Personal Injury Firm
Uber drivers in California reportedly won a small victory after a federal court allowed them to proceed with some parts of their class action lawsuit over employment benefits they claim the ridesharing company owes them.
The court ruled that a group of approximately 4,800 Uber drivers can collectively sue the gig economy company for allegedly denying them expense reimbursements and itemized pay statements by misclassifying them as independent contractors prior to the passage of Prop. 22. However, the court also stated that drivers would have to bring claims individually over whether Uber failed to pay them the minimum wage, overtime, and paid sick leave.
Last year, several Uber drivers brought a lawsuit against the company after it refused to reclassify them as employees. Seeking to extend the state’s existing labor protections to a wider group of workers, the gig economy companies, including Uber, were supposed to obey AB5. Instead, together with Lyft, the company spent the year tied up in litigation after California sued them for not complying. At the time, state regulators determined it did apply to both companies, and a state appeals court agreed.
However, as legal challenges from Uber and Lyft were pending, voters passed Proposition 22, which ultimately exempted them from complying with AB5. As the companies were caught in a legal battle with the state, together with the food delivery app companies, they poured millions in support of the passage of the ballot initiative — making it one of the biggest-ticket California initiatives ever.
The new law classified drivers and couriers for those apps as independent contractors, and went into effect in Dec. However, Uber drivers alleged that the company should have been treating them as employees in the time after AB5 went into effect but before Prop 22 did.
The drivers claimed that Uber violated California’s labor laws by failing to reimburse business expenses, pay the minimum wage and overtime, and provide itemized pay statements and paid sick leave.
Recently, California’s supreme court ruled that Dynamex, a court ruling that became the legal basis for AB5, applies retroactively. This could potentially make gig companies liable for back payments dating back several years before AB5’s passage — including, and especially, Uber.
Uber and Lyft, as well as the food delivery apps, have long considered their drivers to be contractors, meaning that drivers are responsible for their own vehicle and maintenance costs. Before and after AB5, but before Prop 22, the companies did not pay for any benefits such as overtime, paid sick leave, unemployment insurance, medical insurance, or any other expenses. Now, in accordance with the promises made by the companies for additional benefits if Prop 22 passed, Uber and DoorDash raised their prices for customers in California in order to fund said new driver perks.