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Industry Insights

Young: Lyft Attempts a Stiff Arm

  • State: California

A recent Workers' Compensation Appeals Board panel decision highlights some of the issues surrounding workers’ comp claims against gig worker ride-share companies.

Julius Young

Julius Young

The case is Murguia v. Lyft.

The 2018 California Supreme Court decision in Dynamex Operations West Inc. v. Superior Court adopted the ABC test to determine employment in a wage and hour context. In 2019, the Legislature enacted Assembly Bill 5, a codification of the ABC test that extended its reach beyond wage and hour cases to workers’ comp, unemployment and other California labor laws.

But there was still apparently little, if any, reported workers’ comp litigation over the issue of whether California law required ride-share drivers to be covered as employees under California workers’ comp.

Then came the passage of Proposition 22, which effectively exempts Lyft, Uber, DoorDash and certain other gig platform companies from the California system as long as they have a substitute schedule of benefits specified in the initiative.

But Prop. 22 was declared unconstitutional in 2021 by an Alameda County Superior Court judge. That case, Castellanos et. al. v. State of California et al., is currently on appeal and pending at the California Court of Appeal, 1st Appellate District.

So we have a murky situation now. Does AB 5 (and the ABC test) apply to ride-share drivers for purpose of determining if they are employees? Or will Prop. 22 apply?

That brings us to Murguia.

In Murguia v. Lyft Inc., Gisela Murguia claimed injuries while allegedly employed by Lyft Inc. in Culver City. Murguia served a subpoena duces tecum asking for records from Lyft and served the subpoena on Blue Star Claims Management. Lyft objected and contested a workers’ compensation judge’s order to meet and confer over the SDT.

Lyft claimed that there was no personal and subject matter jurisdiction to order a meet and confer order, contending that Murguia was an independent contractor, not an employee. Lyft filed a petition for removal.

The WCJ who had issued the meet and confer order (Van Nuys WCJ Dean Stringfellow) recommended that Lyft’s removal petition not be granted. The WCAB panel rejected Lyft’s petition for removal, adopting the recommendation filed by Stringfellow. That report noted that the WCAB does have jurisdiction to determine jurisdiction.

The Murguia panel decision states that:

First of all, it must be noted that Proposition 22 was enacted as Bus. & Prof. Code Sec. 4751. The statute was declared unconstitutional in Castellanos v. State of California (2021) 86 CCC 826. At the time of this writing, this holding in Castellanos appears to be the present status of Bus. & Prof. Code Sec. 4751 upon which petitioner seems to rely.

However, neither the supposed implications of Proposition 22 nor the burden of proof imposed on the alleged employer under Cal. Lab Code Sec. 2775 in any way affects the jurisdiction of the appeals board to issue interim orders affecting discovery in an ongoing case.

Secondly, Cal. Lab. Code Sec. 3357 states:

"A person rendering service for another, other than as an independent contractor, or unless expressly excluded herein, is presumed to be an employee.”

Hence any claim that applicant is an independent contractor is a contested issue subject to the board’s jurisdiction. This would be true regardless of the constitutional status of Proposition 22.

Obviously, there will be further legal developments surrounding the application of Prop. 22 and AB 5 to California ride-share workers.

Julius Young is an applicants' attorney and a partner for the Boxer & Gerson law firm in Oakland. This column was reprinted with his permission from his Workers Comp Zone blog on the firm's website.

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