Protect the Gig Economy Act of 2025

Bill Summary

What the bill does: H.R. 100, the “Protect the Gig Economy Act of 2025,” would amend Federal Rule of Civil Procedure 23—the rule that governs when lawsuits can proceed as class actions in federal court. Rule 23(a) currently lists four prerequisites for class certification: numerosity (too many members to join individually), commonality (common questions of law or fact), typicality (representative claims typical of the class), and adequacy (representatives will fairly and adequately protect the class). This bill would add a fifth prerequisite: a class action could be certified only if “the claim does not allege the misclassification of employees as independent contractors.” In plain terms, any case that alleges workers were misclassified as contractors could not be certified as a Rule 23 class action in federal court.

What that means in practice: Misclassification cases are common in the “gig economy” (rideshare, delivery, on‑demand services) but also in many other sectors (trucking, construction, cleaning, home health, salons, logistics, media/freelance, and parts of franchising). These cases often seek unpaid minimum wage or overtime, reimbursement of expenses, meal/rest break pay, benefits eligibility, payroll tax consequences, and injunctive relief to reclassify workers as employees. Today, plaintiffs frequently bring “hybrid” cases that combine a federal Fair Labor Standards Act (FLSA) “collective action” (opt‑in) with state‑law wage claims under Rule 23 (opt‑out). The bill would eliminate the Rule 23 class portion for any claim that alleges misclassification, significantly reducing the scale and leverage of such lawsuits in federal court. FLSA collective actions—which are not Rule 23 class actions—would remain possible, but they require workers to affirmatively opt in, typically resulting in smaller groups and lower exposure.

Scope and limits: The bill’s text is broad. Although its title references the “gig economy” and small businesses, the operative language is not limited by industry or company size; it would apply to any federal class action that alleges misclassification, including suits against large corporations. It would also bar class certification for both damages (Rule 23(b)(3)) and injunctive/declaratory relief classes (Rule 23(b)(2)) when misclassification is alleged. The phrase “the claim” is somewhat imprecise in the Rule 23 context and could spawn litigation over whether any misclassification allegation anywhere in the case defeats class treatment for all claims, or only for specific misclassification‑based causes of action. Defendants would likely argue that any misclassification theory precludes class certification across the action; plaintiffs would try to sever non‑misclassification issues.

Federal versus state court: The Federal Rules apply in federal court. State courts use their own class action rules. Many misclassification suits involving state wage laws are filed in state court but removed to federal court under the Class Action Fairness Act (CAFA). If H.R. 100 becomes law, defendants would have an added incentive to remove misclassification class suits to federal court to block certification. Plaintiffs, by contrast, would try to keep cases in state court via CAFA exceptions or by structuring claims to avoid removal. The bill does not directly preempt state court class actions, but it would reshape forum strategy nationwide and could effectively dismantle many state‑law misclassification class cases once they reach federal court.

Interaction with arbitration and other enforcement: Many companies already use arbitration agreements with class/collective action waivers (per Supreme Court decisions like Epic Systems). This bill would independently foreclose Rule 23 classes in federal court even where arbitration is not in play or is unenforceable. Public enforcement—by the U.S. Department of Labor, state labor agencies, and state attorneys general—would remain available. However, private class actions are a major enforcement mechanism in wage‑and‑hour law; eliminating them would reduce aggregate private enforcement pressure. Workers with relatively small individual claims may find it impractical to sue one‑by‑one, even if technically allowed to opt into an FLSA collective.

Process and precedent: It is unusual but not unprecedented for Congress to alter court rules by statute. Congress has authority to do so, though some may criticize direct statutory carve‑outs in procedural rules as policy‑driven “tort reform” via procedure. If enacted without an explicit effective‑date clause, courts would determine how to apply the change to pending cases, likely following the standard practice of applying new procedural rules to ongoing matters where “just and practicable.”

Stakeholder impacts: Gig platforms and small businesses would face less risk of sweeping class exposure for misclassification claims, reducing settlement pressure and litigation costs. Large national employers in logistics, trucking, construction, and franchising would also benefit. Plaintiffs’ lawyers would see a major tool curtailed. Workers who believe they were misclassified would still have avenues (individual suits, FLSA collectives, administrative complaints), but would lose a powerful, opt‑out mechanism to aggregate small claims and seek systemic injunctive relief. Politically, supporters will frame the bill as protecting innovation, flexible work, and small enterprises from coercive litigation; opponents will frame it as stripping workers of a critical enforcement vehicle and weakening wage‑and‑hour protections across many industries, not just the gig economy.

