On May 5, 2020, the Attorney General of California, joined by the City Attorneys of Los Angeles, San Diego, and San Francisco, filed a lawsuit on behalf of the People of the State California seeking injunctive relief, restitution, and penalties against Defendants Uber Technologies and Lyft.
The complaint asserts that Uber and Lyft have misclassified their ride-hailing drivers as independent contractors rather than employees in violation of Assembly Bill 5 , which took effect on January 1, 2020. That statute is intended to ensure that all workers who meet its criteria receive the basic rights and protections guaranteed to employees under California law.
On June 25, the People moved for a preliminary injunction enjoining Defendants from classifying their drivers as independent contractors, and from violating any provisions of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission with regard to their drivers.
Defendants opposed the motion. They also filed three additional motions: a motion to stay the litigation; a demurrer and motion to strike the complaint; and a motion to compel arbitration.
Defendants sought to stay the litigation until the Ninth Circuit rules on Uber’s pending constitutional challenge to A.B. 5; until the November 2020 election, when the voters will consider Proposition 22, an initiative sponsored by Uber and Lyft that would exempt them from the requirements of A.B. 5; or until the final disposition of numerous lawsuits and arbitrations in which similar claims have been raised.
On August 10, the Court ruled on these pending motions after first declaring that “Defendants are not entitled to an indefinite postponement of their day of reckoning. Their threshold motions are groundless.” The case went downhill for the Uber and Lyft from there.
A footnote also proclaimed that the “Court gives no weight to Defendants’ surveys regarding how many of their drivers wish to become employees or remain self-employed. A. B. 5 may be unpopular among some of Defendants’ drivers, but a lawsuit is not a popularity contest. Nor, as Defendants and some amici curiae argue, is it this Court’ s role to decide whether A.B. S ‘s effects on drivers will outweigh its benefits. Policy judgments underlying a statute are left to the Legislature; the judiciary does not pass on the wisdom of legislation.” (
At the conclusion of the 34 page ruling, it was ordered that “During the pendency of this action, Defendants Uber Technologies, Inc. and Lyft, Inc. are hereby enjoined and restrained from classifying their Drivers as independent contractors in violation of Labor Code section 2570.3 .”
“Defendants are further enjoined and restrained from violating any provisions of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission with regard to their Drivers.”
This injunction was stayed for a period of 10 days to allow the two companies an opportunity to appeal. Thereafter, “it shall remain in effect through and including the trial of this matter or upon further order of this Court.”
Uber said it planned to file an immediate emergency appeal to block the ruling from going into effect.