While the “Gig” economy continues to receive plenty of attention from the media, practitioners, and scholars, few have commented on the connection to arbitration. Below, Arbitrator and NAA Member, Barry Winograd comments on the arbitration angle of the recent multi million dollar settlement involving Lyft.
“The recent $12.25 million settlement of the Lyft class action proceeding, as described by plaintiff’s counsel, offers insight about the role of arbitration as a factor influencing the outcome of wage and hour class actions. (The full statement by attorneys Shannon Liss-Riordan and Matthew Carlson is available here.) In the Lyft case, the company’s classification of drivers as independent contractors was challenged, along with its failure to compensate drivers for some of the expenses incurred by drivers. The Lyft case has been watched closely, in part because similar litigation is pending against Uber, another ride-providing company, The Lyft settlement did not convert the drivers to employees, but it will lead to changes in the terms governing drivers. The settlement also provides prospective relief in arbitration for disputes that subsequently arise, including objections to the company’s termination of drivers. The statement by plaintiff’s counsel acknowledges that the settlement amount was reduced substantially, and the conversion of drivers to employees was dropped as a demand, because its challenge to Lyft’s arbitration agreement and class action waiver was unsuccessful, in contrast to the Uber litigation. The Uber class action classification case is set for trial in San Francisco in June 2016.”