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Uber, Lyft Drivers Sue N.Y. Over Unemployment Benefits

May 26, 2020, 8:14 PM

Three former Uber and Lyft drivers hit the state of New York with a suit alleging they were improperly denied unemployment benefits because they were misclassified by the state Department of Labor as independent contractors.

The plaintiffs allege that the state violated settled state law by denying them unemployment benefits, citing a 2018 ruling by the Unemployment Insurance Appeal Board.

The complaint alleges the Labor Department has continued to treat app-based drivers’ applications for benefits as though they are independent contractors, placing the burden on drivers to prove their earnings and employment status.

“As the DOL has not required app-based car service companies to supply their earnings data, drivers’ benefit rates cannot be determined, delaying the delivery of benefits to drivers by months,” the complaint alleges.

But a spokesman for the state says the law is unsettled and the state has acted to get benefits to the drivers quickly during the coronavirus pandemic.

“The idea that the status of Uber drivers in New York is resolved is false,” Jack Sterne, a spokesperson for the office of Gov. Andrew Cuomo (D) said, citing a pending New York appeals court case on the issue.

“During this pandemic emergency, we have been moving heaven and earth to get every single unemployed New Yorker their benefits as quickly as possible—including Uber and Lyft drivers who are treated no different than any other worker and, during this crisis, are receiving unemployment benefits through the Pandemic Unemployment Assistance program quicker than most other states,” Sterne said in a statement.

“New York launched our Pandemic Unemployment Assistance application weeks before other states, and we are now processing more than 100,000 PUA applications per week,” Sterne said. “As a result of this quick action and worker-friendly policy, we’ve delivered over $10 billion in benefits to 2 million unemployed New Yorkers—far more than any other state on a per-capita basis.”

Causes of Action: Equal protection, 42 U.S.C. 1983, N.Y. Labor Law § 501.

Relief: Declaratory and injunctive relief, attorneys’ fees and costs.

Attorneys: Brooklyn Legal Services represents the plaintiffs.

For additional legal resources, visit Bloomberg Law In Focus: Coronavirus (Bloomberg Law Subscription).

The case is Islam v. Cuomo, E.D.N.Y., No. 20-cv-02328, 5/25/20.

To contact the reporter on this story: Peter Hayes in Washington at PHayes@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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