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Uber, Lyft Arbitration Pacts Bypassed When Government Sues

May 6, 2020, 4:51 PM

Uber Technologies Inc. and Lyft Inc. have long used arbitration agreements to keep driver misclassification disputes out of court, eluding a conclusive ruling on their business models that rely on independent contractors rather than employees. They won’t have that shield in California’s lawsuit seeking to enforce a new state law.

California Attorney General Xavier Becerra, along with the state’s biggest cities, sued the companies on Tuesday, alleging that they violated Assembly Bill 5, or A.B. 5, a new state law that makes it harder for companies to classify their workers as contractors who don’t receive minimum wage, overtime, and ...