From the Independent Contractor Misclassification and Compliance Blog, Richard Reibstein continues with Part II of his predictions for 2018. Richard believes the Supreme Court’s decision on the enforceability of class actions is less important that others suggest because arbitration clauses can include an opt-out clause that Richard believes preserves their enforceability. In addition, Richard predicts more state legislation affecting the ride sharing industry and more class action lawsuits. Richard writes:
The first such case is the U.S. Supreme Court’s decision, expected in the first half of 2018, involving mandatory arbitration clauses with class action waivers. This case involving class action waivers may have little impact on companies, including those using ICs, which have already drafted their independent contractor agreements in a manner that will be enforceable regardless of the way in which the Court rules. Those companies are using “opt out” clauses that afford contractors the opportunity to opt out of arbitration agreements with class action waivers, and do to so without any penalty or repercussion on workers who have signed them.
Second, expect more state legislation affecting the ride-sharing industry.
As noted in Part 1, in May 2017, the Governor of Florida signed the Transportation Network Companies Act (HB 221). That law designates drivers for ride-sharing companies in the on-demand economy as independent contractors provided the transportation network company meets four criteria, all of which were already being met by the major ride-sharing companies including Uber and Lyft.
Other state legislatures are likely to follow the lead of Florida and seek to create a safe harbor for ride-sharing companies using ICs to transport customers.
Third, don’t expect an abatement in the number of IC misclassification class actions.
We are likely to see class action lawyers doubling down on IC misclassification cases in the coming year, inasmuch as these types of lawsuits remain a lucrative cottage industry for those lawyers and multi-million-dollar settlements have become commonplace.
Class action lawyers are more likely to target companies that do not have an enhanced level of compliance with IC laws or valid arbitration provisions with class action waivers in their IC agreements.