Buchalter secured a significant legal victory for Arizona’s Yellow Cab in a hybrid class and collective action lawsuit on behalf of former and current airport cab drivers. The lawsuit, initiated in 2012, alleged that drivers were employees under the Fair Labor Standards Act and the Arizona Minimum Wage Act, and that they were not paid minimum wage as required under those two statutes.
Yellow Cab argued that airport cab drivers leased their cabs from the company for a flat fee and retained 100% of the fees the cabs generated, and, therefore, they were independent operators. Based upon available Airport data and records of paid fares, drivers seemed to earn well in excess of minimum wage as well.
Yellow Cab prevailed on summary judgment. The District Court held that two key factors in the six-factor economic realities test (lack of control by purported employer and significant risk of profit or loss for purported employee) weighed so heavily in favor of the independent operator argument that the Airport cab drivers were independent operators as a matter of law.
Unwilling to accept the loss, Plaintiffs filed an appeal to the Ninth Circuit. After a March 17, 2017 oral argument, the unanimous three-judge panel of a Ninth Circuit upheld the decision of the lower court.