Pros

May slightly reduce litigation burdens on truly small, local businesses that rely on contractors in good faith, potentially preserving jobs and keeping local services afloat.
Could channel more disputes into FLSA opt-in collectives, which some Democrats view as a more accurate measure of worker interest than opt-out classes.
If fewer large settlements are priced into business models, some savings could be passed to consumers or workers via higher base pay—though this is uncertain.
Public enforcement (DOL, state AGs) may gain relative importance; some Democrats prefer well-resourced public enforcement over private class litigation to set uniform standards.
Might narrow incentives for overbroad class definitions and reduce forum shopping, encouraging more careful pleading and case selection.

Protects gig platforms and small businesses from the settlement pressure of massive class actions where liability is uncertain and business models are still evolving.
Preserves flexible, independent work arrangements that many contractors prefer, supporting entrepreneurship and supplemental income opportunities.
Reduces litigation costs that can stifle innovation, deter investment, and drive up prices for consumers in rideshare, delivery, and on-demand services.
Targets what supporters view as trial-lawyer abuse of Rule 23—using opt-out classes and statutory penalties to force outsized settlements regardless of merits.
Encourages resolution of individualized questions (control, hours, supervision) on a worker-by-worker basis rather than through broad-brush class treatment.
Narrows the use of hybrid state-law wage classes piggybacking on FLSA collectives, making federal wage litigation more consistent and predictable.
Signals federal support for contractor models at a time of regulatory uncertainty, giving businesses clearer risk assessments and enabling growth.
Could reduce forum shopping and the use of plaintiff-friendly state class rules by incentivizing federal adjudication where standards will be uniform.
May prompt more straightforward compensation structures (e.g., transparent per‑task rates) if class exposure is reduced, aligning expectations for contractors.
Limits the risk of retroactive liability that can threaten the viability of startups and small franchises operating on thin margins.

Cons

Removes a central tool workers use to challenge systematic misclassification, particularly where individual claims are too small to pursue alone, weakening wage-and-hour protections.
Skews the playing field toward companies by eliminating opt-out class actions while leaving employers’ structural advantages (arbitration, resource asymmetry) intact.
Despite its title, the bill broadly shields all industries and large corporations, not just the gig sector or small businesses, resulting in an overinclusive carve-out.
Undercuts deterrence: reduced class exposure may encourage misclassification, shifting costs of underpayment, injuries, and unemployment onto workers and taxpayers.
Blocks injunctive/declaratory class actions that can secure systemic reclassification and policy changes, prolonging noncompliance even when courts find violations.
Encourages removal to federal court under CAFA to defeat state-law class claims, potentially nullifying states’ carefully crafted wage protections in practice.
Could impair ERISA and benefits-related class claims tied to misclassification (retirement/health eligibility), limiting access to earned benefits.
Creates unequal access to justice: workers with language barriers, precarious status, or fear of retaliation are less likely to file individual or opt-in claims.
Procedurally atypical: Congress micromanaging Rule 23 for one category risks politicizing civil procedure and invites more carve-outs that erode class actions.
May increase court dockets with many small individual suits and duplicative FLSA opt-ins, reducing judicial efficiency and consistent outcomes.

The language is broad and imprecise; it may invite satellite litigation over what counts as a misclassification allegation and how it affects mixed claims.
Does not stop litigation; it may just fragment it into multiple individual suits or FLSA collectives, potentially increasing defense costs and uncertainty.
May drive more cases into state courts that certify classes under state rules, creating a patchwork and undermining the goal of uniformity.
Could be seen as Congress picking winners in civil procedure, drawing criticism for politicizing Rule 23 and potentially spurring calls for countervailing reforms.
By reducing deterrence, it may enable bad actors to misclassify, disadvantaging honest businesses that follow the law and compete on higher costs.
Public backlash risk: perceived as favoring big tech and large logistics firms under a “gig economy” label, which could trigger state-level crackdowns or new regulations.
Potential to limit injunctive class relief even where reclassification is clearly warranted, prolonging disputes and leaving businesses in legal limbo.
If federal courts can’t certify classes, plaintiffs may craft claims to avoid removal or target local defendants, complicating defense strategy under CAFA.
Could strain relations with states that have adopted stricter tests (e.g., ABC tests) by enabling more federal removal and undermining state enforcement via private suits.

This bill was introduced on January 03, 2025 in the House.

View on Congress.gov:
https://www.congress.gov/bill/119th-congress/house-bill/100

Jan 03, 2025

Referred to the House Committee on the Judiciary.

H11100
Jan 03, 2025

Introduced in House

Intro-H
Jan 03, 2025

Introduced in House

1000

This bill has not yet been enacted into law.

No related bills found for this legislation.

Protect the Gig Economy Act of 2025

Bill Summary

Pros

Cons

Introduction

History

Referred to the House Committee on the Judiciary.

Introduced in House

Introduced in House

Laws Enacted

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