Papa, Inc. Faces Overtime & Minimum Wage Violation Claims Due To Alleged Misclassification
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A California federal district court granted conditional collective certification of claims brought under the federal FLSA for minimum wage and overtime violations arising from the alleged misclassification of Pals employed by Papa, Inc.
The Case: Pardo v. Papa Inc.
The Court: California Superior CourtCalifornia Supreme Court
The Case No.: CV-496 June 2015
The Plaintiff: Pardo v. Papa Inc.
The plaintiffs in the case claim the company misclassified the Pals, assistants who provide daily living tasks and companionship to seniors, as independent contractors. According to the collective action complaint, Papa Inc.’s Pals were misclassified based on the following:
1. The company conducted background checks before allowing the workers to connect with customers.
2. Providing the workers with training and strict policies.
3. Setting the pay structure for the Pals.
4. Tracking the location and productivity of Pals workers.
5. Retaining the right to terminate Pal workers without cause or for violating rules imposed in the Papa Inc. contract.
The Defendant: Pardo v. Papa Inc.
The defendant in the lawsuit, Papa, Inc., operates an app allowing seniors and their families to access the services of “Papa Pals.” Pals assist with chores and offer companionship services. The company contends that the Pals are independent contractors because they choose how often they use the app. They also operate primarily at the direction of the seniors or the seniors’ families who access the app, and they do so free from the direct supervision of the company. The company argued that the court should deny the plaintiff’s certification motion because the plaintiffs failed to establish they suffered any failure to receive overtime wages or minimum wage because they worked so few hours. The court disagreed, finding that the arguments were related to the merits of the claims, which were not appropriate to consider at that time.
Details of the Case: Pardo v. Papa Inc.
The court concluded that the plaintiff adequately showed that Pal workers are treated as independent contractors, which creates the potential of not receiving overtime pay and minimum wages required by employment law for those legally classified as employees. This court’s decision seems to contradict past case decisions. For instance, in 2021, the Fifth Circuit decision in Swales v. KLLM Transport Services, LLC required district courts to scrutinize similarly situated workers from the outset of the case instead of issuing a lenient conditional certification in the early stages of the suit. The case brings attention to the continuing discussion of how companies should classify their workers.
If you have questions about how to file a California misclassification lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.
