Postmates Sued For Driver Misclassification

On Thursday in the Northern District of California, plaintiff Edmond Mesachi filed a complaint against delivery app Postmates Inc. for driver misclassification alleging that Postmates failed to pay minimum wage and provide other employment benefits.

Postmates works with merchants to deliver their food items to consumers. Consumers use Postmates’s mobile app or website to order these goods and pay Postmates for their delivery, which is delivered by Postmates’s delivery drivers, individually called “Postmates” and collectively referred to as the company’s “Fleet.” The plaintiff alleged that “(b)ecause Postmates controls the delivery drivers’ work; because the delivery drivers’ work is within the usual course of the company’s business; and because the delivery drivers are not independent businesses, the delivery drivers are Postmates’s employees under state and federal law.” As a result, the drivers are “entitled to minimum wage and other benefits.” However, the plaintiff claimed that “Postmates misclassifies its delivery drivers, treating them as independent contractors rather than employees.” Consequently, Postmates “does not pay minimum wage, overtime, and it does not provide the other benefits that employers are required to provide their employees.”

The plaintiff pointed to the “ABC Test”, derived from Dynamex Operations W., Inc. v. Superior Court, whereby a worker is an employee unless the employer can demonstrate: “(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work…”; “(B) that the worker performs work that is outside the usual course of the hiring entity’s business”; and “(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.” Moreover, California’s AB 5 legislation, effective January 1, “codified the ABC Test in the California Labor and Unemployment Insurance Codes.” However, the plaintiff asserted that Postmates “ignore(d)” this law.

The plaintiff claimed that Postmates and the other gig economy companies cannot satisfy the ABC Test. For example, Mesachi stated, “(t)he companies sell rides or deliveries; the workers provide the rides and do the deliveries. They therefore work in the usual course of each business.” Plaintiff Mesachi added that Postmates controls its delivery drivers via its app, which the driver must use in order to perform their work. Additionally, while drivers can decide when to work, drivers “have no power to set prices or wages” and they “have no ability to develop lasting relationships with merchants or consumers.” According to the plaintiff, (t)he only choice a Postmate has is binary: work or don’t.” The plaintiff continued to reiterate that Postmates was in the delivery business, which meant that it was misclassifying its workers. “If Postmates were to admit that it was a delivery company, then it could not possibly argue that the delivery drivers were acting outside the usual course of its business.” The plaintiff proffered that claiming that Postmates is a technology company “mistakenly focuses on how Postmates works instead of what the company does.” Specifically, that while it “uses sophisticated software to facilitate deliveries…in the end, it is selling deliveries.”

The plaintiff has worked for Postmates since 2016 and has often worked more than 8 hours in a day or 40 hours in a week. Mesachi claimed that Postmates paid him below minimum wage for the hours he worked, as well as for expenses, such as gas. Postmates is accused of failure to pay minimum wage and overtime under the federal Fair Labor Standards Act and California State Law, as well as failure to reimburse expenses, provide informative wage statements under California Labor Code, failure to provide sick time benefits, and other violations.

The plaintiff has sought judgment for unpaid wages, expense reimbursement, damages, restitution, penalties, pre and post judgment interest, injunctive and other relief. The plaintiff is represented by the Law Office of Thomas R. Kayes, LLC.

Gig economy misclassification allegations have remained prevalent before and after the passage of AB 5. Uber, Lyft, and DoorDash launched a $90 million campaign for a ballot measure in the upcoming election to exempt themselves from AB 5. A California regulator declared that gig economy workers are employees under AB 5 and California’s Labor Commissioner sued Uber and Lyft for wage theft over their misclassification and California’s Attorney General and several California city attorneys also sued over this purported misclassification; they were later granted a preliminary injunction in the matter.