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Industry Insights

Young: Rope-a-Dope

  • State: California

Uber and Lyft won’t be shutting down just yet.

Julius Young

Julius Young

Thursday, Lyft announced it would be ceasing California operations overnight unless it received judicial relief in a recent case dealing with the definition of driver employment status.

But after Lyft’s announced shutdown, the 1st District California Court of Appeal granted a stay of a recent order from the San Francisco County Superior Court. Judge Ethan P. Schulman's order was a preliminary injunction barring Uber and Lyft from classifying their drivers as independent contractors.

The order granting the stay sets forth a process for further briefing of the issues and includes the following language:

Oral argument shall be scheduled for Oct. 13, 2020. On or before Sept. 4, 2020, each defendant shall submit a sworn statement from its chief executive officer confirming that it has developed implementation plans under which, if this court affirms the preliminary injunction and Proposition 22 on the November 2020 ballot fails to pass, the company will be prepared to comply with the preliminary injunction within no more than 30 days after issuance of the remittitur in the appeal. Should Lyft or Uber fail to comply with these procedures, the people may apply to this court to vacate this stay. Unless otherwise ordered, the stay will dissolve upon issuance of the remittitur in the appeal.

The California labor commissioner announced on Aug. 5 that it is suing Uber and Lyft. The press release stated that:

The labor commissioner’s office has filed separate lawsuits against transportation companies Uber and Lyft for committing wage theft by misclassifying employees as independent contractors. Uber and Lyft have misclassified their drivers, which has deprived these workers of a host of legal protections in violation of California labor law, the lawsuits say.

All of this again highlights how much is at stake in the upcoming battle over Proposition 22, the initiative sponsored by Uber, Lyft, DoorDash and other gig platform companies that would nullify Assembly Bill 5.

Granted, Kamala Harris’ brother-in-law, Tony West, has claimed that Uber can prevail in court by showing that its drivers are performing activity outside the usual course of its business, which he has argued is a technology platform for various digital marketplaces.

I don’t believe for a moment that West and the Uber management think they can win on that issue in the California courts. Thus, Prop. 22 is key for them.

The stay from the Court of Appeal helps the companies' rope-a-dope strategy. Nothing will be decided in the courts before the election. The people will decide. 

Julius Young is a claimants' attorney for the Boxer & Gerson law firm in Oakland. This column was reprinted with his permission from his blog, www.workerscompzone.com.

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