D.C. Accuses Delivery App Gopuff of Misclassifying Drivers (1)

On-demand home delivery company Gopuff illegally misclassified its delivery drivers as independent contractors for more than a decade, the District of Columbia’s attorney general said in a new lawsuit.

The move could have major implications for other big players in the gig-economy.

The complaint, filed Wednesday in the Superior Court of the District of Columbia, alleges that Gopuff has “systematically misclassified” its delivery staff as independent contractors to avoid workers compensation insurance contributions and paying the minimum wage, overtime, and sick leave benefits required under DC law.

Attorney General Brian L. Schwalb argues that Gopuff, which operates in over 500 US cities, treats its workers as employees in part by maintaining full control over their working conditions and hours. Gopuff drivers must submit schedule requests in order to receive a shift assignment, and don’t have a choice about the location they are dispatched to that day, according to the AG’s office. Delivery workers are also expected to be physically present at their assigned Gopuff processing facility and available to take orders during the entirety of their shift, the office said.

The lawsuits cites violations of various city laws including its minimum wage, paid leave, and unemployment compensation statutes, as well as the False Claims Act. Schwalb wants the company to pay its drivers backwages and damages, in addition to civil penalties to the District, according to the suit.

Jonathan Schoenfeld, general counsel at Gopuff, denied the allegations and said the company plans to fight the lawsuit.

“We strongly disagree with the D.C. Attorney General’s allegations and representation of the facts and will vigorously defend both ourselves and the right to earn as independent contractors,” Schoenfeld said in an emailed statement. “Those who choose to engage with Gopuff as delivery partners tell us time and again that they value the flexibility of independent work and we remain committed to protecting these vital earning opportunities.”

While the case involves violations of DC law, it could have ramifications for other gig-economy companies operating under similar independent contractor arrangements in Washington. How drivers for these platforms should be treated for purposes of federal and state laws has been one of the most contentious issues the modern labor and employment legal space.

Under federal and state law, minimum wage, overtime pay, and other common workplace protections typically only apply to employees. Independent contractors on the other hand, are considered to be in business for themselves and aren’t covered by those protections.

Over the past decade, attorneys representing workers in the gig economy have filed numerous lawsuits challenging the legality of these arrangements across the country. States have also waded into the fray, offering up stricter rules for working with independent contractors or passing specific industry carve-outs for these arrangements.

Assistant Attorneys General Norman Anderson, Kara Mahoney, and Morgan Sperry; Dennis Corkery, Assistant Chief of the Workers’ Rights and Antifraud Section; and Graham Lake, Chief of the Workers’ Rights and Antifraud Section are handling the case for Washington.