Jan 9 (Reuters) - A hospitality staffing firm has filed

a novel lawsuit accusing several competitors of misclassifying

their workers as independent contractors, who are cheaper than

employees, in order to gain a competitive advantage.

In a complaint filed in California state court on Wednesday,

The Party Staff claims that app-based "gig" services Qwick,

Instawork, Tend, and Nowsta can offer lower prices because they

do not have to pay the minimum wage, overtime and payroll taxes

or maintain workers' compensation insurance.

And major food service firms Aramark ( ARMK ) and

Guckenheimer Enterprises, who are also defendants in the

lawsuit, profit from and perpetuate the staffing firms'

practices by contracting with them to provide workers for

catered events, The Party Staff claims.

"Plaintiff, which has complied with the law by classifying

its workers as employees, has had its business significantly

undercut by Defendants' actions and has lost numerous clients as

a result, significantly impacting its revenue," the

Hollywood-based company said in the complaint.

Tend could not immediately be reached for comment. The other

defendants did not immediately respond to requests for comment.

The Party Staff is represented by Shannon Liss-Riordan, a

Boston-based lawyer who has represented tens of thousands of

Uber ( UBER ) and Lyft ( LYFT ) drivers, other gig workers, and franchisees who

claim they should have been classified as employees entitled to

the minimum wage, overtime pay and other legal protections.

Liss-Riordan said the lawsuit is the first of its kind

involving staffing firms. Independent contractor

misclassification is an "enormous problem" that hurts not only

workers but also state revenues and compliant employers like The

Party Staff, she said.

"When companies misclassify workers, they make it very

difficult for law-abiding companies to compete, and they drive

an economic race to the bottom," Liss-Riordan said in an email.

The lawsuit accuses the defendants of knowingly

misclassifying workers to gain a competitive advantage in

violation of a California law barring unfair competition. The

Party Staff is seeking unspecified compensatory damages.

The case is The Party Staff v. Qwick, California Superior

Court, San Francisco County, No. CGC-25-621259.

For The Party Staff: Shannon Liss-Riordan of Lichten &

Liss-Riordan

For the defendants: Not available

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