SAN FRANCISCO (CN) — A California appellate panel questioned Wednesday whether it should vacate a state judge’s decision to deny an emergency injunction that would have entitled Lyft drivers to sick pay during the Covid-19 crisis.
A refusal to do so would put an end to litigation dating back to the outset of the pandemic, when ride-share drivers sought to force Lyft to reclassify California drivers as employees instead of contractors so they could receive sick leave as required by state law.
The case was removed to federal court, where U.S. District Judge Vince Chhabria chided Lyft for thumbing its nose at Assembly Bill 5, which codifies a new labor standard imposed by the California Supreme Court that makes it harder for employers to classify workers as independent contractors.
But he also scolded the drivers for rushing to court with a lawsuit “filed hurriedly in an attempt to capitalize on the coronavirus pandemic.” He ruled that the drivers would have to arbitrate most of their claims, finding them not exempt from the Federal Arbitration Act as transportation workers “engaged in interstate commerce.”
Chhabria sent the case back to the state court to deal with the emergency injunction request.
His decision was eventually upheld by the federal Ninth Circuit. Meanwhile, San Francisco Superior Court Judge Ethan Schulman ruled that their injunctive relief claim should be privately arbitrated since the injunction they sought benefited themselves, not the general public.
Labor attorney Shannon Liss-Riordan told the state panel that Schulman got it wrong when he found their request for injunctive relief to be a private matter.
“The idea behind paid sick leave is to allow workers who are sick or think they may be sick to stay home and not infect other people,” she said. “Any incremental additional ability for those drivers to stay home when feeling sick at the outset of the Covid-19 crisis would have helped the public good.”
She said the case presents a significant issue of California law that could come up again in the future, prompting Presiding Justice Jim Humes to ask what exactly could be repeated.
“There will continue to be public health emergencies which may implicate the question of whether or not employees who are denied sick pay as mandated under California state law can seek that sick pay as an injunctive remedy in the face of a global emergency, including a pandemic,” Liss-Riordan answered. “This is something that very well could repeat itself, unfortunately.”
Under further questioning from Humes, Liss-Riordan acknowledged that should Schulman’s ruling be vacated and sent back to him for reconsideration, Schulman would have to evaluate any future injunction under Proposition 22, a voter-passed law that exempts firms like Uber, Lyft and Instacart from treating drivers as employees under California law.
Proposition 22 was declared unconstitutional by a different trial court judge last year, but an appeal is pending.
“My feeling here is if you agree that Prop 22 has to be considered by the trial court on remand in terms of whether or not an injunction should enter, and an injunction is a forward-looking device, why in the world wouldn’t the correct approach for us to take to be to remand it to the trial court for that to exactly happen?” Humes asked.
He added, "We can't say the injunction was good or bad since the passage of Proposition 22 without addressing whether Proposition 22 was valid.”
Liss-Riordan said the court could very well remand the case, but should vacate Schulman’s prior decision first so that the lawsuit could continue. Otherwise, Lyft would take the position that the case is over.
"The only way we’re going to be able to ask the Superior Court to take action that would be appropriate now would be if this court vacates that decision,” she said.
Lyft attorney Jeffrey Wu said the appeal was a ploy to circumvent the court-ordered arbitration. Arbitration clauses compel workers to resolve labor disputes individually and bar them from participating in class actions-- a tactic favored by gig economy giants.
Wu said the appeal should be dismissed as moot.
Humes was joined on the panel by Justice Sandra Margulies and San Francisco County Superior Court Judge Mary Wiss. They took arguments under submission.
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