Can a Cabbie Collect Overtime?

San Francisco, CAMany people assume, without much thinking, that cabbies rent the cab from a cab company and then work pretty independently. The California Court of Appeals decision in Linton v. DeSoto Cab Company breathes life into a driver’s contention that he was an employee, entitled to unpaid wages, unpaid overtime and waiting time penalties. The Appeals Court did not determine that Darnice Linton was an employee, but sent the case back to the trial court with instructions that it apply certain legal principles originally developed in workers compensation and unemployment insurance cases. Simply put, plaintiffs in California overtime lawsuits now have more tools at their disposal.

Linton signed a preprinted agreement, described as a “Lease Agreement,” with DeSoto Cab Company. Under the terms of his agreement, he paid a “gate fee” of $100 each time he took the cab out. In exchange, he got the keys, a taxi medallion, and a "waybill." The bottom of each waybill stated: "DRIVE CAREFULLY. DRESS NEATLY. BE COURTEOUS." Other than the “gate fee,” he kept his fares and tips. The agreement could be terminated by either party.

He was, however, assigned regular shifts and required to lease the cab for 10 hours each shift. The cab was equipped with GPS tracking, as well as audio and video recording devices mounted on the windshield. About 60 percent of Linton’s fares came from street hails. Dispatch radio calls accounted for most of the remainder.

After DeSoto terminated the Lease agreement, Linton filed a complaint with the Labor Commissioner's office contending that he had been misclassified as an independent contractor instead of an employee. He claimed that he was owed wages, overtime and waiting time penalties under the California Labor Code. The Labor Commissioner held for Linton. The trial court reversed. The Court of Appeals reversed the trial court.

But this case is important to people other than Darnice Linton because of what came next. The Appeals Court directed the trial court, in its new trial, to apply standards articulated in two non-overtime cases, to determine whether Linton was an employee. These two cases, Borello v. Department of Industrial Relations and Yellow Cab Cooperative v., Workers Compensation Appeals Board focus on how much control the putative employer exercises over how the work in question is done. Both begin with an implicit assumption that the worker is an employee unless facts prove otherwise. Although both cases deal with the larger question of whether a worker is an employee, entitled to protections under California law, neither actually deals with unpaid overtime.

This is good for workers who claim that they are owed unpaid overtime in California because it reinforces the principle that courts should look at the substance rather than the form of working agreements to determine how broadly the protections of law extend.