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Judge Scolds Lyft and Labor Rights Advocates in Sick Pay Dispute

Rejecting an emergency request to make Lyft give sick pay to its drivers, a federal judge in California on Tuesday scolded labor rights lawyers for exploiting a pandemic to advance a lawsuit “riddled with defects” but also chided the rideshare company for blatantly violating state labor laws.

SAN FRANCISCO (CN) — Rejecting an emergency request to make Lyft give sick pay to its drivers, a federal judge in California on Tuesday scolded labor rights lawyers for exploiting a pandemic to advance a lawsuit “riddled with defects” but also chided the rideshare company for blatantly violating state labor laws.

“There are no heroes in the story of this case,” U.S. District Judge Vince Chhabria wrote in an 18-page ruling

Lead plaintiff John Rogers sought an emergency injunction to compel Lyft to start classifying California drivers as employees instead of contractors so they can obtain sick leave as required by state law. The plaintiffs say many drivers who are sick or ordered to self-quarantine will choose to keep giving rides so they can earn money and in doing so risk spreading the Covid-19 virus. 

FILE - In this Tuesday, Jan. 12, 2016, file photo, a driver displaying Lyft and Uber stickers on his front windshield drops off a customer in downtown Los Angeles. In a big win for labor advocates, the California Supreme Court has limited the ability of businesses to classify workers as independent contractors, which could affect a range of workers in the so-called "sharing economy," such as Uber and Lyft drivers. (AP Photo/Richard Vogel, File)

But Chhabria said the relief sought would only provide up to four hours of sick leave for most California Lyft drivers and reclassifying the drivers could also make them ineligible for new federal sick leave benefits for independent contractors.

“Even if drivers were reclassified, the amount of sick pay involved would be small,” Chhabria wrote.

However, the judge acknowledged California’s Assembly Bill 5, passed last year, makes clear that Lyft should classify its drivers as employees and provide benefits that go with that, including minimum wage, overtime and sick pay.

“Rather than comply with a clear legal obligation, companies like Lyft are thumbing their noses at the California Legislature, not to mention the public officials who have primary responsibility for enforcing A.B. 5,” Chhabria wrote.

Despite his strong feelings about Lyft’s flouting of the law, Chhabria granted the company’s motion to compel the case to individual arbitration, finding Lyft drivers are not exempt from the Federal Arbitration Act as transportation workers “engaged in interstate commerce.”

The judge rejected Lyft’s argument that all workers who transport people rather than goods are subject to arbitration. Nevertheless, he concluded that giving rides, even ones that occasionally cross state lines, does not meet the criteria for “interstate commerce.”

“Their work predominantly entails intrastate trips, an activity that undoubtedly affects interstate commerce but is not interstate commerce itself,” Chhabria wrote.

Chhabria also remanded Rogers’ request for a public injunction to state court. Although Lyft argued the motion was a request for private relief masked as a motion for public benefit, Chhabria said a state court judge should decide that legal question.

Reached by phone, Rogers’ attorney Shannon Liss-Riordan said her client will likely appeal the judge’s decision to compel arbitration. She noted that a federal judge in Massachusetts reached the opposite conclusion on March 27, finding Lyft drivers are transportation workers engaged in interstate commerce and therefore exempt from arbitration.

Liss-Riordan also celebrated Chhabria’s unequivocal assertion that Lyft is violating California labor laws, even though his finding carries no legal weight because the case was sent to arbitration.

“This is an important and historic day that a court has now stated in no uncertain terms that Lyft and other companies are thumbing their noses at California law by misclassifying their drivers,” Liss-Riordan said.

Liss-Riordan said she did not understand why the court chose to criticize her efforts to enforce California labor laws during the pandemic. Even though drivers could only get a maximum of three days of sick leave and most would qualify for four hours or less, she insisted that would still go a long way in helping to keep sick workers at home.

“Even the relatively small amount of sick pay that California guarantees to employees would make a big difference right now,” Liss-Riordan said.

The attorney also rejected Lyft’s argument that classifying drivers as employees under state law would cause them to lose benefits reserved for independent contractors under new federal legislation.

“Lyft is trying to deflect attention away from the fact that it is foisting its own obligations onto the federal government and taxpayers,” Liss-Riordan said. “Lyft is sitting on $2.8 billion in cash, and its drivers need all the cash they can get right now and cannot afford to just wait for federal aid, which may take weeks or months to arrive and which many of them will not be able to access as there are many administrative hurdles they must overcome to receive it.”

In a statement, Lyft said it appreciates Chabria’s recognition that reclassifying drivers as employees could jeopardize their eligibility for emergency federal benefits.

“While we disagree with the judge’s comments regarding the merits of the underlying issue as to whether drivers on the Lyft platform are properly classified as independent contractors, we appreciate the judge’s recognition of the fatal flaws in the plaintiffs’ case for an emergency injunction,” the statement said.

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