Sagafi is in the thick of maneuvering over major class actions affecting the transportation sector of the gig economy as he represents Lyft drivers who sought to derail a $27 million settlement in the separate Cotter v. Lyft Inc. case by filing new claims. In late June, U.S. District Judge Vince Chhabria of San Francisco gave a preliminary OK to the Cotter settlement but did not toss Sagafi's case.
"It's an outcome we did not want," said Sagafi, who had hoped to be allowed to intervene in Cotter. "But we will go forward with our drivers' claims, over a reduced time period" not covered by the Cotter settlement. Zamora v. Lyft Inc., 16-cv-2558 (N.D. Cal., filed May 11, 2016)
Sagafi's clients allege that Lyft failed to pay them the full amounts due from the company's "Prime Time" premium hours. The claim involves the thorny classification question that is at the heart of gig economy litigation. If the Lyft drivers are employees — as Sagafi and other plaintiffs' lawyers contend — and not independent contractors — as the company argues — then they are eligible under California law to collect the full amount of tips they receive, arguably including Lyft's Prime Time payments, in which passengers pay extra for rides during times of high demand.
"But whether they are employees or not," Sagafi said, "it is a work relationship." The suit alleges that despite Lyft's public campaign claiming that the added Prime Time costs go straight to drivers, the company has pocketed millions of dollars from the higher fares. Lyft has told the world that Prime Time is for its workers — and then Lyft dips its hand into that pot of money," Sagafi said. "That's our fraud theory of the case."
Another important public policy aspect of the litigation centers on Lyft's effort to enforce an arbitration clause its drivers signed. "That involves another set of issues involving consumer law fairness questions," Sagafi said.
Looking at the big picture, Sagafi traces the onslaught of lawsuits over employee classification back to Congress' intent decades ago in 1938 when it passed the Fair Labor Standards Act to protect workers. "You have to have rules guarding the welfare of working people, or businesses would forever be running circles around labor," he said. "The problem in recent years is bigger than the gig economy, as business misclassifies employees as independent contractors to sidestep the legal protections employees get."
Class actions are one way of enforcing labor protections. "Suits to correct unfair labor practices can work, but they take time — and lawyers," Sagafi said.
— John Roemer
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