California Attorney General Xavier Becerra Celebrates Court Victory Against Uber and Lyft

Appeals court upholds earlier trial court decision requiring Uber and Lyft to properly classify their drivers

Ehe California Attorney General Xavier Becerra – along with the City Attorneys of Los Angeles, San Diego and San Francisco – today secured another major court victory that blocks the illegal actions of Uber and Lyft that classify their drivers as “self-employed.”

The decision by the state court of appeals in San Francisco follows an earlier preliminary injunction against companies issued by a trial court that required companies to properly classify their drivers.

The appeals court had suspended the lower court ruling pending review by the appeals court.

According to today’s appeals court ruling, the preliminary injunction will re-take effect 30 days after the case is officially sent back to the trial court and companies will need to properly classify their drivers in California while the litigation is ongoing.

This was celebrated by the Attorney General Becerra:

“Californians have fought hard to protect their benefits. Uber and Lyft have used their strength and influence to resist treating their drivers as workers entitled to these labor protections. “

“The courts saw well in their arguments. Amid a COVID health and economic crisis, what worker can afford to be denied basic protections like sick pay, unemployment insurance, minimum wage, or overtime?

Today’s decision comes on the same day the federal government reports that more than a million Americans filed for unemployment, and 3 in 10 of them are self-employed.

“But remember, companies like Uber and Lyft, which classify contract workers as’ self-employed, ‘don’t pay into workers’ unemployment benefit funds.”

That means American taxpayers, not companies like Uber and Lyft, are covering the unemployment benefits that workers are receiving from the COVID bailout.

“That is not fair to our workers and taxpayers. It’s time for Uber and Lyft to play by the rules.

Worker misclassification occurs when a company treats its employees as self-employed, thereby evading legal obligations such as minimum wage, overtime, payroll taxes, and workers’ compensation insurance.

Since their inception, Uber and Lyft have consistently refused to classify their drivers as employees in violation of California law.

Any cost to companies to restructure their businesses to adopt and then optimize an employment model comes from their own long-standing refusal to comply with the law and provide basic protections in the workplace.

While companies argue that drivers want and need “flexibility” to do their jobs, Uber and Lyft have consistently ignored the fact that California law allows companies to give their workers the choice of when and how much to work and still thus be classified as employees.

By misclassifying hundreds of thousands of drivers as self-employed, Uber and Lyft deprive workers of critical protections to benefit their own bottom line and create billions of dollars in private wealth for their venture capital investors.

Misclassification harms workers by depriving them of basic labor standards and the protections of the employee social safety net that serve as lifesavers in times of social and economic crisis.

Misclassification also hurts taxpayers by forcing them to shoulder the burden of funding social safety net services that unprotected unfortunate workers turn to in times of need.