Workers Comp Zone

ROPE-A-DOPE

Lyft won’t be shutting down tonight.

Earlier today the company had announced they would be ceasing California operations tonight unless they received judicial relief in a recent case dealing with the definition of driver employment status.

But after Lyft’s announced shutdown, the California Court of Appeal First District granted a stay of a recent order from the San Francisco County Superior Court (note: at bottom of this post you can find the text of the August 10, 2020 order on request for preliminary injunction signed by Judge Ethan P. Schulman in the case titled People of the State of California v. Uber Technologies and Lyft).

Judge Schulman’s order was a preliminary injunction enjoining Uber and Lyft from classifying their drivers as independent contractors.

Today’s 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 October 13, 2020. On or before September 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.”

Meanwhile, the California Labor Commissioner announced on August 5, 2020 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 Prop 22, the initiative sponsored by Uber, Lyft, DoorDash and other gig platform companies that would nullify AB5.

Granted, Kamala Harris’ brother in law, Tony West, has claimed that Uber can prevail in court by showing that Uber’s 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 believe that they can win on that issue in the California courts.

Thus, Prop 22 is key for them.

Today’s stay from the Court of Appeal helps their rope-a-dope strategy. Nothing will be decided in the courts before the election.

The people will decide. 

Here is the Ballotpedia summary of California Prop 22, which contains some analysis as well as the actual initiative text:

https://ballotpedia.org/California_Proposition_22,_App-Based_Drivers_as_Contractors_and_Labor_Policies_Initiative_(2020)

The Superior Court preliminary injunction can be found here:

WorkersCompAB5(SuperiorCourtOrderText)(8.11.20)

Stay tuned.

Julius Young

Julius Young

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