A bold move by the California Attorney General could have a significant impact on the estimated 500,000 Uber and Lyft drivers in California. On June 24, 2020, Attorney General Xavier Becerra announced plans to file for a preliminary injunction to force the ride-hailing companies to classify drivers as employees rather than independent contractors.

According to the attorney general, “Mis-classifying your workers as ‘consultants’ or ‘independent contractors’ simply means you want your workers or taxpayers to foot the bill for obligations you have as an employer.” Specifically, by characterizing drivers as independent contractors, according to Becerra, the employers can avoid “paying a legal wage or overtime, providing sick leave, or providing unemployment insurance.” 

This issue is not new, and the attorney general and the city attorneys of Los Angeles, San Francisco and San Diego previously sued Uber and Lyft in May 2020, claiming that the companies mis-classified drivers in violation of the newly enacted state law A.B. 5, which made it more difficult to classify workers as independent contractors. Despite being controversial, A.B. 5 provides protection to many workers that were previously mis-classified as independent contractors by employers in order to limit workers’ rights to overtime pay or sick leave, unemployment benefits, workers compensation, and refuse reimbursement for driving expenses.

The test for independent contractors established by A.B. 5, which went in to effect on January 1, 2020, largely due to the CA Supreme Court ruling in Dynamex Operations West, Inc. v. Superior Court of Los Angeles which established a new test for independent contractor:

• The worker works outside the “usual business;” and
• The worker “customarily” does the same work for the alleged employer as part of an “independent business.”

Based on the new test, Attorney General Becerra argues that drivers for Uber and Lyft are “employees” under California state law, and therefore are entitled to rights afforded to all employees in California. If the injunction is granted, Uber and Lyft will be forced to re-classify drivers as employees immediately. Furthermore, a ruling against the ride-hailing companies in the on-going lawsuit filed in May would possibly result in restitution for unpaid wages owed to drivers, civil penalties, and perhaps permanently prohibit the companies from mis-classifying drivers as independent contractors in the future.

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Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law violations by Uber or Lyft, and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.

If you or someone you know suffered employment violations as a driver for Uber or Lyft, you may have certain employee rights under state and federal law, and may be entitled to compensation as a part of the class action lawsuit. Please contact us to speak with one of our lawyers for a free consultation.