Labor & Employment Law Daily Plaintiffs cite California’s A.B. 5—and Uber’s defiance of it—in latest gig suit
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Thursday, September 19, 2019

Plaintiffs cite California’s A.B. 5—and Uber’s defiance of it—in latest gig suit

By Lisa Milam, J.D.

Law firm Lichten and Liss-Riordan references Uber’s pledge to defy California’s A.B. 5 in its latest class action wage-hour complaint against the rideshare company.

Lichten and Liss-Riordan, P.C. has been a key architect in the wave of “gig” litigation accusing companies of misclassifying workers as independent contractors. Uber has been a recurring target of the Boston-based plaintiff’s firm. A complaint filed September 11 against the ride-share giant, a putative class action brought under California wage law, makes reference to A.B. 5—the state’s soon-to-be-passed law codifying the “ABC” test and the 2018 California Supreme Court decision, Dynamex Operations W., Inc. v. Superior Court. The standard puts a thumb firmly on the “employee” side of the “employee vs. independent contractor” scale.

The complaint, filed on September 11 in the Northern District of California, seeks to recover business expenses, minimum wage and overtime, and damages for violations of the state’s pay statements provisions, among other relief. Whether the proposed class of Uber drivers can recover turns on whether they are statutory employees, rather than “independent contractors” as Uber defines them.

“Although classified as independent contractors,” the complaint notes, “Uber drivers are employees under California law.” Their work transporting Uber customers is carried out in the usual course of business for the rideshare service. “Uber holds itself out as a transportation service, and it generates its revenue primarily from customers paying for the very rides that its drivers perform,” the complaint states. “Without drivers to provide rides for Uber’s customers, Uber would not exist.”

The complaint lists a number of factors supporting this contention:

  • Drivers are not engaged in their own transportation business when driving for Uber—customers can’t request specific drivers; instead, Uber assigns particular rides to drivers;
  • Drivers aren’t required to possess any skill above and beyond what is needed to obtain a normal driver’s license;
  • Drivers’ tenure with the company is indefinite;
  • Uber derives a benefit from the drivers’ use of the company’s software—the “primary instrumentality with which they can perform services for Uber”;
  • Uber sets drivers’ pay rates, which change at the company’s sole discretion, and makes promotional deals to riders—thus reducing drivers’ pay—without consulting drivers;
  • Drivers must pass background checks, get initial training, and face other hurdles like written exams in some cases before they can drive for Uber;
  • Uber imposes specific quality standards on the vehicles used by the drivers;
  • Drivers are required to follow “a litany of policies and rules” intended to control their performance;
  • Uber monitors driver performance and can terminate drivers who reject or cancel too many rides, or for other reasons, at the company’s sole discretion, including negative customer feedback.

“Although Uber attempted to obtain a ‘carve-out’ from this statute, it did not obtain such an exemption, and the legislature passed the statute so that it would include Uber drivers,” the complaint notes. “Uber has nevertheless publicly and defiantly stated” that it “intends to defy this statute and continue to classify its drivers as independent contractors—in violation of the express intent of the California legislature. This ongoing defiance of the law constitutes a willful violation of California law.”

In addition to monetary relief, the suit seeks a declaratory judgment that Uber has violated numerous California wage orders, plus the San Francisco and Los Angeles city and county minimum wage ordinances, as well as an order “requiring Uber to comply with the California Labor Code and Wage Orders.”

Massachusetts complaint. The ABC test originated in Massachusetts, where the firm’s Shannon Liss-Riordan is currently running for U.S. Senate. The campaign boasts her significant role in making the ABC test the law in California, and her platform is clear. “We need to make this law nationwide to protect working families across the country,” she writes in a campaign email to supporters. “I care about working people being trampled on by large corporations who think they are above the law.”

Liss-Riordan’s firm filed an action in Massachusetts last week, as well. The Uber drivers are seeking reimbursement for business expenses and to recoup minimum wage and overtime they say they are due as Uber employees under the state wage statutes. The September 12 complaint also seeks a public injunction—not solely for the benefit of the complainant and the class of Uber drivers. “Instead, ordering Uber to comply with Massachusetts law is in the public interest because Uber’s violation of the law diminishes labor standards more generally in the Massachusetts economy and particularly in the transportation industry,” the complaint states.

“Complying competitors are put at a disadvantage when companies such as Uber flout the law by misclassifying their employees as independent contractors. Public funds are also impacted by these violations because the state incurs costs in supporting and providing services to employees who are not properly paid and do not even receive minimum wage.”

The Massachusetts complaint also names Uber President and CEO Dara Kosrowshahi as a defendant.

Liss-Riordan’s firm has pursued misclassification suits against several other “gig” companies that utilize “independent contractor” drivers, including Lyft, Grubhub, and DoorDash, in California and elsewhere.

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