Business Groups Take Unconventional Route Against DOL’s Gig-Worker Rule

A coalition of business groups, representing various industries, including gig economy giants Uber Technologies Inc. and DoorDash Inc., is attempting to expedite their challenge against the US Department of Labor’s (DOL) latest independent contractor rule. The rule, slated to go into effect in March, has faced opposition from these groups, prompting them to forgo filing a new lawsuit and instead revive a previous litigation involving a different Biden administration independent contractor rule issued in 2021.

While the 2021 rule, aimed at worker classification, was blocked by a Texas federal court in 2022, and the latest independent contractor rule released on January 9 differs slightly, both seek to overturn a Trump-era standard that adopted a more business-friendly approach in determining whether a worker should be classified as an employee or contractor under federal wage law.

The coalition, which includes the Coalition for Workforce Innovation, Associated Builders and Contractors, and the Financial Services Institute, opted to piggyback off the prior litigation, a move that legal experts believe could expedite the process and potentially lead to blocking the new rule sooner.

Read more: EU States Introduce Regulations That Protect Gig Economy Workers

Michael Lotito of Littler Mendelson PC, the management-side firm representing the business groups, explained the strategic move as “for judicial expediency, for judicial efficiency.” Lotito emphasized that sending the new rule back to the judge familiar with the independent contractor rule’s history and evolution makes practical sense.

However, the DOL and at least one attorney disagree with this approach, arguing that businesses must file a new lawsuit against the latest rule. According to the agency’s response on January 12, the publication of the new final rule “rendered moot the question whether the prior independent contractor rule was properly delayed and withdrawn.” Allison Zieve, director of Public Citizen’s Litigation Group, supported this stance, stating that since the Biden DOL’s new rule supersedes the 2021 rule, the earlier litigation has no bearing on the current situation.

Zieve clarified, “If these plaintiffs want to challenge what happens, they can’t just rely on the circuit sending them back to the district court. They have to file a case challenging the 2024 rule.” The legal dispute over the procedural approach adds an intriguing layer to the ongoing battle between business groups and the DOL over the classification of independent contractors.

Source: News Bloomberg Law