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Lyft Drivers Lose Second Bid for Emergency Covid-19 Sick Pay (1)

May 1, 2020, 3:34 PM; Updated: May 1, 2020, 8:36 PM

A group of Lyft drivers in California lost their latest bid to convince a state judge to immediately reclassify them as employees with paid sick leave to help fight the spread of Covid-19.

The pandemic has caused dire financial consequences for many Lyft drivers, who are classified as independent contractors, Judge Ethan P. Schulman of the California Superior Court acknowledged Thursday. Despite that, and even though some drivers have contracted the virus, they must keep working if they want to get paid, he said.

“The court’s powers only extend so far,” and neither the record nor California law justifies granting the requested injunction, Schulman said.

The drivers will also have to individually arbitrate their proposed class action claims alleging Lyft’s classification regime violates California unfair competition laws. There’s a valid arbitration agreement in the relevant contracts, and the claim is arbitrable because it seeks relief for the drivers, not the general public, Schulman said.

The state court relied heavily on a decision issued April 7 by Judge Vince Chhabria of the U.S. District Court for Northern California. Chhabria also denied the drivers’ injunction request and compelled them to arbitrate some claims, then remanded an unfair competition claim to state court.

The state court also agreed with Chhabria that forced reclassification wouldn’t necessarily prevent the drivers’ alleged injury, and might actually do more harm than good.

If the drivers were reclassified as employees, they’d likely only get a few days’ worth of paid sick leave and they’d completely lose access to the benefits provided by the Families First Coronavirus Response Act.

The FFCRA, which went into effect April 1, offers independent contractors up to 10 days of paid sick or family leave, but only gives employees those benefits if they work for a company with less than 500 employees. Lyft certainly exceeds that threshold.

The drivers argued that the federal government has delayed implementation of the new law’s benefits and made it hard for people to obtain them, but those aren’t good enough reasons to grant an injunction, Schulman said.

An injunction in this situation might also “undermine or interfere with” other legislative efforts to provide Covid-19 relief, Schulman said, as former California Governors Gray Davis and Arnold Schwarzenegger argued in their amicus brief.

The state court noted that any forced reclassification would dramatically disrupt the status quo for thousands of other drivers, and interfere with arbitration in this particular case.

Benjamin Shatz, an attorney with Manatt, Phelps & Phillips LLC, which represented the governors in their amici filing, also said all Lyft drivers were given access to 14 days paid sick leave through an assistance package provided by Lyft.

Lichten & Liss-Riordan PC represents the drivers. Keker, Van Nest & Peters LLP represents Lyft.

The case is Rogers v. Lyft, Inc., Cal. Super. Ct., No. CGC20583685, 4/30/20.

(Updated to add comments from amici counsel for the governors )

To contact the reporter on this story: Kathleen Dailey at kdailey@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

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