Class Action on Behalf of Lyft Drivers Hits Pothole

(CN) - California-based drivers for the ride-sharing service Lyft cannot represent workers outside the Golden State in a labor class action, a federal judge ruled.

Lyft, a Delaware corporation headquartered in San Francisco, uses smartphone software to connect passengers with rides. The company operates in several states.

Lead plaintiffs Patrick Cotter and Alejandra Maciel brought a federal class action against Lyft in Oakland, Calif., alleging the company inappropriately classifies drivers as independent contractors. The misclassification, they say, allows the company to skirt state minimum wage and wage statement laws.

"Because drivers are in fact Lyft employees, this action also challenges Lyft's policy of taking 20 percent of gratuity payments given by riders to Lyft's drivers, an illegal practice under California Labor Code ... which prohibits an employer from taking any amount of gratuity given to an employee," a second-amended complaint from December 2013 states.

U.S. District Judge Vince Chhabria struck the class allegations Thursday, however, because California law does not apply to people working exclusively in other states.

"Because California's wage and hour provisions do not create a cause of action for work performed exclusively outside the state, and because parties cannot create a cause of action under the wage and hour statutes where none exist, the plaintiffs cannot seek to enforce those provisions on behalf of a nationwide class," Chhabria wrote.

A "choice of law" provision contained within the employment agreement does not apply because "although the agreement will likely be used as evidence to support their statutory claims, their claims do not arise out of the contract, involve the interpretation of any contract terms, or otherwise require there to be a contract in the first place," the nine-page ruling states.

The plaintiffs have 21 days to amend the struck-out claims.

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