San Francisco District Attorney Chesa Boudin filed the lawsuit Monday. It alleges that DoorDash has violated California’s AB5 law, which was enacted to stop gig economy companies from classifying their workers as contractors.
The issue is significant because contractors are typically exempted from federal and state workplace regulations covering things like overtime, minimum wage, and health insurance. Gig economy companies argue that the random, short-term nature of gig work requires the flexibility that only contractors can provide.
Critics, like Boudin, contend this is just a way for the companies to circumvent their legal obligations as employers. The State of California has already sued Uber and Lyft for refusing to comply with AB5. Never mind that the law, which strictly regulates contract work, is undermining actual freelance workers and preventing people from finding alternate work during the COVID-19 crisis.
The federal Fair Labor Standards Act does not provide a strict definition for when worker is an employee, saying the totality of circumstances must be considered. Traditionally, one of the key criteria has been whether the employer controls the worker’s hours. California‘s AB5 uses a three-pronged test, the first part of which is whether the workers are “free from direction and control in connection with the performance of their work.”
Well, San Francisco’s DoorDash lawsuit specifies:
Dashers decide when to log into the DoorDash application and can sign up for scheduled delivery shifts. While dashers decide when to log into the App, DoorDash controls the assignments deliveries but determining which dash receives which delivery request and giving the dash or a short time to accept the assignment. If the dasher fails to respond in time or declines, DoorDash reassigns the request and the dasher must wait to receive the next delivery assignment.
So, as part of its argument that DoorDash is in control, the city concedes:
- The drivers decide when to make themselves available for work;
- The drivers decide whether to accept particular assignments; and
- If the drivers don’t accept the job, they simply get back in line for the next one along without any penalty by the company—if the drivers even want to work that day.
If that isn’t voluntary employment, then what is?
This doesn’t necessarily mean that the city can’t prevail in the lawsuit. The law is ultimately what the court says it is. Nevertheless, if this is the best San Francisco officials can do, they’re going to have a difficult time if this issue ever lands before the Supreme Court.