Northern California Record

Wednesday, November 13, 2019

Postmates moves case alleging couriers were misclassified as contractors to federal court


By Karen Kidd | Jun 14, 2018

General court 4

SAN FRANCISCO (Northern California Record) – Postmates recently moved a class action from a state court to a federal court as the courier delivery service grapples with a California Supreme Court decision earlier this spring that complicates how gig economy companies define independent contractors.

On June 8, Postmates filed a notice of removal to have the case filed against it for allegedly mislabeling drivers and couriers as independent contractors to U.S. District Court for California's Northern District, San Francisco Division. The eight-page notice cited the Class Action Fairness Act of 2005 (CAFA) and federal law to remove the case from San Francisco County Superior Court, where the case was filed in May.

"Under CAFA, federal courts have original jurisdiction over class actions where the amount in controversy exceeds $5 million in the aggregate for the entire class, exclusive of interest and costs; the putative class action contains at least 100 members; and any member of the putative class is a citizen of a state different from that of any defendant," Postmates said in its notice.

Postmates denied "any liability in this case" and said it "will present compelling defenses to those claims on the merits," the notice said, adding that it would oppose class certification in the case for the named plaintiff, Dora Lee, and any other of its independent contractor couriers who might become members of such a class.

In other recent action in the case, the putative class action was assigned to U.S. District Chief Magistrate Judge Joseph C. Spero on June 11 and a couple of days later Postmates filed a stipulation for a time extension to respond to the class action complaint and to set a briefing schedule.

Lee filed a putative class action May 8, alleging she and other Postmates drivers had been labeled as independent contractors when they should be considered employees.

Lee filed her case days after the California Supreme Court handed down a ruling that has been hailed as a "landmark decision" that changed how a worker is determined to be an independent contractor. In that April 30 ruling, the state court affirmed an appeals court's ruling that a three-factor "ABC" used in other states is the correct test for use in California and marked a shift away from the prior standard that was used for decades and considered about a dozen factors.

In that case, the appeals court had upheld a trial court decision to certify a class for drivers for Dynamex Operations West, a subsidiary of TFI International, for almost 230 class members.

In its June 8 notice of removal, Postmates estimated that between June 3, 2017, and June 4, 2018, "at least 10,000 couriers performed at least one delivery in California using the Postmates platform" and that the aggregate distance those couriers covered was more than 10 million miles in that time. "Postmates denies that plaintiff or any class member is entitled to reimbursement for any expenses," the notice said.

"Postmates further denies that the Internal Revenue Service’s standard mileage rates are the appropriate metrics for determining the amount or size of reimbursements under California Labor Code section 2802. However, applying the current Internal Revenue Service reimbursement rate, for the purposes of meeting the jurisdictional requirements for removal only, the amount placed in controversy by the class allegations concerning mileage-related expenses alone exceeds $5 million."

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