out dozens of checks to former workers with paperwork attached asking them to sign away their legal right to sue. The interesting part is that a provision included in the documents stated the deposit of the enclosed check counted as an agreement to waive the right to sue – even without signing the included contract. Almost everyone who received the paperwork deposited the check.
The tactic is not unheard of, but it seems to be particularly effective in the gig economy. This may be due, in part, to the fact that industry workers lack financial stability. Attorneys asked to respond to the topic have described it as “insidious” since most former workers can’t afford to seek legal counsel for advice on depositing the check or holding out for a larger payout from an eventual lawsuit. Low wage workers are particularly vulnerable to this type of legal maneuvering.
The legal strategy in Getaround’s case highlights how creative gig companies are willing to be to avoid scrutiny of their worker classification methods. Many gig companies of this nature are not profitable, and reclassifying workers and providing employment benefits would mean even less profitability for the company. Many gig companies throughout California are still in a flat spin following California Supreme Court’s sweeping ruling last year limiting the scope of work they can classify as “contract” labor.
Settling worker claims using the “Pick Up Stix” tactic (as it is often referred to) is unusual in the gig economy, but this may be largely due to the fact that most gig economy companies require workers to sign class-action waivers as part of their arbitration agreements.
Are you misclassified on the job? If you have questions about what it means to be classified as an independent contractor versus an employee, don’t hesitate to get in touch with an experienced employment law attorney at Blumenthal Nordrehaug Bhowmik De Blouw LLP. Our convenient locations in San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange, and Chicago make it easy for us to be your advocate and seek the justice and compensation you deserve.