Uber, Lyft Get Positive Ruling in California Labor Case

Uber, Lyft Get Optimistic Ruling in California Labor Case

A journey share automotive shows Lyft and Uber stickers on its entrance windshield in downtown Los Angeles. (Richard Vogel/Related Press)

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SACRAMENTO, Calif. — App-based ride-hailing and supply firms like Uber and Lyft can proceed to deal with their California drivers as unbiased contractors, a state appeals courtroom dominated March 13, permitting the tech giants to bypass different state legal guidelines requiring employee protections and advantages.

The ruling principally upholds a voter-approved regulation, known as Proposition 22, that mentioned drivers for firms like Uber and Lyft are unbiased contractors and are usually not entitled to advantages like paid sick depart and unemployment insurance coverage. A decrease courtroom ruling in 2021 had mentioned Proposition 22 was unlawful, however the March 13 ruling reversed that call.

“At the moment’s ruling is a victory for app-based staff and the tens of millions of Californians who voted for Prop 22,” mentioned Tony West, Uber’s chief authorized officer. ”We’re happy that the courtroom revered the desire of the individuals.”

The ruling is a defeat for labor unions and their allies within the state Legislature who handed a regulation in 2019 requiring firms like Uber and Lyft to deal with their drivers as staff.

“At the moment the Appeals Court docket selected to face with highly effective firms over working individuals, permitting firms to purchase their means out of our state’s labor legal guidelines and undermine our state structure,” mentioned Lorena Gonzalez Fletcher, chief of the California Labor Federation and a former state assemblywoman who authored the 2019 regulation. “Our system is damaged. It could be an understatement to say we’re dissatisfied by this determination.”

At the moment’s ruling is a victory for app-based staff and the tens of millions of Californians who voted for Prop 22.

Tony West, Uber

The ruling wasn’t a whole defeat for labor unions, because the courtroom dominated the businesses couldn’t cease their drivers from becoming a member of a labor union and collectively cut price for higher working circumstances, mentioned Mike Robinson, one of many drivers who filed the lawsuit difficult Proposition 22.

“Our proper to affix collectively and cut price collectively creates a transparent path for drivers and supply staff to carry large gig firms accountable,” he mentioned. “However make no mistake, we nonetheless consider Prop 22 — in its entirety — is an unconstitutional assault on our primary rights.”

The California Legislature handed a regulation in 2019 that modified the foundations of who’s an worker and who’s an unbiased contractor. It’s an necessary distinction for firms as a result of staff are lined by a broad vary of labor legal guidelines that assure them sure advantages whereas unbiased contractors are usually not.

Whereas the regulation utilized to plenty of industries, it had the largest impression on app-based ride-hailing and supply firms. Their enterprise depends on contracting with individuals to make use of their very own automobiles to present individuals rides and make deliveries. Underneath the 2019 regulation, firms must deal with these drivers as staff and supply sure advantages that might enormously improve the companies’ bills.

At the moment the Appeals Court docket selected to face with highly effective firms over working individuals.

Lorena Gonzalez Fletcher, California Labor Federation

In November 2020, voters agreed to exempt app-based ride-hailing and supply firms from the 2019 regulation by approving a poll proposition. The proposition included “various advantages” for drivers, together with a assured minimal wage and subsidies for medical health insurance in the event that they common 25 hours of labor per week. Firms like Uber, Lyft and DoorDash spent $200 million on a marketing campaign to verify it might go.

Three drivers and the Service Staff Worldwide Union sued, arguing the poll proposition was unlawful partly as a result of it restricted the state Legislature’s authority to vary the regulation or go legal guidelines about staff’ compensation packages. In 2021, a state choose agreed with them and dominated firms like Uber and Lyft weren’t exempt.

On March 13, a state appeals courtroom reversed that call, permitting the businesses to proceed to deal with their drivers as unbiased contractors.

The ruling won’t be the ultimate determination. SEIU might nonetheless attraction the choice to the California Supreme Court docket, which might resolve to listen to the case.

“We’ll take into account all these choices as we resolve how to make sure we proceed combating for these staff,” mentioned Tia Orr, govt director of SEIU California.

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