Sacramento, CA – California Attorney General Xavier Becerra — alongside the City Attorneys of Los Angeles, San Diego, and San Francisco — today secured a preliminary injunction against unlawful employee misclassification by Uber and Lyft, requiring the companies to rightfully classify their drivers as employees while litigation is ongoing. Per the court order, the preliminary injunction is stayed for a period of 10 days. In addition, the court denied Uber’s and Lyft’s attempts to dismiss the case and stay proceedings. The decision comes after the Attorney General and City Attorneys filed for a preliminary injunction alleging that Uber’s and Lyft’s misclassification of drivers causes immediate and irreparable harm to the state and deprives workers of critical workplace protections.
“The court has weighed in and agreed: Uber and Lyft need to put a stop to unlawful misclassification of their drivers while our litigation continues,” said Attorney General Becerra. “While this fight still has a long way to go, we’re pushing ahead to make sure the people of California get the workplace protections they deserve. Our state and workers shouldn’t have to foot the bill when big businesses try to skip out on their responsibilities. We’re going to keep working to make sure Uber and Lyft play by the rules.”
“This is a resounding victory for thousands of Uber and Lyft drivers who are working hard — and, in this pandemic, incurring risk every day — to provide for their families,” said Los Angeles City Attorney Mike Feuer. “Of course, our fight is not over and we will vigorously pursue this litigation until these workers have the permanent protection they deserve.”
“Today’s ruling is a milestone in protecting workers and their families from exploitation by Uber and Lyft,” said San Diego City Attorney Mara W. Elliott. “I’m proud to be in this fight to hold greedy billion-dollar corporations accountable, especially when a pandemic makes their withholding of health care and unemployment benefits all the more burdensome on taxpayers.”
“Misclassification hurts drivers and it puts the burden on taxpayers to pay for benefits that Uber and Lyft should be providing,” said San Francisco City Attorney Dennis Herrera. “These companies have pocketed millions of dollars by leaving taxpayers to foot the bill. That’s unacceptable. During this global pandemic, it’s even more important for drivers to get access to protections like unemployment insurance. There is no rule that prevents these drivers from continuing to have all of the flexibility they currently enjoy. Being properly classified as an employee doesn’t change that.”
Worker misclassification occurs when a firm treats its employees as independent contractors, thereby evading legal obligations such as minimum wage, overtime, payroll taxes, and workers’ compensation insurance. From their inception, Uber and Lyft have consistently refused to classify their drivers as employees in violation of California law. They argue that drivers want and need “flexibility” to do their job. Uber and Lyft ignore the fact that California law allows companies to provide their workers with the choice of when and how much to work and still be classified as employees. Nothing prevents the companies from providing flexibility to their drivers and properly classifying them. By allegedly misclassifying hundreds of thousands of drivers as independent contractors, Uber and Lyft rob workers of critical protections in order to benefit their own bottom lines and create billions of dollars in private wealth for their venture capital investors. Misclassification harms workers by depriving them of basic labor standards and employee social safety net protections that serve as lifelines during times of social and economic crisis. Misclassification also hurts taxpayers by forcing them to carry the load for funding social safety net services that out-of-luck workers without protections turn to in times of need.
A copy of the court order is available here (PDF).
Source: CA AG’s Office