Judge Reluctant to Designate Lyft Drivers as Employees Amid Pandemic, Despite ‘Obvious’ Worker Misclassification

A federal judge asked a lawyer representing a class of Lyft drivers if she was trying to use the COVID-19 pandemic to get her client’s reclassified as employees after failing to do so during past attempts.

U.S. District Judge Vince Chhabria of the Northern District of California posed the question to Lichten & Liss-Riordan’s Shannon Liss-Riordan in a Zoom video conference Thursday on an emergency motion she filed.

Liss-Riordan said the motion, which seeks to reclassify drivers as employees to take advantage of up to three days of state-mandated paid sick leave, would contribute to reducing the spread of the coronavirus crisis.

Chhabria asserted that “barely qualifying for paid sick leave” doesn’t seem like the main purpose of the motion.

“In the grand scheme of things, considering everything else going on in the country, is it fair to say that you’re using this as a hook to finally get Lyft to reclassify their drivers?” he asked. “That is an important issue, and that really does matter a great deal for drivers and the company, but it kind of seems like you’re using this to get in and get a court ruling you haven’t been able to get.”

In a tentative ruling issued Monday, Chhabria said the claim for a public injunction should be remanded to state court and that “this is not the type of case where it would be appropriate to consider a preliminary injunction motion without first considering the motion to compel arbitration.” He also granted a motion to compel arbitration on individual claims, but “the class action claims should be stricken because the plaintiffs waived the right to bring them.”

In the hearing, he asked Liss-Riordan to focus on why Lyft drivers need to qualify for California paid sick leave instead of taking advantage of federal relief. Chabbria suggested she skip arguing that the company misclassifies its employees under Assembly Bill 5 and the California Supreme Court’s Dynamex Operations West v. Superior Court decision, since he already agrees with her on that.

“That’s not what this emergency motion is about,” he said. Chabbria said the motion is about whether it’s necessary for the court to reclassify drivers on an accelerated schedule so that they can qualify for paid sick leave, in spite of the arbitration clauses and class action waiver.

“It’s obvious that AB 5 applies by its terms to Lyft drivers and that it’s intended to apply to companies like Lyft, and that companies like Lyft who are refusing to reclassify workers despite the passage of AB 5 are really disregarding the rule of law, but that’s not what this emergency motion is about,” Chabbria said. “I think you should stop speaking in terms of Lyft’s obligation to reclassify its drivers, it obviously has an obligation to reclassify workers.”

U.S. District Judge Vince Chhabria of the Northern District of California

The judge also took issue with a Lyft driver’s declaration, which noted he would continue driving “fever or no fever” to feed his children. Chhabria said that 6.6 million Americans filed for unemployment last week, and that restaurant workers, housekeepers and all sorts of workers are experiencing a tremendous loss of income. He asked if it’s more important to the driver to make a few bucks than risk killing his passengers.

Under normal circumstances, the judge said he understands that low-income individuals are faced with competing interests to work while sick … But if he has coronavirus symptoms, doesn’t he have a moral obligation to stay home that supersedes whatever small amount of money he would be able to make?” Chhabria said, noting the low demand for rides amid shelter-in-place orders. “Doesn’t he have a moral obligation to put himself in the same boat as the millions of people who can’t work and rely on federal aid?”

Chhabria appeared unconvinced that granting the motion would provide greater relief than drivers would receive from the federal protections under the Family First Coronavirus Response Act, or the CARES Act, that are available to independent contractors.

Liss-Riordan said it’s “entirely speculative” that just because drivers were considered employees under California labor codes that they would qualify as employees under less-stringent federal tax law and lose access to federal relief.

Chhabria said that her argument “couldn’t possibly be right,” adding it was clearly not the intent of Congress to distribute those federal benefits to people who are employees under California law and treated as employees by their employer, who would surely withhold the federal taxes that are owed.

“You’re creating unintended consequences for the people you purport to represent if they get reclassified under California law and get treated as employees under California law that they would not have this tremendous benefit available to them as independent contractors,” he said to Liss-Riordan of the federal assistance laws.

The judge also asked Keker, Van Nest & Peters’ R. James Slaughter what Lyft was doing to help all of the drivers who lost a significant amount of their business in the crisis. Slaughter said Lyft was providing assistance to drivers who had provided documentation from public health authorities saying they could not work. But Slaughter said he is not sufficiently familiar with all the steps Lyft was taking to increase rider demand and help drivers in terms of loss of income.

On an identical motion in front of U.S. District Judge Edward Chen of the Northern District of California on behalf of Uber drivers, Chen told Uber’s Gibson, Dunn & Crutcher attorneys and Lichten & Liss-Riordan to negotiate a temporary policy that allows workers to take paid time off without having to get a doctor’s note for those who do not have access to overburdened and sometimes costly health care providers.

In that case, Chen said he was “troubled with” sidestepping precedent and process by granting the mandatory injunction ahead of class certification.