Valet service app Zirx is the latest company in the on-demand economy to face a lawsuit over alleged worker misclassification. The company labels its drivers as independent contractors, according to a complaint filed Tuesday in federal court, illegally depriving them of minimum wage and overtime protections.
The proposed class-action lawsuit comes on the heels of similar legal challenges that target ride-hailing giants Uber and Lyft, food delivery service GrubHub and courier service Postmates, among others. Misclassification lawsuits are nothing new -- FedEx, for example, has faced such lawsuits for years -- but they have become more prominent with the emergence of the on-demand or sharing economy, which relies heavily on independent contractors.
In the complaint, first reported by GeekWire, former worker Christina Pascual said Zirx “maintains direct authority and control over the agents’ work" by paying an hourly rate for shifts it sets and requiring a uniform and dress code policy. Pascual said she worked for the valet service company from November 2014 to July 2015, often in excess of 40 hours a week, but did not receive any overtime pay.
Battles over worker classification have increasingly captured the attention of federal regulators. Earlier this year, the U.S. Department of Labor issued an interpretive guidance, noting that the “misclassification of employees as independent contractors is found in an increasing number of workplaces in the United States.” Under the “broad definitions” of the Fair Labor Standards Act, it concluded, “most workers are employees.”
Unlike independent contractors, employees are eligible for unemployment insurance and workers' compensation and are protected by anti-discrimination laws.
"Zirx has created a fun, safe and rewarding platform for our agent network," a spokesman said. "However, as a company practice, we do not comment on litigation." The company has raised $36 million since it was founded last year. For a daily fee of $15, Zirx provides valet agents who pick up customers’ cars, find parking spaces and return the vehicles at customers’ requests.
In September, a federal judge certified that a worker misclassification lawsuit against Uber could proceed with class-action status -- opening it up to as many 160,000 Uber drivers in California. That trial is scheduled to start in June.