Labor & Employment Law Daily Teamsters, drivers object to $12M settlement that would preserve Lyft’s independent contractor model
Monday, March 21, 2016

Teamsters, drivers object to $12M settlement that would preserve Lyft’s independent contractor model

By Pamela Wolf, J.D. The Teamsters Union and five putative class members have filed objections to a proposed $12.25 million settlement of class litigation brought by Lyft drivers who contend they were improperly classified as independent contractors by the ride-share company. The putative class members have designated Teamsters Joint Councils No. 7 and No. 42 as their personal representatives for purposes of the litigation and negotiation of their terms and conditions of employment. The objectors, who plan to intervene in the suit, and perhaps taking their lead from a February 11 ruling by the district court, object to the fact that under the proposed deal, Lyft drivers would remain independent contractors—a continuing misclassification, as the objectors see it. Settlement hearing delayed. Last month, the federal judge presiding over the case delayed the hearing on preliminary approval of the proposed deal, citing the many questions left unanswered, including whether the settlement, in preserving the drivers’ status as independent contractors, would undermine the very purpose of the litigation. The judge ordered additional briefing from the parties. Objections. Noting that the proposed settlement would waive and release the claims of about 100,000 class members, the objectors assert that in exchange for modest payments to individual drivers (an average of less than $60), the settlement leaves, approves, and authorizes the ongoing and continuing violation of California and federal labor law—the misclassification of drivers who are regularly engaged to drive Lyft's customers—while seeking judicial approval of illegal waivers of drivers' statutory rights. Moreover, drivers who have labored for Lyft as full-time workers for several years could receive only up to $1,000 under the proposed deal, a small fraction of what the objectors say they are owed as “employees.” And leaving intact Lyft's business practice of misclassifying “employees” as “independent contractors,” will cost workers and California taxpayers in the future, since drivers are not covered for unemployment, workers’ compensation, or Social Security. The objectors also disfavor a provision requiring notice to be sent to Lyft drivers that, under the settlement, they “can never sue Lyft again.” ULP charge filed. The Teamsters have also filed an unfair labor practice charge with Region 20 of the National Labor Relations Board in San Francisco, alleging Lyft's business practice of misclassifying drivers and its one-sided “terms of use” imposed on its drivers deprives them of rights guaranteed under federal labor law, including the right to join a union. The union noted that in the past year, hundreds of drivers at tech companies, including Facebook, Yahoo, Apple, eBay, and others in Silicon Valley, have organized with Teamsters Local 853 in San Leandro, California. The union said it has negotiated strong contracts for the drivers, including good wages, benefits, and workplace protections. “If companies like Facebook can step up to the plate and make sure drivers are treated with dignity and respect, there's no reason why Lyft and other well-known 'rideshare' companies can't do the same,” said Rome Aloise, Teamsters International Vice President and President of Teamsters Joint Council 7.

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