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Lyft dodges drivers’ bid to be classified as employees

The court agreed with Lyft that the passage of Proposition 22 in 2020, classifying ride-share drivers as independent contractors, mooted drivers' emergency request to be classified as employees.

(CN) — A California appellate panel has declined to revive a bid by a group of Lyft drivers to force the ride-hail company to classify them as employees, saying a change in law has mooted their request.

The San Francisco-based First Appellate District panel on Thursday agreed with Lyft that the 2020 passage of a ballot initiative classifying app-based drivers as independent contractors, which occurred while the Lyft drivers' appeal was pending, made it unnecessary for the court to review a judge's denial of an emergency preliminary injunction to have them classified as employees instead.

The court wasn't persuaded by the drivers' argument that there is still a live issue to be litigated because they would have been entitled to sick pay during the Covid lockdown if an injunction had been in place.

"No California case holds that plaintiffs can maintain an appeal from the denial of a moot preliminary public injunction by asserting claims for 'ancillary restitution,'" San Francisco County Superior Court Judge Mary Wiss wrote for the three-judge panel in an unanimous decision. "In the circumstances of this case, we decline to do so."

Shannon Liss-Riordan, an attorney for the Lyft drivers, said they are "disappointed in the decision and are considering our options, including petitioning the California Supreme Court for review." 

The drivers had sued in early 2020, around the time the Covid pandemic started to get the U.S. in its grip, seeking to force Lyft to reclassify them as employees instead of independent contractors so they could receive sick leave as required by California law.

Lyft removed the case to federal court, where U.S. District Judge Vince Chhabria ruled the drivers would have to arbitrate most of their claims. Chhabria sent the case back to the state court to deal with the drivers' emergency injunction request.

Chhabria's decision was eventually upheld by the Ninth Circuit. Meanwhile, San Francisco Superior Court Judge Ethan Schulman ruled the drivers' injunctive relief claim should be privately arbitrated since the injunction they sought benefited themselves, not the general public.

Liss-Riordan told the appellate panel at a hearing earlier this month 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.

Lyft attorney Jeffrey Wu said argued at the hearing that the drivers' 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.

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